CMS released the 2017 Final Home Health Payment Rule on October 31, 2016.

2017 brings the 4th and final year of this round of rebasing.  Different from the proposed regulation, there will be an INCREASE in the base rate to $2,989.97 from the current $2,965.12.  This is due to a significant increase in the budget neutrality adjustment from the proposed regulation to the final regulation.  There are significant adjustments to the case mix weights and the recalibration of the tables that feed the case mix weight calculations, therefore the reduction coming in those adjustments and making it lean more toward effect on agencies being at the level of determining the HHRG of the patient episode versus making the effect more across the board.  A more specific analysis of case mix weight affect will be released in the very near future.
LUPA rates will rise 2.95% through rebasing and an additional 2.5% through the annual inflation update. The following table assumes Quality Data Reporting requirement is met.  If billing for a Rural CBSA the rates are 3% higher.

Non-routine medical supply rates are decreasing through the rebasing by a factor of 2.82% offset by a 2.5% HH Payment update.  The following table assumes Quality Data Reporting requirement is met.  If billing for a Rural CBSA the rates are 3% higher.

This rule has finalized the proposed changes to the calculation of outlier episodes that will cause many current outlier episodes to no longer qualify for outlier payments and the ones that do qualify will receive less payments, unless the agency is providing 45 minute (3 units) or more on each visit.  This also assumes large numbers of visits.  As much as an 80% DECREASE in the outlier payment if the visits are reported as only 15 minute visit (1 unit).

The Home Health Value Based Purchasing (HHVBP) program gets some important updates. Among them are:

  • Establishing a minimum of 8 HHAs as a cohort for measure application
  • Removing 4 measures that had not been fully developed that include care management; prior function; influenza vaccine data collection; and reason pneumococcal vaccine not received
  • The reporting periods are adjusted
  • Timeframe for submitting New Measure data is increased
  • A progress report on the HHVBP public reporting development
  • The institution of a formal appeals process

This rule includes clarification that payment for the NPWT device is when a HHA “furnishes NPWT using a disposable device” to mean when the HHA provider is either initially applying an entirely new disposable NPWT device, or removing a disposable NPWT device and replacing it with an entirely new one. These visit would be billed on a Type of Bill (TOB) 34x. Follow up visits related to the wound care where the device is not replaced are to be billed as HH visits on TOB 32x.  Examples of how its payment policy relative to the disposable NPWT device should be applied for billing are provided in the rule.
In most instances, an HHA providing NPWT will bill both a 34X for the NPWT device along with the professional services and a 32X bill for other HHA professional and dependent services. This will mean a Medicare Part B payment for the NPWT visits and a LUPA or full episode payment for the other services. The NPWT professional services do not count towards the 4 visit LUPA threshold. The NPWT is also subject to a 20% beneficiary coinsurance.
More analysis on this final rule to come!  Join us for Alliance Members Webinar on November 18, 2016.