On November 17, 2010, CMS is publishing a final rule updating Medicare home health PPS rates for 2011.  CMS estimates that the combined policies of the rule will decrease Medicare payments to home health agencies (HHAs) by $960 million (4.89%) for CY 2011. This reimbursement rate reflects implementation of an ACA provision decreasing the 2011 home health market basket update by 1 percentage point. This results in a 1.1% update for 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 -0.9%. Rates are further impacted by an updated wage index, which is offset by outlier spending reductions mandated by the ACA, along with CMS’s adoption of its proposal to decrease home health PPS rates by 3.79% in 2011 to account for additional growth in aggregate case-mix that is unrelated to changes in patients’ health status (although in response to comments, CMS is not adopting an additional 3.79% case-mix adjustment in 2012 to allow for further analysis). In addition to updating rates, the rule also implements an ACA provision under which, prior to initial certification of a patient’s eligibility for the Medicare home health benefit, the physician must document that the physician or a non-physician practitioner has had a face-to-face encounter with the patient. In response to public comments, CMS has modified the proposed timeframes for the face-to-face encounters and removed proposed requirements concerning the physician’s own medical record documentation, among other refinements. With regard to hospice services, the rule also requires a hospice physician or nurse practitioner to provide a face-to-face encounter prior to the hospice physician re-certifying the patient’s eligibility for hospice services at the 180th day recertification of care and for all subsequent certifications (CMS adopted a series of clarifications and refinements to this proposal in the final rule). The final rule also: adopts exemptions and other clarifications to CMS’s policy requiring HHAs that change ownership within three years of initial enrollment to obtain a new state survey or accreditation; revises requirements for coverage of therapy services in the home health setting (including requirements that qualified therapists perform services and measure and document therapy effectiveness); and updates quality reporting requirements for the 2012 home health PPS rate update.