As in prior years, the Home Health Prospective Payment System (HHPPS) had several revisions in this year’s Final Rule update. These changes will likely impact your agency’s bottom line, so you will want to familiarize yourself with them so you know what to expect in 2017.
This is the last year of the four-year phase-in of the rebasing adjustments to the HHPPS payment rates. This reduction equals 0.97 percent, to account for case-mix growth unrelated to increases in patient acuity. This will equal a reduction of the national 60-day episode amount of $80.95. National per-visit rates were increased by 3.5 percent, with increases ranging from an additional $1.79 for home health aide visits to $6.34 for medical social services. The Non-Routine Supply conversion factor was reduced by 2.82 percent, which means less money for supplies in 2017.
The market basket percentage increase for Calendar Year 2017 is 2.8 percent. This increase is reduced by 0.3 percent for the annual economy-wide private non-farm business multifactor productivity (MFP) rate, so the percentage is equal to a 2.5 percent increase after this is factored in. Agencies who do not submit required quality data for CY2017 face a reduction by 2 percent in home health payments, and therefore they will only see a 0.5 percent increase. These agencies would receive a notice from CMS prior to this reduction being levied against final claims in 2017.
Payments Adjusted For Case-Mix and Wage Index
The 2017 HHPPS continues to make payment under a national standardized 60-day episode period that is adjusted for case-mix and wage index. The 60-day episode payment includes the six home health disciplines Skilled Nursing, Physical Therapy, Occupational Therapy, Speech Language Pathology, Home Health Aide and Medical Social Services. Payment for Non-Routine Supplies (NRS) is no longer part of the 60-day episode rate and is computed by multiplying the relative weight for a particular NRS severity level by the NRS conversion factor. Both the case-mix adjusted episode payment (based on clinical severity level, functional severity level, and service utilization) and the NRS severity levels are calculated from the OASIS assessment. Durable Medical Equipment (DME) is paid separately and outside the HHPPS payment system.
As mentioned, the OASIS assessment data elements place patients into payment groupers, or Home Health Resource Groupers (HHRG), based on the clinical severity, functional severity and service utilization. These 153-category HHRGs have associated case-mix weights that are used to calculate the payment for an episode of care.
Case-Mix Variables Had Relatively Minor Changes
The 2017 HHPPS case-mix variables and scores had relatively minor changes, but case mix points awarded for Primary Diagnoses of Blood Disorders, Cancers and some benign Neoplasms and Diabetes went down in episodes with 14-plus total therapy visits, for example. Overall, the 2017 four-equation case-mix model results in 119 variables giving points (compared to 124 in 2016). Of those, the points for 33 variables increased, while 33 decreased and 47 remained the same. Six new variables were added that were not in the 2016 model and 11 variables were dropped. For example, if OASIS M1400, Dypsnea, is answered 2, 3, or, 4, no case-mix points are awarded in 2017, whereas last year one point was awarded if M1400 was 2, 3, or 4 in episodes with 14+ total therapy visits.
The second part of the case-mix change for this year involves the clinical and functional thresholds. Since the points awarded in the case mix model changed, the thresholds also changed, based on the average resource use associated with each clinical and functional score and placement of the thresholds accordingly. Clinical severities thresholds are C1 = Low, C2 = Moderate, and C3 = High, for example, and an assigned number of qualifying points place the patient in one of these categories. The current 2017 case-mix change means the severity rating of the patient whose OASIS is scored the same in 2017 as it was in 2016 may well be different. Any decreases in the variable points associated with the case-mix model or case mix weights, reflect fewer resources being furnished in those episodes than what was previously furnished, per the final rule’s citation.
Accurate Cost Reporting Is Critical
Of note in this year’s final rule, CMS mentioned multiple times that they use the most recent data available. This data is collected from final claims data, OASIS data and Agency Cost Report submissions. I cannot stress enough how important accurate Cost Reporting is to CMS decision making, as MedPAC uses these reports for basis of many financially driven decisions. In one instance, the Final Rule points out that agencies are reporting non-routine supplies on their final bills, but the same agencies are not reporting non-routine supply cost on their Cost Report. Remember, MedPAC uses the data on Cost Reports to base recommendations for the Non-Routine Supply conversion, which was cut 2.82 percent for this year’s HHPPS Final Rule.
Axxess Electronic Health Record Helps Monitor Data in Real Time
Data, when properly collected and reported, gives clear and accurate information. As an administrator, the ability to monitor your agency’s data in real time, whether quarterly or annually, is imperative. Using your Axxess Electronic Health Record to its full capacity will help you do just this and will assist you in making the best decisions for your agency and your patients.
For more information, contact Axxess for a review of recent updates and for assistance with any questions you may have regarding the use of our software platform. Our solutions ensure you can focus on delivering exceptional patient care while your agency remains compliant and profitable.
Please join us for part three in this series concerning the overhaul to outlier calculations in the 2017 HHPPS Final Rules.
To read the 2017 HHPPS Final Rules in more detail, please visit the Centers for Medicare & Medicaid Services website.