CMS Releases Home Health Rate Update for 2015

CMS has issued an advance release of its Final rule to update Medicare’s Home Health Prospective Payment System (HH PPS) payment rates and wage index for calendar year (CY) 2015. The regulations, which will take effect on January 1, 2015, update the national, standardized 60-day episode payment rates, the national per-visit rates, and the non-routine medical supply (NRS) conversion factor under the Medicare prospective payment system for home health agencies (HHAs). The updates represent the second year in a four year rebasing adjustment required by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Among other provisions, the Final rule, which is set to be published in the Federal Register on November 6, 2014, also makes changes to the face-to-face encounter regulatory requirements and home health quality reporting program requirements.


Beginning in 2014, CMS was obligated, under section 3131(a) of the ACA to make adjustments to home health payment rates over a four year phased in period. Under the law, the rate increases over the four year period must be made in equal increments that cannot exceed 3.5 percent of the 2010 payment rates. Through the 2014 HH PPS Final rule (78 FR 72256), which sets the adjustment for 2014 through 2017, CMS finalized a fixed-dollar reduction to the national, standardized 60-day episode payment rate at $80.95 per year. Additionally, the 2014 Final rule adjusted the per-visit payment rates with upward adjustments that ranged from $6.34 for medical social services on the high end to $1.79 for home health aide services on the low end. Additionally, the non-routine medical supply (NRS) conversion factor was set to reduce by a factor of 2.82 percent per year. The 2015 Final rule continues with the adjustments adopted in the 2014 Final rule. Also in accordance with an ACA mandate, taking into account a multifactor productivity adjustment, under the 2015 Final rule, the HH market basket is being updated 2.1 percent.


In addition to making changes related to the ACA requirement, the Final rule discusses how CMS is monitoring the impacts of the rebasing adjustments. The update also includes simplifications to the ACA-mandated face-to-face encounter requirement. In particular, the Final rule eliminates the narrative requirement for certification of eligibility for home health services. Among other implemented rules, the changes establish procedures for obtaining documentation to establish that a patient is eligible for the home health services and demonstrating that a face-to-face encounter with a patient is related to the reason the patient requires home health services.

Other Changes

The Final rule also makes updates to the home health wage index using a 50/50 blend of the existing core-based statistical area (CBSA) designations and the new CBSA designations outlined in a February 28, 2013, Office of Management and Budget (OMB) bulletin. Additionally, changes are made under the Final rule to the quality reporting program for home health providers. Specifically, the quality changes include the establishment of a minimum threshold for submission of Outcome and Assessment Information Set (OASIS) assessments for purposes of quality reporting compliance and the creation of a policy that will assist in the adoption of changes to measures that take place in between rule making cycles.

Costs and Benefits

CMS projects that new requirements associated with certifying patient eligibility for home health services will result in a reduced burden of $21.5 million. However, the overall economic impact of the Final rule is estimated to be $60 million in decreased payments to home health agencies.