Nursing Homes Get Pay Boost, But Home Health Care
Agencies Take Cut in New CMS Proposals
Home health services will get $900 million less,
nursing homes $542 million more
July
19, 2010 - The Centers for Medicare & Medicaid Services (CMS) has announced pay changes for 2011 that
will represent a 4.75 percent decrease for home health agencies (HHAs),
but a 1.7 percent increase for nursing homes. CMS says the HHAs changes will promote efficiency in payments,
implement provisions of the Affordable Care Act (ACA), and enhance
program integrity. For nursing homes, it reflects changes in the prices
of goods and services used to furnish covered care.
Home Health Agencies Get $900 Million Less Than
2010
The change for HHAs in calendar year 2011 will be a
decrease of $900 million compared to payments they received in CY 2010.
It includes the combined effects of a market basket
update, a wage index update, reductions to the home health prospective
payment system (HH PPS) rates to account for increases in aggregate
case-mix that are unrelated to underlying changes in patients health
status, and other provisions mandated by the Affordable Care Act (ACA)
of 2010.
The ACA mandates that CMS apply a 1 percentage
point reduction to the CY 2011 home health market basket amount, which
equates to a proposed 1.4 percent update for HHAs in CY 2011. CMS also
proposes to further reduce HH PPS rates in CY 2011 to account for
additional growth in aggregate case-mix that is unrelated to changes in
patients health status.
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Based on updated data analysis, instead of the
planned 2.71 percent reduction for CY 2011, CMS proposes to reduce HH
PPS rates by 3.79 percent in CY 2011 and an additional 3.79 percent in
CY 2012.
The ACA also changes the existing home health
outlier policy through a 5 percent reduction to HH PPS rates, with total
outlier payments not to exceed 2.5 percent of the total payments
estimated for a given year. HHAs are also permanently subject to a 10
percent agency-level cap on outlier payments.
The new HH PPS provisions will help ensure more
accurate payments under Medicare and reflect prudent financial
stewardship of the Medicare Trust Fund, said Jonathan Blum, director of
the Center for Medicare and deputy administrator for CMS.
Other Changes for HHAs
The proposed rule also offers an approach to
implement an ACA provision, which mandates that, prior to certifying a
patients eligibility for the Medicare home health benefit, the
physician must document that the physician or a non-physician
practitioner has had a face-to-face encounter with the patient.
Patient care and access are ultimately what CMS is looking to protect,
while working aggressively to prevent fraud. The proposed rule
establishes timeframes for these encounters and documentation
requirements associated with the provision, Blum said.
In CY 2010, CMS finalized a policy, which requires
HHAs that change ownership within three years of initial enrollment to
obtain a new State survey or accreditation. CMS now proposes exceptions
to the 36-month provision for certain types of ownership transactions.
CMS also proposes other changes to the 36-month rule and provides
further clarification on its capitalization provisions.
In addition, CMS proposes to clarify policies
regarding the coverage of therapy services in the home health setting.
Further, CMS provides clarification in this proposed rule regarding the
quality reporting requirements for the CY 2012 HH PPS rate update, as it
relates to the Home Health Consumer Assessment of Healthcare Providers
and Systems (HHCAHPS) Survey.
Finally, the rule proposes an approach to implement
an ACA hospice provision, which requires a hospice physician or nurse
practitioner to see a patient prior to recertifying the patients
eligibility for hospice services.
Background on HHAs
To qualify for the Medicare home health benefit, a
Medicare beneficiary must be under the care of a physician, have an
intermittent need for skilled nursing care, or need physical or speech
therapy, or continue to need occupational therapy. The beneficiary must
be homebound and receive home health services from a Medicare approved
home health agency.
Medicare pays HHAs through a system of prospective
payments that pays at higher rates to care for those beneficiaries with
greater needs. Payment rates are based on relevant data from patient
assessments conducted by clinicians as currently required for all
Medicare-participating HHAs.
Home health payment rates are updated annually by
the home health market basket percentage increase. CMS uses the home
health market basket index, which measures (and tracks) inflation in the
prices of an appropriate mix of goods and services included in home
health services.
Section 5201(c) of the Deficit Reduction Act (DRA)
of 2005 provides for an adjustment to the home health market basket
percentage update for CY 2007 and subsequent years depending on HHAs
submission of quality data. HHAs that submit the required quality data
would receive payments based on the home health market basket update of
1.4 percent for CY 2011. If an HHA does not submit quality data, the
home health market basket percentage increase would be reduced by 2
percentage points to -0.6 percent for CY 2011.
CMS Says Skilled
Nursing Facilities to Get Nice Boost
The Centers for Medicare & Medicaid Services (CMS)
today announced nursing home payment rates for fiscal year 2011 will
increase 1.7 percent. This
The 1.7% pay raise will result in an estimated $542
million increase in Medicare payments to nursing homes across the
country during FY 2011.
CMS says it updates the payment rates annually,
using a market basket index reflecting changes in the prices of goods
and services used to furnish covered care in nursing homes.
In addition, CMS makes a forecast error adjustment
whenever the difference between the forecasted and actual change in the
market basket exceeds a 0.5 percentage point threshold for the most
recently available fiscal year for which there is final data. In
initially establishing the forecast error adjustment, CMS noted that it
would reflect both upward and downward adjustments, as appropriate.
For FY 2009 (the most recently available fiscal
year for which there is final data), the estimated increase in the
market basket index was 3.4 percentage points, while the actual increase
was 2.8 percentage points. This resulted in the actual increase being
0.6 percentage point lower than the estimated increase.
Accordingly, as the difference between the
estimated and actual amount of change exceeds the 0.5 percentage point
threshold, the payment rates for FY 2011 include a negative 0.6
percentage point forecast error adjustment. This adjustment, when
combined with the FY 2011 market basket increase factor of 2.3 percent,
yields a net update of positive 1.7 percent for FY 2011.
CMS is committed to ensuring that beneficiaries
in skilled nursing facilities continue to receive high quality care
while paying those facilities appropriately for that care, said
Jonathan Blum CMS deputy administrator and director of the Center for
Medicare. The payment rates for the coming year that we are announcing
today reflect that goal.
In the notice, CMS discusses a self-implementing
provision contained in section 10325 of the Patient Protection and
Affordable Care Act. This provision modifies the FY 2011 implementation
schedule for the Resource Utilization Groups, version 4 (RUG-IV)
case-mix classification system that CMS announced last year. CMS plans
to delay implementation of the provision until system modifications are
completed.
July
19, 2010 - The Centers for Medicare & Medicaid Services (CMS) has announced pay changes for 2011 that
will represent a 4.75 percent decrease for home health agencies (HHAs),
but a 1.7 percent increase for nursing homes. CMS says the HHAs changes will promote efficiency in payments,
implement provisions of the Affordable Care Act (ACA), and enhance
program integrity. For nursing homes, it reflects changes in the prices
of goods and services used to furnish covered care.