Introduction
On November 8, 2012, the Centers for Medicare and Medicaid Services (“CMS”) published the Home Health Prospective Payment System Final Rule for Calendar Year (“CY”) 2013 (“Final Rule”) in the Federal Register. This alert addresses some of the most notable components of the Final Rule in order to assist Home Health Agencies (“HHAs”) as they plan for the coming fiscal year. Specifically, we discuss the following key takeaways from the Final Rule: (1) the home health prospective payment system (“HH PPS”) update; (2) the Home Health Quality Reporting Program (“HH QRP”); (3) the home health face-to-face encounter requirement; (4) therapy assessments; and (5) HHA surveys and enforcement requirements.
HH PPS Update
Generally, Medicare pays HHAs based on a national standardized 60-day episodic payment that is adjusted for applicable case-mix and wage indexes. For home health episodes with four or fewer visits, an HHA is paid on a per visit basis, which is referred to as a low utilization payment adjustment (“LUPA”). LUPA payments are not adjusted for case-mix. HHAs may also receive additional payments for non-routine medical supplies.
For CY 2013, CMS will increase the HHA national standardized amount by 1.3% as compared to a proposed increased of 1.5%. This increase is a result of a 2.3% market basket (further discussed below) increase, which is then reduced by 1% as required by the 2010 Patient Protection and Affordable Care Act. Unfortunately, CMS also will apply a 1.32% decrease to the national standardized amount to account for the nominal case-mix change from 2000 to 2010. As a result, the HHA national standardized amount ultimately decreased from $2,138.52 for CY 2012 to $2,137.73 for CY 2013. LUPA payments and payments for non-routine medical supplies, though, are not subject to the 1.32% nominal case-mix reduction. Overall, CMS estimates that total payments to HHAs will decrease by approximately .01% or $10 million in CY 2013.
Regarding the market basket update noted above, CMS updates the standard prospective payment amounts (including the standardized 60-day episodic payment amount, the LUPA payments and non-routine medical supply payments) for HHAs each year using a market basket. This is intended to represent changes in the prices of goods and services used to furnish home health services. Periodically, CMS revises the inputs of the market basket and the weights of those inputs based on updated Medicare cost reporting data to better reflect the costs actually incurred by HHAs. For 2013, CMS updated the market basket for the first time since 2003 to reflect cost reporting data from 2010. The changes to the market basket include increasing the share of the market basket associated with labor-related expenses and adding additional categories of expenses.
Home Health Quality Reporting Program
HHAs are required to submit health care quality data each year using the Outcome and Assessment Information Set (“OASIS”) and the Home Health Care Consumer Assessment of Healthcare Providers and System Survey (“HHCAHPS”) for the HH QRP. For each year that an HHA does not meet HH QRP reporting requirements, it is subject to a two percentage point reduction to its market basket update, which may result in a negative market basket update.
CMS has finalized the proposed policy that OASIS assessments submitted by HHAs in compliance with the Conditions of Participation (“CoPs”) will continue to fulfill the requirements of the HH QRP. CMS will also utilize Medicare claims data and patient survey data from HHCAHPS for the HH QRP. In addition, CMS finalized the time period from which data will be collected. In the Final Rule, CMS stated that data for episodes beginning between July 1 and June 30 will fulfill the reporting requirement for the following calendar year. For example, quality and claims data for episodes beginning between July 1, 2012 and June 30, 2013 will satisfy the HH QRP submission requirements for 2014.
Face-to-Face Encounters of Non-Physician Practitioners in Acute Care Settings
As a condition of payment for home health services, a physician must document that he or she, or an allowed non-physician practitioner, has had a face-to-face encounter with the patient to certify that the patient is eligible for the home health benefit. Currently, CMS allows a physician caring for the patient in an acute care or post-acute care facility, and who has privileges at that facility, to perform this face-to-face encounter.
Previously, a non-physician practitioner at the facility was not allowed to perform the face-to-face encounter. However, in the Final Rule, CMS revised the regulation at 42 CFR § 424.22 to now allow a non-physician practitioner to perform the face-to-face encounter for patients admitted to an HHA from an acute or post-acute care facility, in collaboration with or under the supervision of a physician. Please note, though, that the physician supervising the non-physician practitioner must have privileges at the facility and must inform the certifying physician of the patient’s eligibility for home health benefits.
Therapy Assessments
Patients who receive therapy services as part of their home health benefits must receive periodic reassessment visits from a qualified therapist for each type of therapy that the patient is receiving. Previously, there was confusion regarding the coverage of therapy services if a reassessment visit is missed. CMS revised the regulation at 42 CFR § 409.44 to state that if a therapist misses a reassessment visit, therapy coverage for that type of therapy will resume with (and not subsequent to) the visit that the therapist completes the reassessment.
In addition, the regulations currently require therapists to conduct the reassessment visit close to the 14th visit, but no later than the 13th visit, and close to the 20th visit, but no later than the 19th visit. CMS revised the regulations to clarify that therapists must complete their reassessment visits during the 11th, 12th or 13th visit for the required 13th visit reassessment and during the 17th, 18th or 19th visit for the required 19th visit reassessment. This requirement applies individually to each type of therapy that a beneficiary is receiving under the home health benefit.
HHA Surveys and Enforcement Requirements
HHAs must meet the CoPs at 42 CFR part 484 to participate in the Medicare program. To ensure that HHAs meet the CoPs, CMS works with State Survey Agencies to conduct periodic surveys of HHAs to certify that entities meet the CoPs. CMS uses the results of these surveys to determine if it will enter into, deny or terminate a provider agreement with an HHA.
In the Final Rule, CMS set forth requirements and definitions related to HHA surveys, including definitions of the types and frequency of surveys, definitions of the types of deficiencies identified in a survey and requirements for surveyor qualifications. CMS noted that, although these definitions are being added to the regulations by the Final Rule, many have been part of longstanding CMS policy. In addition, CMS instituted an informal dispute resolution process to allow HHAs an opportunity to resolve deficiencies discovered by a survey prior to a formal hearing. This is important because it will provide more clarity for HHAs undergoing a survey or if an HHA is issued a notice of deficiency following a survey.
CMS also finalized sanctions as alternatives to those already available to CMS in the event of a failure to meet any of the CoPs, such as termination of an HHA’s provider agreement, suspension of payment for new admissions and temporary management of the HHA by a third party. In the Final Rule, CMS added the additional enforcement actions of a directed plan of correction and directed in-service training to the regulations. A directed plan of correction would require an HHA to take specific actions to be in compliance with the CoPs by requiring the HHA to meet certain benchmarks in a specific time period. Directed in-service training would require the HHA to participate in health services education and training programs developed by established entities, such as schools of medicine or area health centers. CMS has used these enforcement mechanisms in the past with skilled nursing facilities. An HHA should be aware of these enforcement actions in the event it is issued a notice of deficiency.
To determine which sanctions to apply, CMS finalized the regulations at 42 CFR § 488.815 that set forth factors to be considered in determining which sanctions CMS will consider, which include the following: (a) whether the deficiency poses immediate jeopardy to patient health and safety; (b) the nature, incidence, degree, manner and duration of the deficiencies or noncompliance; (c) the presence of repeat deficiencies; (d) whether the deficiencies are directly related to a failure to provide quality patient care; (e) whether the HHA is part of a larger organization with performance issues; and (f) whether the deficiencies indicate a system-wide failure of providing quality care.
Conclusion
Given the reimbursement and compliance implications of the Final Rule addressed above, HHAs should carefully consider how these changes might impact their budgeting, strategic planning and compliance processes in the coming year.
The Final Rule is available at: http://www.gpo.gov/fdsys/pkg/FR-2012-11-08/pdf/2012-26904.pdf
If you have any questions about this article, please contact Todd A. Nova at 414-721-0464 or tnova@wp.hallrender.com, Joseph R. Krause at 414-721-0906 or jkrause@wp.hallrender.com or your regular Hall Render attorney.
