4011: December 1, 2009
Medicare Calendar Year 2010 Home Health Prospective Payment System Final Rule
The Centers for Medicare and Medicaid Services (CMS) released the Home Health Prospective Payment System (PPS) final rule for 2010. All payment changes are effective January 1, 2010.
We project a 1.6 percent increase in total payments for Washington hospitals. It is important, however, that you review the impact on your facility as individual hospital impacts range from a 6.0 percent increase to a decrease of 1.8 percent. Although CMS is providing a full marketbasket update to home health rates for 2010, the national standardized 60-day episode rate will be reduced for changes due to documentation and coding and further reduced for other factors, resulting in a net reduction in Medicare payments for 2010.
Other key components of the rule include:
- National Standardized 60-Day Episode Rate: CMS increased the episode rate from $2,271.92 in 2009 to $2,312.94 in 2010. This 1.8 percent increase reflects a full marketbasket update minus the reduction for coding improvement plus a 2.5 percent increase to reflect the transfer of funds from the outlier carve-out (as explained below). Home health agencies that do not report the required quality data will receive a 2.0 percentage point reduction to the national standardized 60-day episode rate.
- Outlier Payments: CMS reduced the outlier pool percent of total home health payments from 5 percent in 2009 to 2.5 percent in 2010, returning 2.5 percent of the outlier carve-out to the national standardized 60-day episode rate. In addition, CMS will cap outlier payments at 10 percent per home health agency for 2010.
- Quality Measures: CMS is not adopting any changes to the existing 12 home health care quality measures for CY 2010.
- Outcome and Assessment Information Set (OASIS) data: CMS is adopting a new version (OASIS-C) to collect data on episodes of care beginning on or after January 1, 2010. CMS will introduce 13 new National Quality Forum (NQF) endorsed process of care measures that will be collected beginning January 1, 2010 and reported on the Home Health Compare no earlier than October 2010.
- Low Utilization Payment Adjustment (LUPA): CMS is increasing the LUPA add-on to $94.72 in CY 2010. The LUPA add-on amounts are not subject to the coding reduction as they are per-visit rates.
- Non-routine medical supplies (NRS): CMS increased the NRS conversion factor to $53.34 in 2010. NRS payments are reduced by the 2.75 percent adjustment for changes in coding and documentation.
Linked below are several documents from HIP to help you analyze the proposed rule’s impact.
- An Excel workbook showing the impact and payment for the state and the nation.
- A summary of the proposed rule showing the actual language.
- A report description which provides the assumptions and rules used in the analysis.
If you need assistance in using these documents or have other questions, please contact me at jimc@wsha.org or (206) 216-2551.