CMS’s proposed Medicare home health PPS (HH PPS) rule for CY 2014 would cut payment by 1.5% ($290 million) compared to 2013 levels. This proposed reduction reflects a 2.4% home health payment update, which is more than offset by an ICD–9 grouper refinement and an ACA-mandated rebasing adjustment to the national, standardized 60-day episode payment rate and other applicable payment amounts. The ACA rebasing adjustment is intended to reflect factors such as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, and the average cost of providing care per episode. CMS estimates that the difference between the 2013 average payment per episode and the average cost per episode is 13.63%; since the ACA caps the adjustment at 3.5% per year for four years, CMS proposes to reduce payments in each year from CY 2014 to CY 2017 by 3.5% (for a total of 14% over four years). In addition to other home health policy updates, the proposed rule would revise the Home Health Quality Reporting Program, including adding quality measures relating to hospital readmissions and Emergency Department visits with the first 30 days of a home health stay. The proposed rule would also clarify cost allocation of home health agency survey expenses; for that portion of costs attributable to Medicare and Medicaid, CMS would assign 50% to Medicare and 50% to Medicaid. CMS will accept comments on the proposed rule until August 26, 2013.