Medicare home health PPS rates will be reduced by 2.31% ($430 million) in CY 2012 under a final rule published by CMS on November 4, 2011. This rate cut reflects a 2.4% market basket update that is reduced by 1 percentage point as mandated by the ACA, a 0.03% wage index increase, and a 3.79% reduction to account for increases in aggregate case-mix that are unrelated to changes in the patient’s health status. Note that in the proposed rule, CMS anticipated that rates would be cut by 3.35% for 2012, but the agency decided to implement its case mix adjustment over two years instead of one; under the final rule, an additional -1.32% case mix reduction is scheduled for 2013. In addition, if a home health agency does not submit required quality data, the home health market basket increase will be reduced by an additional 2 percentage points. The rule also makes a number of case-mix changes, including lowering payments for high-therapy episodes and recalibrating case-mix weights. The rule also addresses a number of home health policy issues. For instance, the rule allows physicians who attend to a home health patient in an acute or post-acute setting to inform the certifying physician of their encounter to satisfy the requirement that a certifying physician (or allowed non-physician practitioner) has seen a patient prior to certifying a patient as eligible for the home health benefit. CMS also is clarifying its ‘‘confined to the home’’ definition and certain occupational therapy policies.