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«DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 409, 424, and 484 [CMS-1560-F] RIN 0938-AP55 Medicare ...»

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 409, 424, and 484

[CMS-1560-F]

RIN 0938-AP55

Medicare Program; Home Health Prospective Payment System

Rate Update for Calendar Year 2010

Centers for Medicare & Medicaid Services (CMS), HHS.

AGENCY:

Final rule.

ACTION:

This final rule sets forth an update to the Home

SUMMARY:

Health Prospective Payment System (HH PPS) rates; the national standardized 60-day episode rates, the national per-visit rates, the non-routine medical supply (NRS) conversion factors, and the low utilization payment amount (LUPA) add-on payment amounts, under the Medicare prospective payment system for home health agencies effective January 1, 2010. This rule also updates the wage index used under the HH PPS. In addition, this rule changes the HH PPS outlier policy, requires the submission of OASIS data as a condition for payment under the HH PPS, implements a revised Outcome and Assessment Information Set (OASIS-C) for episodes beginning on or after January 1, 2010, and implements a Consumer Assessment of Healthcare Providers and CMS-1560-F 2 Systems (CAHPS) Home Health Care Survey (HHCAHPS) affecting payment to HHAs beginning in CY 2012. Also, this rule makes payment safeguards that will improve our enrollment process, improve the quality of care that Medicare beneficiaries receive from HHAs, and reduce the Medicare program’s vulnerability to fraud. This rule also adds clarifying language to the "skilled services" section and Conditions of Participation (CoP) section of our regulations. This rule also clarifies the coverage of routine medical supplies under the HH PPS.

These regulations are effective on January 1,

EFFECTIVE DATE:

2010.

FOR FURTHER INFORMATION CONTACT:

Randy Throndset, (410)786-0131 (overall HH PPS).

James Bossenmeyer, (410)786-9317 (for information related to payment safeguards).

Doug Brown, (410)786-0028 (for quality issues).

Kathleen Walch, (410)786-7970 (for skilled services requirements and clinical issues).

SUPPLEMENTARY INFORMATION:

Table of Contents I. Background CMS-1560-F 3 A. Requirements of the Balanced Budget Act of 1997 for Establishing the Prospective Payment System for Home Health Services B. Deficit Reduction Act of 2005 C. System for Payment of Home Health Services D. Updates to the HH PPS II. Summary of the Proposed Provisions and Response to Comments A. Outlier Policy B. Case-Mix Measurement Analysis C. CY 2010 Payment Rate Update

1. Home Health Market Basket Update

2. Home Health Care Quality Improvement

3. Home Health Wage Index

4. CY 2010 Payment Update

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D. ICRs Regarding Patient Assessment Data V. Regulatory Impact Analysis I. Background A. Requirements of the Balanced Budget Act of 1997 for Establishing the Prospective Payment System for Home Health Services The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) enacted on August 5, 1997, significantly changed the way Medicare pays for Medicare home health services. Section 4603 of the BBA mandated the development of the home health prospective payment system (HH PPS). Until the implementation of a HH PPS on October 1, 2000, home health agencies (HHAs) received payment under a cost-based reimbursement system.

Section 4603(a) of the BBA mandated the development of a HH PPS for all Medicare-covered home health services provided under a plan of care (POC) that were paid on a reasonable cost basis by adding section 1895 of the Social Security Act (the Act), entitled "Prospective Payment For Home Health Services".

Section 1895(b)(1) of the Act requires the Secretary to establish a HH PPS for all costs of home health services paid

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Section 1895(b)(3)(A) of the Act requires that: (1) the computation of a standard prospective payment amount include all costs for home health services covered and paid for on a reasonable cost basis and be initially based on the most recent audited cost report data available to the Secretary, and (2) the prospective payment amounts be standardized to eliminate the effects of case-mix and wage levels among HHAs.

Section 1895(b)(3)(B) of the Act addresses the annual update to the standard prospective payment amounts by the home health applicable percentage increase. Section 1895(b)(4) of the Act governs the payment computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act require the standard prospective payment amount to be adjusted for case-mix and geographic differences in wage levels. Section 1895(b)(4)(B) of the Act requires the establishment of an appropriate case-mix change adjustment factor that adjusts for significant variation in costs among different units of services.

Similarly, section 1895(b)(4)(C) of the Act requires the establishment of wage adjustment factors that reflect the relative level of wages, and wage-related costs applicable to

–  –  –

the applicable national average level. Pursuant to 1895(b)(4)(c), the wage-adjustment factors used by the Secretary may be the factors used under section 1886(d)(3)(E) of the Act.





Section 1895(b)(5) of the Act gives the Secretary the option to make additions or adjustments to the payment amount otherwise paid in the case of outliers because of unusual variations in the type or amount of medically necessary care.

Total outlier payments in a given fiscal year (FY) or year may not exceed 5 percent of total payments projected or estimated.

In accordance with the statute, we published a final rule (65 FR 41128) in the Federal Register on July 3, 2000, to implement the HH PPS legislation. The July 2000 final rule established requirements for the new HH PPS for home health services as required by section 4603 of the BBA, as subsequently amended by section 5101 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act (OCESAA) for Fiscal Year 1999, (Pub. L. 105-277), enacted on October 21, 1998; and by sections 302, 305, and 306 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act (BBRA) of 1999, (Pub. L.

106-113), enacted on November 29, 1999. The requirements include the implementation of a HH PPS for home health services,

–  –  –

changes. The HH PPS described in that rule replaced the retrospective reasonable cost-based system that was used by Medicare for the payment of home health services under Part A and Part B. For a complete and full description of the HH PPS as required by the BBA, see the July 2000 HH PPS final rule (65 FR 41128 through 41214).

B. Deficit Reduction Act of 2005 On February 8, 2006, the Deficit Reduction Act of 2005 (Pub. L. 109-171) (DRA) was enacted. Section 5201 of the DRA requires HHAs to submit data for purposes of measuring health care quality, and links the quality data submission to payment.

This requirement is applicable for CY 2007 and each subsequent year. If an HHA does not submit quality data, the home health market basket percentage increase will be reduced 2 percentage points. In accordance with the statute, we published a final rule (71 FR 65884, 65935) in the Federal Register on November 9, 2006 to implement the pay-for-reporting requirement of the DRA, codified at 42 CFR 484.225(h) and (i).

C. System for Payment of Home Health Services Generally, Medicare makes payment under the HH PPS on the basis of a national standardized 60-day episode payment rate

–  –  –

The national standardized 60-day episode rate includes the six home health disciplines (skilled nursing, home health aide, physical therapy, speech-language pathology, occupational therapy, and medical social services). Payment for non-routine medical supplies (NRS), is no longer part of the national standardized 60-day episode rate and is computed by multiplying the relative weight for a particular NRS severity level by the NRS conversion factor (See section III.C.4.e). Durable medical equipment covered under the home health benefit is paid for outside the HH PPS payment. To adjust for case-mix, the HH PPS uses a 153-category case-mix classification to assign patients to a home health resource group (HHRG). Clinical needs, functional status, and service utilization are computed from responses to selected data elements in the OASIS assessment instrument.

For episodes with four or fewer visits, Medicare pays on the basis of a national per-visit rate by discipline; an episode consisting of four or fewer visits within a 60-day period receives what is referred to as a low utilization payment adjustment (LUPA). Medicare also adjusts the national standardized 60-day episode payment rate for certain intervening

–  –  –

(PEP adjustment). For certain cases that exceed a specific cost threshold, an outlier adjustment may also be available.

D. Corrections We published a final rule with comment period in the Federal Register on August 29, 2007 (72 FR 49762) that set forth a refinement and rate update to the 60-day national episode rates and the national per-visit rates under the Medicare prospective payment system for home health services for CY 2008.

In this final rule with comment period, in Table 10B (72 FR 49854), the short description for ICD-9-CM code 250.8x & 707.10should read “PRIMARY DIAGNOSIS = 250.8x AND FIRST OTHER DIAGNOSIS =707.10-707.9. Instead of a formal correction notice, we are notifying the public of this correction in this final rule.

E. Updates to the HH PPS As required by section 1895(b)(3)(B) of the Act, we have historically updated the HH PPS rates annually in the Federal Most recently, we published a notice in the Federal Register.

Register on November 3, 2008 (73 FR 65351) that set forth the update to the 60-day national episode rates and the national per-visit rates under the Medicare prospective payment system

–  –  –

F. Requirements for Issuance of Regulations Section 902 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) amended section 1871(a) of the Act and requires the Secretary, in consultation with the Director of the Office of Management and Budget, to establish and publish timelines for the publication of Medicare final regulations based on the previous publication of a Medicare proposed or interim final regulation. Section 902 of the MMA also states that the timelines for these regulations may vary but shall not exceed 3 years after publication of the preceding proposed or interim final regulation except under exceptional circumstances.

This final rule finalizes provisions set forth in the August 13, 2009 proposed rule (74 FR 40948). In addition, this final rule has been published within the 3-year time limit imposed by section 902 of the MMA. Therefore, we believe that the final rule is in accordance with the Congress' intent to ensure timely publication of final regulations.

II. Summary of the Proposed Provisions and Response to Comments In the, August 13, 2009 Federal Register (74 FR 40948) we

–  –  –

Health Prospective Payment System Rate Update for CY 2010” and provided for a 60 day comment period. In this proposed rule we proposed updates to the Home Health Prospective Payment System (HH PPS) rates; the national standardized 60-day episode rates, the national per-visit rates, the non-routine medical supply (NRS) conversion factor, and the low utilization payment amount (LUPA) add-on payment amount, under the Medicare prospective payment system for home health agencies effective January 1,

2010. As part of the CY 2010 proposed rule (74 FR 40948), we also proposed a change to the HH PPS outlier policy, proposed to require the submission of OASIS data as a condition for payment under the HH PPS, and proposed payment safeguards that would improve our enrollment process, improve the quality of care that Medicare beneficiaries receive from HHAs, and reduce the Medicare program’s vulnerability to fraud. The CY 2010 proposed rule also added clarifying language to the "skilled services" section and the Conditions of Participation (CoPs) sections of our regulations, and also clarified the coverage of routine medical supplies under the HH PPS. We also solicited comments on: physician/patient interaction associated with the home health plan of care (POC); a Consumer Assessment of Healthcare

–  –  –

Outcome and Assessment Information Set (OASIS), Version C, effective January 1, 2010; proposed pay for reporting measures for use in CY 2011; and a number of minor payment-related issues. We also responded, in the CY 2010 proposed rule (74 FR 40948), to comments received as a result of our solicitation in the CY 2008 HH PPS final rule with comment period (72 FR 49762).

In response to the publication of the CY 2010 HH PPS proposed rule, we received approximately 73 items of correspondence from the public. We received numerous comments from various trade associations and major health-related organizations. Comments also originated from HHAs, hospitals, other providers, suppliers, practitioners, advocacy groups, consulting firms, and private citizens. The following discussion, arranged by subject area, includes our responses to the comments and, where appropriate, a brief summary as to whether or not we are implementing the proposed provision or some variation thereof.

A. Outlier Policy Section 1895(b)(5) of the Act allows for the provision of an addition or adjustment to the regular 60-day case-mix and

–  –  –

that incur unusually high costs due to patient home health care needs. This section further stipulates that total outlier payments in a given year may not exceed 5 percent of total projected or estimated HH PPS payments. Section 1895(b)(3)(C) of the Act stipulates that the standard episode payment be reduced by such a proportion to account for the aggregate increase in payments resulting from outlier payments. Under the HH PPS, outlier payments are made for episodes for which the estimated cost exceeds a threshold amount. The wage adjusted fixed dollar loss (FDL) amount represents the amount of loss that an agency must bear before an episodes becomes eligible for outlier payments.



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