The Centers for Medicare and Medicaid Services (CMS)  proposed a new rule last week that will result in home health agencies (HHAs) netting $58 million less in FY 2015 reimbursements. The proposed rule changes the payment rates and wage index of Medicare’s Home Health Prospective Payment System (HH PPS) by reducing payments to home health agencies by approximately 0.30 percent in 2015. The rule also eliminates the requirement that doctors include a detailed narrative in the “face-to-face encounter” document certifying a patient’s eligibility for home health services. Other changes include requiring functional therapy reassessments to occur every 14 days, modifying the qualification standards for speech-language pathologists, and soliciting comments on a value-based purchasing model for HHAs. The proposed rule changes are a part of a broader effort under the Affordable Care Act to rein in home health costs by 2017 through tightened eligibility requirements and increased efficiency. CMS will be accepting comments on the proposed rule until September 2, 2014.

The proposed rule appears to be a mixed bag for the home health industry. The National Association for Homecare & Hospice previously filed a lawsuit in opposition to the narrative requirement and was “delighted” by the CMS rule change, according to its press release. The general reaction to moving closer to a quality-based reimbursement system was also positive. However, the industry surely is not thrilled that the net effect of the rebasing adjustments is a reduction in reimbursements.

We’ll continue to monitor industry reaction to the proposed rule as we move toward the deadline for providing comments.