CMS Releases New HHPPS Rate Proposal

CMS Releases New HHPPS Rate Proposal

(from the CMS and other sources) On Friday, July 6, the Centers for Medicare and Medicaid (CMS) issued proposed rules regarding the Medicare program: Home Health Prospective Payment System Rate Update for Calendar Year 2013, Hospice Quality Reporting Requirements, and Survey and Enforcement Requirements for Home Health Agencies.

The proposal includes the 2013 Market Basket Index (MBI) update, the required 1 point reduction under the Affordable Care Act, and the previously set -1.32% 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 Conditions of Participation (CoP) noncompliance. CMS estimates that the net impact on home health agencies (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.

Texas Association for Home Care & Hospice, NAHC and other state associations will be doing a detailed analysis of the proposal over the coming days. Axxess will forward additional interpretation in the days to come.

Here are some of the most notable aspects of the new rate rule:

PAYMENT RATES
Proposed 2013 payment base episode rates are set at $2,141.95 from the current $2,138.52, an increase of $3.43. While this is a small amount, CMS spared the industry additional case mix creep adjustments which were seriously considered. The base rates are adjusted upwards by 3% for services to rural patients. Rates are adjusted downwards by 2% for providers that failed to submit compliant quality data.

The rate changes are due to a proposed 2.5 percent market basket index (MBI) 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 adjustment from the 2012 rate rule. CMS originally proposed a -5.06% adjustment in 2012, but ultimately decided to phase it in over two years with -1.32% remaining for 2013. The negative 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 since 2010. This is a welcome action from CMS as providers have experienced significantly increased costs with the face-to-face encounter and therapy assessment rules.

The LUPA per visit rates are proposed as follows:

There are further changes to the LUPA add-on and the medical supply rates that will be set forth in the proposed rule. The outlier eligibility standards remain unchanged from 2012.

The rate changes will impact individual providers unevenly. That is because the proposed rate changes are accompanied by changes in the Core-Based Statistical Areas (CBSAs) wage indices. A provider-specific analysis using the provider’s particular wage index is the only reliable way to assess impact. Some providers will experience a net rate reduction when considering the wage index while others will see an increase greater than the base rate changes display.

HHAs also need to keep in mind that it is highly likely that payments will be subjected to a 2% sequestration in 2013 as a result of the deficit reduction law. The sequestration is not a rate change itself, but rather a withholding of 2% from the claims payment. The net result is still a reduction for HHAs.

The proposed rule on rates is in line with what had been expected with the exception of an additional case mix creep adjustment that CMS considered but did not implement. Significant changes are expected for 2014 when CMS rebases the HHPPS rates as required under the Affordable Care Act (ACA). Currently, CMS is engaged in a series of test audits looking at 2010 Cost Report data as part of its effort to design a rebasing method. NAHC has recommended that CMS rebase rate with consideration of the most recently reported cost data combined with cost trend factors that reflect new costs incurred or expected to be incurred in 2014 (face-to-face and the ACA employer mandate/penalty), cost that do not show up on the cost report (telehealth, taxes, and marketing), and needs for capital.

FACE-TO-FACE RULE
With respect to the face-to-face rule, CMS proposes some adjustments that may help. First, CMS will allow non-physician practitioner in an inpatient setting to perform the encounter and inform the certifying physician. Also, CMS proposes to make the document titling non-prescriptive to prevent inappropriate claim denials based solely on the document label.

THERAPY ASSESSMENT RULE
The Therapy assessment rule is also slated for improvement. CMS proposes to revise the regulations to state that if a qualified therapist missed a reassessment visit, therapy coverage would resume with the visit during which the qualified therapist completed the late reassessment, not the visit after the therapist completed late reassessment.

CMS also proposes to revise the regulation to state that in cases where multiple therapy disciplines are involved, if the required reassessment visit was missed for any one of the therapy disciplines for which therapy services were being provided, therapy coverage would cease only for that particular therapy discipline. Therefore, as long as the required therapy reassessments were completed timely for the remaining therapy disciplines, therapy services would continue to be covered for those therapy disciplines.

Finally, with respect to the therapy assessments timing, CMS propose to revise the regulations to clarify that in cases where the patient is receiving more than one type of therapy, qualified therapists could complete their reassessment visits during the 11th, 12th, or 13th visit for the required 13th visit reassessment and the 17th, 18th, or 19th visit for the required 19th visit reassessment.

ALTERNATIVE SANCTIONS
The alternative sanction rule is one of the most significant changes proposed by CMS in years. There has been authority for intermediate sanctions short of termination since 1988, but CMS never implemented the law. Recently, CMS has been under fire by the Office of Inspector General for its inaction. In this proposed rule, CMS sets forth standards for alternative sanctions that include monetary penalties, payment suspension, and temporary management.

Axxess will monitor the TAHC&H, HCAF and others in the coming days and provide more information. The proposed rules can be found at:

https://s3.amazonaws.com/public-inspection.federalregister.gov/2012-16836.pdf.