CMS issues home health final rule for CY 2016

The Centers for Medicare & Medicaid Services today released the final rule for the home health prospective payment system for calendar year 2016, which, after all policy changes, will reduce home health payments by 1.4% from 2015 payment levels, a $260 million decrease. CMS finalized a 2.3% market-basket update and 0.4 percentage point cut for productivity, as mandated by the Affordable Care Act. To account for estimated case mix growth from CYs 2012 through 2014 that CMS states was unrelated to increases in patient acuity, the agency will reduce payments by 0.97 percentage point in FYs 2016, 2017 and 2018 (instead of its proposal to cut 1.72 percentage point in each of CY 2016 and 2017). The rule also implements the third of four installments of the rebasing of this payment system, as mandated by the ACA, with a 2.4 percentage point cut. In addition, CMS finalized its proposal to establish a HH value-based purchasing program to begin Jan. 1, 2016 that will apply to all HH agencies in nine randomly selected states, and to make modifications to the HH quality reporting program. The rule will be published in the Nov. 5 Federal Register.