CMS has issued the final rule to update the Home Health Prospective Payment System (HHPPS) for 2012, which includes an estimated decrease of 2.31% (or $431 million). The net effect for providers is a 1.4% payment update, the wage index update and the case-mix coding adjustment. The rule also includes some revisions to the face-to-face requirement and the therapy assessment rule.
Provider Reimbursement Changes
This final rule reflects the ongoing efforts of CMS to support Medicare beneficiary access to home health services while continuing to improve payment accuracy. Overall there weren’t any big surprises, yet CMS’ decision to phase-in the case mix creep adjustments over 2012 and 2013 is a positive change that will spread out the cuts over two years.
The final 2012 base episode payment rate is $2,138.52, an increase over the proposed $2,112.37 but below the $2,192.07 episodic rate for 2011. This is a result of the 5.06% case mix creep adjustment cut being spread over two years: a 3.79% reduction in 2012 and 1.32% reduction in 2013. The 3.79% for 2012 is in addition to a 1.4% market basket index inflation update, which includes the mandatory 1% reduction to the MBI as required under the Patient Protection and Affordable Care Act.
CMS also adjusted the per-visit rates for the low utilization payment adjustment (LUPA). Providers will see a 2% reduction if there was no quality data submitted, which includes HH-CAHPS and OASIS data. The rates are also subject to the 3% rural add-on.
Face-to-Face Encounter Changes
CMS made changes to the face-to-face encounter requirement, which has proven to be a burden on providers throughout the nation. The final rule adds flexibility to allow physicians who cared for the patient in an acute or post-acute facility to inform the certifying physician of encounters with the patient in order to satisfy the requirement.
In addition, CMS attempted to clarify how a provider can qualify a patient who has missed the 30-day window, allowing a flexible application of the OASIS start of care assessment.
The final rule removed two ICD-9-CM codes related to hypertension from the HHPPS case-mix model’s hypertension group: 401.1, Benign Essential Hypertension, and 401.9, Unspecified Essential Hypertension.
According to the final rule, CMS saw an increase in reporting of these codes after the release of the 2008 final rule which awarded points for these diagnosis codes. CMS noted that the codes were a key driver for high 2008 growth in nominal case-mix but not necessarily higher costs. As such, CMS opted to to remove codes 401.1 and 401.9 to more accurately align payment with resource use.
The 2012 final rule will effectively lower payments for high therapy episodes. Therapy episodes with 14 to 15 visits will see a 2.5% reduction while episodes with more than 20 therapy visits will be reduced 5%.
In last year’s regulations, CMS described a 25% increase since 2008 in therapy episodes with more than 14 visits, and a 50% increase in therapy episodes with more than 20 visits between 2007 and 2009. The Medicare Payment Advisory Commission, also referred to as MedPAC, noted in its 2010 Report to Congress that “therapy episodes appear to be overpaid relative to others and that the amount of therapy changed significantly in response to the 2008 revisions to the payment system.”
In last year’s report, MedPAC continued to focus on increased therapy utilization with more than 14 visits: “The volume data for 2009 indicate that the shifts that occurred in 2008 are continuing … Episodes with 14 or more therapy visits increased by more than 20 percent, and those with 20 or more therapy visits increased by 30 percent.”
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