WASHINGTON – Medicare officials announced on Aug. 22 a decrease in Medicare payments for home care services for 2008, drawing sharp criticism from home care lobbyists.
The Centers for Medicare & Medicaid Services’ final rule to refine and update the Home Health Prospective Payment System for 2008 will channel an estimated additional $20 million in payments to home health agencies, CMS said.
But the rule also reduces the national standardized 60-day episode payment by 2.75 percent per year for three years and 2.71 percent in the fourth year. The reductions account for case-mix changes that are not related to home health patients’ actual clinical conditions, CMS said. Such changes are referred to as “case mix creep.”
The home health market basket increase for 2008, which is based on inflation in prices and services and the submission of quality data, has been set at 3.0 percent, resulting in $430 million in payments. The market basket increase in 2007 was 3.3 percent.
Agencies that do not submit quality data will receive a mere 1-percent market basket update, CMS added.
The National Association for Home Care & Hospice derided the CMS rule as “undermining access to care in patients’ homes and diminishing the importance and value of planned reforms to the Medicare home health services payment methodology.”
William Dombi, vice president for law at NAHC, said the rule reduces overall pay rates by 11 percent over four years.
CMS evaluated case mix rates for home care and concluded that 11 points in growth was due to case mix creep, Dombi said.
“When we entered 2007, we asked CMS if there was any plan to address any perceived case mix creep and they said no. We then learned that there was such a plan,” said Dombi. “We were either misinformed or misled earlier in the year that anything like this would be under consideration.”
While CMS has made coding creep adjustments in other areas such as hospitals and inpatient rehabilitation facilities, such adjustments were not as steep as the home care cuts, he added.
Dombi said some believe the motivation behind the cut is to put roadblocks in Congress in front of other reforms.
“It does lead to some suspicion when the President’s budget had this undefined administrative change that turned out to include this adjustment. Why didn’t they simply define it back then?” he asked.