Health Law Daily Home health payments further reduced, outlier payments no longer per-visit
Tuesday, November 1, 2016

Home health payments further reduced, outlier payments no longer per-visit

By Kayla R. Bryant, J.D.

The standardized 60-day episode payment amount for home health (HHS) care will be reduced by $80.95 for calendar year (CY) 2017, while the national per-visit payment amounts will be increased by 3.5 percent from the CY 2010 amount. CMS’ advance release of the CY 2017 HH prospective payment system (PPS) Final rule, which will be published in the Federal Register on November 3, 2016, implements the final year of the four-year phase-in of rebasing adjustments. The agency also made adjustments to quality reporting and the calculation of outlier episodes of care.

Rebasing and adjustments. Medicare pays for HH care based on a 60-day episode of care. The base unit of payment for 60-day episode is then adjusted by using a case-mix relative weight and a wage index value. Section 3131 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) requires that any HH rate adjustment is to be phased in over a period of four years in equal increments that cannot exceed over 3.5 percent per year of the CY rates. In addition to implementing the final adjustment as proposed (see CMS proposes home health PPS renovation with $180M cut for 2017, June 28, 2016), the rule recalibrated the HH PPS case-mix weights in order to accurately reflect current HH resource use by analyzing CY 2015 HH claims data. The market basket percentage has also been increased by 2.8 percent for to reflect economy-wide productivity changes. As required, a 3 percent add-on has been applied for HH services provided to beneficiaries in rural areas.

Outliers. Adjustments to the 60-day episode payment amount may be made for episodes of care that result in unusually high costs due to a change in the type or amount of medically necessary care. Outlier payments are made for episodes for which estimated costs (sum of the national wage-adjusted per-visit payment amounts) exceed a certain threshold. The ACA requires that the total amount of outlier payments not exceed 2.5 percent of estimated total HH PPS payments per year. In the Final rule, CMS changed the methodology used to estimate episode costs to account for the variation in visit length in outlier episodes and to avoid a financial disincentive for providers to treat medically complex beneficiaries. Instead of a cost-per-visit approach, the rates will be converted into per 15 minute unit rates.

Quality. CMS is finalizing the removal of four quality measures from the Home Health Value Based Payment (HHVBP) Model: Care Management: Types and Sources of Assistance; (2) Prior Functioning ADL/IADL; (3) Influenza Vaccine Data Collection Period; and (4) Reason Pneumococcal Vaccine Not Received. CMS believes that this will not cause a substantial change in the first annual payment adjustment in CY 2018. The rule includes a list of the finalized measure set.

CMS has decided to adopt some new HH Quality Reporting Program (QRP) measures involving drug regiment review, spending per beneficiary, discharge to community, preventable readmissions. As proposed, CMS is also removing six process measures from the HH QRP because they no longer have sufficient variability to distinguish between providers. These measures involve pain assessment and intervention, pressure ulcer assessment and prevention, and addressing heart failure symptoms.

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