On July 23, 2010, CMS published a proposed rule updating Medicare home health PPS rates for 2011. CMS estimates that the combined policies of the rule would decrease Medicare payments to home health agencies (HHAs) by $900 million (4.75%) for calendar year (CY) 2011. Among other things, the rule would implement an Affordable Care Act (ACA) provision decreasing the CY 2011 home health market basket update by 1 percentage point. This results in a proposed 1.4% update for CY 2011 for HHAs that submit the required quality data; if an HHA does not submit quality data, the market basket increase would be reduced by 2 percentage points to -0.6%. CMS also proposes to decrease home health PPS rates by 3.79% in CY 2011 (and an additional 3.79% in 2012) to account for additional growth in aggregate case-mix that is unrelated to changes in patients’ health status, along with further reduction in rates under an ACA outlier policy. In addition to updating rates, the proposed rule would implement an ACA provision under which, prior to certifying a patient’s eligibility for the Medicare home health or hospice benefit, the physician must document that the physician or a non-physician practitioner has had a face-to-face encounter with the patient. CMS also proposes exemptions and other clarifications to its policy requiring HHAs that change ownership within three years of initial enrollment to obtain a new state survey or accreditation, along with changes impacting the coverage of therapy services in the home health setting. CMS is accepting comments on the proposed rule until September 14, 2010.