Home Health & Hospice

CMS Releases 2014 Home Health Prospective Payment System Proposed Rule

Homecare Insider, July 1, 2013

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule Thursday, June 27, which will make significant changes to Medicare home health payments for 2014. This annual proposed rule is payment heavy and focuses on major rebasing of episode rates, per-visit amounts, non-routine medical supplies (NRS) conversion factor (NRS), and more. The rule focuses less on regulatory changes, but does feature proposed changes regarding quality reporting and ICD-10 coding changes.

The proposed rule features a 1.5% payment reduction. According to a CMS press release, the proposed decrease reflects the effects of the 2.4% home health payment update percentage, the rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit payment rates, and the non-routine medical supplies (NRS) conversion factor , and the effects of ICD-9-CM coding adjustments.

In addition, the rule proposes routine updates to the HH PPS payment rates such as updating the payment rates by the HH PPS payment update percentage and updating the home health wage index for 2014. 

According to the CMS website, along with the payment changes, the proposed rule also proposes to:

  • Rebase the 60-day Episode Rate
  • Rebase Per-Visit Amounts
  • Rebasing and Updating Other Components of the HH PPS
    • NRS
    • LUPA add-on payment

 HH PPS Grouper Refinements and ICD-10-CM Conversion

The proposed rule would remove two categories of ICD-9-CM codes from the HH PPS Grouper:

  1. Diagnosis codes that are “too acute,” meaning the condition could not be appropriately cared for in a home health setting
  2. Diagnosis codes for conditions that would not impact the home health plan of care, or would not result in additional resources when providing home health services to the beneficiary

ICD-10-CM codes will be included in the HH PPS Grouper to be used starting on October 1, 2014. The new ICD-10-CM codes will replace the existing ICD-9-CM codes used to report medical diagnoses and inpatient procedures.

Cost Allocations for Home Health Agency Surveys

This proposed rule would ensure that Medicaid responsibilities for home health surveys are explicitly recognized in the State Medicaid Plan. CMS seeks comment on a methodology for calculating State Medicaid programs’ fair share of Home Health Agency surveys costs. For that portion of costs attributable to Medicare and Medicaid, CMS would assign 50% to Medicare and 50% to Medicaid, the same methodology that is used to allocate costs for dually-certified nursing homes.

The proposed rule also makes changes to the quality reporting program. Read our Weekly Q&A to learn more.

This proposed rule will be published in the Federal Register on July 3. CMS will accept comments on the proposed rule until August 26.

Read the full proposed rule here.

Beacon Health will continue to provide in-depth analysis of the proposed rule over the coming weeks.

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