Medicare home health rates would decrease by 0.1% – or $20 million – in CY 2013 under a proposed rule published by CMS on July 13, 2012. CMS anticipates a 2013 home health market basket update of 2.5%, but this increase would be offset by a 1% reduction mandated by the ACA, a 1.32% reduction to account for increases in aggregate case-mix that are unrelated to changes in the patient’s health status (finalized in the CY 2012 rule), and wage index updates that have the aggregate effect of decreasing payments. The proposed rule also includes several policy proposals. Among other things, CMS proposes alternative sanctions (in addition to termination) that could be imposed if a home health agency (HHA) were out of compliance with federal Conditions of Participation (CoPs) in certain circumstances. The proposed alternative sanctions include civil money penalties, suspensions of payment for all new admissions and new payment episodes, temporary management of the HHA, directed plans of correction, and directed in-service training. These alternative sanctions could remain in effect for up to 6 months, until the HHA achieved compliance with the CoPs, or until the HHA’s provider agreement were terminated. CMS also proposes new HHA survey and certification requirements, including requirements for different types of surveys, survey frequency, surveyor qualifications, and an informal dispute resolution process. In addition to these home health provisions, the rule specifies quality measures that hospices would be required to report under the Hospice Quality Reporting Program for the FY 2015 payment determination (no changes are being proposed to the quality measures for the FY 2014 payment determination that were included in the August 4, 2011 hospice wage index final rule for FY 2012). CMS also discusses additional hospice measures under consideration for subsequent years, along with plans to develop a hospice patient-level data item set to be used by all hospices to collect and submit standardized data items about each patient admitted to hospice as early as CY 2014. CMS will accept comments on the proposed rule until September 4, 2012.