CMS News
FOR IMMEDIATE RELEASE
June 27, 2016
CMS Announces Proposed Payment Changes for
Medicare Home Health Agencies for 2017 (CMS-1648-P)
Today, the Centers for Medicare
& Medicaid Services (CMS) announced proposed changes to the Medicare home
health prospective payment system (HH PPS) for calendar year (CY) 2017 that
would foster greater efficiency, flexibility, payment accuracy, and improved
quality. Approximately 3.4 million beneficiaries received home health services
from approximately 11,400 home health agencies, costing Medicare approximately
$17.8 billion in 2015.
In the rule, CMS projects that
Medicare payments to home health agencies in CY 2017 would be reduced by 1.0
percent, or $180 million based on the proposed policies. The proposed decrease
reflects the effects of the 2.3 percent home health payment update percentage ($420
million increase); 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 ($420 million decrease);
the effects of the -0.97 percent adjustment to the national, standardized
60-day episode payment rate to account for nominal case-mix growth for an
impact of -0.9 percent ($160 million decrease); and the effects of the proposed
increase to the fixed-dollar loss (FDL) ratio used in determining outlier
payments from 0.45 to 0.56 for an estimate impact of -0.1 percent ($20 million
decrease).
To be eligible for the home health
benefit, beneficiaries must need intermittent skilled nursing or therapy
services and must be homebound and under the care of a physician. Covered home
health services include skilled nursing, home health aide, physical therapy,
speech-language pathology, occupational therapy, medical social services, and
medical supplies. Home Health Agencies (HHAs) are paid a national, standardized
60-day episode payment for all covered home health services, adjusted for
case-mix and area wage differences.
The HH PPS proposed rule is one of
several rules for calendar year 2017 that reflect a broader Administration-wide
strategy to create a health care system that results in better care, smarter
spending, and healthier people. Provisions in these rules are helping to move
our health-care system to one that values quality over quantity and focuses on
reforms such as achieving better health outcomes, preventing disease, helping
patients return home, helping manage and improve chronic diseases, and
fostering a more-efficient and coordinated health care system.
Payment Policy Provisions
Rebasing the 60-day Episode Rate
The Affordable Care Act directs CMS
to apply an adjustment to the national, standardized 60-day episode rate and
other applicable amounts to 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 must phase-in any adjustment over a four-year
period, in equal increments, not to exceed 3.5 percent of the amount (or
amounts) as of the date of the enactment of the Affordable Care Act (CY 2010).
In this proposed rule, CMS would
complete the final year of the four-year phase-in of the rebasing adjustments
to the HH PPS payment rates. As finalized in the CY 2014 final rule, the
CY 2017 rebasing adjustment to the national, standardized 60-day payment rate
is -$80.95. The overall impact due to the rebasing adjustments is
estimated to be a -2.3 percent decrease in HH PPS payments for CY 2017. As
noted above and further below, this is offset by the home health payment update
percentage, which would increase overall HH PPS payments in CY 2017 by 2.3
percent.
Updates to Reflect Case-Mix Growth
CMS will implement a 0.97 percent
reduction to the national, standardized 60-day episode rate in CY 2017 to
account for nominal case-mix growth from 2012 to 2014 (prior to rebasing). CY
2017 will be the second year of the three-year phase-in of the reduction to
account for nominal case-mix growth. The -0.97 percent adjustment to the
national, standardized 60-day episode payment rate to account for nominal
case-mix growth results in an estimated decrease in HH PPS payments for CY 2017
of -0.9 percent.
Negative Pressure Wound Therapy
(NPWT)
The Consolidated Appropriations Act
of 2016 requires a separate payment to be made to HHAs for disposable NPWT
devices when furnished on or after January 1, 2017 to an individual who
receives home health services for which payment is made under the Medicare home
health benefit. As described in the Consolidated Appropriations Act of 2016,
the separate payment amount for an applicable disposable device will be set
equal to the amount of the payment that would otherwise be made under the
Medicare Hospital Outpatient Prospective Payment System (OPPS).
Change in Methodology and the
Fixed-Dollar Loss (FDL) Ratio Used to Calculate Outlier Payments
CMS is proposing to change the
methodology used to calculate outlier payments, moving from a cost per visit
approach to a cost per unit approach (1 unit = 15 minutes). This approach
would more accurately calculate the cost of an outlier episode of care and thus
would better align outlier payments with episode cost than the cost per visit
approach. In addition, CMS is proposing to increase the FDL ratio from
0.45 to 0.56 in order to ensure outlier payments do not exceed 2.5 percent of
total payments for CY 2017, as required by the Social Security Act (for an
estimated -0.1 percent decrease in HH PPS payments for CY 2017).
Other Updates
CMS is also proposing to update the
HH PPS payment rates by the home health payment update percentage of 2.3
percent, as required by the Social Security Act.
Home Health Quality Reporting
Program (HH QRP) Updat
Section 2(a) of the Improving
Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act)
requires HHAs, Skilled Nursing Facilities (SNFs), Inpatient Rehabilitation
Facilities (IRFs), and Long-Term Care Hospitals (LTCHs) to: submit standardized
patient assessment data, data on quality measures and data on resource use and
other measures. The data must be standardized and interoperable so as to allow
for the exchange of such data among PAC providers. It also modifies PAC
assessment instruments to provide for the submission and comparison of such
standardized patient assessment data. These requirements are intended to enable
interoperability as well as improve quality and discharge planning, among other
purposes.
CMS is proposing to adopt for the
CY 2018 payment determination four measures to meet the requirements of the
IMPACT Act. Three of these measures are resource-based and calculated using
Medicare claims. The fourth measure is assessment-based and is calculated
using Outcome and Assessment Information Set (OASIS) data. The proposed
measures are as follows:
- All-condition risk-adjusted potentially preventable
hospital readmission rates,
- Total estimated Medicare spending per beneficiary,
- Discharge to the community, and
- Medication reconciliation.
The Home Health Conditions of
Participations (CoPs) require HHAs to submit OASIS assessments as a condition
of payment and also for quality measurement purposes. HHAs that do not submit
quality measure data to CMS will see a two percent reduction in their annual
payment update (APU). Last year CMS finalized its proposal to require all HHAs to
submit both admission and discharge OASIS assessments for a minimum of 90
percent of all patients with episodes of care occurring during the reporting
period. CMS is incrementally increasing this compliance threshold over a
three-year period beginning with the reporting period for CY 2017.
In 2015, CMS undertook a
comprehensive reevaluation of all 81 HH quality measures, some of which are
used only in the Home Health Quality Initiative (HHQI), and others which are
also used in the HH QRP. The goal of this reevaluation was to streamline
the measure set, consistent with MMS guidance and in response to stakeholder
feedback. This reevaluation included a review of the current scientific
basis for each measure, clinical relevance, usability for quality improvement,
and evaluation of measure properties, including reportability, and
variability.
Home Health Value-Based Purchasing
Model
In the final CY 2016 Home Health
Prospective Payment System final rule, CMS finalized its proposal to implement
the Home Health Value-Based Purchasing (HHVBP) Model in nine states
representing each geographic area in the nation. All Medicare-certified home
health agencies (HHAs) that provide services in Arizona, Florida, Iowa,
Maryland, Massachusetts, Nebraska, North Carolina, Tennessee, and Washington
are competing on value in the HHVBP Model, where payment adjustments will be
based on each HHA’s total performance score on a set of measures already
reported via OASIS and HHCAHPS for all patients serviced by the HHA, or
determined by claims data, plus three new measures where points are achieved
for reporting data.
The HHAs in these nine states will
have their payments adjusted (upward or downward) in the following manner:
a maximum payment adjustment of three percent in CY 2018; a maximum
payment adjustment of five percent in CY 2019; a maximum payment adjustment of
six percent in CY 2020; a maximum payment adjustment of seven percent in CY
2021; and, a maximum payment adjustment of eight percent in CY 2022.
Under the CY 2017 Home Health
Prospective Payment System proposed rule, in addition to providing an update on
the progress towards developing public reporting of performance under the HHVBP
Model, CMS proposes the following changes and improvements related to the HHVBP
Model:
- Calculate
benchmarks and achievement thresholds at the state level rather than the
level of the size-cohort and revise the definition for “benchmark” to
state that benchmark refers to the mean of the top decile of
Medicare-certified HHA performance on the specified quality measure during
the baseline period calculated for each state;
- A
minimum requirement of eight HHAs in a size-cohort;
- Increase
the timeframe for submitting New Measure data from seven calendar days to
fifteen calendar days following the end of each reporting period to
account for weekends and holidays;
- Remove
four measures (Care Management: Types and Sources of Assistance, Prior
Functioning ADL/IADL, Influenza Vaccine Data Collection Period, and Reason
Pneumococcal Vaccine Not Received) from the set of applicable measures;
- Adjust
the reporting period and submission date for the Influenza Vaccination
Coverage for Home Health Personnel measure from a quarterly submission to
an annual submission; and
- Add
an appeals process that includes the existing recalculation process and
adds a reconsideration process.
