Home Health & Hospice Week

Start by taking a close look at the reg.

Home health prospective payment system changes will be here before you know it--will you be ready to thrive under the PPS refinements?

The Centers for Medicare & Medicaid Services' proposed changes to PPS, published in the May 4 Federal Register, are sinking in across the industry. "The proposed rule contains several significant changes, many of them positive and long anticipated," notes the Connecticut Association for Home Care in a summary of the rule. For example, the elimination of the significant change in condition (SCIC) adjustment and M0175 in prior inpatient stays as a case mix item.

And home health agencies hope the system's increased complexity will create a payment system that more accurately pays for patients based on their needs.

Currently, PPS has only a 21 percent accuracy rate in predicting patient resource use, noted consultant Mark Sharp in a May 17 audioconference on the PPS changes sponsored by Eli Research. It was originally designed for a 34 percent accuracy rate, and hospital PPS has about a 39 percent accuracy rate, said Sharp, of BKD in Springfield, MO.

High hopes: Under the proposed home health PPS changes, CMS and PPS contractor Abt Associates estimate they will drastically improve the system's accuracy rate to 44 percent. That's a "very ambitious" goal, Sharp told listeners. Cut Will Annihilate Industry But the good parts of the PPS refinement are deeply overshadowed by the proposed 2.75 percent cut every year for three years, blasts the National Association for Home Care & Hospice. CMS proposed the 8.25 percent total cut in response to supposed "case mix creep" (see Eli's HCW, Vol. XVI, No. 17).

The rate cut will mean a whopping $7 billion HHA payment rate reduction by 2012, NAHC says. "Home care can not sustain such drastic cuts without the loss of access to care throughout the country," warns NAHC's Val Halamandaris in a statement.

"We will give Medicare a fair chance to ex-plain itself, but we will enlist the support of Congress and even the courts to protect the elderly and infirm from this threat," Halamandaris warns.

CMS bases the cut on "unfounded assumptions and speculation," adds NAHC's Bill Dombi. "With over 20 percent of all home health agencies currently losing money serving Medicare patients, that cut will spell disaster," the trade group protests.

Providers and their representatives aren't the only ones predicting trouble ahead. Stock analysts warn that the changes are negative for home health stocks like Amedisys Inc. and Gentiva Health Services Inc., although industry lobbying could mitigate the impact.

"Buckle your seat belt, as it may be a bumpy ride," CAHC warns its members.

The PPS revisions aren't final yet, but here are steps you can take now to adapt: 1. Study [...]