On October 31, 2018, the Centers for Medicare and Medicaid Services (“CMS”) issued a final rule (CMS-1689-FC) (the “Final Rule”) that makes significant changes to the Home Health Prospective Payments System (“PPS”).  These changes include updates to the rates and wage index for 2019.  Specifically, the Final Rule results in a 2.2 percent increase in payments to home health agencies in 2019.  CMS estimates that this increase will result in $420 million in increased payments in 2019. 

Further, the Final Rule finalizes the methodology used to determine the rural add-on payment for 2019 through 2022. The rural add-on payment is a modifier to reimbursements for services provided in rural and underserved areas continues to be crucial to maintaining access to care. Unlike previous rural add-ons, which were applied to all rural areas uniformly, the extension provides varying add-on amounts depending on the rural county classification by classifying each rural county into one of three categories:  (1) high utilization; (2) low population density; and (3) all other.

Finally, through the Final Rule, CMS states that its aim is to improve the home health care delivery system, and reduce the regulatory burden placed on certifying physicians.  In furtherance of this goal, the Final Rule eliminates the requirement that the certifying physician estimate how much longer skilled services are required when she is recertifying the need for continued home health care.  CMS anticipates that this change could reduce claims denials that solely result from an estimation missing from the recertification statement. CMS estimates that this would result in annualized cost savings to certifying physicians of $14.2 million beginning in 2019.