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Medicare Home Health Services: Case Mix Weight Adjustments Haunt Care Providers
Summary
The Medicare program provides payment for home health services under a model known as the Home Health Prospective Payment System (HH PPS). A prospective payment model replaced a per visit, cost reimbursement model in October 2000, consistent with the mandate under the Balanced Budget Act of 1997.
From 2000-2007, the Centers for Medicare and Medicaid Services (CMS) devised HH PPS to provide a 60-day episodic payment based on one of 80 patient case-mix categories. The patient specific category was determined based upon scoring system that lead to the assignment of a case-mix weight that was applied to the base episodic rate to calculate the payment.
Beginning in 2008, CMS instituted a new 153 category model, revising the scoring system to assign the case mix weights. In 2008, CMS initiated a series of adjustments to the base episodic payment rate known as the Case Mix Weight Change Adjustment. This adjustment was intended to reduce payment rates to take into account increases in case mix weights (and resulting payment levels) that was not due to changes in the condition of patients. Case mix weight changes related to improved coding accuracy, coding behavioral changes, and increased utilization of therapy services in contrast to patient condition changes are the basis of the adjustment.
CMS has implemented three case mix weight change adjustments to date—2.75% rate reductions in each of 2008, 2009, and 2010. It planned on an additional reduction of 2.71% in 2011. In its recent Proposed Rule, CMS proposes to increase the 2011 adjustment to 3.79% and to add a further 3.79% adjustment in 2012.
With these adjustments it is estimated that nearly 45% of home health agencies would receive Medicare payments that are below the cost of care. These rate cuts are in addition to the projected $39.7 billion in cuts coming from the 2010 health care reform legislation, the Affordabl
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