Home Health & Hospice Week

The biggest home care cuts in the recently enacted health care reform package are years away, but other reductions and burdensome requirements will hit next year.

The good news: The 3 percent rural add-on takes effect this month, noted Lori Anderson with the Centers for Medicare & Medicaid Services at the National Association for Home Care & Hospice's March on Washington annual meeting.

"This is good news for those poviders in rural areas," Anderson told attendees of the conference in Washington, D.C.

CMS contemplated holding home health agency claims until the claims system update for the rural add-on was complete, but the agency ultimately decided against it. Instead, contractors will reprocess claims when the new prospective payment system pricer is released, Anderson said at the April 12 session.

And while the HHA rate reductions based on rebasing home health payments and implementing a productivity adjustment could have a big impact on agency payments, at least they won't take place until 2014 and 2015, respectively. Those cuts are predicted to cut tens of millions of dollars from HHA Medicare payments.

There are some cuts in the Patient Protection and Affordable Care Act (PPACA) that will hit next year, however, and one of them might surprise you. First, the legislation calls for a reduction in HHAs' market basket inflation update. A recent estimate for 2011's market basket amount is 2.3 percent, Anderson noted. PPACA reduces that amount by 1 percent.

The legislation also makes changes to outlier calculations, Anderson told the crowd. Last year, CMS reduced the outlier pool to 2.5 percent of estimated HHA outlays, down from 5 percent previously. The agency then added the other 2.5 percent back into HHA base episode payments under PPS.

That outlier reimbursement change is the reason that agencies in many areas of the country saw an increase in PPS payments even though CMS also applied a 2.75 percent reduction for upcoding, Anderson explained.

However, PPACA requires CMS in 2011 to put the outlier pool back at 5 percent, but still aim to pay out only 2.5 percent in outlier payments, Anderson detailed.

The legislation also makes the 10 percent outlier cap permanent, Anderson pointed out. For 2010, CMS planned only a one-year cap to see whether it had unintended negative consequences.

PPACA also includes more long-range plans. The legislation calls for CMS to generate a value-based purchasing plan (i.e., pay for performance -- P4P).

And the health care reform package requires CMS to conduct a pilot project to test bundling of payments for post-acute providers. There is a lot of congressional interest in establishing site-neutral payments for post-acute care, Anderson observed.

Planning for this pilot is in the "very early stages," Anderson says. But it is supposed to start inJanuary 2013 and would likely use the Continuity Assessment Record and Evaluation (CARE) assessment tool.

PPACA calls for the pilot bundling period to include three days prior to hospitalization, the hospital stay, and 30 days following discharge, Anderson explained. But CMS has a lot of discretion to tweak that timeframe.

Worries: Home care providers have voiced concerns over post-acute payment bundling models where hospitals would control the disbursement of Medicare payments. HHAs fear they wouldn't receive fair reimbursement from hospitals under such arrangements.

The legislation also calls for studies on the impact of the rebasing of HHA payment rates and how PPS accounts for low-income patients in underserved areas.

Watch for: With all of the changes afoot, CMS will be issuing a proposed rule instead of just a rate update notice for the 2011 PPS changes,Anderson revealed. That will give HHAs an official channel to comment on the changes.

"Many of these provisions have things that [CMS] has to define," Anderson said. Watch for the proposed rule for those forthcoming details, probably some time this summer.

Another provision that isn't home care-specific but will affect home care providers is formation of the Independent Payment Advisory Board (IPAB), called "Super MedPAC" by some. IPAB's recommendations will be compulsory rather than advisory. Other provisions regarding Medicaid Recovery Audit Contractors and long-term care insurance could also have a big effect in home care.

Stay tuned: "PPACAkeeps spitting out new programs and regulations that were not previously well known or known at all," notes consultant Tom Boyd with Rohnert Park, Calif.-based Boyd & Nicholas, who attended the NAHC meeting. Providers should stay alert to PPACA-related requirements coming down the pike.