CMS Issues Final Rule On Home Health Prospective Payment System And Eliminates Problematic Face-To-Face Physician Narratives

The Centers for Medicare and Medicaid Services (“CMS”) issued the Final Rule on Home Health Prospective Payment System  which will be published in the Federal Register on November 6, 2014. The final 2015 PPS rule reduces overall Medicare payment for HHAs by $60 million or 0.30%.  The calculations do not include the 2% sequestration reduction currently  in effect through March 2015 for all Medicare providers. 

Many of the changes are good news for the home health agencies (HHAs).  In summary:

1.     CMS eliminated the physician narrative requirement for face to face (F2F) encounters that has plagued physicians and HHAs since the F2F requirement was implemented more than 3 years ago.

2.     However, CMS will keep the requirement that physicians have sufficient documentation in their own files to support the certification of homebound status and skilled care need.  As a  slight reprieve, CMS will permit HHAs to provide their record to the certifying physician so that it can be included in considering whether sufficient documentation exists to support the certification.  CMS will require that the certifying physician supply his/her record to the HHA whenever a claim is audited for compliance.

3.     CMS continues rate rebasing with a $80.95 base episode rate reduction offset by a 2.1% inflation update along with the second-year adjustments to LUPA and NRS.  The final rule sets the base rate at $2,961.38, approximately $39 higher than the proposed base payment rate.   The productivity adjustment is 0.1% greater than proposed, resulting to a lower inflation update – 2.1% vs. 2 .2% as CMS proposed.

4.     CMS mandates across-the-board recalibration of case mix weights.  HHAs must include this change in any evaluation of the payment rate reductions as the weights are dramatically different that the 2014 HRRGs. Each of the 153 HHRGs will have a different (mostly lower) weight than the proposed rule.

5.     CMS eliminates the 13^th and 19^th visit professional therapist evaluations and replaces that requirement with assessments every 30 days.  Previously, CMS had proposed a 14 day reassessment requirement.  This is very good news for HHAs.

6.     The new wage index is a 50/50 blend of the new CBSA designations.  CMS has limited the rural add-on to counties that are  “rural” under the new CBSA geographic areas.  The result is that over 100 counties across the U.S. will lose the rural add-on. 

7.     The Final Rule includes other changes regarding OASIS submissions, speech-language pathologist qualifications, civil money penalties for CoP violations, and recertification requirements that will increase the number of F2F situations.

Should you have any questions regarding this Final Rule, please do not hesitate to contact Charles MacKelvie at (312) 235-1117 or Meghan McNab at (317) 808-5863.