Home Health & Hospice Week

The only question some home care industry members have about the therapy case mix changes is "what took so long?"

That's what financial consultant Pat Laff of Laff Associates in Hilton Head Island, S.C. wonders. The Centers for Medicare & Medicaid Services should have shifted the emphasis on therapy in the home health prospective payment system case mix model "as soon as they saw the thresholds becoming points of concentration," Laff tells Eli. "We know it takes a while for CMS to get the info they need," says therapist and consultant Cindy Krafft with Fazzi Associates. That's even when the conclusion seems obvious to providers.

The number of no- or low-therapy episodes fell or remained flat from the inception of PPS to 2009, while 10-to-13-visit therapy episodes peaked when 10 therapy visits was the payment threshold and 14+-visit episodes peaked once the 6-, 14- and 20-visit thresholds took effect in 2008, CMS shows in the 2012 PPS proposed rule published in the July 12 Federal Register (see chart, this page).

Highest goes higher: "Our review of HH PPS utilization data shows a shift to an increased share of episodes with very high numbers of therapy visits," CMS says in the proposed rule. Episodes with 20 or more therapy visits increased 50 percent from 2007 to 2009, from 4 to 6 percent of episodes. "This shift was first observed in 2008 and it continued in 2009" under the new payment bump for 20+- visit episodes, CMS points out.

"The evidence strongly suggests that the utilization shifts are influenced by agencies' attempts to maximize Medicare payments," CMS concludes.

The Medicare Payment Advisory Commission "has provided strong evidence that our reimbursement for episodes with high therapy is too high," CMS acknowledges in the rule. And "the resource costs reflected in our current case-mix weights for therapy episodes, in particular for those episodes with high amounts of therapy, are higher than current actual resource costs." Therefore "an adjustment to the HH PPS therapy case mix weights is warranted," CMS concludes.

CMS is proposing to increase the case mix weight for episodes with 0 to 5 visits by 7.5 percent, decrease case mix for 14-to-15-visit episodes by 5 percent, and decrease case mix for 20+ visit episodes by 10 percent.

The reason for the big cut for 20+-visit episodes is that currently, "there is a large increase in the payment weight between the 18 -19 therapy visit step and the 20 or more therapy visit threshold,"

CMS explains in the rule. "This large increase in the payment weight may create incentives for agencies to provide unnecessary therapy visits up to and including 20 visits, and may explain MedPAC's observation that there was a larger increase in the number of episodes in the 20 or more therapy visit group than the 14 or more therapy visit group."

Bottom line: "By implementing a larger reduction at the 20 or more therapy visits, we will provide a disincentive for agencies to pad episodes just to 20 visits or slightly more, to be able to realize a large margin from that threshold," CMS says. The current payment level "was designed to pay for not only episodes involving 20 or just above 20 therapy visits, but also episodes involving considerably more than 20 therapy visits."

Winners: "The shifting of revenue stands to provide significant increases to agencies that had lower utilization," Krafft observes. "The intent remains to provide the number of therapy visits the patient needs."

Looking ahead: This year's proposed reallocation is only the start to fixing a complex case mix problem, CMS cautions in the rule. "We plan to address [MedPAC's therapy] concerns in a more comprehensive way in future years" through more comprehensive case mix reform, the agency says. In the meantime, it plans to increase the case mix weight for no- and low-therapy episodes and decrease it for high-therapy episodes.

Don't be surprised to see reimbursement for therapy eliminated altogether one day, Krafft tells Eli. "Many expect the issue of ending the relationship being a matter of 'when' and no longer 'if.'"