In The News:  Home Health Prospective Payment System Final Rule

The final rule for the refinement and update of the Home Health Prospective Payment System (HHPPS) for Calendar Year (CY) 2008 was recently released by the Centers for Medicare and Medicaid Services [CMS]. CMS indicates that this is part of its efforts to focus on access to services and improvement of quality and efficiency in care and services. CMS has stated that the refinements reflect more accurate payment for services. While CMS has indicated that these revisions will bring about an increase in disbursements for home health services in 2008, these refinements are also intended to be budget neutral. Some of the revisions to reimbursement, which go into place on January 1 2008, include:

• Revision of the current therapy payment threshold from the existing ten therapy visits per episode to three therapy payment thresholds. These thresholds have been set at 6, 14 and 20 therapy visits per episode of care, and reimbursement is graduated between thresholds.
• Refinement of the case mix model that takes into consideration the co-morbidities and health characteristics of patients who are on home health services for longer periods of time.
• Modification of the low utilization payment adjustment [LUPA] payment, including increasing the LUPA payment if payment is for the sole episode or first episode of care.
• Elimination of the significant change in condition [SCIC] payment.
• Revision of the reimbursement model for non-routine medical supplies [NRS] to more accurately reflect home health agency costs, identifying six severity groups in the new model.

The Medicare home health prospective payment system [PPS] is updated in relationship to the home health market basket index that incorporates inflation into the selected market basket mix of items on an annual basis. In addition, relevant clinical data from patient assessments was also considered in the 2008 payment adjustment. The Outcome and Assessment Information Set (OASIS) data submitted to CMS by Home Health Agencies is evaluated by CMS for home care quality care outcomes. CMS accepted and approved quality measures for Medicare Home Health Agencies are available via the Medicare Home Health Compare website, www.Medicare.gov. In 2008, two additional quality measures have been added to the measures reported to CMS. These are [1] Emergent Care for Wound Infections, Deteriorating Wound Status and [2] Improvement in Status of Surgical Wound. Home health agencies choosing not to submit OASIS assessment quality data will find their reimbursement reduced.

Calendar Year 2005 data, the most recent available home health care claims data, was used by CMS in determining the 2008 reimbursement revisions. The CMS analysis indicated that the majority of the increase in case mix was reflective of coding practice and documentation changes rather than changes in the clinical conditions of home health patients. As a result a reduction to the national standardized 60-day episode payment rate will occur over a four-year period, beginning 2008.

Home health providers have a differing opinion relative to the validity of these findings and subsequent payment revisions resulting from this CMS analysis. As a result, home health agency leaders are actively seeking to influence Congress to reconsider some of the changes put forth in this final rule.  The complete final rule can be accessed at:

http://www.cms.hhs.gov/HomeHealthPPS/HHPPSRN/itemdetail.asp?itemID=CMS1202451.