CMS Cuts Home Health Payments by 2.31%, Agencies Take $430 Million Hit

The Centers for Medicare & Medicaid Services (CMS) issued a final rule last Monday that will cause an estimated 2.31% decrease in payments to home health agencies in calendar year 2012. The rule, which updates the Home Health Prospective Payment System (HH PPS) rates for 2012, could amount to $430 million less in payments, the net effect of a 1.4% payment update, the wage index update and the case-mix coding adjustment.

The rule, CMS says, reflects that ongoing efforts of the centers to support Medicare beneficiary access to home health services while continuing to improve payment accuracy.

The Affordable Care Act, passed in 2010, applies a 1 percentage point reduction to the 2012 home health market basket amount. That market basket for 2012 is equal to 2.4%, so the payment update for HHAs will be 1.4%, CMS explains.

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CMS also reduced HH PPS rates by 3.79% in 2012 to account for additional growth along with a reduction of 1.32% for 2013.

Additionally, the rule finalizes some structural changes to the HH PPS by removing two hypertension codes from the case-mix system, lowering payments for high therapy episodes and adjusting the HH PPS case-mix weights in an effort to increase payment accuracy and reduce growth in aggregate case-mix that is unrelated to changes in patients health status.

The rule adds flexibility to allow physicians who cared for a patient in an acute or post-acute facility to inform the current certifying physician of their patient encounters, which is a change from the previous rule where the certifying physician or other allowed person had to see the patient prior to certifying him or her as eligible for the home health benefit.

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Home health payment rates are updated annually by the home health market basket percentage increase.

View the final rule.

Written by Elizabeth Ecker