Home Health Payments to Take $260 Million Hit

Medicare is still planning to make big reductions to home health agency payments, though they may not be as drastic as it originally seemed.

The Centers for Medicare & Medicaid Services announced Thursday changes to the Medicare home health prospective payment system for calendar year 2016. Specifically, CMS now projects that Medicare payments to home health agencies in 2016 will be reduced by $260 million, or 1.4%. This is down from CMS’ original prediction of 1.8%, or $350 million.

CMS explained in a press release that the 1.4% decrease reflects the impact of the 1.9% home health payment update percentage; a 0.9% decrease in payments due to the 0.97% payment reduction to the standardized, national 60-day episode payment rate to account for nominal case-mix growth from 2012 through 2014; and a 2.4% decrease in payments due to the third year of the four-year phase-in of the rebasing adjustments to the standardized, national 60-day episode payment rate, the national per-visit payment rates, and the non-routine medical supplies conversion factor.

CMS is also finalizing the home health value-based purchasing (HHVBP) model, which it will begin implementing among all home health agencies in nine states on Jan. 1, 2016, according to the release.

As a result, all Medicare-certified home health agencies that provide services in Maryland, Massachusetts, Florida, Washington, North Carolina, Arizona, Nebraska, Iowa and Tennessee are set to compete on value in the HHVBP model, where payment is linked to quality performance.

Home health agencies in these nine states are set to have their payments changed by a maximum payment adjustment of 3% upward or downward in 2018; a maximum payment adjustment of 5% upward or downward in 2019; a maximum payment adjustment of 6% upward or downward in 2020; a maximum payment adjustment of 7% upward or downward in 2021; and a maximum payment adjustment of 8% upward or downward in 2022.

Written by Mary Kate Nelson

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Mary Kate Nelson
Assistant Editor at Aging Media Network
When not in the newsroom, Mary Kate can reliably be found reading on her back porch, marathoning TV shows she’s already seen or overspending at Trader Joe’s.

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