Home Health & Hospice Week

PPS final rule brings major changes to reimbursement for therapy, supplies, coding.

You'll have to do more with less under the prospective payment system makeover that just became final.

The Centers for Medicare & Medicaid Services issued the home health PPS refinements final rule Aug. 22 and it will take effect Jan. 1. CMS published the rule earlier than the October timeframe industry experts originally projected.

"The speed with which the final rule was released, ahead of deadline, alerted everyone that changes would be few and not favorable," warns reimbursement consultant Tom Boyd with Rohnert Park, CA-based Boyd & Nicholas.

One of the biggest complaints: Home health agencies are ruing bigger cuts to PPS rates due to supposed upcoding of patients since the system took effect in 2000. In the April proposed rule, CMS wanted an 8.25 percent cut for case mix creep, staggered at 2.75 percent over three years. In the final rule, CMS keeps those cuts and adds a 2.71 percent cut in 2011 for a total of 10.71 percent.

Agencies had argued vociferously against the case mix creep cut in their comments submitted on the proposed rule. But when CMS updated the data comparison from 2003 to 2005, it found even more alleged upcoding, it says in the rule.

The 33 percent bigger cut took Boyd by surprise, he says.

But it follows CMS' previous logic. "As soon as I heard [CMS was] using 2005 data, I knew it would go up," sighs reimbursement consultant Pat Laff with Laff Associates in Hilton Head, SC. Patients' case mix scores have increased every year under PPS.

"It is a political administrative adjustment probably dictated by the White House," notes consultant Mark Sharp with BKD in Springfield, MO. "Make no mistake about it, this is a political cut."

"The government is looking for ways to reduce overall Medicare spending," Sharp continues. "In their eyes, there is no better place than home health as [the Medicare Payment Advisory Commission] continues to suggest high margins."

Industry representatives were quick to decry the payment decrease. "Cuts of this magnitude cannot be absorbed without negatively impacting patient services," warns Bob Wardwell of the Visiting Nurse Associations of America in a release.

The cut is "undermining access to care in patients' homes," adds the National Association for Home Care & Hospice. HHAs provide far more cost effective care than institutions, saving Medicare money overall.

"Patients who lose access to home care seek out health care services in much more expensive institutional settings," NAHC's Val Halamandaris says in a release. "It makes no sense."

There were good reasons for the case mix and therapy utilization increase, Sharp maintains, such as the increased focused on quality and patient outcomes under PPS. Watch For Further 2008 Cuts And the 2.75 [...]