SUMMARY OF FINAL HH PPS REFINEMENTS COMPARED TO CURRENT HH PPS PAYMENT SYSTEM

Current HH PPS

Final Rule with Comments

Home health disciplines included in the National 60-Day Episode rate:

·         Skilled nursing, home health aide, physical therapy, speech-language pathology, occupational therapy, and medical social services

Home health disciplines included in the National 60-Day Episode rate:

·         Unchanged

For eligible beneficiaries under a home health plan of care:

·         National 60-day episode prospective payment for covered home health services, adjusted for case mix and wage index 

·         LUPA, SCIC, PEP, and outlier adjustments allowed

For eligible beneficiaries under a home health plan of care:

·         Unchanged

·         LUPA, PEP, and outlier adjustments allowed; SCIC adjustment eliminated

Average case-mix weights per episode:

·         Since the inception of the HH PPS, the increase in the average case mix, nominal case-mix growth (which is the change that is not due to changes in the underlying health status of Medicare home health patient) is 11.75 percent.

Average case-mix weights per episode:

·         To account for the 11.75 percent increase in the nominal case-mix growth, we are finalizing the proposed 2.75 percent reduction of the national standardized 60-day episode payment rate for first 3 years beginning in 2008 and a 2.71 percent reduction in the fourth year, 2011.

National 60 Day Episode rate

($2,339.00 for CY 2007)

·         Includes home health market basket increase (3.3% for CY 2007)

·         Adjusted for case-mix and wage-index

National 60 Day Episode rate  ($2,270.32

for CY 2008)

·         Includes home health market basket increase (3.0% for CY 2008)

·         Adjusted for case-mix and wage-index, and further adjusted for aggregate changes in case mix for the nominal case-mix growth(2.75 percent reduction per year for the first 3 years, 2008, 2009, and 2010, and 2.71 percent reduction for 2011.

Home health market basket:

·         Labor portion = 76.775%

·         Non-labor portion = 23.225%

Home health market basket:

·         Labor portion = 77.082%

·         Non-labor portion = 22.918%

Case-mix regression model:

·         Single therapy threshold at 10 visits

·         Did not account for the timing of episodes

·         Single equation model for weight calculation, with a single set of case mix scores and single therapy threshold

·         Model r-squared = 0.29, initial episodes, .21 total episodes

·         Large increase in payment for delivering at least 10 therapy visits in a 60-day episode

·         80 case-mix groups

Case-mix regression model:

·         Therapy thresholds at 6, 14, and 20 visits

·         Accounts for early episodes (the first or second episode in a sequence of adjacent episodes) and later episodes (third or subsequent episodes in a sequence of adjacent episodes), regardless of whether the same home health agency provided care for the entire series of episodes.

·         Four-equation model for weight calculation with scores allowed to vary by episode type and with classification of episodes as follows:          

      1) < 14 therapy visits occurring in

          early episode;

            2) ≥ 14 therapy visits occurring in

                early episode;

      3) < 14 therapy visits occurring in

          later episode;

      4) ≥ 14 therapy visits occurring in

          later episode

·         Model r-squared = 0.45

·         Gradual increase in payment between first and third therapy thresholds

·         153 case-mix groups

Case-mix model variables:

·         M0110 did not exist

·         Included M0175 (inpatient facility discharge), M0530 (incontinence) & M0610 (behaviors observed)

·         Excluded M0800 (injectible medications)

·         Included M0230/240

·         Included M0245

·         M0825: included (exists as a “yes”/”no” question as to whether or not the projected number of therapy visits for the episode meet the threshold for a Medicare high-therapy case mix group)

·         Scores not given for infected surgical wounds, abscesses, chronic ulcers, gangrene, dysphagia, tracheostomy, cystostomy

·         Did not include gastrointestinal, pulmonary, cardiac, hypertension, cancer, blood disorders, or affective and other psychoses diagnosis groups

·         Points not given for secondary diagnoses

·         Points not given for combinations of conditions in the same episode

Case-mix model variables:

·         Creates M0110 for new item to identify early and later episodes

·         Excludes M0175, M0530 M0440& M0610

·         Adds M0800

·         Modifies format of M0230/240 to accommodate changes to payment diagnoses

·         M0246 replaces M0245 and now allows for multiple coding for both primary and secondary diagnoses

·         Includes M0826 and replaces M0825 (identifies the number of projected therapy visits for the episode, which affects the particular case-mix group for which that episode will be grouped)

·         Includes scores for infected surgical wounds, abscesses, chronic ulcers, gangrene, dysphagia, tracheostomy, and cystostomy.

·         Adds gastrointestinal, pulmonary, cardiac, hypertension, cancer, blood disorders, and affective and other psychoses diagnosis groups

·         Assigns points for some secondary diagnoses

·         Assigns points for some combinations of conditions in the same episode

Wage Index:

·         Routine update based on most recently available pre-floor/pre-reclassified hospital wage index

Wage Index:

• Unchanged

Non-routine supplies (NRS):

·         Included in national episode rate as a fixed amount of $49.62, updated annually as part of the national episode rate

·         Case-mix adjusted as part of the national 60-day episode rate

·         Updated annually, as part of the national episode rate, by the home health market basket factor

Non-routine supplies (NRS):

·         Based on a NRS conversion factor of $52.35. (The original $49.62 from the July 3, 2000 final rule, updated to 2008, adjusted to account for the outlier target of 5%, and adjusted for the nominal change in case-mix)

·         Case-mix adjusted separately based on 6 NRS severity groups payments ranges from $14.12 to $551 per episode

·         Unchanged

LUPA Adjustment:

• Calculated if episode has 4 or fewer visits
• No additional payment for LUPA episodes that occur as the first or only episode during a period of home health benefit use

LUPA Adjustment :

• Unchanged

• Additional $87.93 for LUPA episodes that occur as the only episode or the first episode of a sequence of adjacent episodes; to be updated annually by the home health market basket

PEP adjustment calculation:

• Allowed for partial episodes

PEP adjustment calculation:

• Unchanged

Outlier adjustment:

• Fixed dollar loss ratio = 0.67
• Loss-sharing ratio = 0.80
• Outlier expenditure target = 5 percent of total home health PPS payments

Outlier adjustment:

• Fixed dollar loss ratio = 0.89
• Unchanged
• Unchanged

Quality Data Reporting:

• Report data on 10 quality measures
• HHAs that do not submit quality data subject to 2 percent reduction in home health market basket percentage increase for the next year

Quality Data Reporting:

• Report data on 12 quality measures
• Unchanged

Average case-mix under the current case-mix system, based on 20% sample of 2005 data:

• Proprietary agencies: 1.2821

• Voluntary non-profit agencies: 1.1875
• Rural agencies: 1.2047
• Urban agencies: 1.2520

Average case-mix under the revised case-mix system, based on a 20% sample of 2005 data:

• Proprietary agencies: 1.2620
• Voluntary non-profit agencies:  1.2334

• Rural agencies: 1.1798
• Urban agencies: 1.2616