Medicare Home Health Proposed Rule Issued

HHPPS 2013 Rates Reflect Inflation Update and Case Mix Creep Adjustment; Important Policy Changes on CoP Non-Compliance Sanctions: Clarifications and Improvements on Face-to-Face and Therapy Assessment Rules

The Centers for Medicare and Medicaid (CMS) issued the proposed rule regarding 2013 payment rates late Friday. The proposal includes the 2013 Market Basket Index (MBI) update, the required 1 point reduction under the Affordable Care Act, and the previous set 1.32 percent case mix creep adjustment. It also includes a few policy clarifications regarding the face-to-face rule, Hospice quality data indicators, surveys scheduling, and the imposition of intermediate sanctions for CoP noncompliance. CMS estimates that the net impact on HHAs is a $20 million overall reduction in payments in 2013. While the base rates would increase, the impact of the wage index changes lowers total expenditures.

Article from the National Association of Home Care & Hospice (NAHC)

Notable aspects of the rate rule:


Proposed 2013 payment base episode rates are set at $2141.95 from the current $2138.52. This is a small increase, but better than the decrease if CMS included a full creep adjustment. The base rates are adjusted upwards by 3 percent for services to rural patients. Rates are adjusted downwards by 2 percent for providers that failed to submit compliant quality data.

The rate changes are due to a proposed 2.5 percent market basket index inflation update, a 1 point reduction in the MBI under the health care reform law, and a 1.32 percent case mix creep adjustment.

The case mix creep adjustment is the left-over 1.32 percent from the 2012 rate rule. CMS originally proposed a 5.06 percent adjustment in 2012, but ultimately decided to phase it in over two years with 1.32 percent left for 2013. The adjustment could have been increased as a result of CMS adding another year of claims into the evaluation of changes in coding weights, but CMS held any such action because of all the changes experienced in home health in recent times.

The increase would have set the adjustment at 2.18 percent. This is a welcome action from CMS as providers have experienced significantly increased costs with the face-to-face encounter and therapy assessment rules.

Read the CMS Home Health Proposed Payment Update