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CMS announced today cuts to the home health payment system for 2012 as follows (link):

A proposed rule was displayed at the Federal Register today proposing a 3.35 percent decrease in Medicare payments to home health agencies (HHAs) for calendar year (CY) 2012. This would be an estimated net decrease of $640 million compared to HHA payments in CY 2011.  It would include the combined effects of market basket and wage index updates (a $310 million increase) and reductions to the home health prospective payment system (HH PPS) rates to account for increases in aggregate case-mix that are largely related to billing practices and not related to  changes in the health status of patients (a $950 million decrease). 

Provisions of the Affordable Care Act (ACA) mandate that CMS apply a one (1) percentage point reduction to the CY 2012 home health market basket amount; this would equate to a proposed 1.5 percent update for HHAs next year.  As part of the HH PPS rate update, CMS also proposes to reduce HH PPS rates by 5.06 percent in CY 2012 to account for the increase in the case-mix that is unrelated to changes in patient acuity.

The Medicare HHA proposed rule would also make structural changes to the HH PPS by removing two hypertension codes from the case-mix system, lowering payments for high therapy episodes and recalibrating the HH PPS case-mix weights to ensure that these changes result in the same amount of total aggregate payments.      

Notice they left the therapy and the hypertension changes for last.   If I were younger and less cynical, I would guess that many agencies will just find different codes for hypertension to use.  Nurses:  please recognize sarcasm when you read it.  Coding is NOT an exercise in creative writing.

The proposed changes also reference Medicaid.  The Olmstead decision is referenced which says that Medicaid cannot require patients to be confined to the home in order to receive services under the Medicaid benefit.  Many states have already changed this rule but a few, including Louisiana, have not.  Since Olmstead, I have known of no state that enforced it so this is largely a formality.

The relationship between the Federal Medicare Programs and state Medicaid programs is the center of much attention these days.  On Medicaid, the federal notice states:

For clarification and consistency among programs, our expectation regarding the person-centered philosophy is that the plan of care reflects what is important to the recipient and for the recipient.  (Emphasis mine.)  This is hardly a novel idea to nurses but it will be interesting to see how it is spelled out in federal guidelines.

The announcement posted today does ask for comments.  I am planning on reading more thoroughly and submitting my own comments.  This is our only chance to be heard by the folks making the rules.  And when final rules are published, you will note that many comments are taken into consideration.  So, do us all a favor and give the proposed changes some thought and send in your comments.

Occasionally when I post a link to a pdf document, some readers are unable to access it.  If that is the case for you, please email me and I will send a copy.

5 Comments Post a comment
  1. Mike #

    Really? …really…. CMS wants to reduce rates, what a surprise.

    Now I suppose they also want us to continue manage all this “data” they want us to collect, and make sure it’s processed and submitted correctly. And how do they expect us to do that? Should we go out and buy ourselves a box of mechanical pencils and pads of paper to keep track of all this “stuff”. Or maybe, we should all try to save some money and go back to using quill pens.

    Does anyone, including CMS, have any idea what the costs are associated to IT software, infrastructure and support? Apparently not.

    If Home care is going a driving force in reducing medical costs, which I believe it can, it needs the tools to be manage to volumes of data necessary to implement those changes and achieve the sought after desired results.


    July 6, 2011

    • I know it comes as a surprise to most people that CMS wants us to do more with less money. I personally am astounded.

      Your mechanical pencil suggestion is not far off from what I am already doing with some data. If we are to improve the numbers that count – and there is only one in my opinion – we need to have data that reflects our current practices. The only number that counts in my opinion is the hospitalization rate. If you get that down, chances are your other outcomes will improve. There is the additional incentive that in order to stay in business in the next several years, your hospitalization rate must be superior to your competitors. No ifs, ands or buts. But the numbers that are published do not reflect what is going on in a very dynamic agency. I don’t care what Nancy Nurse did or didn’t do two years ago when a patient was hospitalized because she now works in another agency. And the dude who who never had any patients hospitalized is in jail for Medicare Fraud.

      If we want adults to learn, and I like to think of myself as an adult, we need real time data that is easily understandable by people who do not have an extensive background in statistics and pivot tables. Nurses can understand that ten of their 200 patients went to the hospital last month. They may not understand that using the current calculations to adjust for risk, the percentage of all eligible patients who were hospitalized in the year prior to your employment is 32. Please see formulas for risk adjustment below:

      Patient is eligible for this calculation if the the weight in kgs of the patients cat (use largest cat if patient has multiple) divided by the distance the patient could run in high school (graduation dates 1950- 1951 only – if different consult manual, chapter 9712) multiplied the total number of cars the patient has driven in a lifetime equals 72.55. Further adjustments are made according to income, religion, hair color and past history of eating sushi.

      July 6, 2011
  2. gail #

    Nothing to add to those 2 comments except to say, RIGHT ON!!!

    July 11, 2011
  3. Darren Forrest #

    CMS!!! ,uhhhhh ,death sentence for old people! ,low payment for professional services ! ,not good! where are we going USA!!!!

    July 22, 2011
  4. Angie #

    CMS doesn’t understand that there are agencies out there providing proper care and loosing money doing so, barely making any profit. when on the other hand there is a lot of agencies doing nothing about the patient care not visiting, doing fraudulent billing that make 100% in profit. Instead on trying to close good agencies down that provide proper care, They should focus on closing those who are abusing the medicare system and they would increase patient care and save millions. What are we suppposed to do when 40% of our census is wounds and with the supplies alone and visits and oversight we lose per case, are we supposed to ignore the reality and go about our way because medicare wont pay for them? and know they will pay for the lady at mcdonald that was bribed to sign a paper with an unethical agency.I think next they can make mandatory euthanasia for people over 65. Hey they lived long enough right?

    August 16, 2011

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