Home health would see $180 million Medicare cut under CMS proposal

CMS is proposing a 1 percent reduction in reimbursements for home healthcare agencies for 2017, amounting to an overall cut in payment of $180 million.

Along with the proposed payment updates, CMS is detailing a nine-state pilot program to implement a value-based purchasing model.

The payment changes are part of a mandate within the Affordable Care Act to adjust Medicare’s home health reimbursements to make up for overpayments to those agencies dating back to 2000.

The cut comes from factoring in a variety of upward and downward adjustments to home health payments, like a 2.3 percent, $420 million increase from the home health payment update, which is then cancelled out by a $420 million decrease thanks to rebasing adjustments to the national 60-day episode payment rate, per-visit payment rates, and the non-routine medical supplies conversion factor. A $160 million decrease from an adjustment based on nominal case-mix growth and an additional $20 million decrease from adjusting fixed-dollar loss ratio used in determining outlier payments brought the total cut to $180 million.

The 2017 reduction would be the fourth straight year CMS has cut payments to home health, dating back to 2014. On the bright side for those agencies, this year’s reduction appears to be the last.

Included in the CMS announcement is extra details on its Home Health Value-Based Purchasing (HHVBP) Model, which had been unveiled in its last payment update rule.

Home health agencies involved in the pilot program would have their payments adjusted annually based on certain performance measures. The changes CMS are announcing include removing some of the proposed metrics, such as care management, and allowing agencies 15 days, rather than seven, to submit information on new measures.

Participating in the model will be all home health agencies certified by Medicare in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington.