Home Health & Hospice Week

Cuts for case mix creep may do more damage to you next year than a new proposed rule shows.

The Centers for Medicare & Medicaid Services proposes raising home health agency rates under Medicare 2 percent in 2010, according to a proposed rule published in the Aug. 6 Federal Register. That would take the current episode base rate of $2,271.92 to $2,317.47 effective Jan. 1.

However, CMS didn't use a simple inflation calculation to arrive at that rate of increase. Rather, the agency took a 2.5 percent increase resulting from a proposed outlier policy change (see related story, p. 219), subtracted a 2.75 percent case mix creep cut, and then added a 2.2 percent inflation update. Without the outlier policy change, HHAs' rates would see a more-than-half-percent cut.

Worse coming: In the final rule, the case mix creep cut figure could actually get even worse. CMS had proposed in previous years' rate update rules to reduce HHA payments by 2.75 percent in 2010 and 2.71 percent in 2011 for supposed upcoding of home health patients. But recent analysis found even more upcoding, the agency maintains. Data from 2007 shows a 15 percent increase in case mix since PPS began in 2000, CMS notes in the rule. With the help of contractor Abt Associates, CMS estimates that 9.8 percent of that increase is "real" while the remainder is due to upcoding.

To counteract the continued case mix increase, CMS is thinking of increasing the case mix creep cut to 4.26 percent in 2011, it says in the rule. Or the agency could institute a 3.51 percent cut for both 2010 and 2011, it says. But it proposes keeping the 2010 cut at 2.75 percent as previously estimated.

The National Association for Home Care

& Hospice continues to vigorously oppose cuts for "perceived" case mix increases. "Our lawsuit against coding creep adjustments is awaiting a ruling by the federal court in D.C.," says NAHC's vice president for law William Dombi. "We strongly believe that CMS continues to assess case mix weight changes using improper standards and that this latest iteration is no better than earlier analyses."

Watch out: "HHAs should not be misled by CMS's presentation of the 2010 rates showing a rate increase," Dombi stresses. "The threat remains that CMS will impose a significant cut in 2010 or 2011 to address its findings on case mix creep."

Bonus: Because LUPA and outlier per-visit rates aren't affected by the case mix creep calculation, they would increase 4.7 percent in 2010 (see chart, p. 219). CMS does factor case mix creep adjustments into the NRS payment levels, however, so they would also increase by only 2 percent.

Prepare For Patient Satisfaction Tool Requirement

In addition, CMS proposes a number of non-payment-related changes in the rule. Most significantly, the agency wants to require a new patient satisfaction tool. "For CY 2011, CMS proposes to expand the home health quality measures reporting requirements to include the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Home Health Care Survey," the notice says.

"The HHCAHPS data collection will support the effective and efficient operation of the program because patients' feedback on their perspectives of the home health quality of care from the agency cannot be obtained from any other quality measure in the program," CMS maintains. The 34-question CAHPS tool was developed by the HHS Agency for Healthcare Research and Quality, CMS notes. (For more details on the currently optional CAHPS tool, see Eli's HCW, Vol. XVIII, No. 20, p. 154).

CMS also wants to set OASIS as a condition for payment, add some clarifications about coverage of evaluation and management services, and beef up its program integrity efforts in certain areas.

Keep an eye out: In addition to changes that CMS could make to its case mix creep cut figures or other calculations, HHAs should be on the lookout for significant changes from legislators, warns NAHC's Val Halamandaris. "Proposals are winding their way through Congress that will severely and unjustifiably cut Medicare payment rates," he says. "HHAs need to engage their congressional representatives to stop proposed cuts and direct CMS to take responsible actions." Comments on CMS's proposed rule are due by Sept. 28.