CMS Publishes 2011 PPS Rate Update

The Centers for Medicare & Medicaid Services published the 2011 Home Health Prospective Payment System (PPS) Update Rule.

Combining the effects of a market basket update, a wage index update, reductions to the home health prospective payment system (HH PPS) rates to account for increases in aggregate case-mix that are unrelated to underlying changes in patients’ health status, and other provisions mandated by the Affordable Care Act, today’s rule proposed a 4.75 percent decrease in Medicare payments to home health agencies (HHAs) for calendar year (CY) 2011.  The rule also changes the existing home health outlier policy, with total outlier payments not to exceed 2.5 percent of the total payments estimated for a given year. HHAs are also permanently subject to a 10 percent agency-level cap on outlier payments.

Additionally, the proposed rule includes provisions mandated in the health care reform act, which states that a physician must document a face-to-face encounter with the patient, prior to certifying a patient’s eligibility for the Medicare home health benefit and that a hospice physician or nurse practitioner has seen a patient prior to recertifying the patient’s eligibility for hospice services.

In a separate notification, hospices serving Medicare beneficiaries will see an estimated 1.8 percent increase in their payments for fiscal year (FY) 2011.   The estimated hospice payment increase is the net result of a 2.6 percent increase in the “hospital market basket,” an indicator of input price increases. This is an offset by an estimated 0.8 percent decrease in payments to hospices due to updated wage index data and the second year of CMS’ 7-year phase-out of its wage index budget neutrality adjustment factor (BNAF).

A link to the notice, along with accompanying documents can be found here. Information on submitting comments is available within the notices.

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