Home Health & Hospice Week

Another payment update, another significant case mix revision.

Get ready for your bottom line to look significantly different, depending on your patient mix.

Reminder: In its 2015 prospective payment system proposed rule, the Centers for Medicare & Medicaid Services proposes yet another significant revision to the PPS case mix methodology (see Eli’s HCW, Vol. XXIII, No. 25). CMS wants to drop about 300 case mix codes from the calculation, including about 200 diabetes codes. And the system assigns more points to high-therapy cases, multiple comments on the rule point out.

CMS doesn’t give many details about the changes. “The CY 2015 four-equation model resulted in 121 point-giving variables being used in the model (as compared to the 164 variables for the 2012 recalibration),” the agency notes in a brief over-view of the adjustments in the rule published in the July 7 Federal Register. “There were 19 variables that were added to the model and 62 variables that were dropped … due to the lack of additional re-sources associated with the variable. The points for 56 variables increased in the CY 2015 four-equation model and the points for 28 variables decreased.”

Where Are The Details?

CMS’s lack of disclosed information is one of the issues multiple commenters criticized in their letters. “The case mix adjuster weight recalibrations cannot be sufficiently evaluated as CMS has not provided full and adequate technical information and data on the nature and basis for the changes in case mix adjuster weights,” says the National Association for Home Care & Hospice in its comments. “Unlike previous recalibrations, CMS has not provided a technical report so that stakeholders such as NAHC have the opportunity to fully review the proposed action.”

“It is especially concerning that CMS ex-plains its proposed increases and reductions in the weight given to certain therapy utilization variables, but does not provide the evidentiary basis for these modifications,” NAHC continues. “The NPRM references that ‘(t)hese adjustments were made to discourage inappropriate use of therapy while addressing concerns that non-therapy services are undervalued.’ As such, it is confusing how the case mix weights for therapy related episodes disproportionately increase over those with limited or no therapy visits.”

For example: Payment Group 40111, All Episodes, 20+ Therapy Visits, C1F1S1 would have a base episode payment rate of $5,324.52 in contrast to the 2014 rate of $4,804.71 — a difference of $519.81, the trade group points out. “With the rate cut related to rebasing and the case mix weight reduction of 5 percent in the weights associated with 20+ therapy visits, it is wholly confusing how the other variables in the recalibration could lead to a payment rate increase of nearly 10 percent,” NAHC tells CMS.

In contrast: “While the NPRM indicates that the weights associated with 0 to 5 therapy visits were increased by 3.75 percent, Payment Group 10121, 1st and 2nd Episodes, 0 to 5 Therapy Visits, C1F2S1 experiences a rate reduction from $2,189.67 to $2133.22,” NAHC adds.

Bottom line: “These inconsistencies in rate impact exist throughout the recalibration,” NAHC maintains. “It is a result that is counterintuitive, but also in direct conflict with the NPRM references to modification in therapy-oriented episode weights.”

Paying More For Therapy A Bad Idea

“One of CMS’s stated objectives is to disincentivize the overprovision of therapy,” coding ex-pert Lisa Selman-Holman says in her comment letter. “However points have been added to equations 2 and 4. Points have been subtracted from diagnoses and conditions that should be receiving extra case mix points in early episodes and those that may not be able to tolerate increased therapy, for example, those with IV therapy (M1030), heart failure (row 11), exacerbations of COPD (row 23 and 24) and those with trauma wounds and postoperative complications (row 25),” says Selman-Holman of Sel-man-Holman & Associates and CoDR — Coding Done Right in Denton, Texas.

“CMS does not publish the data or the analysis used to support its conclusions” when it comes to the case mix change, say Paul Giles and Clara Ev-ans of Dignity Health based in Rancho Cordova, Calif. “Based on its analysis, CMS increases therapy case-mix weights while reducing others. This change creates incentive for providing more therapy,” they note in Dignity’s comment letter.

“There does … appear to be a trend toward assigning points when high therapy is present, which seems odd, as that seems to ‘reward’ agencies for once again allowing therapy to provide an excess of visits in an attempt to boost reimbursement,” points out consultant Arlynn Hansell of Ohio in her comment letter.

“With the criticisms levied on the home health industry over the years related to therapy utilization, we are concerned that the increased payment rates will be viewed again as incenting the overutilization of therapy visits,” NAHC cautions. “We have long supported a reform of the HHPPS case mix adjuster model to eliminate the Service Utilization domain. We hope that CMS’ efforts in that regard are progressing smoothly.”

Trade-Off: The cost of the therapy-related case mix increases is lowered reimbursement for certain diagnosis codes. “CMS has effectively shut down any case mix for various conditions and deleted approximately 300 case mix codes,” Selman-Holman says in her letter.

“There are many diagnosis codes that are losing case mix points, and there does not appear to be any rhyme or reason to it,” Hansell says. “Some of the conditions that were slashed of valuable points are very common in home health, requiring a good deal of resources (heart failure, diabetes, etc.).”

CMS needs to stop monkeying around with the case mix formula, one home health agency commenter says. “Case mix weight and the resultant HHRG calculations could be a meaningful comparative tool over time for the home health industry,” says Athens Regional Home Health of Georgia in its comment letter. “However, it is rendered virtually useless by including therapy utilization and by the constant annual revision to the various OASIS items or diagnoses included/excluded.”

Hidden agenda: “It makes sense to update case mix points if/when statistical analysis warrants,” Athens says. “However it seems most adjustments in recent years have been done to further reduce payments to home health agencies.”

Plus: The added points in the 2015 revision “are all an illusion,” Selman-Holman insists in her letter. For example, CMS has proposed to add points in equations 2 and 4 to the clinical severity domain, she notes. “However, it only takes 8 points to obtain a C3 in equation 2 and 13 in equation 4. Providing additional points (12) for a stasis ulcer with early partial granulation gets to a C3.”

Conclusion: “CMS should reconsider this revision as there is no logical rationale for the changes,” Selman-Holman tells the feds.

Watch for CMS to issue the PPS final rule any day to find out whether the agency heeded commenters’ requests, remarks, and suggestions. 

Note: To peruse the 354 comments on the proposed rule, go to www.regulations.gov, search for “CMS-2014-0090,” click on the rule entry, scroll down to the “Comments” section, and click on “View All.”