Medicare home health rates will be largely unchanged in 2013 under a CMS final rule published November 8, 2012. Specifically, under the final rule, Medicare home health PPS (HH PPS) rates will be cut by approximately 0.01%, or a total of $10 million compared to 2012 levels. This reduction results from a 2.3% market basket update that is more than offset by a 1% reduction mandated by the ACA and a 1.32% reduction to account for increases in aggregate case-mix that CMS considers unrelated to changes in the patient’s health status (finalized in the CY 2012 rule), along with various other payment policies. The rule also finalizes several policy proposals impacting home health agencies (HHAs). Among other things, CMS is providing for alternative sanctions (in addition to termination) that could be imposed if an HHA were out of compliance with federal Conditions of Participation (CoPs) in certain circumstances. Such alternative sanctions include civil money penalties (CMPs), suspensions of payment for all new admissions, 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 adopts new HHA survey and certification requirements, including requirements for different types of surveys (including for unannounced, standard, and extended surveys), survey frequency, surveyor qualifications, and an informal dispute resolution (IDR) process. In addition, the rule addresses, among other things, home health quality reporting, policy changes regarding therapy reassessments and face-to-face encounter requirements, and grouper enhancements. The rule generally is effective on January 1, 2013, except the effective date of the CMP, suspension of payment for new admissions, and IDR provisions will be July 1, 2014, and the effective date of other survey and enforcement provisions will be July 1, 2013. In addition to these home health provisions, the rule specifies quality measures that hospices will be required to report under the Hospice Quality Reporting Program for the FY 2015 payment determination.