CMS Proposes Home Health Agencies Tighten Their Belts in 2017

CMS Proposes Home Health Agencies Tighten Their Belts in 2017

Medicare payments to home health agencies in 2017 will be reduced by 1.0 percent, or $180 million, projects the Centers for Medicare & Medicaid Services (CMS) in a proposed rule, published in the July 5 Federal Register.

The payment reduction reflects a 2.3 percent Home Health Prospective Payment System (HH PPS) update percentage equaling $420 million, less:

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  • Rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit payment rates, and the non-routine medical supplies conversion factor (a $420 million reduction);
  • A negative 0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth (a -0.9 percent or $160 million reduction); and
  • A proposed increase to the fixed-dollar loss ratio used in determining outlier payments from 0.45 to 0.56 (a -0.1 percent or $20 million reduction).

The rebasing adjustments for 2017 will reduce the national, standardized 60-day episode payment amount by $80.95, increase the national per-visit payment amounts by 3.5 percent compared to 2010, and reduce the NRS conversion factor by 2.82 percent.

This is the final year of the four-year phase-in of the rebasing adjustments to the national, standardized 60-day episode payment amount, the national per-visit rates, and the non-routine supplies conversion factor.

Proposed Changes to the HH PPS

In addition to rebasing the 60-day episode rate, CMS is proposing to revise current methodology used to estimate the cost of an episode of care to determine whether the episode of care would receive an outlier payment. The methodology change includes calculating the cost of an episode of care using a cost-per-unit calculation, rather than a cost-per-visit calculation.

CMS is also proposing changes in payment for when negative pressure wound therapy is performed using a disposable device for a patient under a home health plan of care and for which payment is otherwise made under the HH PPS.

Proposed Changes to Home Health Value-based Payments

CMS is also proposing changes to the Home Health Value-based Payment model (HH VBP), implemented in January.

Proposed changes include:

  • Removing the definition for “starter set;”
  • Revising the definition for “benchmark;”
  • Calculating benchmarks and achievement thresholds at the state level;
  • Imposing a minimum requirement of eight home health agencies in a cohort; and
  • Increasing the time frame for submitting new measure data; removing four measures from the set of applicable measures; adjusting the reporting period and submission dates for one of the new measures; and adding an appeals process that includes the exiting recalculation process.

The proposed four new measures for 2018 payment determination are:

  1. All-condition risk-adjusted potentially preventable hospital readmission rates
  2. Total estimated Medicare spending per beneficiary
  3. Discharge to the community
  4. Medication reconciliation

The first three measures are resource-based and calculated using Medicare claims; and the fourth measure is assessment-based and calculated using Outcome and Assessment Information Set (OASIS) data.

CMS is accepting comments on the Medicare Home Health Prospective Payment System for 2017 proposed rule through August 26, 5 p.m.

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Renee Dustman

Renee Dustman

Renee Dustman is executive editor at AAPC. She has a Bachelor of Science degree in Journalism and a long history of writing just about anything for just about every kind of publication there is or ever has been. She’s also worked in production management for print media, and continues to dabble in graphic design.
Renee Dustman

About Has 425 Posts

Renee Dustman is executive editor at AAPC. She has a Bachelor of Science degree in Journalism and a long history of writing just about anything for just about every kind of publication there is or ever has been. She’s also worked in production management for print media, and continues to dabble in graphic design.

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