Home Health & Hospice Week

There's no end in sight for case mix creep cuts to HHA reimbursement. Will an extra $1.60 per episode be enough to cover all your increased costs in 2009? If not, you're out of luck, because that's what Medicare intends to pay you next year. The home health agency base episode payment rate will increase to $2,271.92, the Centers for Medicare & Medicaid Services says in the PPS rate update notice in the Nov. 3 Federal Register. That's up from $2,270.32 currently. The reason for the low increase is the multi-year case mix creep adjustment, CMS explains in the notice. CMS calculated the 2009 inflation update as 2.9 percent, but the 2.75 percent reduction for supposed case mix creep negates most of it. The meager 0.15 percent increase will result in an additional $30 million in HHA payments in 2009, CMS says in a release. One exception: Low utilization payment adjustment (LUPA) amounts aren't subject to case mix creep adjustments, so they will rise by the 2.9 percent market basket increase (see chart, p. 307). The case mix creep adjustment does affect nonroutine supplies payment levels, however. The NRS conversion factor goes up just four pennies to $52.39 this year, resulting in NRS categories that increase from 1 cent to 43 cents, depending on the severity level (see chart, p. 307). Low Inflation Update Decimates Rate Increase Many industry experts were surprised by the low rate increase. "Essentially it didn't move," financial consultant Pat Laff with Laff Associates in Hilton Head, S.C., says of Medicare's HHA payment rate. Industry veterans expected a market basket figure between 3.2 and 3.7 percent, they tell Eli. The National Association for Home Care & Hospice was expecting a 3.6 percent figure, it says. Instead, CMS pegged the inflation factor at the much lower 2.9 percent figure, which barely ex-ceeded the 2.75 percent case mix creep reduction. "I was certainly hoping for a higher market basket to offset more of the creep cut," says Bob Wardwell with the Visiting Nurse Associations of America. "The real damage ... is the case mix creep adjustment wiping out so much of what would otherwise have been included in an update," says financial consultant Rick Ingber with VantaHealth Consulting. "This will bring home to HHAs the magnitude of what CMS has done here." Politics as usual: Political maneuvering is likely partially to blame for the flat rates next year, experts believe. Sympathetic CMS officials were probably "hemmed in by the folks in the White House Budget Office, who are too removed from reality to appreciate the impact of freezing home care revenues in a time of inflation and recession," contends Wardwell, a former top CMS official. The cut is [...]