The Final Medicare 2016 HH PPS Rule

The Centers for Medicare and Medicaid Services (CMS) announced late Thurs. afternoon the final payment changes for the 2016 Home Health Prospective Payment System (HHPPS) rates.

CMS projects the Medicare home health payments will be reduced by 1.4 percent or $260 million nation wide, instead of the 1.8 percent (approximate total of $350 million) originally announced in the proposed version of the Rule.

Other important highlights of the final rule are:

1. Rebasing the 60-day episode rate

As we have previously reported, the Affordable Care Act (ACA) directs CMS to apply an adjustment to the national standardized 60-day episode rate and other applicable amounts that reflect factors such as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other relevant factors. CMS is implementing the third year of rebasing adjustments as finalized in the Calendar Year (CY) 2014 final rule; for CY 2016 the negative adjustment is $80.95.

2. Recalibration of the HH PPS Case-Mix Weights

CY 2016 will be the second year that CMS is proposing to recalibrate the HH PPS case-mix weights, this is identical to CY 2015 proposal.

3. Updates to Reflect Case-Mix Growth

CMS is decreasing the national standardized 60-day episode payment amount by 0.97 percent in CYs 2016, 2017 and 2018, instead of the original proposed amount of 1.72 percent. CMS added a third year to include 2018.

4. Home Health Quality Reporting Program (HH QRP) Update

The Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act)  requires HHAs to submit standardized patient assessment data, as well as standardized data on quality measures and resource use and other measures. The IMPACT Act requires collection across eight domains.  In the final rule CMS is considering one standardized cross-setting measure for CY 2016 under the categories of skin integrity and changes to skin integrity domain. Measures for the other domains will be addressed in future rulemaking.

The Home Health Conditions of Participation (CoPs) require HHAs to submit OASIS assessments as a condition of payment and also for quality measurement purposes. CMS is also proposing to require all HHAs to submit both admission and discharge OASIS assessments for a minimum of 70 percent of all patients with episodes of care occurring during the reporting period starting July 1, 2015.

5. Home Health Value-Based Purchasing (HHVBP) Model

CMS had proposed a new initiative designed to support greater quality and efficiency of care among Medicare-certified HHAs across the nation. According to the press release, “the HHVBP model leverages the successes of and lessons learned from other value-based purchasing programs and demonstrations – including the Hospital Value-Based Purchasing Program and the Home Health Pay-for-Performance and Nursing Home Value-Based Purchasing Demonstrations – to shift from volume-based payments to a model that promotes the delivery of higher quality care to Medicare beneficiaries.”  

CMS will start the HHVBP model among all HHAs in nine states representing each geographic area in the nation so that there is a fair and equal sample of all Medicare-certified HHAs delivering services within those states.  Compared to the proposed rule the maximum payment reduction during the first year will be at 3 percent instead of 5 percent.

LeadingAge New York will continue to review the final rule and provide a more detailed analysis.

Contact: Cheryl Udell, cudell@leadingageny.org, 518-867-8871