Under the final Medicare home health PPS (HH PPS) rule released on November 22, 2013, payments in 2014 will be cut by 1.05% (about $200 million) compared to 2013 levels (and compared to a -1.5% cut forecast in the proposed rule). This reduction reflects a 2.3% home health payment update, which is more than offset by a -0.62% ICD–9 grouper refinement and a -2.73% ACA-mandated rebasing adjustment to the national, standardized 60-day episode payment rate and other applicable payment amounts. The ACA rebasing adjustment is intended to reflect factors such as changes in the number of visits, the mix of services, the level of intensity, and the average cost of providing care in an episode.
CMS estimates that the difference between the 2013 average payment per episode and the average cost per episode is 13.09%; CMS is recouping this difference over four years (from CY 2014 to CY 2017). The final rule also revises the Home Health Quality Reporting Program, including adding quality measures relating to hospital readmissions and Emergency Department visits with the first 30 days of a home health stay; CMS will begin reporting feedback to HHAs on performance on these measures in CY 2014, and they will be added to Home Health Compare for public reporting in CY 2015. On the other hand, the final rule reduces the number of process measures reported on the certification and survey provider enhanced reports (CASPER) by eliminating the stratification by episode length for nine process measures. The rule also clarifies cost allocation of home health agency survey expenses; for that portion of costs attributable to Medicare and Medicaid, CMS will assign 50% to Medicare and 50% to Medicaid. The official version of the rule will be published in the Federal Register on December 2, 2013.