Home Health & Hospice Week

CMS calls for 0.4% reduction to home health payments next year.

While the drastic HH PPS payment overhaul may be getting all the attention in the 2018 payment rule, home health agencies need to keep sight of next year’s payment ramifications as well.

In its 2018 Home Health Prospective Payment System proposed rule, the Centers for Medicare & Medicaid Services floats a 0.4 percent payment decrease for home health agencies. That translates to cutting $80 million from current spending levels, CMS notes in a fact sheet about the rule.

Sadly, the home care industry is “used to the cuts,” notes attorney Robert Markette Jr. with Hall Render in Indianapolis. Last year, CMS imposed a 0.7 percent cut on home health rates, equalling a $130 million reduction.

Once again, CMS recalibrates the case mix weights. The agency plans to do so annually, it notes in the rule published in the July 28 Federal Register.

That recalibration makes an “apples-toapples” comparison of rates hard, says the National Association for Home Care & Hospice in its rule analysis. But CMS notes that “the proposed decrease reflects the effects of a 1 percent home health payment update percentage ($190 million increase); a -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth for an impact of -0.9 percent ($170 million decrease); and the sunset of the rural add-on provision ($100 million decrease).”

CMS proposes a base rate of $3,038.43 for agencies that submit required quality data (2 percent less for those that don’t). That compares to last year’s $2,989.97 base rate, but the case mix changes mean there still will be an overall payment decrease on average.

Hopes are high that Congress will approve an extension of the rural add-on before 2018 rates take effect in January, industry sources note. But you can expect the 2 percent sequestration reduction to continue, NAHC predicts.

The home health update percentage is limited to 1 percent by the “doc fix” MACRA law.

Plus: The nearly 1 percent cut for case mix creep doesn’t affect Low Utilization Payment Adjustment or Non-Routine Medical Supply rates, notes consulting firm The Health Group in Morgantown, West Virginia (see charts, this page).

CMS opts to keep its outlier calculation the same, with a share-loss ratio of 0.80 and a Fixed Dollar Loss threshold of 0.55.

HHAs might have been hoping for better times ahead, with four years of rebasing cuts ending last year and the current round of cuts for case mix creep ending this year.

Instead, the PPS reconfiguration will strip nearly $1 billion from home health spending in just one year, if it’s adopted as proposed (see story, p. 302).