On July 1, 2014, CMS released the proposed update to the Home Health Prospective Payment System (HH PPS) rates, which would apply to calendar year 2015 Medicare payments. As required by Section 3131(a) of the Affordable Care Act, the Proposed Rule implements the second year of the four-year phase-in of the rebasing adjustments. CMS estimates that the Proposed Rule will decrease overall payments to home health agencies (HHAs) by approximately 0.3 percent in calendar year 2015, which translates into a $58 million overall impact to HHAs. The changes would reduce the national, standardized 60-day episode payment amount by $80.95. Comments on the Proposed Rule must be received by 5:00 p.m. on Tuesday, September 2, 2014.  

CMS also proposes updates to the home health wage index and a recalibration of the HH PPS case-mix weights for calendar year 2015. The home health wage index would be updated as outlined in a February 28, 2013 OMB bulletin, available here.

Other notable provisions set forth in the Proposed Rule include:

• Simplifying the face-to-face physician encounter rule based on industry efforts to eliminate the redundancies in the physician documentation of need.
  • If adopted, the Proposed Rule would eliminate the narrative requirement in 42 C.F.R. § 424.22(a)(1)(v), but still require physician certification, as outlined in the Proposed Rule.
  
  
  • CMS is also proposing to clarify that under sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Social Security Act, the face-to-face encounter requirement is applicable for certification (not recertifications), rather than initial episodes.
• Introducing possible new, restrictive coverage standards on insulin injection assistance. Although CMS did not propose any policy changes at this time, it solicits public comment on developing a comprehensive list of diagnosis codes that indicate when a patient may not be able to self-inject, and included a comprehensive discussion of the use of insulin pens.
• Unveiling a likely model for Value Based Purchasing for home health "with greater upside benefit and downside risk" to motivate HHAs to improve quality. If implemented, the model would begin in calendar year 2016.
• Limiting the discretion of judges to take downward deviations in Civil Money Penalty sanctions for Medicare Conditions of Participation violations and prohibiting the imposition of zero penalties where there have been findings of deficiencies.
• Requiring a qualified physical therapist to functionally reassess patients once every 14 calendar days (instead of on a visit-based schedule).
• Announcing that ICD-10 will be used on HHA claims starting in October 2015.

This article highlights some of the key provisions of the HH PPS Proposed Rule. The full text of the HH PPS Proposed Rule is available here. The CMS Fact Sheet addressing proposed 2015 HHA payment changes is available here.

Reporter, Kristin Roshelli, Houston, +1 713 751 3263, kroshelli@kslaw.com.