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CMS Finalizes Home Health Prospective Payment System Rule

On October 30, 2014, the Centers for Medicare and Medicaid Services (CMS) announced its final rule regarding changes to the Medicare home health care prospective payment system. The changes, which are set to go into effect in calendar year 2015, will reduce payments to home health agencies (HHAs) by approximately .30 percent, or $60 million. This decrease comes as a result of the 2.1 percent home health payment update percentage. Additionally, the decrease implements the second year of the four-year phase in of the rebasing adjustments promulgated by Section 3131(a) of the Affordable Care Act.

CMS stated that the final rule is one of several to be released for calendar year 2015 aimed at reflecting a broader strategy to deliver better care at lower cost by increasing delivery efficiency. Provisions in the final rule should transition the healthcare system into one that values quality over quantity by focusing on reforms such as helping manage and improve chronic diseases, measuring for better health outcomes, focusing on disease prevention and fostering a more-efficient and coordinated system.

The Medicare program reimburses HHAs through a prospective payment system that pays higher rates for beneficiaries with greater needs. Currently, all HHAs must provide relevant data from patient assessments, which CMS uses to annually determine payment rates. In order to qualify for the Medicare home health benefit, a beneficiary must be cared for by a physician, require physical therapy or speech-language pathology, require intermittent skilled nursing care, or continue to need occupational therapy. Additionally, the beneficiary is required to be homebound and receive services from a Medicare-approved HHA. Outlined below are changes that the final rule makes to various aspects related to the home health prospective payment system.

Face-to-Face Encounter Regulatory Requirements Reform– Under the ACA, certifying physicians, or allowed non-physician providers, are required to have a face-to-face encounter with a beneficiary before the physician certifies the beneficiary’s home health benefit eligibility. Under current requirements, the encounter must occur within 90 days before care begins, or within 30 days after care begins. In addition, part of the documentation must include a “brief narrative” that explains why the clinical findings during the encounter support that the patient is homebound and needs skilled services.

In the final rule, CMS finalized three changes to the face-to-face encounter documentation requirements that are effective for start of care episodes beginning on or after January 1, 2015. First, CMS eliminated the current narrative requirement for most services. The certifying physician must still certify that the face-to-face encounter occurred, that the encounter was related to the primary reason for home health services and document the date of such encounter. CMS will require the certifying physician to provide documentation in their medical records, or when applicable the acute/post-acute care facility’s medical records, to be used as the basis for certification of the beneficiary’s eligibility for home health services. CMS confirmed that the medical records should include the visit note from the face-to-face encounter. Second, CMS finalized that if a HHA claim is denied, the related physician claim for certifying or re-certifying the beneficiary’s eligibility is considered non-covered as well because there is no longer a respective claim for Medicare-covered home health services. Lastly, CMS clarified that face-to-face encounters are required for certifications, rather than initial episodes. CMS also noted that certification, as opposed to re-certification, is typically considered to be whenever a new assessment is completed to initiate care.

Therapy Reassessments Modifications– The final rule eliminated the 13th and 19th visit reassessment requirements for therapists. Instead, for episodes beginning on or after January 1, 2015, a qualified therapist, not an assistant, is required to provide the needed services and reassess the patient at least once every 30 days. CMS hopes this change will reduce the burden on HHAs who formerly had to count visits. Additionally, the new policy should reduce the risk of non-covered stays, allowing therapists to focus on providing higher quality of care.

Conditions of Participation Changes for Speech-language Pathologists– In the final rule, CMS changed the Home Health Conditions of Participation for speech language pathologists (SLPs) in an effort to provide more flexibility by deferring to State licensure requirements. Following the implementation, an SLP is an individual that meets one of the following requirements:

  • Has a master’s or doctoral degree in speech-language pathology, and is licensed as a speech-language pathologist by the state where they furnish services; or
  • Has a master’s or doctoral degree in speech-language pathology, and successfully completed 350 hours of supervised clinical practicum (or is on the process of accumulating such supervised clinical experience), has at least nine months of supervised full-time speech-language pathology experience after obtaining a master’s or doctoral degree in speech-language pathology or related field, and has successfully completed a national examination approved by the Secretary.

Wachler & Associates regularly counsels healthcare providers regarding rules and regulations involving Medicare compliance and reimbursement, including application to home health agencies. If you have questions about how CMS’s final rule may impact your agency, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com. To stay updated on breaking healthcare news, please subscribe to the Wachler & Associates health law blog by adding your email address and clicking “Subscribe” in the window on the top right of this page.