Proposed changes to the Medicare home health prospective payment system (HH PPS) will save the government approximately $290 million, but the resulting cuts have home health agencies (HHAs) concerned.
The Centers for Medicare & Medicaid Services (CMS) announced last week, and is publishing in the Federal Register today, its proposed changes for the HH PPS for calendar year 2014.
The 1.5 percent reduction is based on the 2.4 percent home health payment update percentage ($460 million increase), 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 ($650 million decrease) and the effects of ICD-9-CM coding adjustments ($100 million decrease).
The rebasing adjustment is phased in over a four-year period and, in the proposal, is set at the maximum 3.5 percent rate reduction allowed in the Affordable Care Act, a choice that rankles those in the home health industry.
Per CMS' calculations, the 2013 differential between cost and revenue is 13.63 percent. Split into equal increments over four years, the annual reduction would be 3.6 percent, which exceeds the 3.5 percent maximum set by the ACA.
Both the National Association of Home Care & Hospice (NAHC) and the Partnership for Quality Home Healthcare question the accuracy and depth of the data CMS used in its calculations.
"At this point, NAHC believes that the proposal is based on an unsupportable calculation," the membership organization said in a statement released last week.
"The proposal places the 3.5 million Medicare beneficiaries receiving home care services at risk of losing access to care as nearly half of the providers of this vital service would be paid less than the cost of care," said Val J. Halamandaris, president of NAHC, in the statement. "It is neither fair nor right and needs to be changed."
In a statement, the Partnership said that CMS' analysis doesn't seem to factor in the cumulative effect of the proposed funding cuts or the regulatory cuts the industry has already sustained nor does it project the proposed cuts' impact in the years beyond 2014.
"On a proportional basis, Medicare home health services have suffered the deepest cuts of any provider sector in the Medicare program," said Chairman Billy Tauzin, senior counsel to the Partnership, in the statement. "When the impact of these cuts are taken into account, the prospect of even more reductions is alarming."
While the proposed cuts have garnered the most feedback from home health representatives, CMS' proposed rule also establishes home health quality reporting requirements and cost allocations (50 percent to Medicare and 50 percent to Medicaid) for home health agency surveys.
The two proposed quality reporting requirements are claims-based measures: rehospitalization during the first 30 days of home health and emergency department use without hospital readmssion during the first 30 days of home health.
The proposed changes would become effective Jan. 1, 2014. Comments are being accepted through Aug. 26.