Publication of Home Health Prospective Payment System Final Rule


On December 2, 2013, the Federal Register published CMS’s final rule regarding the home health prospective payment system (PPS) and home health quality reporting requirements. The final rule reduces payments under the PPS by 1.05 percent, resulting in an estimated $200 million in decreased payments to home health agencies in CY 2014. The regulations are effective on January 1, 2014.  Highlights are noted below.

Home Health PPS:

  • The final rule removed 170 diagnosis codes from diagnosis groups within the Home Health PPS Grouper. In addition, on October 1, 2014, CMS will begin the use of ICD-10-CM codes within the Home Health PPS Grouper.
  • For CY 2014, the case-mix weights will be adjusted to reduce the average case-mix weight for CY 2012 from 1.3464 to 1.0000.
  • As required by the Affordable Care Act (ACA), the standardized 60-day episode payment amount, the national per-visit rates, and the Nonroutine Medical Supply conversion factor will be rebased over the next 4 years.
  • CMS will update the home health wage index and increase payment rates for CY 2014 by 2.3 percent. This increase will be offset by the 2.73 percent decrease due to rebasing adjustments and a .62 percent decrease due to the PPS Grouper refinements, for an overall reduction of 1.05 percent.

Home Health Quality Reporting and Surveys

  • CMS will continue to work on the home health study, required by the ACA, which will assess the costs associated with providing access to care to patients with high severity of illness, low income patients, and/or patients in medically underserved areas.
  • Outcome & Assessment Information Set (OASIS) data, claims data and patient experience of care data will be used to meet the requirement that home health agencies submit data to measure home health care quality for the annual payment update (APU) for 2014.
  • CMS will implement two claims based measures of quality for home health patients who were recently hospitalized.
  • The number of home health quality measures currently reported to home health agencies will be reduced.
  • State Medicaid programs must provide that, in certifying home health agencies, the designated survey agency must carry out certain other responsibilities that already apply to surveys of nursing facilities and Intermediate Care Facilities for Individuals with Intellectual Disabilities.  States will share 50/50 in the cost of home health agency surveys although the cost will be allowed as an administrative cost.

The Final Rule is available here.

Reporter, Lauren Slive, Atlanta, +1 404 572 3592,

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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