Home Health & Hospice Week

Controversial rate reductions may hold up PPS refinement rule.

Your reward for more accurately completing OASIS may be lower reimbursement.

The Centers for Medicare & Medicaid Services is considering rebasing home health prospective payment system rates due to increasing average case mix weight, report national trade group representatives.

Between 2002 and 2005, the average case mix weight for Medicare home health patients rose from 1.18 to 1.23, notes the National Association for Home Care & Hospice. That's an annual change of 1.4 percent.

Case mix could increase for three main reasons, NAHC's William Dombi tells Eli: OASIS coding abuse, change in patient acuity and more accurate assessments. "No one knows which of those reasons caused the increase," Dombi protests.

Pure speculation: The proposal to rebase PPS rates surprises Bob Wardwell with the Visiting Nurse Associations of America because so-called "case mix creep can never really be proved, only inferred," he says. "An increase in average case mix weight is a fact, but differentiating creep from genuine increase in average severity is conjectural."

It's unclear how much CMS would want to cut rates, but it could be a significant amount combining annual increases, NAHC worries.

Beware: "This is an extremely serious development with Medicare," Dombi warns in a message to NAHC members. "It is a very direct way of reducing payment rates and total Medicare home health expenditures without congressional action specifically authorizing those changes."

Rate Rebasing and PPS Revamp A Bad Mix

Even worse is the fact that CMS is looking to roll the cuts into the much-anticipated PPS refinement rule that was supposed to come out earlier this year. The rule is widely expected to change the 10-visit therapy threshold, among other things. "We don't want to see the PPS refinement rule derailed by case mix upcoding cuts," Dombi says.

Budget-cutting pressure from the White House may have led to the potential inclusion, speculates Wardwell, a former top CMS official. President Bush's 2008 budget proposal calls for $1 billion in cuts for next year alone due to administrative actions that don't require congressional action, NAHC notes.

It's a terrible mistake to try to rebase rates while revamping the whole PPS system, criticizes Wardwell, who headed up PPS' design while at CMS. "I hope wiser heads prevail and [the PPS rate rebasing] is not included in the proposed rule," he tells Eli.

On hold: Given this new wrinkle, CMS isn't likely to issue the PPS refinements proposed rule until the May date it indicated in its last semiannual regulatory agenda, experts predict. That timeline is likely to hold even if CMS decides against rebasing rates in the rule.