Home Health Medicare Payment Rates Announced for CY 2011
Abbreviations Key
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CBSA: core-based statistical area
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CMS: Centers for Medicare & Medicaid Services
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CY: calendar year
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HH PPS: home health prospective payment system
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PPACA: Patient Protection and Affordable Care Act (also referred to as the health reform act or Affordable Care Act [ACA])
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SNF: skilled nursing facility
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CMS issued a variety of payment changes to Medicare home health services for 2011. The proposal published in the Federal Register contains substantial cuts totaling a 4.75 percent decrease in Medicare revenues for most home health agencies.
While health reform focuses on the 1 percent productivity adjustment, the case mix updates, which will decrease HH PPS rates even more, were determined before the reform legislation was signed into law. These adjustments are in effect until the rebasing of home health rates occurs in 2014.
“In the wake of health care reform and its myriad of provisions, some home care providers may not have been aware of the proposed case mix adjustments set for 2011,” warns Gregg Hathorne, health care principal with LarsonAllen.
“The upcoming rate changes are more significant than most people expected. Determining the impact on budgeting as well as operational and strategic decision making is very important.”
According to CMS, these alterations will promote efficiency in payments, enhance program integrity, and implement the health reform provisions. A comment period is open until September 14, 2010.
A break down of the proposed rate changes for 2011
In addition to the reductions outlined in the PPACA, the previously determined case mix adjustment was planned to decrease home health Medicare payment rates another 2.71 percent. However, the rate reduction in the proposed rule was increased to 3.79 percent, representing total cuts of about 4.75 percent (along with changes to the wage index factors for several CBSAs).
The example rate change calculation within the federal notice shows the change is closer to a net average of about 4.94 percent, according to Hathorne. He says the adjustment percentage for those agencies that do not file the required quality data is closer to 6.8 percent. These numbers are based on the 2010 national standardized 60-day episode payment rate of $2,312.94. After applying the proposed rate changes, the 2011 national standardized 60-day episode payment rate is $2,198.58.
This is an estimated net decrease of $900 million compared to the amount home health agencies received in 2010, per CMS.
HH PPS rate adjustments for 2012
CMS is proposing to reduce HH PPS rates by 3.79 percent again in 2012, according to its news bulletin released on July 16, 2010. This reduction is in addition to the 1 percent productivity adjustment in the PPACA. Watch for the final rates, which will be published in the Federal Register in 2011.
Submit comments by September 14
The public comment and question period is open until 5 p.m. on September 14, 2010. You can submit your feedback in one of the following ways. All communications should refer to file code CMS–1510–P.
Electronically
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Follow the instructions under the ‘‘More Search Options’’ tab at http://www.regulations.gov.
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Standard Mail
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Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS–1510–P
P.O. Box 1850
Baltimore, MD 21244–1850
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Express or Overnight Mail
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Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS–1510–P
Mail Stop C4–26–05
7500 Security Boulevard
Baltimore, MD 21244–1850
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By Hand or Courier
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Centers for Medicare & Medicaid Services
Department of Health and Human Services
Room 445–G, Hubert H. Humphrey Building
200 Independence Avenue, SW
Washington, DC 20201
(Leave comments in the CMS drop slots located in the main lobby of the building.)
or
Centers for Medicare & Medicaid Services
Department of Health and Human Services
7500 Security Boulevard
Baltimore, MD 21244–1850
(For this address, call 410-786-7195 in advance to schedule your arrival.)
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SNF rates for 2011
CMS also published the 2011 SNF Medicare PPS rates. Read our web story, “Skilled Nursing Facility Medicare PPS Rates Announced for Fiscal Year-End 2011.”
How we can help
We can assist you in preparing calculations of the 2011 HH PPS rate changes for the areas you serve. In addition, we can help you understand how these payment adjustments will affect your agency. When the new rates are available, we will post them on the home care page of our website.
Gregg Hathorne, Health Care Principal
ghathorne@larsonallen.com or 407-802-1297
View our health care principals.