Payments will decrease if 2012 proposed rule goes into effect

A proposed rule in the Federal Register on Tuesday proposes a 3.35 percent decrease in Medicare payments to HHAs for calendar year 2012. This would be an estimated net decrease of $640 million compared to HHA payments in CY 2011.  It would include the combined effects of market basket and wage index updates (a $310 million increase) and reductions to the HHPPS rates to account for increases in aggregate case-mix that are largely related to billing practices and not related to  changes in the health status of patients (a $950 million decrease). 

Provisions of the Affordable Care Act (ACA) mandate that CMS apply a one (1) percentage point reduction to the CY 2012 home health market basket amount; this would equate to a proposed 1.5 percent update for HHAs next year.  As part of the HH PPS rate update, CMS also proposes to reduce HH PPS rates by 5.06 percent in CY 2012 to account for the increase in the case-mix that is unrelated to changes in patient acuity.

The Medicare HHA proposed rule would also make structural changes to the HH PPS by removing two hypertension codes from the case-mix system, lowering payments for high therapy episodes and recalibrating the HH PPS case-mix weights to ensure that these changes result in the same amount of total aggregate payments.      

The proposed home health market basket increase for CY 2012 is 1.5 percent.  HHAs that submit the required quality data would receive payments based on this full home health market basket update.  If an HHA does not submit quality data, the home health market basket percentage increase would be reduced by 2 percentage points to -0.5 percent for CY 2012.

See the proposed rule.


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