Home Health & Hospice

Home health proposed rule for 2016 now available in the Federal Register

Homecare Insider, July 13, 2015

CMS’ proposed home health rule for calendar year (CY) 2016—which was first released last Monday and officially published in the Federal Register on Friday—has caused a stir among home health providers. Under the proposal, the sector would take a $350 million overall payment hit and see the first inklings of a value-based purchasing (VBP) program that is poised to introduce escalating, performance-related payment implications throughout the setting.

The immediate payment cuts would stem in part from the start of the third year of a four-year “rebasing” of the standardized 60-day homecare episode rate that was promulgated by the Affordable Care Act in 2010. 
Beyond this expected reduction, the proposal also calls for an additional 1.72% cut to the standard episode rate in 2016 and again in 2017 to account for what CMS believes is a disparity in recent years between the true growth in the home health patient population’s condition severity and the expensive care for which providers have been billing Medicare—a conclusion that many in the setting refute.
“This is yet another example of CMS being heavy-handed and imposing unwarranted cuts beyond those required by Congress. They will severely affect Medicare patients and participating home health providers,” Val J. Halamandaris, president of the National Association for Home Care & Hospice, said in a statement. “The impact of the rate rebasing requirement in and of itself will force many agencies already teetering on the brink to close their doors. The additional cuts, along with them the veiled and inaccurate accusation that all home health agencies are abusing the Medicare program, may very well be the straw that breaks the camel’s back.”
Other proposed payment changes include a recalibration of case-mix weights for the second year in a row and a 2.3% overall increase in the market basket index.
The sum of the rate changes proposed for CY 2016 would result in a $350 million (or 1.8%) reduction in total HHA payments for the year, CMS estimates. 
Last week’s proposal also outlines the 2016 launch of a VBP program for home health providers that is intended to foster higher quality care delivery, wiser healthcare spending, and healthier people and communities. 

The home health VBP will draw on versions already in the works for providers in other settings across the healthcare continuum, such as hospitals. During the program’s trial run, CMS would apply a 5% annual payment reduction or increase to all home health agencies in nine randomly selected states based on their performance on designated measures. The payment adjustment would increase to 8% in later years. 
Another notable proposal CMS has posed for home health agencies in CY 2016 relates to the setting’s Quality Reporting Program, which was updated with a new metric, the Quality Assessments Only measure, earlier this month.
Last year’s IMPACT Act—which introduced frameworks for unifying assessment mechanisms across the spectrum of postacute care providers—calls for the collection of data in eight clinical domains. In keeping with these provisions, CMS is proposing the addition of a standardized, PAC-wide measure for CY 2016 that would fall under “the skin integrity and changes to skin integrity” umbrella. Although CMS plans to introduce measures related to other domains identified in the IMPACT Act through future rulemaking, the agency is seeking feedback through its CY 2016 proposal on four future, cross-setting measure constructs:
  • All-condition, risk-adjusted, potentially preventable hospital readmission rates
  • Resource use, including total estimated Medicare spending per beneficiary
  • Discharge to the community
  • Medication reconciliation

Comments on the proposed rule are due by September 4.

To read the proposed rule in its entirety, click here.
To read CMS’ initial announcement of the rule, click here