The CMS final rule on Medicares home health prospective payment system was described by the agency as a 3% increase for 2008. But home healthcare providers argue that policy changes also in the rule mean theyre actually in line for devastating reimbursement cuts over the next four years.
Home health reimbursements would fall by nearly 12% over four years, based on changes in how the CMS handles assumptions for patient-care complications in its case mix calculations, according to the National Association for Home Care and Hospice.
The cuts planned over the next four years will chop home health payment rates by $7 billion, according to Val Halamandaris, president of the association. If these cuts are put into place, over 50% of all home health agencies will be paid less than it costs to deliver care. No healthcare provider can sustain that impact, he said.
The CMS made a number of changes to its policy on case mix, which represents the variations in documented conditions of the patient population served by home health agencies.
In analyzing the latest available home health claims data from 2005, the CMS found that there had been a nearly 13% increase in home health case mix since 2000. Digging further, the agency determined that most of the increase was because of changes in coding practices and documentation rather than treatment of more resource-intensive patients.
Case mix is increasing for two reasons: Patients are getting sicker and more complicated to treat, and that theres been improvement in accuracy and documentation of coding for home health cases, said Larry Goldberg, a healthcare consultant in Oakton, Va.
To account for these changes, the final rule reduced the national standardized 60-day episode payment rate for home health agencies over a period of four years. A reduction of 2.75% per year will take place from 2008 to 2010. In addition, there will be a 2.71% reduction in 2011. The rule goes into effect in January 2008. The agency estimates it will pay home health agencies $20 million more in 2008 under the new system.
But the home-care association argues that the shift of patients from higher-cost institutional care in hospitals and nursing homes has increased the intensity of care for these patients at home. The predictable result from this cut will be that healthcare spending will increase exponentially as patients who lose access to home care seek out healthcare services in much more expensive institutions. It makes no sense, Halamandaris said.
Incentives for quality reporting also are part of the rule. Home health agencies collect and report Outcome and Assessment Information Set data, and the CMS will continue to lower the payments to agencies that do not report the data. The rule added two new National Quality Forum-endorsed measures involving wound care to the 10 measures home health agencies must report to receive the full update. Agencies that dont submit quality data on the 12 measures will receive only a 1% increase in 2008.