CMS releases home health final rule for CY 2017

The Centers for Medicare & Medicaid Services today released the final rule for the home health prospective payment system for calendar year 2017, which, after all policy changes, would reduce HH payments by 0.7%, a $130 million cut, from 2016 payment levels. This net cut includes a 2.8% market-basket update and 0.3 percentage point cut for productivity, as mandated by the Affordable Care Act. It also applies the second of three planned 0.9 percentage point cuts to account for estimated case mix growth from CYs 2012 through 2014 that the agency states was unrelated to increases in patient acuity. In addition, the rule implements the final year of the four-year phase-in of the rebasing of this payment system, a 2.3% cut, as mandated by the ACA. The final rule implements and clarifies billing protocols for new, statutorily-mandated HH coverage for negative pressure wound therapy; AHA will discuss these clarifications with members to determine if adequate clarity has been achieved. CMS also finalized, as proposed, a new methodology for calculating outlier payments, which will base outlier payments on costs per 15-minute units rather than costs per visit. In addition, CMS finalizes four new measures to the HH Quality Reporting Program reflecting Medicare spending per beneficiary, preventable hospital readmissions, discharges to community and medication reconciliation. The agency also adopts several changes to the measures and scoring approach of the HH Value-Based Purchasing program, a mandatory payment model for all HH agencies in nine states. The rule will be published in the July 5 Federal Register and take effect Jan. 1.