CMS Finalizes Home Health Payments for 2014

On December 2, 2013, CMS will publish the final payment rates for home health agencies (HHAs) for calendar year (CY) 2014. The final rule includes the rebasing adjustments to the national, standardized 60-day episode payment rate, the national per visit rates, and the non-routine supply (NRS) conversion factor. The rule reduces Medicare payments under the Home Health Prospective Payment System (HH PPS) by 1.05 percent. This amount reflects an increase in the HH payment update percentage of 2.3 percent, offset by a decrease of 2.7 percent, the result of rebasing the adjustments required by the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), and a 0.6 percent decrease due to a refinement of the HH PPS Grouper.

The rule also addresses: (1) International Classification of Diseases, 9th Edition (ICD-9) Grouper refinements; (2) implementation of the International Classification of Diseases, 10th Edition (ICD-10); (3) a budget neutral adjustment to the case-mix weights; (4) updates to the payment rates by the HH payment update percentage (the HH market basket); (5) adjustments for geographic differences in wage levels; (6) outlier payments; (7) the submission of quality data; (8) additional payments for services provided in rural areas; and (9) state Medicaid program requirements related to the cost of HHA surveys.

Grouper Refinements

In the rule, effective January 1, 2014, CMS removes 170 diagnosis codes from assignment to diagnosis groups within the HH PPS Grouper. CMS also announces that it will begin using ICD-10-CM codes within the HH PPS Grouper effective October 1, 2014.

Rebasing Adjustments

In the rule, CMS adjusts the case-mix weights for CY 2014 in order to reduce the average case mix weight for CY 2012 from 1.3464 to 1.0000, in a budget neutral manner. CMS also rebases the national, standardized 60-day episode payment amount, the national per-visit rates and the NRS conversion factor, as required by section 3131(a) of PPACA.

The rebasing adjustments will reduce the national, standardized 60-day episode payment amount in each the next four years by $80.95. This amount is 3.5 percent of the national, standardized 60-day episode payment amount in effect as of the date of enactment of PPACA, which was $2,312.94 in CY 2010. Therefore, in each year from CY 2014 to CY 2017, the rebasing adjustments will increase the national per-visit payment amounts by 3.5 percent of the national per-visit payment amounts in effect in CY 2010.

The rebasing adjustments will also reduce the NRS conversion factor in each year from CY 2014 to CY 2017 by 2.82 percent. CMS will use three low-utilization payment adjustment (LUPA) add-on factors in calculating the LUPA add-on payment amount for LUPA episodes that are the only episode or the first episode in a sequence of adjacent episodes. CMS will update the HH wage index and increase payment rates for CY 2014 by 2.3 percent.

HH Study

As required by section 3131(d) of PPACA, CMS will continue work on the HH study, which will assess the costs associated with providing access to care for patients with high severity of illness, low income patients, and patients in medically underserved areas.

Quality of Care

CMS will continue to use Outcome & Assessment Information Set (OASIS) data, claims data, and patient experience of care data, as forms of quality data to meet the requirement that HHAs submit data appropriate for the measurement of HH care quality for the annual payment update for 2014. CMS will implement two claims-based measures of quality for HH patients who were recently hospitalized, as these patients are at an increased risk of additional acute care hospital use. CMS is also reducing the number of HH quality measures currently reported to HHAs.

HHA Surveys

Finally, CMS will review each state’s allocation of costs for HHA surveys for compliance with Office of Management & Budget Circular A-87 principles and the statutes in 2014 with the goal of ensuring full compliance no later than July 2014. The rule clarifies that a state Medicaid program must provide that, in certifying HHAs, the state’s designated survey agency must carry out certain other responsibilities that already apply to surveys of nursing facilities and Intermediate Care Facilities for Individuals with Intellectual Disabilities, including sharing in the cost of HHA surveys. For that portion of costs attributable to Medicare and Medicaid, CMS will assign 50 percent to Medicare and 50 percent to Medicaid.