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Home Health & Hospice Week

Prospective Payment System:

PPS Reform Could Slap You With Risk-Sharing

Published on Thu Feb 17, 2005

MedPAC also considering return to per-visit pay.

The time has come for refinement of the home health prospective payment system, home health agencies and policy-makers agree.

The Medicare Payment Advisory Commission is exploring the issue of PPS reform, with plans to make recommendations to Congress, according to MedPAC's March 10 meeting. Here is the preliminary list of what the influential advisory body is considering: 

  • Reweighting case mix groups. In this least radical of the PPS reform suggestions, MedPAC would recommend assigning different payment levels to case mix categories to predict costs more accurately. Along with reweighting the current HHRG groups, the commission could look into other "incremental" changes such as taking obesity and smoking into account in the case mix methodology. 
     
  • Risk-sharing. Under this proposal, HHAs would share their profits or losses with the Medicare program. 
     
  • Per-visit pay. While not returning entirely to a per-visit payment system, MedPAC may advise a combination of per-episode and per-visit pay to counteract possible stinting by HHAs. 
     
  • Splitting the benefit. In the vaguest of its four options, MedPAC will consider a wholesale restructuring of the home care benefit. Some suggestions are to split post-acute versus chronic care patients or dual eligibles versus non-dual eligibles into separate payment systems.

    Editor's Note: The transcript of the MedPAC meeting is at     www.medpac.gov/public_meetings/transcripts/0305_allcombined_transc.pdf.

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