CMS Seeks Changes to the Medicare Home Health PPS

On July 1, the Centers for Medicare & Medicaid Services (CMS) announced proposed changes to the Medicare Home Health Prospective Payment System (HH PPS) for Calendar Year (CY) 2015 that they anticipate will provide greater efficiency, flexibility, payment accuracy and improved quality. According to CMS, based on the most recent data available, it is estimated that approximately 3.5 million beneficiaries received home health services from nearly 12,000 home health agencies, costing Medicare approximately $18 billion in 2013.

In the rule, CMS projects that Medicare payments to home health agencies in CY 2015 will be reduced by 0.30 percent, or -$58 million based on the proposed policies. The proposed decrease reflects the effects of the 2.2 percent home health payment update percentage ($427 million increase) and the rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit payment rates, and the Non-Routine medical Supplies (NRS) conversion factor ($485 million decrease).

On July 7, the proposed rule was posted in the Federal Register. What are interesting are the proposed changes to the Face-to-Face (F2F) requirements and the clarification on when documentation of a F2F encounter is required. CMS is proposing three changes in the F2F requirement:

1. Proposing to eliminate the narrative requirement currently in regulation. The certifying physician would still be required to certify that a face-to-face patient encounter occurred and document the date of the encounter as part of the certification of eligibility.
2. For medical review purposes, CMS is proposing to only consider medical records from the patient’s certifying physician or discharging facility in determining initial eligibility for the Medicare home health benefit.
3. Proposing that the physician claim for certification/re-certification of eligibility for home health services (not the face-to-face encounter visit) be considered a non-covered service if the HHA claim was non-covered because the patient was ineligible for the home health benefit.

There is some inconsistent language in the proposed rule on the F2F requirement that we will be pursuing with CMS.

Another important proposed change is the clarification on when the documentation for the face-to-face encounter is required.  As per the proposed rule the requirement applies to the physician’s certification only, not the re-certification of eligibility for subsequent episodes. CMS previously clarified that the face-to-face encounter requirement applies to “initial episodes,” the first in a series of episodes separated by no more than a 60-day gap. CMS is proposing to clarify that a face-to-face encounter is required for certifications, rather than initial episodes; and that a certification (versus a re-certification) is generally considered to be any time a new start of care assessment is completed to initiate care.

Other noteworthy changes that are being proposed are the Conditions of Participation for speech-language pathologists, Home Health Quality Reporting Program, and Home Health Value-based Purchasing Model.

Rate setting changes include:

• Recalibration of the HH PPS case-mix weights - proposing to recalibrate the HH PPS case-mix weights by adjusting the weights relative to one another, using CY 2013 home health claims data, to ensure that the case-mix weights reflect the most current utilization and resource data available.
• Core Based Statistical Area (CBSA) changes for the HH wage index - CMS is proposing changes to the wage index based on the newest CBSA changes and OMB definitions for the CY 2015 HH PPS wage index. These changes will be made to the wage index using a blended wage index for a one-year transition.
• Home health payment update percentage - The CY 2015 home health market basket (2.6 percent) adjusted for multifactor productivity (0.4 percentage points) would result in a 2.2 percent payment update.

LeadingAge NY will be sending out a thorough analysis of the proposed rule this week.

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