Home Health & Hospice Week

The feds' message:  Get ready for pay for performance.

If you're not monitoring your quality indicators, take note: The feds just took the first firm step to link your Medicare payments to the quality data you must submit.

The recently released proposed rule on home health Medicare payments spells out how the Centers for Medicare & Medicaid Services plans to implement a provision in the Deficit Reduction Act of 2005 that calls for a 2 percent cut in Medicare rates paid to HHAs that fail to report quality data (see Eli's HCW, Vol. XV, No. 13).

The good news: In 2007, home health agencies will have to submit only quality data generated by the Outcome and Assessment Instrument Set (OASIS) to avoid the 2 percent penalty, says the proposed rule. Specifically, CMS proposes that the quality data required will be the 10 risk-adjusted OASIS quality measures.

The ten measures are

1) Improvement in ambulation/locomotion;
2) Improvement in bathing;
3) Improvement in transferring;
4) Improvement in management of oral medications;
5) Improvement in pain interfering with activity;
6) Acute care hospitalization;
7) Emergent care;
8) Improvement in dyspnea;
9) Improvement in urinary incontinence; and
10) Discharge to community.

Silver lining: CMS could have heaped a new burden on agencies by calling for the reporting of data in addition to the OASIS quality measures, notes Judy Adams of LarsonAllen in Chapel Hill, NC.

Don't Miss These Key Points

HHAs should pay close attention to two other aspects of the proposed rule's quality data provision:

• The proposed rule sets the stage for a pay for performance payment system. By implementing the DRA's so-called "pay for reporting" requirement, CMS is putting into place a mechanism to link payment to quality data at its most basic level.

Background: HHAs are already required by law to collect quality data through OASIS, but there is currently no cross-link to payment, explains Rick Ingber of VantaHealth Consulting in Philadelphia.

Translated: CMS requires home health agencies to submit OASIS data, but noncompliant agencies can still receive their full Medicare payments. If the provision in the proposed rule becomes final, the feds will have a way to track compliance--and to implement the DRA-mandated dock in pay for agencies that don't submit OASIS quality data.

• If you didn't submit quality data this year or in past years, your revenues are likely to suffer. That's because the proposed rule suggests looking at data submitted for episodes beginning on or after July 1, 2005 and before July 1, 2006 for purposes of meeting the reporting requirement.

Bottom line: If you are on track in your efforts to submit OASIS-based quality data to the feds, you'll receive the full Medicare rate. But you are likely to soon face a pay cut if you are among the 0.5 percent of agencies that have not been submitting OASIS data. If home health rates are frozen, agencies that have not reported their quality data as required may wind up with a 2 percent reduction over last year.