[Federal Register Volume 74, Number 216 (Tuesday, November 10, 2009)]
[Rules and Regulations]
[Pages 58078-58183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-26503]
[[Page 58077]]
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Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 409, 424, and 484
Medicare Program; Home Health Prospective Payment System Rate Update
for Calendar Year 2010; Final Rule
Federal Register / Vol. 74, No. 216 / Tuesday, November 10, 2009 /
Rules and Regulations
[[Page 58078]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 409, 424, and 484
[CMS-1560-F]
RIN 0938-AP55
Medicare Program; Home Health Prospective Payment System; Rate
Update for Calendar Year 2010
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule sets forth an update to the Home Health
Prospective Payment System (HH PPS) rates; the national standardized
60-day episode rates, the national per-visit rates, the non-routine
medical supply (NRS) conversion factors, and the low utilization
payment amount (LUPA) add-on payment amounts, under the Medicare
prospective payment system for home health agencies effective January
1, 2010. This rule also updates the wage index used under the HH PPS.
In addition, this rule changes the HH PPS outlier policy, requires the
submission of OASIS data as a condition for payment under the HH PPS,
implements a revised Outcome and Assessment Information Set (OASIS-C)
for episodes beginning on or after January 1, 2010, and implements a
Consumer Assessment of Healthcare Providers and Systems (CAHPS) Home
Health Care Survey (HHCAHPS) affecting payment to HHAs beginning in CY
2012. Also, this rule makes payment safeguards that will improve our
enrollment process, improve the quality of care that Medicare
beneficiaries receive from HHAs, and reduce the Medicare program's
vulnerability to fraud. This rule also adds clarifying language to the
``skilled services'' section and Conditions of Participation (CoP)
section of our regulations. This rule also clarifies the coverage of
routine medical supplies under the HH PPS.
DATES: Effective Date: These regulations are effective on January 1,
2010.
FOR FURTHER INFORMATION CONTACT:
Randy Throndset, (410) 786-0131 (overall HH PPS).
James Bossenmeyer, (410) 786-9317 (for information related to payment
safeguards).
Doug Brown, (410) 786-0028 (for quality issues).
Kathleen Walch, (410) 786-7970 (for skilled services requirements and
clinical issues).
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
A. Requirements of the Balanced Budget Act of 1997 for
Establishing the Prospective Payment System for Home Health Services
B. Deficit Reduction Act of 2005
C. System for Payment of Home Health Services
D. Updates to the HH PPS
II. Summary of the Proposed Provisions and Response to Comments
A. Outlier Policy
B. Case-Mix Measurement Analysis
C. CY 2010 Payment Rate Update
1. Home Health Market Basket Update
2. Home Health Care Quality Improvement
3. Home Health Wage Index
4. CY 2010 Payment Update
a. National Standardized 60-Day Episode Rate
b. Updated Cy 2010 National Standardized 60-Day Episode Payment
Rate
c. National Per-Visit Rates Used To Pay LUPAs and Compute
Imputed Costs Used in Outlier Calculations
d. LUPA Add-On Payment Amount Update
e. Non-Routine Medical Supply Conversion Factor Update
D. OASIS Issues
1. HIPPS Code Reporting
2. OASIS Submission as a Condition for Payment
E. Qualifications for Coverage as They Relate to Skilled
Services Requirements
F. OASIS for Significant Change in Condition No Longer
Associated With Payment
G. Payment Safeguards for Home Health Agencies
H. Physician Certification and Recertification of the Home
Health Plan of Care
I. Routine Medical Supplies
III. Provisions of the Final Rule
IV. Collection of Information Requirements
A. ICRs Regarding the Requirements for Home Health Services
B. ICRs Regarding Deactivation of Medicare Billing Privileges
C. ICRs Regarding Prohibition Against Sale or Transfer of
Billing Privileges
D. ICRs Regarding Patient Assessment Data
V. Regulatory Impact Analysis
I. Background
A. Requirements of the Balanced Budget Act of 1997 for Establishing the
Prospective Payment System for Home Health Services
The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) enacted on
August 5, 1997, significantly changed the way Medicare pays for
Medicare home health services. Section 4603 of the BBA mandated the
development of the home health prospective payment system (HH PPS).
Until the implementation of a HH PPS on October 1, 2000, home health
agencies (HHAs) received payment under a cost-based reimbursement
system.
Section 4603(a) of the BBA mandated the development of a HH PPS for
all Medicare-covered home health services provided under a plan of care
(POC) that were paid on a reasonable cost basis by adding section 1895
of the Social Security Act (the Act), entitled ``Prospective Payment
For Home Health Services''. Section 1895(b)(1) of the Act requires the
Secretary to establish a HH PPS for all costs of home health services
paid under Medicare.
Section 1895(b)(3)(A) of the Act requires that: (1) The computation
of a standard prospective payment amount include all costs for home
health services covered and paid for on a reasonable cost basis and be
initially based on the most recent audited cost report data available
to the Secretary, and (2) the prospective payment amounts be
standardized to eliminate the effects of case-mix and wage levels among
HHAs.
Section 1895(b)(3)(B) of the Act addresses the annual update to the
standard prospective payment amounts by the home health applicable
percentage increase. Section 1895(b)(4) of the Act governs the payment
computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act
require the standard prospective payment amount to be adjusted for
case-mix and geographic differences in wage levels. Section
1895(b)(4)(B) of the Act requires the establishment of an appropriate
case-mix change adjustment factor that adjusts for significant
variation in costs among different units of services.
Similarly, section 1895(b)(4)(C) of the Act requires the
establishment of wage adjustment factors that reflect the relative
level of wages, and wage-related costs applicable to home health
services furnished in a geographic area compared to the applicable
national average level. Pursuant to 1895(b)(4)(c), the wage-adjustment
factors used by the Secretary may be the factors used under section
1886(d)(3)(E) of the Act.
Section 1895(b)(5) of the Act gives the Secretary the option to
make additions or adjustments to the payment amount otherwise paid in
the case of outliers because of unusual variations in the type or
amount of medically necessary care. Total outlier payments in a given
fiscal year (FY) or year may not exceed 5 percent of total payments
projected or estimated.
In accordance with the statute, we published a final rule (65 FR
41128) in the Federal Register on July 3, 2000, to implement the HH PPS
legislation. The July 2000 final rule established requirements for the
new HH PPS for home health services as required by section 4603 of the
BBA, as
[[Page 58079]]
subsequently amended by section 5101 of the Omnibus Consolidated and
Emergency Supplemental Appropriations Act (OCESAA) for Fiscal Year
1999, (Pub. L. 105-277), enacted on October 21, 1998; and by sections
302, 305, and 306 of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act (BBRA) of 1999, (Pub. L. 106-113), enacted on November
29, 1999. The requirements include the implementation of a HH PPS for
home health services, consolidated billing requirements, and a number
of other related changes. The HH PPS described in that rule replaced
the retrospective reasonable cost-based system that was used by
Medicare for the payment of home health services under Part A and Part
B. For a complete and full description of the HH PPS as required by the
BBA, see the July 2000 HH PPS final rule (65 FR 41128 through 41214).
B. Deficit Reduction Act of 2005
On February 8, 2006, the Deficit Reduction Act of 2005 (Pub. L.
109-171) (DRA) was enacted. Section 5201 of the DRA requires HHAs to
submit data for purposes of measuring health care quality, and links
the quality data submission to payment. This requirement is applicable
for CY 2007 and each subsequent year. If an HHA does not submit quality
data, the home health market basket percentage increase will be reduced
2 percentage points. In accordance with the statute, we published a
final rule (71 FR 65884, 65935) in the Federal Register on November 9,
2006 to implement the pay-for-reporting requirement of the DRA,
codified at 42 CFR 484.225(h) and (i).
C. System for Payment of Home Health Services
Generally, Medicare makes payment under the HH PPS on the basis of
a national standardized 60-day episode payment rate that is adjusted
for the applicable case-mix and wage index. The national standardized
60-day episode rate includes the six home health disciplines (skilled
nursing, home health aide, physical therapy, speech-language pathology,
occupational therapy, and medical social services). Payment for non-
routine medical supplies (NRS), is no longer part of the national
standardized 60-day episode rate and is computed by multiplying the
relative weight for a particular NRS severity level by the NRS
conversion factor (See section III.C.4.e). Durable medical equipment
covered under the home health benefit is paid for outside the HH PPS
payment. To adjust for case-mix, the HH PPS uses a 153-category case-
mix classification to assign patients to a home health resource group
(HHRG). Clinical needs, functional status, and service utilization are
computed from responses to selected data elements in the OASIS
assessment instrument.
For episodes with four or fewer visits, Medicare pays on the basis
of a national per-visit rate by discipline; an episode consisting of
four or fewer visits within a 60-day period receives what is referred
to as a low utilization payment adjustment (LUPA). Medicare also
adjusts the national standardized 60-day episode payment rate for
certain intervening events that are subject to a partial episode
payment adjustment (PEP adjustment). For certain cases that exceed a
specific cost threshold, an outlier adjustment may also be available.
D. Corrections
We published a final rule with comment period in the Federal
Register on August 29, 2007 (72 FR 49762) that set forth a refinement
and rate update to the 60-day national episode rates and the national
per-visit rates under the Medicare prospective payment system for home
health services for CY 2008. In this final rule with comment period, in
Table 10B (72 FR 49854), the short description for ICD-9-CM code 250.8x
& 707.10-707.9 should read ``PRIMARY DIAGNOSIS = 250.8x AND FIRST OTHER
DIAGNOSIS =707.10-707.9. Instead of a formal correction notice, we are
notifying the public of this correction in this final rule.
E. Updates to the HH PPS
As required by section 1895(b)(3)(B) of the Act, we have
historically updated the HH PPS rates annually in the Federal Register.
Most recently, we published a notice in the Federal Register on
November 3, 2008 (73 FR 65351) that set forth the update to the 60-day
national episode rates and the national per-visit rates under the
Medicare prospective payment system for home health services for CY
2009.
F. Requirements for Issuance of Regulations
Section 902 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) amended section 1871(a) of the Act and
requires the Secretary, in consultation with the Director of the Office
of Management and Budget, to establish and publish timelines for the
publication of Medicare final regulations based on the previous
publication of a Medicare proposed or interim final regulation. Section
902 of the MMA also states that the timelines for these regulations may
vary but shall not exceed 3 years after publication of the preceding
proposed or interim final regulation except under exceptional
circumstances.
This final rule finalizes provisions set forth in the August 13,
2009 proposed rule (74 FR 40948). In addition, this final rule has been
published within the 3-year time limit imposed by section 902 of the
MMA. Therefore, we believe that the final rule is in accordance with
the Congress' intent to ensure timely publication of final regulations.
II. Summary of the Proposed Provisions and Response to Comments
In the, August 13, 2009 Federal Register (74 FR 40948) we published
the proposed rule entitled, ``Medicare Program; Home Health Prospective
Payment System Rate Update for CY 2010'' and provided for a 60-day
comment period. In this proposed rule we proposed updates to the Home
Health Prospective Payment System (HH PPS) rates; the national
standardized 60-day episode rates, the national per-visit rates, the
non-routine medical supply (NRS) conversion factor, and the low
utilization payment amount (LUPA) add-on payment amount, under the
Medicare prospective payment system for home health agencies effective
January 1, 2010. As part of the CY 2010 proposed rule (74 FR 40948), we
also proposed a change to the HH PPS outlier policy, proposed to
require the submission of OASIS data as a condition for payment under
the HH PPS, and proposed payment safeguards that would improve our
enrollment process, improve the quality of care that Medicare
beneficiaries receive from HHAs, and reduce the Medicare program's
vulnerability to fraud. The CY 2010 proposed rule also added clarifying
language to the ``skilled services'' section and the Conditions of
Participation (CoPs) sections of our regulations, and also clarified
the coverage of routine medical supplies under the HH PPS. We also
solicited comments on: Physician/patient interaction associated with
the home health plan of care (POC); a Consumer Assessment of Healthcare
Providers and Systems (CAHPS) Home Health Care Survey; the Outcome and
Assessment Information Set (OASIS), Version C, effective January 1,
2010; proposed pay for reporting measures for use in CY 2011; and a
number of minor payment-related issues. We also responded, in the CY
2010 proposed rule (74 FR 40948), to comments received as a result of
our solicitation in the CY 2008 HH
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PPS final rule with comment period (72 FR 49762).
In response to the publication of the CY 2010 HH PPS proposed rule,
we received approximately 73 items of correspondence from the public.
We received numerous comments from various trade associations and major
health-related organizations. Comments also originated from HHAs,
hospitals, other providers, suppliers, practitioners, advocacy groups,
consulting firms, and private citizens. The following discussion,
arranged by subject area, includes our responses to the comments and,
where appropriate, a brief summary as to whether or not we are
implementing the proposed provision or some variation thereof.
A. Outlier Policy
Section 1895(b)(5) of the Act allows for the provision of an
addition or adjustment to the regular 60-day case-mix and wage-adjusted
episode payment amount in the case of episodes that incur unusually
high costs due to patient home health care needs. This section further
stipulates that total outlier payments in a given year may not exceed 5
percent of total projected or estimated HH PPS payments. Section
1895(b)(3)(C) of the Act stipulates that the standard episode payment
be reduced by such a proportion to account for the aggregate increase
in payments resulting from outlier payments. Under the HH PPS, outlier
payments are made for episodes for which the estimated cost exceeds a
threshold amount. The wage adjusted fixed dollar loss (FDL) amount
represents the amount of loss that an agency must bear before an
episodes becomes eligible for outlier payments.
In recent years, our analysis has revealed excessive growth in
outlier payments, primarily the result of suspiciously high outlier
payments in a few discrete areas of the country. In our CY 2009 payment
update, we did not raise the FDL ratio, given the statistical outlier
data anomalies that we identified in certain targeted areas, because
program integrity efforts, such as payment suspensions for HHAs with
questionable outlier billing activities, were underway to address
excessive, suspicious outlier payments that were occurring in these
areas. Instead, we maintained the then-current (CY 2008) FDL ratio of
0.89 in CY 2009 while actions to remedy inappropriate outlier payments
in these target areas of the country were effectuated.
In our CY 2010 HH PPS proposed rule, we expanded our outlier
analysis to assess the appropriateness of adopting a lower target
percentage of outlier payments to total HH PPS payments. We performed
an analysis of all providers who receive outlier payments, focusing our
analysis on total HH PPS payments, total outlier payments, number of
episodes, number of outlier episodes, and location of provider.
Specifically, our analysis incorporated a 10 percent per-agency cap on
outliers and looked at outlier payments as a percentage of total HH PPS
payments with that 10 percent per-agency cap in place. That analysis
revealed that with a 10 percent per-agency outlier cap in place,
outlier dollars accounted for approximately 2.1 percent of total HH PPS
payments. Additionally, we performed a separate analysis on CMS data
using Medicare provider numbers of members of a major association of
home health agencies who claim to be safety-net providers, serving
sicker, more costly patients. The average outlier payment to these
agencies was found to be less than 2 percent.
In the proposed rule we recognized that although program integrity
efforts associated with excessive outlier payments continue in targeted
areas of the country, we continue to be at risk of exceeding the 5
percent statutory limit on estimated outlier expenditures. Therefore,
we focused our analysis on whether a broader policy change to our
outlier payment policy might also be warranted, to mitigate possible
billing vulnerabilities associated with excessive outlier payments, and
to adhere to our statutory limit on outlier payments. Our analysis
revealed that a 10 percent per-agency cap in outlier payments would
mitigate potential inappropriate outlier billing vulnerabilities while
minimizing the access to care risk for high needs patients.
Therefore, to mitigate possible billing vulnerabilities associated
with excessive outlier payments, and to adhere to our statutory limit
on outlier payments, we proposed to implement an agency level outlier
cap such that in any given calendar year, an individual HHA would
receive no more than 10 percent of its total HH PPS payments in outlier
payments. Additionally, we proposed to reduce the FDL ratio to 0.67 for
CY 2010. This combination of a 10 percent agency level outlier cap, and
reduced FDL ratio of 0.67, and allowing for future growth in outlier
payments, resulted in a projected target outlier payment outlay of
approximately 2.5 percent of total HH PPS payments in outlier payments.
Currently, we reduce the national standardized 60-day episode
payment rates, the national per-visit rates, the LUPA add-on amount,
and the NRS conversion factor by 5 percent in order to create an
outlier pool that accommodates estimated outlier payments of 5 percent
of total HH PPS payments. Targeting the percentage of outlier payments
at approximately 2.5 percent would allow us to create a smaller outlier
pool and return the remaining 2.5 percent to the HH PPS rates. In the
proposed rule, we proposed to retain a 2.5 percent reduction to the
national standardized 60-day episode rates, the national per-visit
rates, the LUPA add-on payment amount, and the NRS conversion factor to
fund the proposed target of approximately 2.5 percent of total
estimated HH PPS payments in outlier payments, adhering to the
statutory requirement in section 1895(b)(3) of the Act.
Comment: Most commenters were very supportive, and in favor of the
overall proposed HH PPS outlier policy. Commenters stated that
anomalous outlier trends in recent years are compelling evidence that
abusive and possibly fraudulent practices are widespread in many areas
of the country and that increased safeguards are necessary to curb
inappropriate activity as it relates to the billing of outlier episodes
under the HH PPS. Commenters further stated that the proposed changes
were reasonable areas of focus for additional safeguards against fraud
and abuse in the area of billing for outliers in the HH PPS. Other
commenters stated that they strongly supported CMS in its efforts to
curb fraud and abuse and are not opposed to the proposed implementation
of these changes to the outlier policy. Several commenters found the
proposed outlier policy to be fair and expect the policy to be
effective.
Response: We appreciate the overwhelming support from commenters
that we received on our proposed HH PPS outlier policy. We would like
to point out that fraudulent activity is not widespread in many areas
of the country. These sort of fraudulent activities are occurring in a
few discrete areas of the country. We continue to believe that an
agency-level outlier cap is the appropriate policy, at this time, to
mitigate possible billing vulnerabilities associated with excessive
outlier payments and to adhere to our statutory limit on outlier
payments. As such, in conjunction with the 10 percent agency level
outlier policy, we proposed to target a new 2.5 percent outlier pool
(as opposed to the existing 5 percent outlier pool), and return 2.5
percent back into the national standardized 60-day episode rates, the
national per-visit rates, the LUPA add-on payment amount, and the NRS
conversion factor,
[[Page 58081]]
with a 0.67 FDL ratio. For reasons outlined later in this final rule,
we are finalizing this outlier policy for CY 2010 only.
Comment: Several commenters supported the new, lower, outlier
target of approximately 2.5 percent, and applauded CMS for restoring
dollars to the HH PPS payment rates. A commenter commended CMS for
thoughtfully considering the negative impact on patient access, should
outlier payments be completely eliminated. A few commenters urged CMS
to monitor outlier expenditures and further reduce the FDL if outlier
payments drop below the new 2.5 percent target. A commenter asked CMS
to explain the methods that would be used to monitor these outlier
payments.
Response: We appreciate the support of the proposed outlier target
of approximately 2.5 percent and returning 2.5 percent back into the HH
PPS rates. As a commenter stated, CMS did give thoughtful consideration
to eliminating the outlier policy altogether, and although we reserve
the right to eliminate the outlier policy in the future, should
circumstances make that necessary, we believe that an outlier target of
approximately 2.5 percent and returning 2.5 percent back into the HH
PPS rates, for CY 2010, is the appropriate policy at this time. As part
of our final outlier policy, in addition to returning 2.5 percent back
into the HH PPS rates, because of the 10 percent cap on outlier
payments, CMS is also lowering the FDL from 0.89 to 0.67, making it
easier for episodes to qualify for outlier payments. Thus, in addition
to the fact that few non-fraudulent providers are expected to be
impacted by the 10 percent cap, all providers will benefit from the 2.5
percent increase in the base rate and will also be helped by the
lowering of the FDL ratio. As stated above, CMS plans to analyze
overall national spending on outlier payments relative to the new 2.5
percent outlier pool by geographic area and provider type. CMS also
plans on looking at outlier payments, per HHA, relative to the 10
percent cap on outlier payments at the agency level by geographic area
and provider type.
Comment: There was a commenter who was opposed to returning a
portion of the current 5 percent pool to the HH PPS rates, stating that
doing so would reduce resources to provide for sicker patients and
increase funds paid for lost-cost/low-utilization patients who are
already well provided for. Another commenter was concerned about
reducing the outlier pool to 2.5 percent, stating that it would hurt
providers that accept difficult and hard-to-place patients.
Response: For the past several years, CMS has updated the FDL ratio
in attempts to estimate outlier dollars to be no more than 5 percent.
However, because outlier payments in certain areas of the country
continue to increase at alarming rates, updating the FDL on an annual
basis has proven to not be enough to keep outlier dollars at no more
than 5 percent of total HH PPS payments. As we described in the
proposed rule, our analyses show that when we remove from our analyses
HHAs in areas of the country with high suspect outlier payments, as
well as small agencies that are not representative of the types of
agencies we suspect of suspicious billing activities, outlier payments
for the rest of the country account for less than 2 percent of total HH
PPS payments. As described in the proposed rule, our analyses have
shown that in simulating payment for CY 2010, imposing an outlier cap
of 10 percent at the agency level, we would pay approximately 2.32
percent of total HH PPS payments in outlier payments.
Additionally, in our separate analysis of CMS data using provider
numbers from a major home health agency association's agencies, which
claim to service a sicker, more costly population, only one of these
agencies was estimated to exceed a 10 percent outlier cap. Further
analysis shows us that approximately 70 percent of all HHAs receive
between 0 percent and 1 percent in outlier dollars as a percentage of
their total HH PPS payments. Consequently, we believe that a final
outlier policy for CY 2010 that includes a 10 percent agency level
outlier cap, a target of approximately 2.5 percent for outlier dollars
as a percentage of total HH PPS payments, returning 2.5 percent back
into the HH PPS rates, and a 0.67 FDL ratio is the appropriate policy,
and that it appropriately pays for legitimate outlier episodes as well
as all other types of episodes under the HH PPS. Because our trend
analysis shows that outlier expenditures continue to grow, we proposed
and are finalizing as part of our final outlier policy, an outlier
target of approximately 2.5 percent.
Comment: Most commenters were in support of lowering the FDL ratio
to that of 0.67, but urged CMS to carefully monitor the effects of
reducing the FDL ratio to gauge whether there is an increase in
inappropriate outliers and if increasing the FDL ratio might be
necessary in the future. A commenter asked CMS to keep the FDL ratio at
0.89 because lowering it to 0.67 would make it easier for episodes to
become outliers, thereby making it difficult for HHAs that are trying
to stay under a 10 percent cap to meet the requirement and still
deliver care. Another commenter stated that the proposal to reduce the
FDL to 0.67, which would increase the number of episodes that qualify
for outlier payments, is a ``futile gesture'' in the face of a 10
percent cap.
Response: We appreciate commenters' support of lowering the FDL
ratio to 0.67. As stated above, CMS plans to analyze overall national
spending on outlier payments relative to the new 2.5 percent outlier
pool by geographic area and provider type. CMS also plans on looking at
outlier payments per HHA relative to the 10 percent cap on outlier
payments at the agency level by geographic area and provider type. At
the same time, we will be looking at how the FDL ratio of 0.67 affects
the percentage of outliers, and consider adjustments to the FDL ratio
(up or down) if appropriate. We are decreasing the FDL ratio from 0.89
to 0.67 because the latest data and best analysis available tell us
that in conjunction with an outlier policy that invokes a 10 percent
agency level outlier cap and a target outlier pool of approximately 2.5
percent (returning 2.5 percent to the HH PPS rates), a FDL ratio of
0.67 is appropriate. As we stated in the proposed rule and throughout
this final rule, if we are unable to see measurable improvements with
respect to suspected fraudulent billing practices as they relate to HHA
outlier payments, CMS may consider eliminating the outlier policy
entirely in future rulemaking.
Comment: A number of commenters supported the ``rolling basis'' in
determining whether outlier payments should be made at any given time
during the year. However, another commenter cautioned CMS not to create
a tracking nightmare for fiscal intermediaries and providers that is
overly burdensome or complicated to administer. Yet another commenter
was concerned about a delay in payments to HHAs, for services that have
already been provided, and expenses that have already been incurred.
That same commenter suggested that to address cash flow issues, CMS
should delay the process of identifying and withholding outlier
payments until the end of the first or second quarter of the calendar
year, making it easier to HHAs to absorb early outlier cases. Another
commenter was concerned that the ``rolling cap'' would result in
accounting challenges, and suggested a quarterly look-back with a lump
sum whenever outlier payments exceeded the 10 percent cap. A commenter
stated that a rolling method could create excessive outlier
[[Page 58082]]
down-scores until the next calculation. The commenter believed that a
retrospective adjustment would be fairer and would enable HHAs to
reconcile revenue. Another commenter expressed concern about a
retrospective recoupment, particularly an annual one, and the impact
such a recoupment could have on the cash flow of smaller agencies and
agencies with lower Medicare margins.
Response: Implementing the cap by a post-payment recoupment
process, either quarterly or annual, would delay impact of the cap on
HHAs that are billing outlier episodes inappropriately. Under a lump
sum recoupment, there could be a total disruption to an HHA's cash
flow. That is, if the amount of outlier dollars paid in excess of the
cap and scheduled for recoupment is greater than the amount due to the
HHA for other claims, the HHA's payment could stop completely for a
time while the recoupment was made. We believe this sort of payment
disruption is undesirable.
Under our planned implementation approach, for each home health
provider, the claims processing system will maintain a running tally of
the year-to-date (YTD) total home health payments. The claims
processing system will ensure that each time an outlier claim for an
agency is processed, actual outlier payments will never exceed 10
percent of the agency's YTD total payments. While an agency will always
receive its base episode payment timely, the outlier portion of the
claim will be paid on a rolling basis, as the agency's YTD payments
support payment of the outlier. We plan to have a periodic
reconciliation process under which outlier payments that were withheld
are subsequently paid if the HHA's total payments have increased to the
point that their outlier payments can be made. This reconciliation
process will always result in additional cash flow to HHAs, and so we
believe it is preferable. With regard to revenue tracking, distinct
coding will be used on the HHA's remittance advice when outlier
payments are withheld, assisting receivables accountants to identify
and account for the differences between expected and actual payments.
For these reasons, we agree with the commenter that supported a rolling
implementation of the cap and will finalize this proposal.
Comment: A number of commenters encouraged CMS to take more
aggressive actions through program integrity activities. One commenter
recommended that a high rate of outliers for a particular HHA should
trigger medical review, creating a greater/more effective deterrent to
fraudulent behavior. In general, the commenter supported more
aggressive enforcement. A commenter stated that reference areas with
fraud should have much higher incidence of additional document requests
(ADRs) and phone calls to beneficiaries from fiscal intermediaries.
Documentation should be closely reviewed for medical necessity,
qualifications, and homebound status.
Response: As we stated in the proposed rule, so far as activities
related to high levels of suspicious outlier payments, CMS is
continuing with program integrity efforts including possible payment
suspensions for HHAs with questionable outlier billing activities.
Comment: Commenters asked that CMS clarify that while outlier
payments would be capped at 10 percent, at the agency level, that the
non-outlier portion of the payment would still be paid.
Response: We thank the commenters for this comment, and apologize
if we were not clear as to what portion of the HH PPS payment would be
subject to the 10 percent cap. As stated in the proposed rule (at 74 FR
40957),the outlier policy, finalized for CY 2010 only, will include a
10 percent cap on outlier payments at the agency level. That is to say,
an agency's outlier payments are to be capped at 10 percent of its
total HH PPS payments (of which outlier payments are a part). For any
claim with an outlier payment, if it were determined that paying the
outlier portion of the total HH PPS payment for that claim would result
in the HHA exceeding the 10 percent cap in outlier payments, only the
outlier portion of the claim would not be paid at that time. However,
the regular HH PPS payment (based on the HHRG that applies to that
claim) is not subject to that 10 percent outlier cap, and thus would be
paid. Any HH PPS payment adjustments other than the outlier payment
(that is, PEP, recoding for therapy visits, etc.), would also continue
to apply to the claim.
Comment: CMS' analysis in the proposed rule started by first
identifying ``all providers who receive outlier payments'' but excluded
agencies with greater than 15 percent outlier episodes for one reason
or another. Such exclusion skews analysis in favor of the 10 percent
cap at the agency level, without considering that HHAs are shouldering
the burden of serving sicker, more costly patients, represented by the
excluded agencies with greater than 15 percent outlier episodes.
Response: The purpose of our analyses was to show the impact of the
outlier cap policy on agencies not likely to be receiving inappropriate
outlier payments. It is clear that a 10 percent agency outlier cap
would have a major effect on agencies in certain areas of the country
involved in suspect inappropriate billing practices. As such, we did
not want to have data from those agencies skewing the results. To
clarify, we did not exclude agencies with either outlier payments or
outlier episodes greater than 15 percent. We did exclude agencies from
our analysis that received sizeable outlier payments (totaling at least
$100,000), had high ratio of outlier payments to total HH PPS payments
(30 percent or more), and were located in the counties in Florida,
Texas and California where program integrity issues had been
identified. Those agencies simultaneously satisfying all three of these
exclusion criteria were considered highly suspect for inappropriate
billing practices. We also excluded a small number of agencies that had
fewer than 20 Medicare HH PPS episodes, believing that Medicare
beneficiaries account for such a small part of their business that they
are not representative of the types of agencies we are most concerned
about disadvantaging with an outlier cap policy. Finally, we excluded a
few additional agencies because they, too, were located in those same
counties experiencing program integrity issues, and thus we did not
want to have data from those agencies skewing the results either.
Comment: Some commenters suggested that the proposed outlier
policies will put small HHAs out of business, while larger HHAs will be
impacted only slightly. A commenter suggested that small HHAs will have
to transfer their complex patients to larger HHAs that generate enough
income to receive outlier patients, leaving small HHAs with limited
service offerings and more competitive disadvantages. The commenter
further asked CMS to further research the impact that the 10 percent
cap will have on HHAs that generate $2 million or less. Another
commenter stated that special consideration should be given to smaller
HHAs with fewer than 50 patients with low socioeconomic status (SES).
The commenter also stated that CMS should take into account that there
are cultural and racial reasons why certain areas may have more home
health chronic patients. Another commenter stated that our proposed
outlier policies would eliminate a safety net for HHAs that typically
treat higher needs patients. Some commenters cautioned CMS to analyze
carefully the effects of such an outlier policy to ensure that HHAs and
[[Page 58083]]
beneficiaries and rural and under-served areas are not adversely
affected. A number of commenters urged CMS to ensure that HHAs that
legitimately serve sicker/more clinically complex patients are not
penalized or put out of business, causing access issues for
beneficiaries. Another commenter suggested that in some areas lacking
of other post acute settings available to beneficiaries, HHAs may have
higher outlier costs. There was, however, a commenter who stated that
the proposed outlier policy assumes some financial loss from outlier
episodes, but that the commenter's analysis on freestanding HHAs
indicates that some HHAs have lower costs than those costs assumed in
the proposed policy. Consequently, these HHAs with lower costs may be
able to profit from abusing the outlier policy, even with a smaller
outlier pool and provider level cap.
Response: Our analysis (see proposed rule at 74 FR 40956) shows
that when the counties with program integrity problems are removed, the
vast majority of the remaining providers have outlier dollars below 10%
of their total home health expenditures and thus will not be affected
by the policy. Further mitigating the effects of the outlier policy is
that the base rates for all episodes are being increased by 2.5%. An
alternative, as was discussed in the proposed rule, would be to
eliminate the outlier policy altogether, an option that some providers
might find even less appealing. While we continue to believe that our
proposed outlier policy would not negatively impact the access to home
health care, we believe it prudent to carefully monitor the impact that
this new policy may have on access to home health care. Therefore, we
are finalizing our proposed outlier policy, but for CY 2010 only. We
will closely monitor data trends and we may make this policy, or some
variation of this policy, permanent in future rulemaking. We believe
that a final outlier policy for CY 2010 that includes a 10 percent
agency level outlier cap, a target of approximately 2.5 percent for
outlier dollars as a percentage of total HH PPS payments, returning 2.5
percent back into the HH PPS rates, and a 0.67 FDL ratio is the
appropriate policy at this time.
Comment: Some commenters opposed the proposed outlier policy,
stating that it penalized HHAs that treat insulin-dependent diabetes
mellitus (IDDM) patients. These commenters stated that this policy
would ultimately end up causing patients with IDDM to be denied
treatment, and thus jeopardizing their lives. The same commenter stated
that IDDM patients have always been the exception to the rule, ``end in
sight''. The commenter went on to say that this policy would be life
threatening to insulin dependent diabetics because they would have no
one to administer their insulin. The commenter stated that they were
one of the few HHAs that accepted these types of patients, and that if
the 10 percent outlier cap were implemented, there would be no HHA to
take these patients, resulting in insulin mismanagement, increased
hospitalizations, and complications (including death). The commenter
stated that Houston has a high population of IDDM patients, and that
CMS should consider regions/geography as to how an outlier cap should
appropriately be applied.
A few commenters wanted to see exceptions for certain types of
patients, while other commenters wanted to see exceptions for HHAs
specializing in treating certain types of patients. One commenter
proposed that HHAs specializing in chronic disease management
(diabetes, congestive heart failure (CHF), wound care, etc.), with
criteria to safeguard against fraud, should be exempt from the 10
percent outlier cap policy. The commenter stated that criteria may
include having specialty providers working with the HHA and that
enhanced services (placing the patient as an outlier) are necessary.
The commenter pointed out that, in their State, an association of
diabetes educators was working towards being able to certify HHAs with
a ``Diabetes Education Program'' which could also be a requirement for
those with outlier diabetics. HHAs providing that specialty care should
be willing to collect and report data on outcomes to assure quality
care is being provided. A commenter stated that while a 10 percent
outlier cap may be appropriate in most cases, episodes in which IDDM
patients are being served should be exempt from that policy. Another
commenter suggested that an exemption for those HHAs willing to follow
criteria for specialty care to safeguard against fraud should be
excluded from the cap.
Another commenter adamantly opposed the 10 percent outlier cap, as
they specialize in diabetic care, and such a policy would affect the
way they do business and their cash flow. The commenter stated that
they would be forced to transfer IDDM patients to other HHAs. The
commenter stated that such patients should not be punished by forcing
them to change providers due to government policy rather than choice.
The commenter also suggested that CMS do more research on the impact of
such a change and the effects that such a change would have on
competitive dynamics as well as ways to ``even the playing field.''
Another commenter suggested that CMS allow higher cap percentages for
counties with high IDDM populations.
Another commenter was opposed to the 10 percent outlier cap,
stating that it would put their patients in jeopardy. The commenter
went on to say that they see elderly and mentally disabled adults
through Diabetic Outreach Services (DOS). The commenter stated that
many patients in DOS have vision disturbances, cognitive impairment, or
dexterity issues and are on the Medicare home health benefit for
multiple daily insulin injections. Without the HHA, or a willing/able
caregiver, these patients would likely dose incorrectly or not at all,
leading to hospitalization, SNF placement, or death. The commenter
further stated that those IDDM patients receiving services from home
health agencies have fewer hospitalizations or urgent use of the
medical system.
A few commenters were opposed to the proposed outlier policy,
stating that they take the ``difficult cases'' such as the unwanted
children with psychiatric issues, low SES, IV, wound-care, and other
diabetic cases, many of whom do not have caregivers. Many of their
homebound patients are also vision impaired, have dexterity issues, or
have dementia and/or Alzheimer's disease and require someone to be
involved in their care. Those in assisted living facilities have even
more specialized needs. The commenter stated that assisted living
facilities are not always able to check glucose levels, and some are
prohibited from administering insulin. The commenter stated that many
patients cannot administer insulin safely, and families are unable to
do so due to work schedules. The commenter wrote that incorrectly
administered insulin can cause frequent calls to 911 and visits to the
emergency room, and that poorly managed diabetes can cause
hyperglycemia, hypoglycemia, and death. The commenter stated that if
this outlier policy were to be implemented, their patients would end up
in the hospital, only redirecting Medicare costs to high hospital
bills. The commenter went on to say that their agency sees patients in
the homes and assisted living facilities for ``house call'' diabetic
services, and that patients who are homebound and residing in assisted
living facilities would be adversely affected by this proposal. The
commenter stated that putting a cap on outliers will force HHAs to
``dump'' IDDM patients, causing concern about these patients losing
access to quality care.
Response: Excessive billing for IDDM patients in counties with
program
[[Page 58084]]
integrity concerns is one of the main reasons necessitating the new
outlier policy. However, we are sensitive to the commenter's concerns
that homebound IDDM patients receive diabetes management support;
likewise, we are sensitive to the support and disease management needs
of patients with chronic diseases such as other types of diabetes, CHF,
and wound care. Under Medicare's home health benefit, agencies are
expected to provide education and training to help IDDM (and other
diabetic) patients self-manage their diabetes. Many homebound patients
with diabetes require short-term management for skilled observation,
assessment, teaching and training activities. If the patient is unable
to learn to self-manage, including self-administer medication, the home
health agency would be expected to provide the teaching and training to
a care-giver or family member. There will always be a subgroup of
patients who cannot learn self-management, do not have a willing and
able caregiver, and/or have no community support. However, as discussed
in the proposed rule, our analysis shows us that after excluding HHAs
in certain areas of the country where fraudulent billing practices are
suspected, we expect that less than 2 percent of all Medicare HHAs
would be affected by a 10 percent cap on outlier payments, and that of
that less than 2 percent of HHAs, almost all are located in urban areas
where beneficiaries have other choices. We also expect that the ability
of agencies to receive 10 percent of their total payment in outliers
would partially compensate agencies for the care associated with this
subgroup. The outlier policy in the HH PPS was never intended to fully
compensate HHAs for episodes that incur unusually high costs due to
patient home health care needs. Rather, the intent of the outlier
policy is to mitigate the negative financial impact that unusually high
cost patients have on HHAs. We believe that our final outlier policy
for this rule, that includes a 10 percent per-agency cap on outlier
payments, is consistent with that intent. Our analysis shows us that
approximately 70 percent of HHAs receive between 0 percent and 1
percent in outlier payments. Therefore, we believe our final outlier
policy (which includes a 10 percent cap on outlier payments at the
agency level) is reasonable and responsible. We also encourage home
health agencies to take advantage of the help and support available
from organizations such as the American Diabetes Association, the
Indian Health Service, and the American Association of Diabetic
Educators regarding innovative techniques associated with diabetes self
management training (DSMT). Collaborating with these organizations may
allow agencies to achieve greater success in enabling IDDM patients
and/or their caregivers to better achieve self-management, and may
provide the agencies with innovative care suggestions regarding their
IDDM patients. CMS will closely monitor utilization trends of IDDM home
health patients to assess the impact this policy may have on their
access to care. Specifically, we plan to look at pre-2010 data to
analyze trends of home health usage by IDDM patients, looking also at
patterns of their Medicare utilization prior to the home health
episode, and will compare those patterns with current usage.
Comment: A commenter stated that while MedPac may have reported
that beneficiaries have access to an adequate number of HHAs, the
reality is that many HHAs limit acceptance of high- utilization
patients due to lack of resources or to protect their bottom line. The
commenter also stated that they accept referrals for patients that
other agencies will not admit. Another commenter stated that they would
not be able to accept these types of patients if the proposed outlier
policy were implemented, stating that they already take a 20 percent
loss on these patients, which they offset with the few low-utilization
short episodes they receive. The commenter stated that their agency
will be restricted in the number of high utilization, sicker patients
that they will accept. The commenter stated that many HHAs will not
gamble with reimbursement calculations, timing, and cash flow issues
that would be associated with a 10 percent cap. Consequently, the
commenter believed that there would be no agency for many of the
patients to turn to, and therefore this would likely result in an
access to care issue.
Response: While experience varies from year to year, on average,
the increased cost of sicker patients should generally be offset by the
decreased cost for other patients. As stated in an earlier response to
comments, based on our analysis (which excludes HHAs in certain areas
of the country involved in potentially fraudulent billing practices),
we expect that less than 2 percent of all Medicare HHAs may be affected
by a 10 percent cap on outlier payments, and of this group of HHAs who
may be affected by the 10 percent outlier cap, a vast majority are
located in urban areas where beneficiaries have other choices. That
being stated, an overwhelming majority of HHAs will not be affected by
the 10 percent outlier cap, and thus will be in a position to accept
patients who legitimately need home health services, and meet the
eligibility requirements for the Medicare home health benefit.
Comment: A few commenters generally supported the proposed outlier
policy, but recommended modifications to the policy. Generally
speaking, some commenters requested that an appeals process be created
for HHAs that CMS initially determined to have exceeded the 10 percent
cap. The concern here was that such a cap could potentially affect
legitimate outlier cases. As such, a commenter stated that situations
could evolve in which high needs patients receiving care at one HHA are
forced to change agencies during a potentially critical time. This
commenter also found it concerning that we would have a cap policy that
could potentially not allow for reimbursement for a valid outlier case.
Another commenter suggested that CMS target areas where the data
indicate the overutilization of outliers, rather than applying the
policy to all HHAs in the country. We also received the following
recommended modifications: (1) The cap should be put in place no
earlier than 2011 (different versions of a delay included that of a
delay until it is clear that Congress has addressed the issue, while
another version suggested phasing-in the 10 percent cap by starting
with a higher cap of 15 or 20 percent); (2) CoPs should be amended to
allow agencies to discharge outlier patients when it can be estimated
that a HHA will exceed the cap; similarly, CoPs should be amended to
permit a HHA to deny admission to an outlier patient when its estimated
cap will be exceeded. CoP amendments should also address patient notice
rights; (3) During pendency of cap discharges, allow an exception to
the cap if a HHA can show that it took all reasonable measures to
secure alternative care for qualified patients; (4) Establish an
exemption if the provider exceeding cap can show that patients served
are qualified and that no other HHA is available to admit them; (5)
Establish a registry of HHAs that report availability to accept outlier
patients; (6) Issue ``best-practice'' guidelines for dealing with
outlier patients; (7) The Secretary of HHS should coordinate regulatory
efforts with current proposals in Congress that would modify outlier
standards. Not doing so could result in piecemeal enactment which could
put HHAs at higher risk; (8) Clarify that the application of the cap
calculation is based solely on outlier adjustments.
[[Page 58085]]
Response: An appeals process would be cumbersome and difficult to
implement for such a small percentage of situations. HHAs should be
able to predict whether they will be affected by a 10 percent outlier
cap policy based on past utilization and, in legitimate situations, be
able to point the beneficiaries to alternatives. CMS is moving forward
with implementation of the 10 percent outlier cap for CY 2010,
effective January 1, 2010. With suspect fraudulent outlier billing
practices continuing to increase, we believe it crucial to implement
this policy now (CY 2010) rather than delay. Additionally, a delay,
while maintaining the current FDL ratio of 0.89, would not be possible.
In such a scenario (that is, a delay), CMs would have to either
eliminate the outlier pool altogether, or raise the FDL ratio
significantly (see CY 2009 HH PPS Update Notice at 73 FR 65357), so as
to maintain a 5 percent outlier pool, if the 10 percent outlier cap
were not implemented this year. However, CMS does not believe that
eliminating the outlier policy or raising the FDL ratio is the
appropriate policy at this time. Revisions to existing CoPs do not need
to take place in order to implement this outlier policy. CoPs do not,
and are not intended to, address or restrict the ability of HHAs to
discharge patients. The HHA is required to accept patients with a
reasonable expectation that the patient's medical, nursing, and social
needs can be adequately met by the agency at the patient's place of
residence (42 CFR 484.18). The CoPs already address patients' rights at
42 CFR 484.10. Given the availability of HHAs, and the estimated
infrequency of circumstances where legitimate cases might exist, we do
not believe that exemptions are necessary. As noted in a previous
response to comments, as stated in the proposed rule (at 74 FR 40957)
and finalized in this rule for CY 2010 only, the outlier policy will
include a 10 percent cap on outlier payments at the agency level. That
is to say, an agency's outlier payments are to be capped at 10 percent
of its total HH PPS payments (of which outlier payments are a
component). For any claim with an outlier payment, if it is determined
that paying the outlier portion of the total HH PPS payment for that
claim would result in the HHA exceeding the 10 percent cap in outlier
payments, the outlier portion of the claim would not be paid at that
time. However, the regular HH PPS payment (based on the HHRG that
applied to that claim) would not be subject to that 10 percent outlier
cap, and thus would be paid. Any HH PPS payment adjustment (that is,
PEP, recoding for therapy visits, etc.) other than the outlier payment,
would also continue to apply to the claim.
Comment: A commenter agreed with the approach, but stated that the
overarching problem is that beneficiary needs have increased and that
the flaw is not in the outlier policy but in low reimbursement. The
commenter suggested that CMS develop more accurate methods to deal with
HHAs that ``gamed'' the outlier policy, versus putting forward the
proposed policy. The commenter asked CMS to consider something akin to
the hospice cap, but with a modifier to allow for HHAs with sicker
patients.
Response: We disagree that the flaw is in the low reimbursement
rates. The newly refined 153-HHRG case-mix model now reflects different
resource costs for early home health episodes versus later home health
episodes and expanded the case-mix variables included in the payment
model. The newly refined model also replaced the previous single 10-
therapy threshold with three therapy thresholds (6, 14, and 20 therapy
visits), with gradual payment increases between the first and third
therapy thresholds. The newly refined model also includes six severity
levels at which it pays for non routine medical supplies (NRS). We
believe that the new model has addressed the areas identified by the
industry as ``not being accounted for'' in the previous 80-HHRG case-
mix model. Sicker patients are accounted for in the more detailed 153-
HHRG case-mix model. Home health margins, even by industry standards,
have been generous.
Comment: Several commenters whose parents are Medicare HHA patients
were opposed to the proposed outlier policy, stating that their parents
are diabetic and unable to administer insulin; that the children's work
schedules are not flexible, and consequently the adult children are not
consistently available to assist their parents. These commenters stated
that they rely on the HHA to administer the insulin to their parents.
These commenters emphasized that their parents have paid into the
Medicare program and that it should be available to them in their time
of need. The commenters also stated that changing this would be a
horrible burden on them, as they would have to have their parents move
into their homes, which would be a difficult situation. Commenters
stated that their parent's independence would be lost forever and that
their overall health would suffer. These commenters stated that they
may have to change jobs, which was not an option at this time;
otherwise their parents would not get their insulin regularly. The
commenters stated that if their parents would not move in with them,
their parents would go into a nursing home. Commenters believed this
was an attempt by CMS to save money while risking the lives of
patients. These commenters urged CMS to reconsider the outlier policy.
One commenter, an insulin patient, stated that he/she was unable to
give himself/herself shots and did not have family to do so on a
regular basis. The commenter went on to say that if nurses cannot come
to their home, he/she would end up in the hospital or nursing facility.
The commenter stated that the cost to be in a nursing facility would be
more than the cost of a home health nurse who comes to his/her home.
The commenter requested that CMS not change how it pays the home health
nurse.
Response: CMS is sympathetic to the fact that some beneficiaries
who need help administering insulin. The new outlier policy is intended
to address the inappropriate, potentially fraudulent billing practices
that we are seeing. In our view, there is no reason to expect a large
number of insulin patients unable to treat themselves would all be
utilizing a single provider, and this is, in fact, generally the case
in all areas of the country except those with severe program integrity
issues. We believe that by implementing such a policy, in conjunction
with the continued program integrity efforts, including possible
payment suspensions for HHAs with questionable outlier billing
activities, Medicare beneficiaries will continue to receive the
services they need, while providers receive appropriate payment for the
services they provide. We are committed to addressing potentially
fraudulent activities, especially those in areas where we see
suspicious outlier payments, and will monitor and aggressively pursue
actions towards agencies where inappropriate billing of outlier
payments is identified.
Comment: One commenter urged CMS to re-examine the outlier policy
in its entirety, as some HHRGs have more underlying cost variation than
others. Another commenter recommended that CMS modify use of HHRG
scores and related payment in PPS for diabetic episode and outlier
payments, rather than limit the number of diabetic patients that an HHA
can care for and be paid for. A commenter suggested we re-examine the
outlier payment policy in its entirety. This commenter wrote that some
HHRGs have significantly more underlying variation in costs than
others. Additionally, he wrote that high therapy cases are unlikely to
have
[[Page 58086]]
outliers because of therapy dominance. He added that agencies with a
high proportion dual eligibles have different visit profiles due to the
more acute needs of dual eligibles. This commenter believes that these
issues suggest that a uniform fixed loss threshold and loss ratio
across all HHRGs may not be appropriate policy. The commenter suggested
that a more customized policy should be examined and may obviate the
need for a cap altogether. Another commenter suggested that good HHAs
may easily exceed the cap, but fraudulent HHAs may use outlier clients
as a method of getting cross-referrals from other fraudulent HHAs for
non-outlier patients. The commenter stated that the proposed policy
will not eliminate fraud/abuse or save Medicare dollars because most
outlier patients would be spread to all providers in an area. CMS would
still be paying for just as many outlier cases, but they would be
spread amongst more providers. The commenter suggested that a better
approach would be to increase the FDL ratio so that estimated outlier
dollars were close to the 5 percent allowed under statute. The
commenter also suggested that another approach could be to cap payment
based on the published per visit rates, multiplied by the number of
visits billed, or the outlier payment, whichever is lower. Another
commenter recommended grandfathering in current patients, as HHAs
shouldn't abandon patients already receiving services. The commenter
also recommended grandfathering in each HHA's current percentage of
outliers and using that percentage as the cap for that HHA. A few
commenters also suggested that in setting caps, CMS should consider the
population of the county.
Response: The premise of the new outlier policy is not that the
case-mix model is not accurately capturing the cost of resources in
providing care for these patients. Rather, the new outlier policy is
being implemented due to the frequency of inappropriate and possibly
fraudulent billing practices. The commenter's suggestion of increasing
the FDL to pay 5 percent in outlier dollars is precisely what CMS had
been doing in past years, before the highly suspect, and possibly
fraudulent, billing activities became so prevalent. As we stated in a
previous response to comments, our analysis shows us that minus the
suspect fraudulent activity, we believe that 2.5 percent is a more
appropriate target for outlier payments as a percentage of total HH PPS
payments. As such, we do not believe that simply increasing the FDL to
pay outlier payments at 5 percent of total HH PPS payments is the
appropriate policy at this time. Increasing the FDL ratio would prevent
many legitimate outlier cases from being considered as such,
essentially hurting the larger majority of HHAs that are billing
appropriately. The commenter's suggestion that we pay HHAs the lower of
the published per-visit rates multiplied by the number of visits
billed, or the current calculated outlier payment, would not be an
acceptable alternative, as the end result would be to pay the outlier
payments as currently calculated. Using a HHA's current outlier
percentage as the cap for that HHA would ignore the problematic billing
that has been occurring, and would do nothing to control the problem
that exists today with outliers in home health.
Comment: A commenter stated that there exist a number of negative
effects, which are significant and should be modified/addressed, if the
proposed outlier policy were implemented, which include: (1) Legitimate
benefits would decrease due to lack of access resulting in a poorer
quality of care due to the incentives to restrict care to diabetics to
avoid outlier status; therefore, people would not receive care at home
due to outlier status, resulting in an increase in the use of
hospitals, nursing homes and emergency rooms; (2) Costs will increase;
(3) Increasing number of patients will be displaced from homes,
creating emotional and physical hardship on patients and families, yet
patients respond best in a comfortable home environment; (4) It would
be more cost-effective and promote better care if the HHA were to
specialize in diabetic care, as long as such care was medically
necessary and the patient was homebound.
Response: As stated in an earlier response to comments, based on
our analysis (which excludes HHAs in certain areas of the country
involved in suspicious billing practices), we expect that less than 2
percent of all Medicare HHAs will be affected by a 10 percent cap on
outlier payments, and that of this group of HHAs who may be affected by
the 10 percent outlier cap, a vast majority are located in urban areas
where beneficiaries have other choices. Thus, an overwhelming majority
of HHAs will not be affected by the 10 percent outlier cap, and will be
in a position to accept patients who legitimately need these services,
and meet the eligibility requirements for the Medicare home health
benefit. As such, we do not believe that increased costs will occur as
a result of increases in hospital or nursing home stays, or visits to
emergency rooms.
To summarize, we believe that our final outlier policy, for CY 2010
only, that includes a 10 percent cap on outlier payments at the agency
level, in concert with a new 2.5 percent outlier pool (as opposed to
the existing 5 percent outlier pool), and returning 2.5 percent back
into the national standardized 60-day episode rates, the national per-
visit rates, the LUPA add-on payment amount, and the NRS conversion
factor, with a 0.67 FDL ratio, to be the appropriate policy at this
time.
We will continue to monitor the trends in outlier payments and any
related policy effects. Specifically, we plan to analyze overall
national spending on outlier payments relative to the new 2.5 percent
outlier pool by geographic area and provider type. We also plan to look
at outlier payments, per HHA, relative to the 10 percent cap on outlier
payments at the agency level by geographic area and provider type. So
far as activities related to high suspect outlier payments, CMS is
continuing with program integrity efforts including possible payment
suspensions for suspect agencies. We will re-examine this policy in
future rulemakings, and will consider further adjustments to this
policy for CY 2011 and future years.
Implementation strategy for a 10 percent agency level cap on
outlier payments.
CMS plans on implementing the 10 percent cap policy by making
determinations as to whether or not a given outlier payment exceeds the
10 percent cap on a ``rolling'' basis. Under our planned implementation
approach, for each home health provider, the claims processing system
will maintain a running tally of the year-to-date (YTD) total home
health payments. The claims processing system will ensure that each
time an outlier claim for an agency is processed, actual outlier
payments will never exceed 10 percent of the agency's YTD total
payments. While an agency will always receive its base episode payment
timely, the outlier portion of the claim will be paid as the agency's
YTD payments support payment of the outlier. We plan to utilize a
periodic reconciliation process under which outlier payments that were
withheld are subsequently paid if the HHA's total payments have
increased to the point that its outlier payments can be made. This
reconciliation process will always result in additional cash flow to
HHAs, and so we believe it is preferable. With regard to revenue
tracking, distinct coding will be used on the HHA's remittance advice
when outlier
[[Page 58087]]
payments are withheld, assisting receivables accountants in identifying
and accounting for the differences between expected and actual
payments.
B. Case-Mix Measurement Analysis
In the CY 2008 HH PPS final rule with comment period, we stated
that we would continue to monitor case-mix changes in the HH PPS and to
update our analysis to measure change in case-mix, both nominal and
real. As stated in the proposed rule, we have continued to monitor
case-mix changes and our latest analysis supports the payment
adjustments which we implemented in the CY 2008 HH PPS.
The case-mix analysis used for this rule uses PPS data from 2007.
As discussed in the proposed rule, this analysis indicates a 15.03
percent increase in the overall observed case-mix since 2000. We next
determined what portion of that increase was associated with a real
change in the actual clinical condition of home health patients. As was
done for the CY 2008 final rule, using Abt Associates' 6-phase model,
we examined data on demographics, family support, pre-admission
location, clinical severity, and non-home health Part A Medicare
expenditure data to predict the average case-mix weight for 2007. Our
best estimate is that approximately 9.77 percent of the 15.03 percent
increase in the overall observed case-mix between the IPS baseline and
2007 is real; that is, due to actual changes in patient
characteristics.
The estimate of real case-mix change continues to decrease for a
number of reasons: First, because the nominal change in case-mix
continues to grow, real case-mix as a percentage of the total change/
increase in case-mix becomes less. With each successive sample,
beginning with 2005 data (in the CY 2008 final rule), the predicted
average national case-mix weight is moving very little because the
variables in the model used to predict case-mix are not changing much.
At the same time, the actual average case-mix continues to grow
steadily. Thus, the gap between the predicted case-mix value, which is
based on information external to the OASIS, and the actual case-mix
value, grows with each successive sample. Consequently, as a result of
this analysis, CMS recognizes that a 13.56 percent nominal increase
((15.03 - (15.03 x 0.0977)) in case-mix is due to changes in coding
practices and documentation rather than to treatment of more resource-
intensive patients.
We stated in our CY 2008 HH PPS proposed and final rules that we
might find it necessary to adjust the offsets as new data became
available. Given that we have adjusted the rates for two consecutive
years by -2.75 percent in each year (2008 and 2009), based on 2007
data, if we were to account for the remainder of the 13.56 percent
residual increase in nominal case-mix over the next two years, we
estimate that the percentage reduction in the rates for nominal case-
mix change for each of the remaining two calendar years (2010 and 2011)
of the case-mix change adjustment would be 3.51 percent per year. If we
were to account for the remaining residual increase in nominal case-mix
in CY 2010, we estimate that the percentage reduction to the national
standardized 60-day episode rates and the NRS conversion factor would
be 6.89 percent. In the proposed rule, we proposed to move forward with
our existing policy, as implemented in the August 22, 2007 CY 2008
final rule, of imposing a 2.75 percent reduction to the national
standardized 60-day episode rates and the NRS conversion factor for CY
2010. We stated that we would continue to monitor any future changes in
case-mix as more current data became available and update as
appropriate.
Comment: A number of commenters were opposed to further payment
reductions based on estimates of nominal CM change. One commenter wrote
that CMS assumes upcoding, yet 2008 HHA payments are $1 billion less
than 1997 payments. Several commenters noted that HHAs have faced years
of market basket update reductions during this decade, and that
combined with annual wage index uncertainties and reform pending in
Congress, and a case-mix adjustment on top of these other reductions,
the survival of HHAs is threatened. The commenter stated that
reductions may force the quality providers out of business,
jeopardizing access, and leaving only those who ``game'' the system to
provide care. A commenter wrote that this is contrary to the interests
of Medicare's long term solvency or growing future care needs, and
another wrote that reductions hurt innovation and quality.
Additionally, a commenter suggested that the effect of the reductions
will be to decrease dollars available for treating patients, and will
indirectly limit access for patients with heavy care needs.
Response: We understand that some aspects of the payment
environment have been uncertain at times. However, the total of 1997
payments is not comparable to the expenditures following the Balanced
Budget Act (BBA) of 1997, which took effect in August of that year. The
BBA led to a markedly lower use rate of home health services by 1999.
Although the use rate has been rising since the historically low level
brought by the BBA, the change in use rate is one reason for lower
payments compared to the past. Analyses by the Medicare Payment
Advisory Commission (MedPac) indicate that home health agency margins
have been generally very healthy. Congressionally mandated updates and
other payment changes under law have been made in the knowledge that
agencies are generally not at risk of becoming insolvent. The
continuing certification of new agencies and capital access for the
industry, both of which are documented in MedPac's March 2009 annual
report, are additional indications that Medicare payment is generally
adequate or more than adequate. Furthermore, MedPac reported that
freestanding agencies' cost per case grew at a relatively low annual
average rate of 1.5 percent per year between 2002 and 2007. This low
rate of cost growth compares favorably with annual payment updates of
those years, notwithstanding Congressionally mandated reductions to
some updates. Net updates for 2008 and 2009, incorporating the case-mix
change adjustment, have been modestly positive. In terms of impacts on
innovation, as we have noted elsewhere in our responses, some agencies
have been able to make investments in new technology during these
years. Home health quality measures have been generally stable or
improving. In short, at this time, we do not believe that the survival
of home health providers is threatened, and we have no indication that
quality, access, and innovation are being compromised.
Comment: One commenter agreed with MedPAC's suggestion to establish
``profit/loss corridors'' as a financial safeguard for HHAs. Several
commenters urged CMS to suspend further case-mix changes until a
solution is found that ensures continuing access to home health care,
and offered to work with CMS on the issues surrounding the case-mix
change reductions. Several suggested that CMS meet with the industry to
discuss the data and methodology, and find consensus. Another suggested
that CMS refrain from additional case-mix adjustments until an
impartial third party, the industry, and Congress review the process
for analyzing case-mix.
Response: We appreciate the public's continuing effort to provide
us with comments and creative suggestions. The Secretary does not have
authority under current law to establish profit/loss corridors. Should
these be mandated, we welcome suggestions about how to
[[Page 58088]]
implement them. Congress specifically addressed the possibility that
nominal coding change might occur when it authorized (in BIPA
legislation) the Secretary to offset such changes by reducing rates
(see Section 1895(b)(3)(B)(iv) of the Act), and we are cognizant of the
large reduction in costs per episode that accompanied prospective
payment. Therefore, in 2007 we proposed and finalized a phased
reduction in coding-based payment increases that we believe were not
reflected by changes in underlying acuity, that were incurred between
FY2000 and CY2005. We have continued to monitor nominal case-mix change
through CY2007, and found continuing evidence that such changes were
occurring. We received public comments on the case-mix change
adjustment methodology in the past, and we have enhanced the model
consistent with comments where necessary. As we noted in the proposed
rule, after developing more data, we intend to test additional
enhancements pursuant to comments we received in this rulemaking. At
this time, we do not know whether any future results incorporating
enhancements will measure additional real case-mix change than we have
already accounted for using the existing model and data. We continue to
welcome suggestions on how to improve our measurement method in a
feasible and cost-efficient manner.
Comment: A number of commenters were opposed to the continuing
decision to apply case-mix reductions to all agencies regardless of
their average case-mix or rate of case-mix change. A commenter stated
that the analysis focused on averages and does not account for States
or regions with slower, more modest growth. A few commenters suggested
that the Abt Associates reports showed that freestanding nonprofit
agencies have not contributed to nominal case-mix change at a level
comparable to for-profits, yet all agencies are suffering equal cuts.
The commenter believes such a policy was unfair, and damaged agencies
that CMS should be rewarding for their compliance, particularly non-
profits. Several commenters stated that the reductions
disproportionately affected hospital-based agencies or smaller
agencies, particularly in rural areas.
While one commenter recognized the logistical problems if CMS were
to excuse some agencies from further case-mix reductions, such as those
that didn't have high average case-mix or which had not increased their
average case-mix at a rate suggesting nominal change, the commenter
wrote that CMS is obligated to apply policy fairly. The commenter
suggested that we exempt agencies with low case-mix weights or which
have not had excessive case-mix change from further across-the-board
reductions.
Response: We continue to believe that it is more appropriate and
feasible to implement a nationwide approach to case-mix change
adjustment. An individual agency approach would be administratively
burdensome and difficult to implement. Policies to address the identity
of agencies in light of changes to organizational structures and
configurations would need to be developed. Furthermore, smaller
agencies might have difficulty in providing accurate measures of real
case-mix change because of their small caseloads. We do not foresee
being able to administer an individualized rate reduction fairly and
effectively. Nor do we believe it would be possible to administer a
regional or other classification-based reduction fairly. Any sort of
special regional payment adjustments, the most common example being a
rural add-on payment, would need to be legislated by Congress. Contrary
to the statement a commenter made about the conclusions of the Abt
Associates reports, the reports documented that freestanding voluntary/
nonprofit agencies had relatively low average case-mix weights in
FY2000. The analysis allowed changes in the ownership/affiliation
composition of the population of agencies to contribute to real case-
mix change, but it did not identify differences in case-mix growth
since FY2000 within any class of agencies. Further, it seems unlikely
that some significant number of agencies has avoided nominal case-mix
change. It is counterintuitive to believe that agencies in general have
not advanced and updated their application of OASIS and ICD9-CM
diagnosis coding. In accordance with continuing educational efforts on
the part of CMS, the State OASIS coordinators help agencies understand
and apply OASIS, and other public and private assistance services that
have developed around the proper and accurate interpretation of OASIS
items and selection of the correct response to each item. That process
of advancing and updating the application of OASIS is a natural
outgrowth of the fundamental approach to payment adopted under the HH
PPS.
Comment: A commenter wrote that CMS should adopt criteria to
identify and protect ``safety net'' agencies from the impact of case-
mix payment reductions, which admit patients based on need rather than
on profitability. This commenter is concerned that these safety net
agencies would be pushed out of the Medicare program by negative
margins, creating a loss of critical patient access. This commenter
stated that CMS should pay for the reasonable cost of care so that
safety net agencies could be viable.
Response: Currently, the law does not provide for payment
differentials for ``safety net'' agencies. Additionally, we believe
that it would be extremely difficult to accurately identify safety-net
providers, and any such process to identify and pay such providers
differently could be inaccurate, prone to program vulnerabilities and
costly to administer. Additionally, it would require CMS to enforce
compliance with whatever criteria we used to identify such providers,
to ensure that these providers continue to qualify for the payment
differential. Rather, CMS is currently focusing on demonstrations which
have a goal to reward providers based on the high quality of care
provided, and savings associated with high quality, such as decreased
hospitalizations.
Comment: Some commenters suggested further refinements to the case-
mix adjustment model as a way of mitigating effects of the case mix
change adjustment to the episode payment rate. The commenters mentioned
giving credit for the absence of a caregiver, Medicaid status,
residence in high crime areas, use of wound care and other supplies,
use of innovative technologies, and for patients with advanced stages
of debilitating chronic diseases.
Response: We appreciate the commenters' concerns and point out that
we addressed the absence of caregivers in our CY 2008 final rule. OASIS
item M0350 asks whether there are assisting persons in the home, other
than the home care agency staff. On average, episodes without
caregivers might be underpaid under the current case-mix model, but our
analysis also showed that the payment difference was not large.
Moreover, we continue to believe this variable raises significant
policy concerns. We restate our belief that a case-mix adjustment
should not discourage assistance from family members, nor should it
make patients believe that there is some financial stake in how they
report their familial supports while they are receiving home health
services. Adoption of this measure of case-mix risks introduction of
negative incentives into the case-mix adjustment system; these negative
incentives potentially could have adverse effects on home health
Medicare beneficiaries.
[[Page 58089]]
We also considered Medicaid status. After accounting for a broad
range of clinical and functional factors which predict resource use,
the presence of a Medicaid number was found to add a negligible amount
to the predicted resource use, suggesting that having Medicaid is not a
strong predictor of resource use. Given the administrative burdens of
verifying the current Medicaid status of a patient, we judged that, on
balance, adding Medicaid enrollment to the case-mix model was not
warranted.
We know of no data to measure residence in high crime areas
reliably for purposes of payment operations; nor are there studies
documenting the role of this variable in patient-by-patient cost
differences. The idea of incorporating technology use, such as wound
care supplies and other innovative technologies, in determining the
payment for specific patients raises significant policy issues about
the role of the government in driving agency decisions about the mix of
inputs to be used in delivering care. Our approach has been to document
and pay in accordance with the average costs incurred when treating
patients with different characteristics, but not to pay in accordance
with agency technology choices. To the extent that costly technology is
reflected in NRS costs and charges routinely available in
administrative data, and use of such technology is the standard of care
in specific circumstances, then we welcome proposals for identifying
these situations in current data collection processes so that we can
study their impact on NRS costs. We believe that any proposals from the
public should balance the burden from adding complexity to coding
systems and data collection processes on account of a small number of
episodes against the impact on payment accuracy. Instruments such as
OASIS are not designed to focus on uncommon situations. Regarding
refinements for advanced stages of debilitating chronic diseases, we
have concerns that measurement of this aspect of case mix would not be
reliable, and could lead to inequities and nominal case mix change.
Nonetheless, we welcome specific suggestions in future comment periods
for measurement items and instruments that promise to reliably capture
this dimension of health status.
Comment: Some commenters suggested that in the review of real vs.
nominal case-mix change, CMS consider factors such as OASIS
implementation, educational initiatives to teach agencies how to more
comprehensively assess patient needs and more accurately code OASIS,
improvements in documentation, and the quality of care.
Response: As we have noted in responding to similar comments in
previous regulations, improved OASIS implementation, staff education,
and improvements in documentation are indications of coding change, not
an actual change in patient case-mix. While they may represent a much-
desired improvement in the accuracy of data used to manage the care of
patients, they do not represent cost increases related to the health
status of patients. We have no basis to recognize the quality of care
as a factor to consider in the review of nominal vs. real case-mix
change. The legal basis for making payment reductions is nominal case-
mix increases that can result from changes in coding practices and from
coding improvements, as well as from financial incentives in the
payment system.
Comment: Commenters cited an evolving home health population and
changes in patient characteristics as factors to consider in the review
of nominal vs. real case-mix change. A number of commenters mentioned
that the patients entering home health are sicker, have more complex
conditions with more co-morbidities, and require a more costly inter-
disciplinary approach. One noted that the 1997 to 2000 increase of
13.4% in case-mix weights demonstrates the substantial effect that
changes in patient characteristics can produce; this commenter wrote
that if real case-mix could increase prior to HH PPS, it is
unreasonable to assume that none of the change after that point is
real.
Response: In our case-mix change model, we measured demographic and
health status factors, and utilization indicators of health status, and
then related them to the HH PPS case-mix weight in a regression
equation. The methodology attempts to capture the effects of an
evolving home health population by measuring the entire set of factors
at two points in time. Having established the relationship between
predictors and case-mix weight using data from the first time period,
we then use the model to predict the case-mix weight based on the
factors during the second time period. Therefore, this approach does
consider changes in the home health population. To the extent that
patients entering home health are sicker, have more complex conditions,
and more comorbidities, the variables predicting the case-mix weight in
the case-mix change model reflect such changes to a large extent. As we
indicated in the proposed rule, we intend to test additional variables
to pick up possible unmeasured population changes. It is not certain
that these attempts will identify additional real case-mix change. If
home health practice has evolved between FY2000 and today to provide an
inter-disciplinary approach, this is not necessarily a change in the
real case-mix of the treated population; it could well be a change in
treatment practices, given that evidence from the case-mix change model
and other evidence we have presented in previous regulations point to
little change in the health characteristics of home health users.
Notwithstanding the question of whether any shift towards an
interdisciplinary approach has occurred, data cited by the Medicare
Payment Advisory Commission and our own analyses of home health margins
indicate that home health agencies are being adequately paid under the
HH PPS.
Contrary to the assertion of the specific commenter that we had
concluded that all of the change in case-mix was nominal, we identified
nearly one-tenth of the difference between the average case-mix weight
for FY2000 and CY2007 as real case-mix change. We allowed for that
amount in the rate reductions. Regarding the large 13.4 percent change
in average case-mix weight between 1997 and 2000 (that is, the last
year of the IPS), in the 2007 proposed rule (72 FR 25393), we reviewed
and discussed comparative OASIS data from the original Abt Associates
case-mix study (1996-1998) and from FY 1999, as well as several studies
of the effects of the Balanced Budget Act, and specifically, of the
Interim Payment System (IPS).
The literature and data identified several changes in the health
and demographic characteristics of the home health user population. An
important implication of those studies and data was that patients with
intensive or lengthy needs for nursing and personal care services as
opposed to short-term or rehabilitative needs were less likely to be
found in the national home care caseload as a result of the IPS (72 FR
25393). We also noted in that discussion that changes in therapy
utilization during the final year of the IPS period, after the
proposals for the HH PPS were issued, could have reflected an
anticipatory response to the coming payment system. Such a behavioral
response on the part of home health agencies would therefore have
contributed to the 1997-2000 13.4 percent change in the average case-
mix. As we indicated in our discussion, it is very possible that a
certain amount of nominal change occurred during 1997-2000; this would
have been due to the
[[Page 58090]]
period October 28, 1999, through September 30, 2000, which is the
period after the proposed rule was issued.
Comment: Some commenters had specific criticisms of the real case-
mix change model. Some wrote that the methodology for assessing changes
in patient characteristics relies on DRG changes, but only half of HHA
patients are discharged directly from a hospital to an agency. In
commenting on the case-mix change model, some commenters stated that
data on ownership structure were not related to patient
characteristics. They went on to write that the methodology gave no
consideration to changes in care delivery in other health sectors (for
example, the growth in Medicare Advantage), or in reimbursement
methodologies that drive patients into home health care.
Response: Far greater than half of the observation units--that is,
episodes--in the samples had hospital discharge data. The model uses
data from the last hospital stay the patient had before the home health
episode. Approximately 90 percent of the random sample of episodes in
the case-mix change model, regardless of the time period (FY2000 or
CY2007), had a hospital stay record. Not all of these hospital stay
records were classifiable to a specific DRG because of sample size
considerations, but we were able to classify every hospital stay into a
medical or a procedure group, based on information in the hospital stay
record. For patients with multiple episodes, the last discharge did not
necessarily lead directly to home health admission, but it would still
reflect fairly recent health characteristics. For a small proportion of
episodes, the hospital stay may have occurred distantly in time (but no
more than four years earlier). In alternative models described in the
Abt Associates Final Report (April, 2008), hospital stays for some
conditions were not used if they did not occur relatively close in time
to the home health episode, but the results did not change the
essential conclusions we drew from the analysis.
The predictions of the case-mix weight from the model were adjusted
for the ownership/affiliation category of the agency that delivered the
care under the episode. We made this adjustment to account for the
historically different coding practices and apparent case-mix levels
associated with different kinds of ownership. We did this out of an
abundance of caution, because of a paucity of literature explaining
these differences. It is plausible that the large decline in hospital-
based agencies that occurred after the last year of the IPS could have
affected the national case-mix in a real sense. In any case, had we not
made the ownership/affiliation adjustment, we would have found less
real case-mix change from our analysis.
We disagree with the commenter's conclusion that we have ignored
the effects of reimbursement methodologies that drive patients into
home health care. Variables in the model account for prior utilization
in acute care hospitals, long-term-care hospitals, inpatient
rehabilitation facilities and skilled nursing facilities. The model
relates these various kinds of utilization to the case-mix weight in
the ensuing home health episode. We used the model and the levels of
prior utilization that occurred by CY2007 to make predictions of the
real case-mix weight for that year. In fact, the net effect of all the
Medicare cost and utilization variables in the model was to raise the
predicted average case-mix weight, consistent with what appears are the
commenter's assumptions. However, the increase was small. To the extent
that the nature of the relationship between the specific kind of prior
utilization and the ensuing episode's case-mix weight has changed, the
case-mix prediction methodology may not capture the entire impact of
reimbursement changes in other parts of Medicare. However, in its Final
Report (April, 2008), Abt Associates conducted a test for possible
changes in the relationship between predictor variables and case-mix,
and this test did not support the idea that changes in the model
variables' relationship to case-mix had occurred. Moreover, we believe
we have captured some of the other settings' reimbursement effects by
measuring change in utilization of prior settings. In addition, the
model includes an array of other demographic and health-related
variables that are expected to detect change in the health status of
the user population, which is the real underlying issue raised by
reimbursement changes.
As we indicated in the proposed rule, we intend to test changes to
the model that may represent the growth in Medicare Advantage.
Comment: Several commenters wrote that CMS' methodology for
estimating nominal case-mix change is imprecise and relies on limited
sources of data. One commenter noted that the methodology was not based
on clinical analysis but on statistical inferences in a complex model
that is so abstract and complex that significant data errors were
undetected. The commenter noted that it is plausible that the average
case-mix continues to grow, since the ratio of for-profit to nonprofit
agencies increases each year, and for-profit agencies have higher case-
mix. Several commenters wrote that nominal case-mix change estimate is
a guesstimate, and is not sufficient or accurate. Some commenters
suggested CMS engage additional consultants to use alternative methods
of evaluation, and cross-compare outcomes, before the proposed 2011
adjustment is finalized. Another commenter asked for an independent
audit of Abt's work.
Response: We believe that our methodology for quantifying the
contribution of real case-mix change to total case-mix change between
FY2000 and CY2007 is a reasonable approach, but it is only part of the
evidence base for our conclusion that nominal case-mix change has been
pervasive. As we noted in the proposed rule, the full evidence base was
presented in a series of regulations, beginning with the May 4, 2007,
proposed rule (72 FR 25393). We discussed a variety of statistical
data, including but not limited to resource use measures in comparison
to case-mix weight changes, shifts among severity levels of the
clinical, functional, and service dimensions of the case-mix system,
shifts in the share of high-therapy episodes, differential changes in
responses among various OASIS items (payment-related items and non-
payment-related items), and a detailed analysis of the evolution of
OASIS guidance and manual instructions and definitions that could have
affected case-mix item responses. We presented admission rates over
time for five specific conditions suggested by commenters, and examined
the time to admission for those conditions. These results were updated
in the proposed rule, and suggested that changes were insufficient to
explain the substantial upward trend in case-mix. We also noted the
steep learning curve faced by agencies in adapting to the new
environment presented by OASIS, resulting in improved coding. We also
pointed out that coding changes are not foreign to any payer system
when payment methodology becomes more dependent on provider
ascertainment of health status information. The evidence base is the
best available, given the infeasibility of auditing large chart samples
from both time periods, which may be assumed to be the type of clinical
analysis that a commenter suggests. As we noted in the proposed rule,
we are investigating enhancements to the model to capture more elements
of real case-mix change that may be unmeasured. However, whether these
enhancements will reveal any additional real case-mix change than we
have already measured is unclear at this time.
[[Page 58091]]
From the point of view of statistical methodology, the model is a
basic linear model and not complex; although it includes several
variables. Our application of the model relies on large, representative
samples. The preparation of the data has been subject to some technical
corrections, but the basic approach has remained the same and is not
subject to significant error. Furthermore, insofar as there have been
data errors, they have not been so significant as to alter by large
amounts the size of the payment reductions we made based on the model
findings. As we have noted elsewhere in our responses, the model does
allow for the contribution of for-profit agencies to real case-mix
change.
We have no plans for undertaking alternative methods of evaluation.
An independent audit is not necessary because the model and results of
the application of the model have been presented in detail in the Abt
Associates reports. However, we do intend to test enhancements to the
model (described in the proposed rule) and welcome suggestions from the
public for modifications to the statistical approach and additions to
the data that are cost-efficient to make.
Finally, as a point of clarification, the 2.71 percent reduction
for CY 2011 is not a proposed adjustment. In the CY 2008 final rule (at
72 FR 49843) we promulgated our policy of a 2.75 percent reduction for
3 years (CY 2008, CY 2009, and CY 2010) and a 2.71 percent reduction
for CY 2011. Nothing in this final rule changes what was finalized in
the above rule, with regards to payment reductions to address the
increase in nominal case-mix.
Comment: Some commenters believed that the increased therapy needs
or increased involvement of physical therapists in assessing patients
have contributed to appropriate growth in HHRGs. They wrote that the
change in focus from disease management to restorative therapy has
increased HHRGs and benefited patients. A few suggested that the
process for evaluating case-mix change related to therapy utilization
must include in-depth review of the merits of individual claims, as the
limited use of proxies is unreliable. Several commenters believed that
the analysis failed to adequately evaluate whether changes in case-mix
are due to abusive over-utilization of therapy, fraudulent or abusive
coding, erroneous coding, revised coding instructions, or improved
quality coding. Where changes are due to abusive or fraudulent
practices, several commenters suggested that CMS address those abuses
with the specific providers, rather than applying a punitive adjustment
to all agencies. Alternatively, commenters suggested CMS use
enforcement to conduct targeted claims review and deny payment where
case-mix weights are not supported by the plan of care.
Response: We agree that there has been a shift toward
rehabilitative services, but we believe commenters are confusing a
change in the home health ``product'' with actual change in the health
status of the treated population. As MedPAC has noted for years, with
the implementation of the HH PPS, the service payment unit underwent
changes: the unit of payment changed from visits to 60-day episodes,
and the content of the home health product changed from that of the
1997-2000 period--consisting of fewer visits, shorter stays, and more
therapy with less aide care (MedPAC, March 2004, ``Report to Congress:
Medicare Payment Policy'', Section 3D, ``Home Health Services''). In
any future enhancement of the real case-mix change model, we may
investigate allowing for the possible increased use of physical
therapists as the assessing clinician. We would do this on the
assumption that increased use of therapists to make assessments is a
change that is not a consequence of the agencies' learning curve in the
HH PPS environment or of new financial incentives that began in October
2000. We would do this despite the fact that it could be stated that
differing assessment results arising from the use of nurses vs.
therapists as assessing clinicians do not signify differences in the
health status of the treated patient. In any case, we expect that such
a change to the model would have a very small impact on our
conclusions.
To the extent that abusive over-utilization of therapy and
fraudulent or abusive coding are responsible for case-mix growth
between FY2000 and CY2007, it would be preferable to remove agencies
engaging in these activities from the data analysis. However, it is
difficult for us to identify these agencies on a large scale, so we
find the commenter's suggestion impractical. Furthermore, we believe
that the overwhelming majority of providers are not committing fraud,
which would mean that eliminating the fraudulent providers would not
have a large impact on our results. If commenters know of fraud being
committed in their areas, we urge them to inform the Office of the
Inspector General and the CMS Regional Office. As stated earlier, CMS
is committed to addressing suspect fraudulent activities, especially
those in areas where we see suspicious outlier payments, and will
monitor and aggressively pursue actions towards agencies where
inappropriate billing of outlier payments is identified.
Comment: Several commenters suggested we conduct an impact analysis
of the proposed rule relative to case-mix, include an evaluation of
access in each year of any adjustment, and consider all factors related
to access. These commenters felt that the impacts in the proposed rule
were factually and legally inadequate and therefore violated the
Regulatory Flexibility Act.
Response: We appreciate the commenter's suggestion; however, our
current approach to impact analysis does include the effect of the rate
reduction related to nominal case-mix change. Our impact analysis is
subject to OMB review and meets legal requirements. We will consider
how to increase our monitoring of access going forward. We would
appreciate any specific suggestions from commenters on ways to do this.
Comment: A few commenters questioned the assumptions surrounding
LUPA episodes which were used in the case-mix change analysis. One
wrote that nearly all ``creep'' may have been offset if CMS had
modified its actuarial assumption of 5 percent LUPA incidence to actual
occurrence once PPS was in place. The commenter asked that we disclose
the LUPA incidence for 2001 through 2006. The commenter felt that using
a 5 percent LUPA incidence, rather than the higher, actual LUPA
incidence, has led to agencies being underpaid. This commenter added
that instead of lowering rates using a ``creep'' theory of
justification, CMS should have raised the base rate calculation
methodology with the refinement process, at a minimum for the LUPA mis-
application and also for the real need severity CMS determined exists.
This commenter wrote that the combination of LUPA incidence, an outlier
rate below 5 percent, changing the single therapy threshold to multiple
therapy thresholds, and the increased incidence of high therapy cases
constitutes more than 100 percent of the observed increased in the
average case-mix weight.
Response: Based on a 10 percent random beneficiary sample, our data
show the LUPA incidence rates from 2001 to 2007 were the following:
15.06 percent, 14.11 percent, 13.35 percent, 12.53 percent, 12.12
percent, 11.16 percent, 10.54 percent. We note that LUPA incidence
rates, while higher than the forecasted 5 percent, continue to decline.
LUPA episodes were not used in the measurement of case-mix
[[Page 58092]]
change in either our analysis or in the Abt Associates model of real
case-mix change. We have no evidence that LUPA episode assumptions
caused agencies to be underpaid; in fact, margin analysis shows PPS
payments have been adequate. It should be recognized that we proposed
to adjust the episode national standardized payment amount to be
consistent with an outlier expenditure proportion of less than 5
percent of total outlays. This upward adjustment is a continuation of
the methodology we have used since the beginning of PPS; the upward
adjustment is simply to provide for a lower rate of outlier
expenditures than the 5 percent assumption we have traditionally used.
We made this proposal in conjunction with the proposal to cap outlier
payments at 10 percent on an per-agency basis. We have no basis to
change payment rates on account of the refinement of the therapy
thresholds. Even if agencies return to more clinically based therapy
treatment plans, resulting in a new distribution of therapy visits per
episode and reduced total expenditures, we would not make any payment
rate changes in isolation from other issues, such as the change in the
mix of visits since the original PPS final rule, and change in the
total number of visits in a 60-day episode. Similarly, we do not
believe it is appropriate to adjust payment rates for the deviation of
LUPA episodes from the forecasted 5 percent, in isolation from other
issues, such as addressing the issue of lower visits per episode
existing today, as compared to the number of visits per episode on
which the HH PPS rates were originally based. We believe that the
appropriate time and place to deal with any re-estimates, in these
multiple areas, is if and when a rebasing for the rates were to take
place.
Comment: A commenter wrote that the elimination of the single
therapy threshold was an attempt by CMS to align payment incentives
with patient care needs. This commenter felt the case-mix change
primarily reflects growth in therapy utilization. A different commenter
asked CMS to clarify how going from single to multiple therapy levels
did not constitute a ``double dip'' penalty. This commenter wrote that
the multi-level therapy equation model HHRG modifications may have
lowered the relative value for all higher therapy cases, but the
commenter couldn't confirm this since CMS did not release the data. The
commenter stated that ``re-jiggering'' of service factors was likely
directed toward lowering reimbursement rates and having therapy
services delivered in a more clinically driven manner. The commenter
added that the relative loss of aggregate case-mix weight under the 4-
Equation model equals measured case-mix weight change, which is
tantamount to a ``double dip''. Another commenter wrote that the data
he analyzed showed that 95 percent of case-mix growth was a direct
result of higher levels of service domain in care delivery under PPS.
He added that when PPS was originally proposed, and again in 2007, CMS
acknowledged that it did not have good data to measure or apply case-
mix based on patients' service needs, yet CMS stated that it believed
that the multi-level therapy thresholds was an improvement over the
single threshold approach.
Response: The following table illustrates the change in the
distribution of therapy visits per episode since FY2000:
Percent of Total Episodes by Number of Therapy Visits per 60-Day Episode: Interim Payment System and HH PPS
--------------------------------------------------------------------------------------------------------------------------------------------------------
Time period
Number of therapy visits -------------------------------------------------------------------------------------------------------
FY2000 2001 2002 2003 2004 2005 2006 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
None............................................ 60.0 54.5 52.3 51.2 49.9 49.6 49.6 49.8
1 to 3.......................................... 9.7 9.1 9.4 9.6 9.7 9.6 9.3 9.1
4 to 6.......................................... 7.4 8.0 8.3 8.3 8.4 8.3 8.1 7.9
7 to 9.......................................... 6.2 6.4 6.4 6.2 6.1 6.1 5.9 6.0
10 to 12........................................ 4.8 8.3 9.2 10.4 11.3 11.8 12.3 12.6
13 to 15........................................ 3.4 4.8 5.3 5.6 5.9 6.0 6.2 6.3
16 to 18........................................ 2.5 3.3 3.5 3.5 3.7 3.8 3.8 3.8
19 to 20........................................ 1.2 1.4 1.5 1.4 1.4 1.4 1.3 1.3
21+............................................. 4.7 4.2 4.1 3.8 3.7 3.5 3.5 3.2
�������������������������������������������������
Total....................................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: FY2000 data from 100% sample of claims from Oct. 1, 1999, through Sept. 30, 2000.
Data presented for 2001 through 2007 are Calendar Year data.
Claims were grouped into 60-day episodes.
PPS data based on a 10% random beneficiary sample of PPS episode claims beginning with 1/1/2001.
We agree that growth in therapy utilization of ten visits or more
was a significant factor in case-mix change, because the ten-visit
therapy threshold produced a large increase in an episode's case-mix
weight. The table above shows that episodes of ten to eighteen therapy
visits grew steadily as a proportion of total episodes under HH PPS.
Ten to twelve therapy visits, a range that would generally be most
profitable to agencies, grew the most, and by 2007 such episodes
accounted for about one quarter of all the episodes that had a therapy
visit. These episodes, of course, also were among those with the
highest case-mix weights and had a minimum case-mix weight of 1.4847.
One goal of the case-mix refinements was to better match payments
with agency cost experience under PPS; thus we used 2005 data for
estimating the final case-mix model that was used for the 153-group
system. Changing to multiple therapy thresholds with a gradual increase
in payment better aligns costs and payments and avoids incentives for
providers to distort patterns of good care that would occur at each
proposed therapy threshold. As a disincentive for agencies to provide
more care than is appropriate, we proposed that any per-visit increase
incorporate a declining, rather than constant, amount per added therapy
visit. It should be understood that the refined case-mix methodology
redistributed the resource costs expended in 2005 to the new set of 153
groups we defined from the severity levels developed from the four-
equation model generating OASIS item scores.
[[Page 58093]]
Instead of a single high therapy range, one based on average resource
costs for all episodes with 10 or more therapy visits (including those
with the very highest number of therapy visits), the refined system had
multiple therapy ranges, with the payment addition for therapy being
based on all episodes with therapy visits in the stated range.
Therefore, the right tail of the distribution (that is, cases with the
highest therapy visits and thus the highest resource costs for therapy)
is not figuring into the payment increment until the 20+ therapy visit
level is reached. Thus, it was our intention to have lower payments for
episodes with 10 to 12 therapy visits, so as to better align costs and
payments.
The redistribution of resource costs among the new 153 groups
resulted in some lowering of case-mix weights, as just described, but
all the resource costs expended in 2005 were accounted for in the
payment system. The final case-mix change adjustment addresses nominal
case-mix change and is applied across all case-mix groups in a similar
manner. Therefore, the final case-mix adjustment is completely separate
from the realignment of payments to the 153 groups, and thus there was
no double-dipping. In sum, the multiple therapy thresholds and the
case-mix change adjustment are unrelated and do not doubly adjust the
rate as each adjustment is clearly warranted by the data.
We do not have enough information to verify the commenter's finding
that 95 percent of case-mix growth was a direct result of higher levels
of service domain in care delivery under PPS.
Comment: Several commenters wrote with suggestions or alternatives
to the case-mix analysis. One commenter wrote that CMS should continue
to work on developing post-acute care national assessment tool for use
across all settings, which would allow CMS to better determine what
settings were appropriate for patients based on acuity. It would also
allow CMS to understand how changes in home health case-mix are
affected by the type of patient admitted to home health. Some wrote
that CMS should allow implementation of OASIS-C before any further
case-mix reductions are made. A commenter suggested that we fully
analyze and compare information within OASIS-C with the development and
testing of the Continuity Assessment Record and Evaluation (CARE)
instrument. Another commenter felt that the data from OASIS-C would be
helpful to CMS in determining real changes in case-mix rather than
those stemming from coding or documentation improvements.
A number of commenters felt that the proposed 2011 adjustment was
too steep, particularly given low or negative profit margins, and
recommended a minimum 4-year phase-in; another suggestions that we
consider the impact on low-margin agencies before finalizing the rule.
Some commenters suggested that the complexities of the case-mix
methodology warranted making relevant CMS staff and contractors
available to respond to questions regarding the assessment methods
prior to expiration of the comment period. Additionally, these
commenters suggested that CMS make all data used in the analyses
available, and provide a 120-day comment period to allow time for
expert analysis to evaluate the methodology and findings. A different
commenter was strongly opposed to reductions for 2011 until more
analysis of medical necessity of the care provided was complete. This
commenter encouraged us to reduce or eliminate the creep attributed to
the shift to provision of higher therapy services unless clear evidence
existed that the therapy services were not medically necessary. This
commenter suggested we make a distinction in the application of creep
between therapy and non-therapy HHRGs, and recommended that physical
and occupational therapists be added to MAC review departments with
mandatory education and experience as qualifications for medical
review.
Response: We thank the commenters for these thoughtful comments and
suggestions. We assure the commenter that we are continuing our work
associated with the post-acute care demonstration. We are currently in
the early stages of data analysis of the assessment data and resource
data which has been collected to date. We will finish data collection
by the end of calendar year 2009. We remind the commenter that the
analysis of these data is a multi-year project, and that the analysis
will consider the data collected via the CARE instrument, the validity
and reliability of those data, and the strength of the items as payment
predictors. CMS plans to present the analysis of the data collected
during the demonstration and associated recommendations to Congress in
the summer of 2011. Regarding the commenters' suggestions that we wait
to make further case-mix reductions until we assess the OASIS-C data,
we remind the commenter that the OASIS-C revisions did not
significantly change payment items. We believe that the commenter may
be suggesting that CMS analyze OASIC-C non-payment items to assess
whether these new items would enable CMS to better identify the health
status of the patient, and whether these new items might be more
reliable in assessing real patient acuity change versus that which is
unrelated to real changes in acuity (nominal). It is important to note
that because we are just beginning to collect these items in CY 2011,
that sort of comparative analysis would only be possible after several
years of OASIS-C data collection. We may consider the suggestion that
we account for increases in nominal case-mix over a longer period of
time, in future rulemaking. In this final rule, we are not accounting
for additional changes in nominal case-mix which we identified from
current data analysis. Rather, we are maintaining the policy, finalized
in CY 2008, to reduce CY 2010 base episode payments by 2.75 percent.
With regards to the suggestion for a 120-day comment period, we are
unfortunately unable to adopt such a comment period given our
rulemaking timeframes, but we will continue to make every attempt
possible to share our analyses with the public in as timely as
possible. Regarding the commenter's suggestion that CMS should assess
the medical necessity of therapy visits before applying up-coding
reductions, as we described in an earlier comment, we find this
suggestion impracticable. With finite resources, it would be
challenging to perform a medical review on every claim which includes
therapy.
Again, as a point of clarification, the 2.71 percent reduction for
CY 2011 is not a proposed adjustment. That percentage reduction was
promulgated in the CY 2008 final rule (72 FR 49843).
Comment: A commenter stated that while he did not assess changes in
home health case-mix, an increase in case-mix unrelated to severity in
2007 confirms the need for continuing review of annual case-mix change.
The commenter noted that nominal changes in case-mix had been found
when major revisions were implemented in other payment systems,
suggesting particular scrutiny of the 2008 changes in case-mix was
warranted. The commenter wrote that if additional nominal case-mix
change was indicated, CMS should adjust payments as appropriate. The
commenter further recommended that we combine the planned reductions
for 2010 and 2011, and reduce payments in 2010 by 5.5 percent, and that
payments should be rebased to a level equal to average costs in 2011.
Response: We thank the writer for these comments. We agree with the
commenter that we need to continue to analyze current data as they
become available to us and update our
[[Page 58094]]
identification of nominal case-mix using these more current data. We
are currently analyzing 2008 data to assess the impact of our CY 2008
refinements, and determine the effect these refinements may have had on
nominal case-mix growth and will address the need for additional
reductions to the HH PPS rates in future rulemaking.
Comment: Another commenter wrote that CMS uses MedPAC's reports of
strong profit margins and high levels of new entrants to bolster the
view that access will be unaffected after the full creep cutbacks are
implemented. This commenter wrote that an industry association
disagrees with MedPAC's methodology, and concluded that one-third to
one-half of HHAs would lose money when creep reductions are fully
implemented. The commenter questioned MedPAC's use of a sample of HHA
cost reports representing less than 60 percent of HHA visits. This
commenter asked that the full information from MedPAC be released and
subject to review since CMS is supporting its case-mix reduction using
that report.
Response: We would like to assure the commenter that the analysis
and associated methodology CMS used to differentiate between real and
nominal case-mix growth involved extensive analysis, which is fully
documented in the Abt report, publicly available via the HH PPS Web
site at http://www.cms.hhs.gov/Reports/downloads/Coleman_final_April_2008.pdf.
We understand that the commenters are concerned about whether we
are taking into consideration the financial conditions of hospital-
based home health agencies. As MedPAC noted in its March 2009 report,
financial margin estimates using hospital-based providers are impacted
by the allocation of overhead costs from the hospital. We agree with
this assessment and believe that using this information would not
provide an accurate view of the overall industry margin or the impact
of the proposed change to the payment system.
Comment: A commenter disagreed with our choice of data used for the
creep analysis, saying that he was not convinced that data from the
final year of IPS could serve as a base period from which to measure
nominal growth in case-mix. The commenter questioned whether these data
were representative of post-PPS, and noted that there was a learning
curve with OASIS. The commenter wrote that until we made the ``derived
base period'' information available to the public, we should defer
further creep adjustments and roll back the first two stages. He also
questioned Abt's use of just 313,447 IPS OASIS assessments, and was
concerned that 18 percent of the episodes could not be evaluated since
the OASIS could not be reliably linked to claims. He also noted that
much has been made of improvements in OASIS coding over time, which
suggests that the OASIS was not properly coded at the time of IPS. He
questions the validity of this sample since many HHAs were not filing
OASIS at the time, and concluded that it was illogical to assume the
IPS data could be reliable bases for measuring creep. He also suggested
we make public the data showing actual use of S2 and S3, and the IPS
data used as a proxy for S2 and S3 cases. He noted that there was no
M0825 data in OASIS for the final IPS period; therefore one could argue
that the final IPS data understates case-mix.
Response: We disagree that OASIS data collected during the last
year of IPS were so poor as to be unusable to measure the case mix
during that period. Agencies were not supposed to be unfamiliar with
OASIS in the fall of 1999. Medicare first proposed making OASIS
mandatory in March 1997. The development of OASIS had been supported
and publicized by a large industry group over the years (transcript of
June 24, 1997, meeting of National Committee on Vital and Health
Statistics, accessed at http://www.ncvhs.hhs.gov/970624b1.htm#oasis).
OASIS was discussed in professional and research journals (for example,
see Home Healthcare Nurse, May 1997, Vol. 15/5: 340-342). OASIS version
B-1 was released in October 1998, one year before our observation
period for the IPS baseline began. After first publishing a final
regulation in January 1999 whose effective date was delayed on April
27, 1999, Medicare re-finalized the OASIS regulations in June 1999.
Agencies were instructed to begin OASIS data collection for Medicare,
Medicaid, and all other skilled services patients by July 19, 1999.
This was 2.5 months before the beginning of our IPS baseline
observation period, though they did not have to transmit data (other
than for testing purposes) until August 25, 1999. The Health Care
Financing Administration (HCFA), CMS's predecessor agency, issued a
comprehensive OASIS Implementation manual in July 1999 containing item-
by-item instructions about how to complete the OASIS assessment. It was
for the use of HHA agency staff who would be implementing OASIS as a
uniform core data set. HCFA conducted a national meeting of State OASIS
coordinators in mid-September 1999 to train them in responding to
agency requests for information. Four million assessments were
submitted by HHAs to State agencies from July 1999 to January 2000
(CMS-3006-F, Dec. 23, 2005). This is an indication that agencies were
actively working with OASIS from the start of the OASIS effective date.
Our inability to match all simulated episodes to an OASIS stems mainly
from the fact that time points of data collection for OASIS before HH
PPS did not necessarily match the starting points of simulated
episodes. During that period, OASIS was collected for outcomes
purposes, not payment purposes.
The learning curve with OASIS is an important reason why nominal
case-mix growth should be expected. However, we based our case-mix
change adjustment on the evidence that patient health status did not
change substantially, notwithstanding that improved understanding of
and application of OASIS occurred. Contrary to the commenter's
implication that the IPS sample was small, our sample size of hundreds
of thousands is extremely large. Scientifically, sample size adequacy
does not hinge on the ratio of the sample to the total population, but
does depend on the actual absolute numbers of observations. Regarding
the 18 percent of IPS episodes without a matched OASIS, we appreciate
the commenter's concern, but we have good reason to believe that the
sample we used is representative. Based on our understanding of the
main cause of the OASIS shortfall (described above), we do not have
reason to infer a bias in the assessments that we do have. We also note
that the sample's average is consistent with an average from an initial
episode sample. Initial episodes are more likely to have a matched
OASIS (89 percent for initial episodes vs. 75 percent for subsequent
episodes) so using data based on initial episodes should reduce
concerns about sample representativeness. The estimate of average case-
mix weight that we get from the sample combining initial and subsequent
episodes differs from the estimate we get from the initial episodes
sample in the direction we expect (1.096 vs. 1.125). That is, the
estimate from total (initial and subsequent) episodes is lower because
health conditions measured in OASIS and used in the case-mix system
tend to be more severe around the time of admission. Furthermore--and
most important in terms of the basis for our policy decision to adjust
payment to compensate for nominal case-mix change--using an initial
episode sample would produce the same percentage
[[Page 58095]]
growth in case-mix as using a combined initial and subsequent episode
sample. As we stated in the CY 2008 final rule (72 FR 49833): ``We used
all episodes rather than just initial episodes. This change in our
sample selection approach does not materially change the estimate of
case-mix change, whether comparing the baseline to HH PPS 2003 or HH
PPS 2005.'' Finally, modeling case-mix on an IPS sample that could
possibly deviate in some respects from a fully representative sample
would not necessarily produce distortions in the relationships found by
the modeling procedure. Our conclusions about real case-mix change
depend upon those relationships.
As we have noted elsewhere in our responses to comments, we believe
we have made available highly detailed information about our data and
methodology in the Abt Associates reports (April 2008 and August 2009)
and in our regulations. For years, claims and OASIS data have been
routinely available for purchase from CMS for researchers who wish to
analyze it and can guarantee the security of the data. We published
data on the rates of use of S2 and S3 under the IPS baseline period and
2003 in Tables 8 and 9 in the May 4, 2007 proposed rule (72 FR 25396-
25399). The table in this section, in a response to a comment, provides
detailed annual therapy visit distributions and thereby reflects S2 and
S3 rates year by year. We did not use M0825 in determining S2 and S3;
instead, we used the therapy visits reported by providers on the
matched paid claims.
Comment: A commenter asked that we re-examine the case-mix weights
for congestive heart failure (CHF), chronic obstructive pulmonary
disease (COPD), and similar chronic conditions. She wrote that we claim
HHAs are seeing fewer of such patients, and that she believes this is
either due to coding practices or to agencies not accepting these
patients. The commenter believes that the current method for accounting
for patients with these conditions results in a very low case-mix
weight. This low case-mix weight, coupled with high nursing needs,
causes these patients to exceed available reimbursement, leading to a
loss for the agency. The commenter asked that we increase points for
these diagnoses, refine how shortness of breath is assessed and points
calculated, and consider the speed at which such patients can perform
Activities of Daily Living (ADLs), and not just whether the patient can
do the ADL independently.
Response: The case-mix model we finalized in the CY 2008 final rule
recognizes more diagnoses than the original (FY2000) HH PPS model, and
it includes the specific diagnoses mentioned by the commenter, CHF and
COPD. Also, the CY 2008 case-mix model recognizes resource-intensive
interactions (that is, combinations of conditions within the same
episode). The model specifically recognizes the interaction of
pulmonary conditions and ambulation: the cost of serving pulmonary
patients with a limitation in ambulation is more during an initial
episode, and this combination increases the case-mix score. We believe
this interaction case-mix item does capture the burden of COPD on ADLs.
Shortness of breath, as measured by OASIS item M0490, provides
additional points for initial episodes. Providers receive points for
these and other conditions identified from statistical modeling of the
relationship between diagnoses and OASIS measures on the one hand, and
resource costs on the other. Agencies also receive points for secondary
diagnoses, thereby accounting for multiple co-morbidities.
Furthermore, we implemented a case-mix adjusted payment for non-
routine supplies, such as those related to ulcers or wounds. All of the
point values in the case-mix model represent the average addition to
the resource cost of the 60-day episode when a patient has the
condition associated with the points. The fact that agencies may
encounter some cases more costly than the case-mix-adjusted payment is
a result of the variability in patient needs inherent in the
population. We believe that, on average, this model aligns payment and
agency costs with acceptable accuracy. As shown in Table 1 of the CY
2010 proposed rule (74 FR 40958), the proportion of episodes (initial
episodes and all subsequent episodes) where the patient was discharged
from the hospital prior to entering home health and had a hospital
principal diagnosis of CHF has decreased by more than one-third since
FY 2000. We did not publish a similar statistic for COPD. The
statistics in Table 1 do not reflect coding practices in home health
agencies; the conditions in Table 1 come from the hospital principal
diagnosis preceding the episode (where the discharge occurred within
the 14 days before the first day of the episode). As for refining the
dyspnea and ADL measures in OASIS, we have reviewed all items in the
course of developing OASIS-C. We made changes to selected items where a
need for improvement was apparent. This review did not result in
significant changes along the lines suggested by the commenter.
Furthermore, it is unclear how the speed of ADL performance affects the
resource costs for nursing care, beyond the added costs already
accounted for in the point-bearing items mentioned earlier in this
response. Finally, all changes to the OASIS instrument have to be
balanced against the added burden imposed on the agency to measure
performance reliably and accurately.
To summarize, we are moving forward with our existing policy, as
implemented in the August 22, 2007 CY 2008 final rule with comment, of
imposing a 2.75 percent reduction to the national standardized 60-day
episode rates and the NRS conversion factor for CY 2010. We will
continue to monitor any future changes in case-mix as more current data
become available. We will also continue to look at ways to enhance the
Abt model, and depending on the availability of newer and additional
data, look to take into account factors that might yet be unmeasured in
the current model. Given the continued growth in nominal case-mix, we
expect to revise upward the 2.71 percent reduction to the national
standardized 60-day episode rates and the NRS conversion factor for CY
2011 in next year's rule. Analysis in next year's rule will update the
measure of the nominal increase in case-mix and compute the appropriate
percent reduction to the national standardized 60-day episode rates and
the NRS conversion factor to account for that increase.
C. Proposed CY 2010 Rate Update
1. The Home Health Market Basket Update
We proposed a HH market basket update of 2.2 percent for CY 2010.
This update was based on IHS Global Insight Inc.'s first quarter 2009
forecast, utilizing historical data through the fourth quarter 2008.
Since publication of the proposed rule, we have a revised market basket
update based on IHS Global Insight Inc.'s third quarter 2009 forecast,
utilizing historical data through the second quarter of 2009. The final
HH market basket update for CY 2010 is 2.0 percent. A detailed
description of how we derive the HHA market basket is available in the
CY 2008 Home Health PPS proposed rule (72 FR 25356, 25435).
Comment: One commenter stated the market basket increase of 2.2
percent would not be sufficient to cover the increased costs of
implementing OASIS-C, CAHPS, as well as increases in staffing costs.
The ongoing phase-in of the case-mix ``creep'' adjustment would add to
the financial burden of receiving a market basket increase
[[Page 58096]]
which is lower than the previous year's 2.9 percent. According to
MedPAC, 25 percent of HHAs have negative profit margins. The increase
in costs of operation will have a negative impact on the financial
viability of these agencies.
The commenter noted that not-for-profit HHAs are investing more of
their revenue in attracting and retaining qualified HH staff. The
shortages of nursing and physical therapy personnel are a major
challenge. HHAs compete with other providers to attract these
professionals.
Response: We disagree with the commenter that the 2010 market
basket update is not sufficient. The home health (HH) market basket is
not designed to account for changes in total costs (such as those
associated with the implementation of OASIS-C or other initiatives),
but rather it is intended to measure the input price pressures that the
average home health provider is expected to face in the coming year.
The composition of the market basket itself is made up of a set of
mutually exclusive and exhaustive cost categories that reflect the cost
structure of the industry (in a given base year). The HH index's cost
shares (or weights) are based on data reported on the Medicare cost
report forms and are specific to home health agencies. Each cost
category is assigned an appropriate price proxy whose projected
movements are weighted by their respective cost shares resulting in the
actual market basket update.
We recognize that HH providers compete with the rest of the health
care industry for nurses, physical therapists, and other health care
personnel. To the extent that the cost structure of the HH industry
changes over time, such as a greater share of expenses being devoted to
wages and salaries, for example, that change in share is picked up
during the rebasing process of a market basket. It has been our
experience that the cost structure of the HH industry does not vary
substantively from year to year. As a matter of practice, however, CMS
periodically rebases its market baskets to reflect updated cost
structures. The current HH market basket is based on Medicare cost
report data from 2003 and, we believe, reflects the appropriate cost
composition of the industry. We will continue to closely monitor the
cost structure of the HH industry and will propose to rebase the market
basket, as appropriate. Notably, the final update contained in this
rule does reflect the expected competitive wage pressures associated
with hiring health care personnel in the coming year.
Comment: One commenter stated support for our proposal to provide
the full market basket update of 2.2 percent in CY 2010. The commenter
stated that this measure provides relief to HHAs that have been subject
to market basket cuts for several years including a 0.8 percent
reduction in the market basket for 2004 (July to December) and 2005,
and a full 3.6 percent market basket reduction in 2006 (per provisions
of section 5201 of the DRA of 2005).
Response: We appreciate the commenter's support. We will
incorporate the final market basket update of 2.0 percent into the CY
2010 HH PPS rates.
2. Home Health Care Quality Improvement
As part of the CY 2010 proposed rule, we proposed to consider OASIS
assessments submitted by HHAs to CMS in compliance with HHA conditions
of participation for episodes beginning on or after July 1, 2008 and
before July 1, 2009 as fulfilling the quality reporting requirement for
CY 2010. We proposed to reconcile the OASIS submissions with claims
data in order to verify full compliance with the quality reporting
requirements in CY 2010 and each year thereafter on an annual cycle
July 1 through June 30 as described above. HHAs that meet the reporting
requirements would be eligible for the full home health market basket
percentage increase. HHAs that do not meet the reporting requirements
would be subject to a 2 percent reduction to the home health market
basket increase.
In the proposed rule we described the impending transition from
OASIS-B1 to OASIS-C. This revision to the current OASIS version B-1 has
undergone additional testing, and has been distributed for public
comment and other technical expert recommendations over the past few
years. CMS received OMB approval to modify the OASIS data set and will
require that this new version of OASIS (OMB 0938-0760) be
collected on episodes of care beginning on or after January 1, 2010.
In the proposed rule we also noted that as a result of implementing
OASIS-C, we will update Home Health Compare to reflect the addition of
the following 13 new process of care measures:
[cir] Timely initiation of care,
[cir] Influenza immunization received for current flu season,
[cir] Pneumococcal polysaccharide vaccine ever received,
[cir] Heart failure symptoms addressed during short-term episodes,
[cir] Diabetic foot care and patient education implemented during
short-term episodes of care,
[cir] Pain assessment conducted,
[cir] Pain interventions implemented during short-term episodes,
[cir] Depression assessment conducted,
[cir] Drug education on all medications provided to patient/
caregiver during short-term episodes,
[cir] Falls risk assessment for patients 65 and older,
[cir] Pressure ulcer prevention plans implemented,
[cir] Pressure ulcer risk assessment conducted, and
[cir] Pressure ulcer prevention included in the plan of care.
Also under consideration are three additional process of care
measures that may be added to home Health Compare based on results of
consumer testing. Those additional process measures are:
[cir] Drug education on high risk medications provided to patient/
caregiver at start of episode,
[cir] Potential medication issues identified and timely physician
contact at start of episode,
[cir] Potential medication issues identified and timely physician
contact during episode.
Comment: One commenter stated that he believes a six to twelve-
month delay in implementation of OASIS-C would be necessary to
accommodate a reasonable phase-in of such a significant change in
OASIS. The commenter stated that the vendor community reports that it
is not yet ready for OASIS-C. As a result, agencies can neither test
the software changes needed nor can they begin training their clinical
and information systems staff on the changes. As of mid-September 2009,
CMS had not released the final interpretive guidelines for OASIS-C.
There is simply not enough time to do all the planning, testing and
training needed to successfully implement OASIS-C on January 1. The
commenter believed outcome measurement is far too important to be
implemented without adequate training and testing, and wrote that
changes in OASIS implementation of this magnitude deserve a proper
implementation process. He felt that the home health community has
waited for many years for some of these changes, so waiting a few more
months to do it right would be prudent.
Another commenter stated that our proposal to require home health
agencies to transition patient assessment data collection from OASIS B1
to OASIS-C on January 1, 2010 was considered to be an appropriate
timeline when proposed. However, he felt that in
[[Page 58097]]
light of the recently issued version OASIS-C (August 2009) and the fact
that guidance and Q&As have not yet been made available, this would no
longer be an appropriate target timeline. The commenter wrote that this
timeline would not give software vendors and home health agencies
sufficient time to complete programming, testing and education of
clinicians. The commenter appreciated that CMS is undertaking several
venues for educating providers on OASIS-C to ensure that all home
health agencies have access to free training, but stated that there are
too many unresolved issues to meet a January 1, 2010 implementation
date. The commenter requested that CMS delay implementation of OASIS-C
implementation until April 1, 2010.
Response: We appreciate the magnitude of the effort required to
transition to OASIS-C, but we believe that it will offer substantial
benefits, in terms of improved support for agency quality improvement
efforts and provision of enhanced quality information for providers and
beneficiaries. The new data set also incorporates process of care items
that measure agencies' use of evidence-based practices that have been
shown to prevent exacerbation of serious conditions, can improve care
received by individual patients, and can provide guidance to agencies
on how to improve care and avoid adverse events. Making these
improvements is a high priority for CMS, which is why we have proceeded
on a well-considered course of data set development and field testing,
solicitation of public comment, and revision of the data set, on a
deliberate schedule over the past 4 years. Our experience in field
testing showed that agency staff could be trained on the new and
modified items in a relatively short period of time, and welcomed the
improvements to the data set. We released the post-testing version of
the data set in March 2009, and the initial OASIS Data Specifications
on July 1, 2009, so that vendors could begin to develop the needed
system changes. CMS has not received feedback from the vendor community
to date, relating to lack of readiness for OASIS-C. We believe that
software vendors who took timely advantage of the resources made
available will be prepared for the OASIS-C transition. In addition, the
State systems are being configured to accept OASIS-C as of January 1,
2010, as is the updated home health PPS grouper software. While such a
major change will never be easy, we believe that the benefits to be
realized and the burdens of delaying the process at this point, and
argue for proceeding with this transition as scheduled. The immediate
need of HHAs related to the OASIS-C instrument is to understand what
the new, changed and deleted items are. This information has been
available since August. Agencies will not be introduced to new quality
measures until September 2010 and additional resources related to these
will be made available. We will shortly be posting the final OASIS-C
User Guidance Manual, and we will be offering free training
teleconferences through the Medicare Learning Network. We urge all
providers or vendors who have questions about OASIS-C or the transition
to take advantage of all of the resources that CMS has provided, which
can be accessed through the CMS Web site, the Quality Improvement
Evaluation System (QIES) Technical Support Office (QTSO) Web site, and
our State OASIS Education Coordinators.
Comment: One commenter stated that it is his understanding that the
current number of quality measures available through Outcome-Based
Quality Improvement (OBQI) is 41, rather than 54, with plans by CMS to
expand to 54 once process measure data are available from OASIS-C data
collection. The commenter recognized the value of adding process
measures to Home Health Compare as additional consideration by the
public in search for home health services. However, the commenter
believed that 13 process measures, in addition to the 12 quality
measures already publicly reported, will only serve to overwhelm
beneficiaries. He wrote that the important considerations related to
processes are assessment of need and implementation of interventions.
The commenter recommended that measures related to ``plan of care''
not be publicly reported since this is information not essential to the
agency selection process. He added that current regulations require
that all services, regardless of professional practice requirements, be
included in the plan of care.
Response: We agree that assessment of need and implementation of
interventions are important considerations related to processes, but we
also believe that proactive planning for appropriate interventions is
an indicator of quality care. HHA clinicians play a key role in the
formulation of the plan of care and when interventions such as diabetic
foot care or falls prevention are stated clearly in the plan of care,
they are available for reference by all staff who provide care for the
patient, thereby ensuring that efforts are coordinated effectively. The
seven process measures related to the plan of care are National Quality
Forum (NQF) endorsed measures of accountability for HHAs. They assess
adherence to recommendations for best clinical practice which we
believe is an essential piece of the agency selection process.
Comment: One commenter suggested that CMS use caution when
selecting indicators which may focus solely on processes that may not
have been tested to be predictors of quality.
Response: The new process measures are NQF-endorsed, in addition to
extensive testing and evaluation of CMS based on criteria that include,
but are not limited to: Addressing a national health goal or priority
area, consistency with clinical practice guidelines and action-ability
of the measures (that is, the measures' susceptibility to experiencing
improved outcomes through intervention). CMS will continue to provide
meaningful, relevant, timely, and consensus-based measures.
Comment: CMS received several comments supporting the value of
adding the new process measures.
Response: We appreciate the industry's willingness and
encouragement regarding adopting these new methods of reflecting the
quality of care provided to Medicare beneficiaries.
Comment: One commenter urged CMS to provide guidance to Home Health
Agencies on the use and role of physical therapists.
Response: Though we recognize the valuable role of physical therapy
in the documentation and reporting of the new process measures as well
as the provision of home health care to multiple patient populations
including those with wounds, heart failure, and those in need of
medication management, we hesitate to make recommendations on issues
relating to staff use. Each HHA must review the needs of its patient
population and evaluate the best way to achieve the appropriate level
of care based on the competency of its staff.
Comment: Several commenters noted that their memberships believe
that the OASIS-C instrument is an improvement over the existing OASIS-
B1, but that many HHAs still have questions regarding the new tool and
request information regarding training on its use.
Response: CMS believes that HHA's questions have been answered with
the release of the OASIS-C Guidance Manual on October 9, 2009, the
content of the OASIS-C presentation at the NAHC annual conference on
October
[[Page 58098]]
10, 2009, and within the National Provider Calls that started on
October 22, 2009.
Comment: Two commenters requested a delay in the public reporting
of process measures. One requested delay until January 2012 to allow
time for implementation, development of and risk adjustment models and
staff education.
Response: Process measures are derived directly from OASIS-C data
and by nature do not require risk adjustment. We began providing
education on OASIS-C starting in October 2009.
Comment: One commenter requested a delay in the public reporting of
process measures until June 1 (no year was included in the request).
Response: CMS plans that the process measures will be reported on
Home Health Compare no earlier than October 2010.
Comment: Several commenters expressed concern with specifics
related to the addition of the 13 new process measures. One commenter
mentioned the lack of a timeframe for these measures and the perception
that some measures (pneumococcal vaccine ever received and depression
assessment conducted and influenza immunization received) are above and
beyond what an agency is expected to do. One commenter recommended that
questions related to ``potential medication issues identified'' and
``timely physician contact'' should not be included in public reporting
since the outcome of those measures is largely determined by physician
response.
Response: We believe strongly that the addition of process measures
will enhance the HHAs' ability to improve the quality of care provided
to beneficiaries. Process measures assess adherence to recommendations
for clinical practice based on evidence or consensus. Measures based on
data items that align with those used across other provider settings
(such as pneumonia vaccine received) will promote systematic use of
evidence-based practices with the aim of improving population health.
To a greater extent than outcome measures, process measures can
identify specific areas of care that may require improvement and give
credit for good care provision. Data related to the process measures
will be collected in the OASIS-C instrument beginning January 1, 2010
and the first reports on process measures are projected to be available
to agencies in September 2010.
Comment: One commenter requested definitions of various terms used
within the process measure descriptions.
Response: The OASIS-C Guidance Manual contains detailed information
for the clinician in order to be able to respond to these items
accurately.
``Short-term episode of care'': Implementation process
measures report whether a care process was ``implemented since the last
OASIS assessment''. These measures will be calculated separately for
short-term episodes and long-term episodes. Short-term episodes are
those in which the time frame from Start of care (SOC)/Resumption of
Care (ROC) to Transfer (TRF)/Discharge (DC) is less than or equal to 60
days (and DO NOT contain a 60-day follow-up assessment). Long-term
episodes are those in which the time frame from SOC/ROC to TRF/DC is
longer than 60 days (and DO contain a 60-day follow-up assessment). In
response to industry and NQF concerns that measures might not
accurately reflect care for longer stay patients, episodes that exceed
60 days will not be included in publicly reported measures on
implementation of evidence based practices.
The phrase ``at start of episode'' does not refer to
payment episodes and does not mean that this information will be
collected and reported for each 60-day episode. The phrase means that
the measure reports on best care practices that occur when a patient is
admitted to home care. It is used to distinguish this measure from
others that report on best practices that are implemented over the
course of the home health stay (rather than at the time of home health
admission) and are collected at transfer or discharge.
``Timely physician contact'' is defined as communication
to the physician within one calendar day of the assessment by
telephone, voicemail, electronic means, fax, or any other means that
appropriately conveys the message of patient status.
``High risk medications'' are defined as those identified
by quality organizations (Institute for Safe Medication Practices,
Joint Commission, etc.) as having considerable potential for causing
significant patient harm when they are used erroneously.
In the OASIS-C Guidance Manual, clinically significant
medication issues are defined as those that, in the care provider's
clinical judgment, pose an actual or potential threat to patient health
and safety, such as drug reactions, ineffective drug therapy, side
effects, drug interactions, duplicate therapy, medication omissions,
dosage errors, or non-adherence to prescribed medication regimen.
Potential clinically significant medication issues include adverse
reactions to medications (for example, rash), ineffective drug therapy
(for example, analgesic that does not reduce pain), side effects (for
example, potential bleeding from an anticoagulant), drug interactions
(for example, serious drug-drug, drug-food and drug-disease
interactions), duplicate therapy (for example, generic name and brand
name drugs that are equivalent both prescribed), omissions (missing
drugs from an ordered regimen), dosage errors (for example, either too
high or too low), noncompliance (for example, regardless of whether the
noncompliance is purposeful or accidental) or impairment or decline in
an individual's mental or physical condition or functional or
psychosocial status.
Comment: One commenter expressed concern with our proposal (set out
at 74 FR 40960) regarding home health care quality improvement. We
proposed to ``reconcile the OASIS submissions with claims data in order
to verify full compliance with the quality reporting requirements.''
The commenter thought this process was new and requested that it be
defined in more detail.
Response: This proposal is not new. Identical language was proposed
in our May 4, 2007, CY 2008 HH PPS proposed rule (72 FR 25450) and in
our CY 2009 HH PPS update notice (73 FR 65356). These proposals were
subsequently implemented. Details regarding the process are available
in the Medicare Claims Processing Manual, Chapter 10, section 120.
Comment: One commenter was concerned that pay for performance does
not differentiate between traditional Medicare patients and those
participating in waiver programs. Waiver patients have long-term
chronic needs, unlikely to be shown in discharge data, or to improve in
the same manner as traditional patients with short-term needs and
expectations for recovery.
Response: We thank the commenter for the comment on this topic, and
will consider his concerns related to differences in outcomes for
dually eligible waiver patients as plans for pay for performance are
developed.
Reporting of Home Health Care Quality Data Through CAHPS Survey
In the Home Health Prospective Payment System Rate Update for
Calendar Year 2010 (August 13, 2009), we proposed to expand the home
health quality measures reporting requirements to include the
CAHPS[supreg] Home Health Care (HHCAHPS) Survey, as initially discussed
in the May 4, 2007 proposed rule (72 FR 25356, 25452) and in the
November 3, 2008 Notice (73 FR 65357,
[[Page 58099]]
65358). As part of the U.S. Department of Health and Human Services
(DHHS) Transparency Initiative, we proposed to implement a process to
measure and publicly report patient experiences with home health care
using a survey developed by the Agency for Healthcare Research and
Quality's (AHRQ's) Consumer Assessment of Healthcare Providers and
Systems (CAHPS[supreg]) program. The HHCAHPS survey is part of a family
of CAHPS[supreg] surveys that asks patients to report on and rate their
experiences with health care. The HHCAHPS survey presents home health
patients with a set of standardized questions about their home health
care providers and about the quality of their home health care. Prior
to this survey, there was no national standard for collecting
information about patient experiences that would enable valid
comparisons across all home health agencies (HHAs).
In this Final Rule, we intend to move forward with the
implementation of the HHCAHPS. However, we intend to link the survey to
the CY 2012 payment update rather than to the CY 2011 payment update.
We still intend to implement the survey on a voluntary basis beginning
in October 2009.
Background and Description of the HHCAHPS
AHRQ, in collaboration with its CAHPS grantees, developed the
CAHPS[supreg] Home Health Care Survey with the assistance of many
entities (for example, government agencies, professional stakeholders,
consumer groups and other key individuals and organizations involved in
home health care). The HHCAHPS survey was designed to measure and
assess the experiences of those persons receiving home health care with
the following three goals in mind:
To produce comparable data on patients' perspectives of
care that allow objective and meaningful comparisons between home
health agencies on domains that are important to consumers;
To create incentives for agencies to improve their quality
of care through public reporting of survey results; and
To hold health care providers accountable by informing the
public about the providers' quality of care.
The development process for the survey began in 2006 and included a
public call for measures, review of the existing literature, consumer
input, stakeholder input, public response to Federal Register notices,
and a field test conducted by AHRQ. AHRQ conducted this field test to
validate the length and content of the CAHPS[supreg] Home Health Care
Survey. We submitted the survey to the National Quality Forum (NQF) for
consideration and endorsement via their consensus process. NQF
endorsement represents the consensus opinion of many healthcare
providers, consumer groups, professional organizations, health care
purchasers, Federal agencies and research and quality organizations.
The survey received NQF endorsement on March 31, 2009.
The HHCAHPS survey includes 34 questions covering topics such as
specific types of care provided by home health providers, communication
with providers, interactions with the home health agency, and global
ratings of the agency. For public reporting purposes, we will utilize
composite measures and global ratings of care. Each composite measure
consists of four or more questions regarding one of the following
related topics:
1. Patient care;
2. Communications between providers and patients; or
3. Specific care issues (medications, home safety and pain). There
are also two global ratings; the first rating asks the patient to
assess the care given by the HHA's care providers, and the second asks
the patient about his/her willingness to recommend the HHA to family
and friends.
There are two options for administering the HHCAHPS survey. The
agency can choose to administer the existing HHCAHPS survey, or the HHA
can integrate additional questions within the HHCAHPS survey. If an
agency chooses to implement an integrated survey, the core questions
from the HHCAHPS survey (questions 1 through 25) must be placed before
any specific/supplemental questions that the home health agency wishes
to add to the survey. Questions 26 through 34 (the ``About You'' survey
questions) must be administered as a unit--although they may be placed
either before or after any supplemental questions that the HHA wishes
to add to the HHCAHPS survey. If no HHA-specific questions are to be
added to the HHCAHPS survey, the ``About You'' questions should follow
the core questions (numbered 1 through 25) on the HHCAHPS survey. In
addition, there are nine optional supplemental HHCAHPS questions that
are available for HHAs to use (in addition to the 34-item HHCAHPS
survey). These optional supplemental HHCAHPS questions will not be
publicly reported and are not required. The supplemental questions are
listed in the Protocols and Guidelines Manual available at https://www.homehealthcahps.org.
The survey is currently available in both English and Spanish
translations. We proposed that HHAs and their survey vendors will not
be permitted to translate the HHCAHPS survey into any other languages
on their own. However, it was proposed that CMS will provide additional
translations of the survey over time. The Web site https://www.homehealthcahps.org will provide information about the subsequent
availability of additional translations. In the proposed rule, we asked
for suggestions for any additional language translations. Such
suggestions should be submitted online to the HHCAHPS Survey
Coordination Team, at [email protected].
Home health agencies interested in learning about the survey are
encouraged to view the HHCAHPS survey Web site, at https://www.homehealthcahps.org. Agencies can also call toll-free (1-866-354-
0985), or send an e-mail to the HHCAHPS Survey Coordination Team at
[email protected] for more information.
The following types of home health care patients were proposed as
eligible to participate in the HHCAHPS survey:
[rtarr8] Current or discharged patients who had at least one
skilled care home health visit at any time during the sample month;
[rtarr8] Patients who were at least 18 years of age at any time
during the sample period, and are believed to be alive;
[rtarr8] Patients who received at least two skilled care visits
from HHA personnel during a 60-day look-back period. (Note that the 60-
day look-back period is defined as the 60-day period prior to and
including the last day in the sample month);
[rtarr8] Patients who have not been selected for the monthly sample
during any month in the current quarter or during the 5 months
immediately prior to the sample month;
[rtarr8] Patients who are not currently receiving hospice care;
[rtarr8] Patients who do not have ``maternity'' as the primary
reason for receiving home health care; and
Patients who have not requested ``no publicity status.''
To collect and submit HHCAHPS data to CMS, Medicare-certified
agencies will need to contract with an approved HHCAHPS survey vendor.
Beginning in summer 2009, interested vendors applied to become approved
HHCAHPS vendors. The application process was (and still is) delineated
online at https://www.homehealthcahps.org. Vendors are required to
attend training conducted by CMS and the HHCAHPS Survey Coordination
Team, and to pass a post-training certification test.
[[Page 58100]]
Home health agencies that are interested in participating in the
HHCAHPS survey may do so on a voluntary basis beginning in October
2009. Such agencies must select a vendor from the list of HHCAHPS
approved survey vendors. This listing was made available on the Web
site https://www.homehealthcahps.org on September 14, 2009. The listing
will be updated on an ongoing basis to reflect the current approved
list of survey vendors.
Participation Requirements for CY 2011: The Consumer Assessment of
Healthcare Providers and Systems (CAHPS[supreg]) Home Health Care
Survey
In the proposed rule, we proposed that beginning in the first
quarter of CY 2010, all Medicare-certified home health agencies would
begin to collect the CAHPS[supreg] Home Health Care (HHCAHPS) survey
data in accordance with the Protocols and Guidelines Manual located on
the HHCAHPS Web site https://www.homehealthcahps.org. Home health
agencies would contract with approved HHCAHPS survey vendors (posted on
https://www.homehealthcahps.org) that are to conduct the survey. We
proposed that participating home health agencies would conduct a dry
run of the survey for at least one month in the first quarter of 2010
(January, and/or February, and/or March 2010), and submit the dry run
data to the Home Health CAHPS[supreg] Data Center by 11:59 p.m. EST on
June 23, 2010. The dry run data would not be publicly reported on the
CMS Home Health Compare Web site. This dry run would provide an
opportunity for vendors and HHAs to acquire first-hand experience with
data collection, including sampling and data submission to the Home
Health CAHPS[supreg] Data Center, with no public reporting of the
results. We proposed that all Medicare-certified home health agencies
continuously collect HHCAHPS survey data every quarter beginning in the
second quarter (April, May and June) of 2010, and submit these data for
the second quarter of 2010 to the Home Health CAHPS[supreg] Data Center
by 11:59 p.m. EST on September 22, 2010. We proposed that these data
submission deadlines be firm (that is, there would be no late
submissions allowed).
Medicare-certified HHAs would need to provide their respective
survey vendors with information about their survey-eligible patients
(either current or discharged) every month in accordance with the
Protocols and Guidelines Manual posted on https://www.homehealthcahps.org. Details about selecting the HHA sample are
also delineated in the Protocols and Guidelines Manual.
In the proposed rule, we proposed that the HHCAHPS survey data be
submitted and analyzed quarterly, and that the sample selection and
data collection occur on a monthly basis. HHAs would target 300 HHCAHPS
survey completes annually. Smaller agencies that were unable to reach
300 survey completes by sampling would survey all HHCAHPS eligible
patients. We proposed that survey vendors initiate the survey for each
monthly sample within 3 weeks after the end of the sample month. We
proposed that all data collection for each monthly sample be completed
within 6 weeks (42 days) after data collection began. We have approved
three modes of the survey to be used: mail only, telephone only, and
mail with telephone follow-up (the ``mixed mode''). We proposed that
for mail-only and mixed-mode surveys, data collection for a monthly
sample would end 6 weeks after the first questionnaire was mailed. We
proposed that for telephone-only surveys, data collection would end 6
weeks following the first telephone attempt.
In the proposed rule we wrote that we were aware that there was a
wide variation in the size of Medicare-certified home health agencies.
We proposed that the requirement to collect HHCAHPS survey data be
waived for agencies that served fewer than 60 HHCAHPS eligible patients
annually. The HHCAHPS eligible, unduplicated patient counts for the
period of October 1 through September 30 for a given year would be used
to determine if the HHA had to participate in the HHCAHPS survey in the
next calendar year.
We also proposed that newly Medicare-certified home health agencies
(that is, those certified on or after January 1, 2010 for payments to
be made in CY 2011) be excluded from the HHCAHPS reporting requirement
for the first year, as data submission and analysis would not be
possible for an agency this late in the reporting period.
In the proposed rule, we strongly recommended that home health
agencies participating in the HHCAHPS survey promptly review the
required Data Submission Summary Reports that are described in the
Protocols and Guidelines Manual posted on https://www.homehealthcahps.org. These reports will enable the home health
agency to ensure that its survey vendor has submitted their data on
time, and that the data have been accepted/received by the Home Health
CAHPS[reg] Data Center. We received no comments on this proposal, and
are finalizing it as proposed.
Oversight Activities: The Consumer Assessment of Healthcare Providers
and Systems (CAHPS[supreg]) Home Health Care Survey
We proposed that vendors and HHAs be required to participate in
HHCAHPS oversight activities to ensure compliance with HHCAHPS
protocols, guidelines and survey requirements. The purpose of the
oversight activities is to ensure that HHAs and approved survey vendors
follow the Protocols and Guidelines Manual. It was proposed that all
approved survey vendors develop a Quality Assurance Plan (QAP) for
survey administration in accordance with the Protocols and Guidelines
Manual. The QAP would include the following:
Organizational chart;
Work plan for survey implementation;
Description of survey procedures and quality controls;
Quality assurance oversight of on-site work and of all
subcontractors work; and
Confidentiality/Privacy and Security procedures in
accordance with the Health Insurance Portability and Accountability Act
(HIPAA).
As part of the oversight activities the HHCAHPS Survey Coordination
Team would conduct on-site visits and/or conference calls. The HHCAHPS
Survey Coordination Team would review the survey vendor's survey
systems, and would assess administration protocols based on the
Protocols and Guidelines Manual posted on https://www.homehealthcahps.org. We proposed that all materials relevant to
survey administration would be subject to review. The proposed systems
and program review would include but not be limited to: (a) Survey
management and data systems; (b) printing and mailing materials and
facilities; (c) data receipt, entry and storage facilities; and (d)
written documentation of survey processes. Organizations would be given
a defined time period in which to correct any problems and provide
follow-up documentation of corrections for review. Survey vendors would
be subject to follow-up site visits as needed.
We did not receive any comments regarding the proposed oversight
activities and therefore, the proposed recommendations are considered
to be final for this rule.
For Further Information on the HHCAHPS Survey
It is strongly recommended that all home health care agencies
participating in the HHCAHPS survey regularly check
[[Page 58101]]
the Web site, https://www.homehealthcahps.org for program updates and
information.
We proposed that all HHAs, unless covered by specific exclusions,
meet the quality reporting requirements or be subject to a 2 percent
reduction in the home health market basket percentage increase in
accordance with section 1895(b)(3)(B)(v)(I) of the Act. A
reconsideration and appeals process is being developed for HHAs who
fail to meet the HHCAHPS reporting requirements. We proposed that these
procedures would be detailed in the proposed CY 2012 home health
payment rule, the period for which HHCAHPS will be linked to the home
health market basket percentage increase.
Comment: We received a comment endorsing the proposed addition of
the HHCAHPS patient perspectives of care survey, stating that it would
be a useful supplement to existing performance measures.
Response: We appreciate this comment in support of adding the Home
Health Care CAHPS (HHCAHPS) measures to the quality reporting program
of the agency.
Comment: We received comments that HHCAHPS needs to be field-tested
and the survey results need to be statistically reliable before such
results are incorporated into quality reports, published on Home Health
Compare, or counted in the consideration of the annual payment update
for home health agencies.
Response: The Home Health Care CAHPS has been field-tested by AHRQ
and the CAHPS grantees and the final survey is currently being used in
a national, randomized mode experiment. A rigorous, scientific process
was used in the development of the survey, including: a public call for
measures; literature reviews; focus groups with home health patients;
cognitive interviews with home health patients; stakeholder input;
public response to Federal Register notices; and a field test.
Comment: We received feedback from commenters asking how HHCAHPS
would be adjusted to account for variation in quality scores which is
unrelated to agency behavior. One commenter noted that this would
require matching of demographic and insurance data into a risk
adjustment methodology. The commenter asked CMS to articulate how this
adjustment will be achieved to prevent the release of spurious quality
measures.
Response: We appreciate this feedback and would like to emphasize
that from the very beginning of the planning for HHCAHPS, the
prevention of spurious variables on the data was viewed as essential in
the implementation of HHCAHPS. To further achieve this goal, we have
additionally revised our protocols for the HHCAHPS based on comments
that were sent to us. We are now including only Medicare and/or
Medicaid patients in the HHCAHPS survey. For public reporting of the
data, the data will be adjusted for mode of survey administration. The
HHCAHPS measures will also be adjusted for patient mix. Patient-mix
adjustments are made when certain patient characteristics that are
beyond home health agencies' control impact how a patient responds to
the survey. The patient-mix characteristics that have been identified
for possible inclusion cover variables such as overall health status,
diagnosis information, age, education, managed care indicator, whether
the patient lives alone, and insurance coverage. Although the patient-
mix adjusters included in the model are constant over time, the exact
values of patient-mix adjustment coefficients are re-estimated each
reporting period based on the empirical relationship observed between
the patient-mix adjustment variables and HHCAHPS outcomes in that
period.
Comment: We received comments that the HHCAHPS survey is too long.
These commenters mentioned that the rates of completion of consumer
satisfaction surveys are typically low, particularly when the
instrument is long.
Response: The version of the HHCAHPS that was used in the AHRQ
field test had 58 items, and the length of that survey did not appear
to influence the completion of the survey. However, as a result of
intensive data analysis and input from the stakeholders and the
Technical Expert Panel, over 20 questionnaire items were eliminated
from the field test survey. The current 34-item questionnaire (that
ultimately received NQF endorsement) was the outcome of this
development process. We believe that the length of the survey
represents an effective compromise and achieves the goal of providing
key quality measures of the patient perspectives of care while at the
same time keeping the survey as short as possible. CMS is not
shortening the survey in this Final Rule.
Comment: We received feedback from a commenter concerned that many
HHA patients were not sufficiently educated to interpret the HHCAHPS
correctly.
Response: We appreciate the sensitivity to the home health patients
by asking about the readability of the HHCAHPS survey. The Flesch-
Kincaid reading test showed that the HHCAHPS survey is at less than a
seventh grade level. More importantly though, if patients are unable to
answer the survey due to decreased capacities, a family or friend may
assist the patient and answer the questions on behalf of the selected
home health patient in the HHCAHPS home health agency sample.
Comment: We received comments asking how the HHCAHPS survey would
be administered to patients suffering from dementia or psychiatric
disorders.
Response: We appreciate comments sensitive to concerns about how
HHCAHPS would be administered to patients suffering from dementia, or
other disorders that might present challenges to respondents. Early on,
we recognized the importance of allowing proxy respondents for this
population even though proxy respondents are not always used in other
CAHPS surveys. Proxy respondents answer the HHCAHPS survey on behalf of
the patient respondent. We analyzed the field test data and found that
proxy respondents do not respond differently from home health patients;
thus, proxy respondents (that is, family members) are allowed. However,
home health agency staff cannot serve as proxy respondents for
patients.
Comment: We received feedback from one commenter that the existing
survey timelines could result in patients being surveyed more than 60
days after their home health services ended, resulting in an inability
to recall or evaluate services accurately.
Response: We appreciate this comment concerning surveying patients
too long after they received services. We received comments from the
home health agencies in our mode experiment that the earliest that they
can deliver a patient list from the end of the month is about two weeks
after the close of the month. Therefore, we have emphasized to the HHAs
to send their patient lists to their respective vendors in time to
begin data collection within 21 days after the close of any month. In
most data collection scenarios, we believe that patients will be
surveyed within 60 days from the time that they last received services
from the home health agency. In certain circumstances, it may be that
patients will be surveyed later than 60 days if they were seen the very
beginning of the sample month and do not respond to the initial mail or
telephone attempts. Overall, the goal of the data collection process is
to survey the patients as soon as possible.
Comment: We received comments that there is a need for additional
[[Page 58102]]
language translations of the HHCAHPS besides English and Spanish.
Several commenters mentioned the difficulties in implementing HHCAHPS
because their agencies have few patients who speak either English or
Spanish.
Response: We appreciate these concerns regarding the need for
additional language translations and strongly encourage that these
suggestions and specific requests be submitted as soon as possible to
the HHCAHPS Survey Coordination Team at [email protected]. Currently, CMS
is creating a Chinese translation of the questionnaire and will produce
additional translations in the coming year. CMS is not allowing vendors
or individual HHAs to independently translate the survey into other
languages on their own because of the need to assure comparable (if not
identical) wording in every language, and thus ensure comparability of
the survey data on a national basis.
Comment: We received several comments about how we chose the
particular criteria on who is eligible/ineligible to participate in the
survey.
Response: Based on input received through stakeholder meetings,
AHRQ and CMS agreed that patients 18 and older needed to have 2 or more
skilled visits in order to evaluate an agency's care. Additionally,
maternity and hospice patients were excluded due to (1) the unique
circumstances surrounding maternity care; and (2) the sensitivity
associated with surveying hospice patients.
Comment: We received several comments concerning the inclusion of
all patients, rather than limiting the survey to Medicare and/or
Medicaid patients only. Commenters were concerned about the burden and
validity of including non-Medicare or non-Medicaid patients as
respondents.
Response: In this Final Rule we are recommending that the
submission of HHCAHPS data be initially applied to Medicare and
Medicaid patients only. Only Medicare and/or Medicaid patients are
included in the HHCAHPS survey. All other eligibility criteria are
being implemented as proposed.
Comment: We received comments asking why Home Health Agencies
cannot conduct the HHCAHPS survey themselves (that is, self-administer
the survey).
Response: Agencies are not allowed to conduct the survey on their
own. Since many patients have a continuing relationship with their home
health agency, we believe that an independent third party will be
better able to solicit an unbiased response. Since they receive care in
their homes, this population is particularly vulnerable and dependent
upon their home health agency caregivers.
Comment: We received a comment asking CMS to clarify what oversight
would occur regarding how agencies compile their patient lists and
submit them to vendors.
Response: We thank the commenter for this inquiry and respond that
we will be conducting oversight activities for the HHCAHPS vendors. As
part of the oversight activities, we will monitor information about the
number of patients eligible per month and may ask the vendor to provide
sampling frame counts for a sample of agencies. If we are seeing
unusual numbers of eligible patients counts compared against OASIS
counts, we may work with the vendor and agency to determine if there
are any systematic issues.
Comment: We received comments concerning the costs involved in
contracting with an approved Home Health Care CAHPS vendor to collect
and submit data. These costs represent an additional expenditure for
agencies without additional compensation from CMS. These commenters
stated vendor cost estimates have been provided, ranging anywhere from
$5 per completed survey, up to $9,000 a year.
Response: We recognize that vendors will charge different amounts
for the survey, and highly recommend that home health agencies ``shop
around'' for the best value for their agency. The vendor list is
available on www.homehealthcahps.org. Currently, 34 vendors have been
approved to conduct the survey and additional vendors will be approved
in the coming months. Therefore, for the final rule, only HHCAHPS-
approved vendors may be used to conduct the HHCAHPS survey for
participating home health agencies.
Comment: We received multiple comments about cost to the HHAs, and
burden to the HHAs. We received feedback from one commenter who wrote
that the HHCAHPS implementation process has not been well explained or
thought through in terms of impacts on agencies; a number of commenters
were concerned about the financial burden, particularly when
reimbursements are decreasing. Another felt that software reprogramming
costs and fees were not accurate in the burden estimates. Another
commenter asked that CMS clarify whether CMS or HHAs will be paying
vendors for their services. A number of commenters wrote that a policy
which imposes a mandatory requirement but makes non-compliance subject
to a penalty should be funded by CMS. Another commenter asked that we
cap the amount that vendors would charge HHAs and allow HHAs to claim
the cost as allowable on their cost reports.
Response: We are fully appreciative of the comments concerning cost
burdens to the HHAs with the implementation of HHCAHPS. We believe that
home health agencies should ``shop around'' for the best value by
researching as many vendors as possible that are listed on the vendor
list on http://www.homehealthcahps.org. We are confident that there are
reasonable choices for the HHAs with the current list of vendors. We
have limited the initial data collection to Medicare and/or Medicaid
patients to reduce the burden of providing administrative data on
private pay patients. We will also accept V codes instead of ICD-9
codes if the agency does not have ICD-9 codes for particular patients.
All of the administrative variables should be available on OASIS and
should require minimal reprogramming for the HHAs to provide patient
information to their survey vendors. HHAs will be paying vendors for
data collection and processing services and we will be paying for
training, technical assistance, oversight of vendors, and data analysis
of the HHCAHPS data. In response to the comment that this is a
mandatory requirement that makes non-compliance subject to a penalty,
we respond that the expanded requirements concerning the collection of
quality data were stated in the CY 2008 Home Health Payment Rule and in
the CY 2009 Home Health Notice of October 31, 2008. The expanded
requirements concerning quality data for home health agencies were also
stated in the Deficit Reduction Act. The collection of quality data for
similar CAHPS surveys, such as the Hospital CAHPS survey, follow the
same model wherein the health care providers pay the approved survey
vendors for the data collection costs and we pay for the training,
technical assistance, oversight of vendors, and data analysis costs.
HHAs are strongly encouraged to report their respective HHCAHPS cost on
their cost reports but should note that these costs are not
reimbursable under the HH PPS.
Comment: We received comments asking whether HHCAHPS participation
is really a voluntary program.
Response: The first year of the HHCAHPS is entirely voluntary. Once
data collection is tied to the annual payment update for CY 2012
(voluntary data collection begins October 2010), agencies may choose to
participate. Moreover, agencies may still choose not to participate in
the survey if they believe that the costs of participating
[[Page 58103]]
will exceed the two percent reduction of the full annual payment update
they would otherwise receive.
Comment: While commenters were generally supportive of the survey,
and of quality improvement measures in home health, many requested a
delay in the implementation of the survey. Commenters were concerned
about implementing this new requirement at the same time as the rollout
for OASIS-C. They wanted home health agencies to have additional time
to select a vendor to conduct the survey for them. Commenters were
concerned about not accounting for this expense in their 2010 budgets,
and wanted additional time to evaluate and pilot the survey on their
own.
Response: CMS has carefully considered the comments it received,
and is delaying the linkage of HHCAHPS data to the quality reporting
requirements for the annual payment update by 6 months. This will allow
home health agencies to first fully implement OASIS-C before being
required to implement the HHCAHPS survey for payment considerations. As
such, agencies will be required to do a dry run for at least one month
in third quarter CY 2010, and to begin data collection on an ongoing
basis in October 2010. With this change, HHAs will be required to
submit dry run data from the third quarter of CY 2010 to the Home
Health CAHPS Data Center by 11:59 p.m. EST on January 21, 2011.
Similarly, HHAs will be required to submit data for the fourth quarter
of CY 2010 to the Home Health CAHPS Data Center by 11:59 p.m. on April
21, 2011. With this delay, HHCAHPS will be a requirement for agencies
to receive their full 2012 annual payment update.
As a result of this rule's final provision to tie the HHCAHPS to
the CY 2012 annual payment update (rather than to the CY 2011 annual
payment update), home health agencies certified on or after April 1,
2011 will be excluded from the HHCAHPS reporting requirement for CY
2012 as data submission and analysis will not be possible for an agency
this late in the CY 2012 reporting period. Agencies should begin
HHCAHPS data collection as soon as possible to meet HHCAPS reporting
requirements for future years. Additionally, by June 16, 2010, HHAs
need to provide CMS with patient counts for the period of April 1, 2009
through March 31, 2010. CMS will post a form that the HHAs will use to
submit their patient counts via the Web site, http://www.homehealthcahps.org. This requirement pertains only to Medicare-
certified HHAs with fewer than 60 eligible, unduplicated patients for
that time period. Such agencies would be exempt from conducting the
HHCAHPS survey for the annual payment update in CY 2012. Agencies that
have fewer than 60 eligible, unduplicated patients would be exempt from
data collection from third quarter CY 2010 through second quarter CY
2011.
Comment: We received comments about the HHCAHPS data submission
requirements for reporting ICD-9 codes for patient diagnosis. It was
proposed in the Protocols and Guidelines Manual and also in CMS
training that ICD-9 codes be used in patient mix adjustment to ensure
the HHCAHPS results are comparable across agencies. However, commenters
wrote that over 40 percent of home health agencies use V-codes to
indicate a patient's primary diagnosis. Home health agencies however,
are in agreement that V codes do not accurately reflect the medical
conditions of their patient population.
Response: Based on feedback from the proposed rule, we have
modified the specifications to allow for the submission of V codes if
those are the only available data. However, we strongly encourage the
submission of ICD-9 codes if feasible. The reason for collecting
diagnosis codes that are not V codes is to distinguish patients who,
because of their underlying condition, may have very different
attitudes about the health care they receive and who also may respond
very differently to the questions on the HHCAHPS. Prior research has
shown that patients rate the care they receive differently based on
their characteristics. For example, older patients tend to rate more
favorably than younger patients, but sicker patients tend to rate less
favorably than relatively healthier patients. Consider the case in
which two patients are coded with one of the V57 rehabilitation codes;
however, one has had knee surgery and the other has had a stroke. These
two patients will potentially have different perspectives and opinions
about the home health care they receive, and these perspectives will
affect how they respond to the HHCAHPS survey items. The V code in this
example does not indicate the severity of the illness/condition. For
this reason, we urge survey vendors to provide ICD-9 codes whenever
possible, so that survey results can be statistically adjusted to
account for any differences in responses based on patient
characteristics. Therefore, for the final rule, we will allow V codes
if those are the only available data.
Comment: We received feedback from a commenter that the
requirements for HHCAHPS include reporting ADL scores from OASIS, but
OASIS is not required for non-Medicare, non-Medicaid patients. HHAs
that do perform an OASIS assessment on these patients do not enter the
information into their electronic files since HHAs are prohibited from
reporting these data to the State repository.
Response: We are appreciative of this comment and for the final
rule have limited data collection to Medicare and/or Medicaid patients.
In addition, we are also allowing V codes if ICD-9 data are unavailable
for the HHCAHPS patients.
Comment: We received a comment suggesting that we reevaluate
patient data submission requirements, and streamline the amount of
information essential to the accurate reporting of patient experiences.
Response: We appreciate this comment concerning a reevaluation of
the patient data submission requirements for HHCAHPS. Accordingly, we
have revised the data submission requirements with two significant
changes in this final rule. The first change is that only Medicare and/
or Medicaid patients are in the HHCAHPS. The second change is that HHAs
may submit V codes if ICD-9 codes are unavailable.
Comment: We received several comments concerning the survey modes
and the need for 300 completed surveys a year. We received several
comments that HHCAHPS should only be administered by mail mode to
ensure comparability. Similarly, we received requests that HHCAHPS be
only available in the telephone mode for comparability. Finally, we
received comments that only one survey mode should be accepted for use
for HHCAHPS, no matter what the mode choice was, for comparability
across all agencies nationally.
Response: We appreciate these comments because they are all related
to the same goal to ensure comparability of the survey results for all
participating HHAs. HHCAHPS, as a part of the CAHPS program, is always
striving to ensure comparability in all steps of the survey
implementation and analysis of results. We realized that to limit the
survey mode to only one type (for example, telephone only) could be
limiting the HHAs in choosing survey vendors.
We dealt with a similar issue with the Hospital CAHPS survey, for
which several modes of administration were ultimately permitted. While
patient responses did vary based on the survey mode employed, it was
possible to adjust for these differences statistically. We are
therefore conducting a randomized mode experiment to test the
[[Page 58104]]
effect of using three data collection modes: mail only, telephone only,
and mixed mode (mail with telephone follow-up of non-respondents). If
the mode experiment suggests that the method of data collection has a
significant impact on the survey responses, then we will use the
results from the mode experiment to make appropriate adjustments in the
reporting of the survey responses. When the mode experiment is
concluded and all results, conclusions and recommendations are
available, the results as well as the adjustments will be posted on
http://www.homehealthcahps.org, the official Web site of the Home
Health Care CAHPS survey. In the meantime, for the final rule, the
HHCAHPS will allow three survey modes as proposed.
Comment: We received comments that questioned the advisability of
requiring a total of 300 completed surveys since this number will have
varying statistical validity for small versus large agencies. Further,
HHAs serving populations that tend to be poor respondents will be
unable to meet this total number, particularly if the agencies
themselves are small in size. In addition, commenters were concerned
about the validity of data comparing small agencies (that may need to
survey 100 percent of the patients in order to meet the required
target) with large agencies (which may be able to survey as few as 1
percent of their patients and reach the target).
Response: We understand concerns about the sample size. In the
practice of statistics however, it is established that the sample size
in absolute numbers is more important than the proportion of the
population surveyed. Surveying a sample of 300 will produce the same
level of precision whether the sample is 10 percent, 1 percent or even
0.01 percent of the total population. We understand that 300 may be
higher than achievable for some small agencies. However, the larger the
sample (even if less than 300), the less the variability in an agency's
ratings over time. Therefore, in the final rule we are moving forward
with the sample sizes for HHCAHPS as proposed.
Comment: We received feedback from a commenter that suggested that
CMS base compliance with the requirement on whether HHAs submitted
appropriate numbers of patient files for their size, rather than on the
number of patients that responded to surveys.
Response: We appreciate this question clarifying whether agencies
must submit 300 completed surveys on an annual basis. In the proposed
rule and in this final rule, we emphasized that HHAs should target 300
completes annually which averages about 25 completes a month. However,
we equally emphasized that smaller agencies that are unable to reach
300 survey completes by sampling should survey all HHCAHPS eligible
patients. We will accept less than 300 survey completes annually if an
agency is unable to achieve that number. Compliance is based on whether
the agency did the survey and followed the protocols. It is not based
on the number of patients that responded to the survey.
Summary of Final Rule Changes for HHCAHPS
For this final rule, we are adopting three changes to the
previously proposed provisions for HHCAHPS. The first change is the
delay in the HHCAHPS linkage to the annual payment update, from CY 2011
to CY 2012. This delay means that home health agencies will need to
conduct a dry run for at least one month in the third quarter 2010, and
continuously collect survey data beginning in the fourth quarter 2010
and moving forward. HHAs are urged to note the revised dates in this
Final Rule and to routinely check the Web site http://www.homehealthcahps.org for the key dates. The second change concerns
the patients eligible for the survey: only Medicare and/or Medicaid
patients will be eligible to take the HHCAHPS survey. The third change
is that V codes may be submitted if ICD-9 codes are unavailable. Home
Health Compare will be updated to reflect the addition of HHCAHPS to
the quality reporting requirements.
3. Home Health Wage Index
Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require that we
adjust the HH PPS payment rates to account for differences in area wage
levels, using a wage index that we find appropriate. Since the
inception of the HH PPS, we have used hospital wage data in developing
a wage index to be applied to HHAs.
In the CY 2010 proposed rule, we proposed to continue that
practice, as we continue to believe that using the pre-floor, pre-
reclassified hospital inpatient wage index is appropriate and
reasonable for the HH PPS. As explained in the update notice for CY
2009 (73 FR 65359), the HH PPS does not use the hospital area wage
index's occupational mix adjustment, as this adjustment serves
specifically to define the occupational categories more clearly in a
hospital setting.
We apply the appropriate wage index value to the labor portion
(77.082 percent) of the HH PPS rates based on the site of service for
the beneficiary (defined by section 1861(m) of the Act as the
beneficiary's place of residence).
In the HH PPS final rule for CY 2006 (70 FR 68138, November 9,
2005), we adopted the changes discussed in the Office of Management and
Budget (OMB) Bulletin No. 03-04 (June 6, 2003), available online at
http://www.whitehouse.gov/omb/bulletins/b03-04.html, which announced
revised definitions for Metropolitan Statistical Areas (MSAs), and the
creation of Micropolitan Statistical Areas and Combined Statistical
Areas. In addition, OMB published subsequent bulletins regarding CBSA
changes, including changes in CBSA numbers and titles.
In adopting the OMB Core-Based Statistical Area (CBSA) geographic
designations, we provided for a 1-year transition with a blended wage
index for all providers. For CY 2006, the wage index for each provider
consisted of a blend of 50 percent of the CY 2006 MSA-based wage index
and 50 percent of the CY 2006 CBSA-based wage index (both using FY 2002
hospital data). We referred to the blended wage index as the CY 2006 HH
PPS transition wage index. As discussed in the HH PPS final rule for CY
2006 (70 FR 68138, November 9, 2005), subsequent to the expiration of
the 1-year transition on December 31, 2006, we use the full CBSA-based
wage index values.
We continue to use the methodology discussed in the CY 2007 final
rule (71 FR 65884, November 9, 2006) to address those geographic areas
in which there are no hospitals and, thus, no hospital wage data on
which to base the calculation of the HH PPS wage index. For those
areas, we use the average wage index from all contiguous CBSAs as a
reasonable proxy. This methodology is used to calculate the wage index
for rural Massachusetts. However, we do not apply this methodology to
rural Puerto Rico due to the distinct economic circumstances that exist
there, but instead continue using the most recent wage index previously
available for that area (from CY 2005). For urban areas without
specific hospital wage data, we use the average wage indexes of all
urban areas within the State to serve as a reasonable proxy for the
wage index of that that urban CBSA. The only urban area without wage
data is Hinesville-Fort Stewart, Georgia (CBSA 25980).
On November 20, 2008, OMB issued Bulletin No. 09-01 located at Web
address http://www.whitehouse.gov/omb/bulletins/fy2009/09-01.pdf. This
bulletin highlights three geographic areas that were previously
classified as Micropolitan Statistical Areas but now
[[Page 58105]]
qualify as Metropolitan Statistical Areas. The three areas are: (1)
CBSA 16020, Cape Girardeau-Jackson, MO-IL (this includes Alexander
County in Illinois and Bollinger and Cape Girardeau Counties in
Missouri); (2) CBSA 31740, Manhattan, KS (this includes Geary,
Pottawatomie, and Riley Counties in Kansas); and (3) CBSA 31860,
Mankato-North Mankato, MN (this includes Blue Earth and Nicollet
Counties in Minnesota).
The comments that we received on the wage index adjustment to the
HH PPS rates, and our responses to those comments, appear below.
Comment: A commenter requested that CMS develop an industry
specific (HH specific) wage index.
Response: Our previous attempts at either proposing or developing a
home health specific wage index were not well received by commenters or
the industry. Generally, the volatility of the home health wage data
and the resources needed to audit and verify those data make it
difficult to ensure that such a wage index accurately reflects the
wages and wage-related costs applicable to the furnishing of services.
We believe it is important that a HH specific wage index be more
reflective of the wages and salaries paid in a specific area, be based
upon stable data sources, and significantly improve our ability to
determine HH payments without being overly burdensome.
Comment: As an alternative to the rural floor, one commenter
suggested we adjust for population density during calculation of the
labor portion of payments to account for the increased costs of
providing services in rural areas.
Response: The proposal of utilizing a population density adjustment
is suggestive of a rural add-on. The HH PPS has utilized rural add-ons
during various time periods since its inception. However, rural add-ons
must be legislated. The last rural add-on, which was mandated by
section 5201(b) of the Deficit Reduction Act (DRA), expired in early CY
2007.
Comment: A commenter wrote that it was unfair for HHAs to be tied
to erroneous hospital data with no recourse.
Response: CMS utilizes efficient means to ensure and review the
accuracy of the hospital cost report data and resulting wage index. The
home health wage index is derived from the pre-floor, pre-reclassified
hospital wage index which is calculated based on cost report data from
hospitals paid under the hospital inpatient prospective payment system
(IPPS). All IPPS hospitals must complete the wage index survey
(Worksheet S-3, Parts II and III) as part of their Medicare cost
reports. Cost reports will be rejected if Worksheet S-3 is not
completed. In addition, our intermediaries perform desk reviews on all
hospitals' Worksheet S-3 wage data, and we run edits on the wage data
to further ensure the accuracy and validity of the wage data.
Furthermore, HHAs have the opportunity to submit comments on the
hospital wage index data during the annual IPPS rulemaking period.
Therefore, we believe our review processes result in an accurate
reflection of the applicable wages for the areas given.
Comment: A few commenters objected to our using CBSA area, which
they stated creates arbitrary payment differences along CBSA borders,
and exacerbate instability in the wage index.
Response: We believe that adjusting payments based on the CBSA
areas is the best available method of compensating for differences in
labor markets.
Comment: A few commenters suggested we establish limits on
allowable annual changes in wage index values from one year to the
next. One suggested spreading any wage index value changes greater than
2 percent over at least 2 years.
Response: Updating the wage index must be done in a budget neutral
manner. Establishing limits on how much a particular wage index could
increase or decrease from one year to another would not be consistent
with budget neutrality. Consequently, we implement updated versions of
the wage index, in their entirety.
Comment: Several commenters asked CMS to allow HHAs to apply for
the type of geographic reclassification that IPPS hospitals are
provided. In addition, several commenters recommended establishing a
rural floor.
Response: The commenters are referring to rural floor and
geographic reclassification provisions in the IPPS which are only
applicable to hospital payments. The rural floor provision is provided
at section 4410 of Public Law 105-33 and is specific to hospitals. The
reclassification provision provided at section 1886(d)(10) of the Act
is also specific to hospitals. In its June 2007 report titled, ``Report
to Congress: Promoting Greater Efficiency in Medicare'', MedPAC
recommends that Congress ``repeal the existing hospital wage index
statute, including reclassification and exceptions, and give the
Secretary authority to establish new wage index systems.'' We believe
that adopting the IPPS wage index policies (such as reclassification or
floor) would not be prudent at this time, because MedPAC suggests that
the reclassification and exception policies in the IPPS wage index
alter the wage index values for one-third of IPPS hospitals. In
addition, MedPAC found that the exceptions may lead to anomalies in the
wage index. By adopting the IPPS reclassification and exceptions at
this time, the HH PPS wage index could become vulnerable to problems
similar to those that MedPAC identified in their June 2007 Report to
Congress. However, we will continue to review and consider MedPAC's
recommendations on a refined alternative wage index methodology for the
HH PPS in the future.
Comment: Several commenters recommended MedPAC's approach to the HH
wage index outlined in its June 2007 report. This approach would use
Bureau of Labor Statistics (BLS) data to provide more consistent values
among neighboring markets and less year-to-year volatility in values.
Additionally, the MedPAC methodology would utilize data that are
available for all labor areas, eliminating the need to impute a wage
index in areas with no hospital.
Response: In February 2008, CMS awarded a Task Order under its
Expedited Research and Demonstration Contract, to Acumen, LLC. Acumen,
LLC conducted a study of both the current methodology used to construct
the Medicare wage index and the recommendations in MedPAC's 2007 report
to Congress. Part One of Acumen's final report, which analyzes the
strengths and weaknesses of the data sources used to construct the CMS
and MedPAC indexes, is available online at http://www.acumenllc.com/reports/cms. We will continue monitoring wage index reform efforts and
their potential influence on the HH PPS wage index.
Moreover, in light of all of the pending research and review of
wage index issues in general, it would be premature at this time to
initiate revisiting the use of CBSA labor market areas and review of a
HH specific wage index.
Therefore, in this final rule, we will continue to use hospital
wage data to calculate the HH PPS wage index adjustment, and are
finalizing the wage index policies as discussed in the CY 2010 proposed
rule (74 FR 40948-40982, August 13, 2009). Refer to Addenda A and B of
this final rule for the wage index applicable to CY 2010 HH PPS
payments.
[[Page 58106]]
4. CY 2010 Payment Update
a. National Standardized 60-Day Episode Rate
The CY 2010 HH PPS rates use the same case-mix methodology and
application of the wage index adjustment to the labor portion of the HH
PPS rates as set forth in the CY 2008 HH PPS final rule with comment
period. We multiply the national 60-day episode rate by the patient's
applicable case-mix weight. We divide the case-mix adjusted amount into
a labor and non-labor portion. We multiply the labor portion by the
applicable wage index based on the site of service of the beneficiary.
We add the wage-adjusted portion to the non-labor portion yielding the
case-mix and wage adjusted 60-day episode rate subject to any
additional applicable adjustments.
For CY 2010, we base the wage index adjustment to the labor portion
of the HH PPS rates on the most recent pre-floor and pre-reclassified
hospital wage index. As discussed in the July 3, 2000 HH PPS final
rule, for episodes with four or fewer visits, Medicare pays the
national per-visit amount by discipline, referred to as a LUPA. We
update the national per-visit rates by discipline annually by the
applicable home health market basket percentage. We adjust the national
per-visit rate by the appropriate wage index based on the site of
service for the beneficiary, as set forth in Sec. 484.230. We will
adjust the labor portion of the updated national per-visit rates used
to calculate LUPAs by the most recent pre-floor and pre-reclassified
hospital wage index, as discussed in the CY 2008 HH PPS final rule with
comment period. We update the LUPA add-on payment amount and the NRS
conversion factor by the applicable home health market basket update of
2.0 percent for CY 2010.
Medicare pays the 60-day case-mix and wage-adjusted episode payment
on a split percentage payment approach. The split percentage payment
approach includes an initial percentage payment and a final percentage
payment as set forth in Sec. 484.205(b)(1) and Sec. 484.205(b)(2). We
may base the initial percentage payment on the submission of a request
for anticipated payment (RAP) and the final percentage payment on the
submission of the claim for the episode, as discussed in Sec. 409.43.
The claim for the episode that the HHA submits for the final percentage
payment determines the total payment amount for the episode and whether
we make an applicable adjustment to the 60-day case-mix and wage-
adjusted episode payment. The end date of the 60-day episode as
reported on the claim determines which calendar year rates Medicare
would use to pay the claim.
We may also adjust the 60-day case-mix and wage-adjusted episode
payment based on the information submitted on the claim to reflect the
following:
A low utilization payment provided on a per-visit basis as
set forth in Sec. 484.205(c) and Sec. 484.230.
A partial episode payment adjustment as set forth in Sec.
484.205(d) and Sec. 484.235.
An outlier payment as set forth in Sec. 484.205(e) and
Sec. 484.240.
b. Updated CY 2010 National Standardized 60-Day Episode Payment Rate
In calculating the annual update for the CY 2010 national
standardized 60-day episode payment rates, we first look at the CY 2009
rates as a starting point. The CY 2009 national standardized 60-day
episode payment rate is $2,271.92.
As discussed in section II.B., ``Outlier Policy'', of the CY 2010
proposed rule, and finalized in section II.A. of this final rule, in
our final policy of targeting outlier payments to be approximately 2.5
percent of total HH PPS payments in CY 2010, we are returning 2.5
percent back into the HH PPS rates, to include the national
standardized 60-day episode payment rate. As such, to calculate the CY
2010 national standardized 60-day episode payment rate, we first
increase the CY 2009 national standardized 60-day episode payment rate
($2,271.92) to adjust for the 5 percent originally set aside for
outlier payments. We then reduce that adjusted payment amount by 2.5
percent, the final target percentage of outlier payments as a
percentage of total HH PPS payment. Next, we update by the final CY
2010 home health market basket update percentage of 2.0 percent.
As previously discussed in section II.C., ``Case-Mix Measurement
Analysis'', of the proposed rule, our updated analysis of the change in
case-mix not due to an underlying change in patient health status
reveals additional increase in nominal case-mix. As discussed, we are
moving forward with our existing policy to reduce rates by 2.75 percent
in CY 2010. Consequently, to calculate the CY 2010 national
standardized 60-day episode payment rate, we then reduce the rate by
2.75 percent, for a final updated CY 2010 national standardized 60-day
episode payment rate of $2,312.94. The final updated CY 2010 national
standardized 60-day episode payment rate for an HHA that submits the
required quality data is shown in Table 1. The final updated CY 2010
national standardized 60-day episode payment rate for an HHA that does
not submit the required quality data (home health market basket update
of 2.0 percent is reduced by 2 percent) is shown in Table 2.
Table 1--National Standardized 60-day Episode Payment Rate Updated by the Home Health Market Basket Update for
CY 2010, Before Case-Mix Adjustment and Wage Adjustment Based on the Site of Service for the Beneficiary
----------------------------------------------------------------------------------------------------------------
Adjusted to
return the Multiply by
outlier Adjusted to the home Reduce by CY 2010
funds, that account for health 2.75 percent National
CY 2009 National standardized 60-day paid for the the proposed market for nominal standardized
episode payment rate original 5% 2.5% outlier basket change in 60-day
target for policy update (2.0 case-mix episode
outlier percent) \1\ payment rate
payments
----------------------------------------------------------------------------------------------------------------
$2,271.92................................. / 0.95 x 0.975 x 1.020 x 0.9725 $2,312.94
----------------------------------------------------------------------------------------------------------------
\1\ The estimated home health market basket update of 2.0 percent for CY 2010 is based on IHS Global Insight
Inc., 3rd Qtr 2009 forecast with historical data through 2nd Qtr 2009.
[[Page 58107]]
Table 2--For HHAs That Do Not Submit the Required Quality Data; National Standardized 60-Day Episode Payment
Rate Updated by the Home Health Market Basket Update for CY 2010, Before Case-Mix Adjustment and Wage Adjustment
Based on the Site of Service for the Beneficiary
----------------------------------------------------------------------------------------------------------------
Multiply by
the home CY 2010
Adjusted to health National
return the market standardized
outlier Adjusted to basket Reduce by 60-day
Total CY 2009 National standardized 60-day funds, that account for update (2.0 2.75 percent episode
episode payment rate paid for the the 2.5% percent) \1\ for nominal payment rate
original 5% outlier minus 2 change in for HHAs
target for policy percent for case-mix that do not
outliers a 0.0 submit
percent required
update quality data
----------------------------------------------------------------------------------------------------------------
$2,271.92................................. / 0.95 x 0.975 x 1.00 x 0.9725 $2,267.59
----------------------------------------------------------------------------------------------------------------
\1\ The estimated home health market basket update of 2.0 percent for CY 2010 is based on IHS Global Insight
Inc., 3rd Qtr 2009 forecast with historical data through 2nd Qtr 2009.
c. National Per-Visit Rates Used To Pay LUPAs and Compute Imputed Costs
Used in Outlier Calculations
In calculating the CY 2010 national per-visit rates used to
calculate payments for LUPA episodes and to compute the imputed costs
in outlier calculations, we start with the CY 2009 national per-visit
rates. We first adjust the CY 2009 national per-visit rates to adjust
for the 5 percent originally set aside for outlier payments. We then
reduce those national per-visit rates by 2.5 percent, the final target
percentage of outlier payments as a percentage of total HH PPS payment.
Next we update by the current CY 2010 home health market basket update
percentage of 2.0 percent. National per-visit rates are not subjected
to the 2.75 percent reduction related to the nominal increase in case-
mix because they are per-visit rates and hence not case-mix adjusted.
The final updated CY 2010 national per-visit rates per discipline are
shown in Table 3.
Table 3--National Per-Visit Rates for LUPAs (Not including the LUPA Add-On Payment Amount for a Beneficiary's Only Episode or the Initial Episode in a
Sequence of Adjacent Episodes) and Outlier Calculations Updated by the CY 2010 Home Health Market Basket Update, Before Wage Index Adjustment
--------------------------------------------------------------------------------------------------------------------------------------------------------
For HHAs that DO submit For HHAs that DO NOT
the required quality submit the required
data quality data
Adjusted to ---------------------------------------------------
return the Multiply by
CY 2009 Per- outlier CY 2010 per- the home CY 2010 per-
visit funds that Adjusted to Multiply by visit health visit
amounts per paid for account for the home payment market payment
Home health discipline type 60-day the the 2.5% health amount for basket amount for
episode for original 5% outlier market HHAs that update (2.0 HHAs that
LUPAs target for policy basket DO submit percent) DO NOT
outlier update (2.0 the \1\ minus 2 submit the
payments percent) required percent, required
\1\ quality for a 0 quality
data percent data
update
--------------------------------------------------------------------------------------------------------------------------------------------------------
Home Health Aide............................................. $48.89 / 0.95 x 0.975 x 1.02 $51.18 x 1.00 $50.18
Medical Social Services...................................... 173.05 / 0.95 x 0.975 x 1.02 181.16 x 1.00 177.60
Occupational Therapy......................................... 118.83 / 0.95 x 0.975 x 1.02 124.40 x 1.00 121.96
Physical Therapy............................................. 118.04 / 0.95 x 0.975 x 1.02 123.57 x 1.00 121.15
Skilled Nursing.............................................. 107.95 / 0.95 x 0.975 x 1.02 113.01 x 1.00 110.79
Speech-Language Pathology.................................... 128.26 / 0.95 x 0.975 x 1.02 134.27 x 1.00 131.64
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The proposed estimated home health market basket update of 2.0 percent for CY 2010 is based on IHS Global Insight Inc., 3rd Qtr 2009 forecast with
historical data through 2nd Qtr 2009.
d. LUPA Add-on Payment Amount Update
Beginning in CY 2008, LUPA episodes that occur as the only episode
or initial episode in a sequence of adjacent episodes were adjusted by
adding an additional amount to the LUPA payment before adjusting for
area wage differences. As previously discussed, we are returning 2.5
percent back into the HH PPS rates, to include the LUPA add-on payment
amount, as a result of our final policy to target outlier payments to
be approximately 2.5 percent of total HH PPS payments in CY 2010. As
such, we first adjust the CY 2009 LUPA add-on payment amount to adjust
for the 5 percent originally set aside for outlier payments. We then
reduce that amount by 2.5 percent, the final target percentage of
outlier payments as a percentage of total HH PPS payment. Next we
updated by the current CY 2010 home health market basket update
percentage of 2.0 percent. The LUPA add-on payment amount was not
subject to the 2.75 percent reduction related to the nominal increase
in case-mix because it is an add-on to the per-visit rates which are
not case-mix adjusted.
The final updated CY 2010 LUPA add-on payment amount is shown in
Table 4 below. Just as the standardized 60-day episode rate and the
per-visit rates paid to HHAs that do not submit the required quality
are reduced by 2 percent, the additional LUPA payment should be reduced
by 2 percent also. In neither the CY 2008 nor the CY 2009
[[Page 58108]]
HH PPS rulemaking did we include such an adjustment to the LUPA add-on
payment amount. For CY 2010, the add-on to the LUPA payment to HHAs
that submit the required quality data will be updated by the full home
health market basket update. The add-on to the LUPA payment to HHAs
that do not submit the required quality data will be updated by the
home health market basket update minus two percent.
Table 4--CY 2010 LUPA Add-On Payment Amounts
--------------------------------------------------------------------------------------------------------------------------------------------------------
For HHAs that DO submit the required For HHAs that DO NOT submit the required
----------------------------------------------------------------- quality data quality data
---------------------------------------------------------------------------------------
Adjusted to return Multiply by the home
the outlier funds, Adjusted to account Multiply by the home CY 2010 LUPA Add-on health market basket CY 2010 LUPA Add-on
CY 2009 LUPA Add-on that paid for the for the proposed health market basket payment amount for update (2.0 percent) payment amount for
payment amount original 5% target 2.5% outlier policy update (2.0 percent) HHAs that DO submit \1\ minus 2 percent, HHAs that DO NOT
for outliers \1\ required quality for a 0.0 percent submit required
data update quality data
--------------------------------------------------------------------------------------------------------------------------------------------------------
$90.48 / 0.95 x 0.975 x 1.02 $94.72 x 1.00 $92.86
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The proposed estimated home health market basket update of 2.0 percent for CY 2010 is based on IHS Global Insight Inc., 3rd Qtr 2009 forecast with
historical data through 2nd Qtr 2009.
e. Non-Routine Medical Supply Conversion Factor Update
Payments for non-routine medical supplies (NRS) are computed by
multiplying the relative weight for a particular severity level by the
NRS conversion factor. We first adjust the CY 2009 NRS conversion
factor ($52.39) to adjust for the 5 percent originally set aside for
outlier payments. We then reduce that amount by 2.5 percent, the final
target percentage of outlier payments as a percentage of total HH PPS
payment.
Next we update by the current proposed CY 2010 home health market
basket update percentage of 2.0 percent. Finally, we then reduce that
adjusted payment amount by 2.75, to account for the increase in nominal
case-mix. The final updated CY 2010 NRS conversion factor is shown in
Table 5a below. The NRS conversion factor for CY 2009 was $52.39. For
CY 2010, the NRS conversion factor is $53.34.
Table 5a
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted to return the
outlier funds, that paid Multiply by the home Reduce by 2.75 percent CY 2010 NRS conversion
CY 2009 NRS conversion for the original 5% Adjusted to account for health market basket for nominal change in factor for HHAs that DO
factor target for outlier the 2.5% outlier policy update (2.0 percent) case-mix submit the required
payments quality data
--------------------------------------------------------------------------------------------------------------------------------------------------------
$52.39 / 0.95 x 0.975 x 1.02 x 0.9725 $53.34
--------------------------------------------------------------------------------------------------------------------------------------------------------
The payment amounts, using the above computed CY 2010 NRS
conversion factor ($53.34), for the various severity levels based on
the updated conversion factor are calculated in Table 5b.
Table 5b--Relative Weights for the 6-Severity NRS System
----------------------------------------------------------------------------------------------------------------
Points Relative NRS payment
Severity level (scoring) weight amount
----------------------------------------------------------------------------------------------------------------
1............................................................... 0 0.2698 $14.39
2............................................................... 1 to 14 0.9742 51.96
3............................................................... 15 to 27 2.6712 142.48
4............................................................... 28 to 48 3.9686 211.69
5............................................................... 49 to 98 6.1198 326.43
6............................................................... 99+ 10.5254 561.42
----------------------------------------------------------------------------------------------------------------
For HHAs that do not submit the required quality data, we again
begin with the CY 2009 NRS conversion factor. We first adjust the CY
2009 NRS conversion factor ($52.39) to adjust for the 5 percent
originally set aside for outlier payments. We then reduce that amount
by 2.5 percent, the final target percentage of outlier payments as a
percentage of total HH PPS payment. Next we update by the current CY
2010 home health market basket update percentage of 2.0 percent minus 2
percent) for a 0.00 percent update. Finally, we then reduce that
adjusted payment amount by 2.75, to account for the increase in nominal
case-mix. The final updated CY 2010 NRS conversion factor for HHAs that
do not submit quality data is shown in Table 6A below.
[[Page 58109]]
Table 6a--CY 2010 NRS Conversion Factor for HHAs That Do Not Submit the Required Quality Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
Multiply by the proposed
Adjusted to return the home health market CY 2010 NRS conversion
CY 2009 NRS Conversion outlier funds, that paid Adjusted to account for basket update (2.0 Reduce by 2.75 percent factor for HHAs that DO
Factor for the original 5% the proposed 2.5% percent) minus 2 percent for nominal change in NOT submit the required
target for outlier outlier policy for a 0.0 percent case-mix quality data
payments update
--------------------------------------------------------------------------------------------------------------------------------------------------------
$52.39 / 0.95 x 0.975 x 1.00 x 0.9725 $52.29
--------------------------------------------------------------------------------------------------------------------------------------------------------
The payment amounts for the various severity levels based on the
updated conversions factor, for HHAs that do not submit quality data,
are calculated in Table 6B, below.
Table 6b--Relative Weights for the 6-Severity for HHAs That Do Not Submit Quality Data
----------------------------------------------------------------------------------------------------------------
Relative Proposed NRS
Severity level Points (scoring) weight payment amount
----------------------------------------------------------------------------------------------------------------
1........................................... 0................................. 0.2698 $14.11
2........................................... 1 to 14........................... 0.9742 50.94
3........................................... 15 to 27.......................... 2.6712 139.68
4........................................... 28 to 48.......................... 3.9686 207.52
5........................................... 49 to 98.......................... 6.1198 320.00
6........................................... 99+............................... 10.5254 550.37
----------------------------------------------------------------------------------------------------------------
D. OASIS Issues
1. HIPPS Code Reporting
In the proposed rule we clarified our policy regarding the
submission of the Health Insurance Prospective Payment System (HIPPS)
codes to CMS via OASIS. Sec. 484.250 requires HHAs to submit to CMS
the OASIS data described in Sec. 484.55(b)(1) and Sec. 484.55(d)(1)
in order for CMS to administer the payment rate methodologies. Also, as
described in Sec. 484.20, HHAs must electronically report all OASIS
data collected in accordance with Sec. 484.55 as a condition of
participation, and HHAs must encode and electronically transmit the
completed OASIS assessment to CMS in the standard data format as
described in Sec. 484.20(d). For those OASIS assessments required for
payment, the standard format which is electronically transmitted by the
HHA to CMS includes a HIPPS code, generated by grouper software at the
HHA. When an HHA electronically transmits OASIS assessments to CMS (via
the State agency), the CMS OASIS submission system performs a
validation check of the transmitted OASIS items, including the
submitted HIPPS code. If the CMS OASIS submission system validation
determines that the submitted HIPPS code is in error, it informs HHAs
of that error via the Final Validation Report which is returned to HHA.
The Final Validation Report will include the valid, CMS OASIS
submission system calculated HIPPS code. We have become aware of a
proliferation of incidents where the HIPPS code submitted to CMS on the
OASIS does not match the HIPPS code, which is calculated by the CMS
OASIS submission system. The HH PPS Grouper Software, which is used by
the CMS OASIS submission system in its validation, is the official
grouping software of the HH PPS, and thus the HIPPS code produced by
the CMS OASIS submission system is the HIPPS code that should
ultimately be billed on the claim. Consequently, in the interest of
accurate coding and billing, we proposed that the HHA be required to
ensure that the HIPPS code billed on the claim is consistent with that
which CMS' OASIS submission system calculated. In the case where the
Final Validation Report returns to the HHA a HIPPS code which is
different than the HIPPS code submitted to CMS by the HHA on the OASIS,
the HHA must ensure that the HIPPS code from the Final Validation
report is the HIPPS code reported on the bill.
Comment: Commenters were supportive of our proposal to require that
the OASIS HIPPS code match that on the claim. However, one commenter
noted that some software cannot identify claims that need to have the
HIPPS codes reconciled, and suggested we allow time for vendors to
accommodate, and time for providers to develop internal procedures.
This commenter also asked that we clarify in greater detail what is
meant by non-compliance. If the proposal is finalized, and enforced on
an individual claim basis, this commenter suggested that after a delay
for systems changes, we allow for testing of individual claim edits by
generating warning messages. The commenter suggested this occur during
a trial period to give providers time to test out procedures and
software.
Other commenters wrote that if we move toward requiring claim-by-
claim verification of the HIPPS codes against the OASIS data
repository, the system should be constructed to avoid delays in
payment. One commenter stated that the proposed rule wasn't clear about
when the trend toward incorrect HIPPS coding began. This commenter
wrote that if it began with the 2008 refinement, did we consider
factors outside of HHA control, such as the effect of item M0110, which
impacts the HIPPS code. HHAs may not have enough information to answer
M0110 at the start of the episode, but the FI may automatically change
the HIPPS code due to more current information related to M0110 in CWF
which was not available to the HHA at start of care. The commenter asks
how we will ensure that the HIPPS codes match in this scenario, and how
agency oversight would occur. Another commenter asked what the
consequences would be if a few claims had minor discrepancies, and
would like us to provide additional information on the implications and
consequences of policy statements regarding the differences in HIPPS
generated by OASIS and HIPPS on the claim.
[[Page 58110]]
Some commenters expressed concern that some vendor billing software
used by HHAs is not currently able to identify situations where the
HIPPS code submitted on claims needs to be reconciled to the HIPPS code
calculated by State OASIS systems. The commenter requested that CMS
allow additional time for vendors and HHAs to make changes to their
software and that CMS systems generate warning messages during a trial
period.
Response: HHAs do not necessarily need to change their software
initially in order to comply with this requirement. If HIPPS codes
generated by the HHA's software do not match the code calculated by
State OASIS systems, the HHA currently receives a warning message
alerting them to this problem. HHAs should use these warning messages
as a trigger to correct any HIPPS code submitted for payment by either
canceling and resubmitting any paid Request for Anticipated Payment
(RAP) or adjusting any paid claim. Since canceling or adjusting claims
are routine billing processes, we do not believe additional time is
necessary to allow HHAs to prepare for them.
In the future, enforcement of this requirement may be implemented
on a pre-payment basis. HHAs should seek to improve their compliance
and their internal processes now in order to prepare for any future
pre-payment requirement. Specific information about future enforcement
mechanisms will be provided by Medicare program instructions with
sufficient time for HHAs to prepare for them.
The information that highlighted the errors in HIPPS code reporting
reflected all 2008 claims. However, the information compared the HIPPS
codes the HHA initially submitted on claims with the HIPPS codes
calculated by the State OASIS system for the same episode. Both the HHA
and the State system were using the same M0110 information in their
calculations, so subsequent changes in that information could not
affect the results. CMS will consider the effect of M0110 information
in any future enforcement mechanism.
As such, in the interest of accurate coding and billing, we are
implementing the provision that the HHA be required to ensure that the
HIPPS code billed on the claim is consistent with that which CMS' OASIS
submission system calculated. In the case where the Final Validation
Report returns to the HHA a HIPPS code which is different than the
HIPPS code submitted to CMS by the HHA on the OASIS, the HHA must
ensure that the HIPPS code from the Final Validation report is the
HIPPS code reported on the bill.
2. OASIS Submission as a ``Condition of Payment''
Section 484.20 requires that HHAs must electronically report to CMS
(via the State agency or OASIS contractor) all OASIS data collected in
accordance with Sec. 484.55 as a condition of participation.
Additionally, Sec. 484.250 requires that HHAs must submit to CMS the
OASIS data described at Sec. 484.55(b)(1) and (d)(1) in order for CMS
to administer the payment rate methodologies. Building on the above
clarification for HHAs to ensure the HIPPS code reported on the bill is
consistent with that which CMS' OASIS submission system calculated, and
in order to be consistent with Sec. 484.250, in the proposed rule, we
proposed to require the electronic reporting of OASIS to CMS as a
condition of payment in Sec. 484.210. Currently, as a requirement for
pay for reporting, HHAs are required to submit quality data (that being
OASIS data) in order to receive the full home health market basket
update to the rates. The burden associated with the requirement for the
HHA to submit the OASIS is currently accounted for under OMB
0938-0761. Making OASIS submission a condition for payment is
consistent with both OASIS submissions being a condition of
participation and a requirement to receive full market basket updates
under pay for reporting.
Comment: Several commenters supported our proposal to require OASIS
reporting as a condition of payment, calling it an appropriate step
toward ensuring agreement between the HHRG on OASIS and that reported
on the claim. However, these commenters were confused because they
wrote that the proposed regulatory language and the language in the
current regulation are the same. They also requested that we clarify
how the proposed change would affect current procedures for RAPs and
claims submissions, saying that currently HHAs are required to have
OASIS data ready for transmission before submitting a RAP, but are not
required to have submitted OASIS.
Additionally, these commenters noted that compliance with 42 CFR
455.55(b)(1) and (d)(1) specifies that OASIS data submitted requires
completion of the comprehensive assessment with OASIS within 5 days
after the start of care and during the last 5 days of a prior episode
for recertification. The commenter was concerned that the impact of the
proposed change could preclude HHAs from receiving Medicare payment in
all cases where OASIS was not completed within the 5-day timeframe. The
commenters noted some exceptions to the 5-day timeframe, and that in
the early years of HH PPS, CMS used Q&As and letters to express its
intention to refrain from penalizing HHAs that failed to submit OASIS
during the 5-day timeframe under certain circumstances. In these cases,
the commenters wrote that CMS allowed HHAs to either conduct a
comprehensive assessment as soon as possible in the 60 day episode, or
to determine appropriate OASIS responses required for payment from the
clinical record when Medicare is the payer. Also, when payment-only
items are collected, HHAs are not to submit these data to CMS. The
commenters recommended that we amend any enforcement to consider that
100 percent compliance with the 5-day timeframe is not always
achievable.
A different commenter was opposed to the proposal to require OASIS
reporting as a condition for payment, noting the exceptions to the 5-
day timeframe because of issues outside of the provider's control. This
commenter wrote that we should not include timeframes in any submission
requirement related to payment and also asked that we change
enforcement to recognize that 100 percent compliance with the 5-day
timeframe is not always achievable.
Several commenters were concerned about the potential for
reinstitution of collection of all OASIS items for one-visit-only
cases; currently HHAs limit the OASIS collection to payment-only items
for one-visit patients.
One commenter wrote that the current OASIS requirements are
included only in the home health CoPs, and is concerned that the
proposal would lead to the use of OASIS requirements by Regional Home
Health Intermediaries (RHHIs), Payment Safeguard Contractors (PSCs),
and Recovery Audit Contractors (RACs) to deny or adjust claims payment.
The commenter wrote that HHAs are already inundated with State and
Federal audits, and that this proposal would only exacerbate the
problem. Another asked us to provide additional information in the
implications and consequences of policy statements regarding OASIS
being a condition of payment, and asked what actions would result if an
agency failed to meet the requirement.
Response: We thank the writers for their comments. We assure
commenters that we have no intention that this proposed requirement
would have an effect on long-standing direction associated with
submitting RAPS, OASIS completion timeframes, and
[[Page 58111]]
instructions associated with one-visit episodes. Rather, we intend that
in finalizing this policy, providers will ensure that prior to
submitting a final HH PPS episode claim, a provider will have submitted
an OASIS, and the HIPPS code on the final HH PPS episode claim will be
consistent with the HIPPS on the OASIS validation report.
As such, we are implementing the provision to require the
submission of OASIS, for final claims, as a condition of payment, and
revising Sec. 484.210 ``Data used for the calculation of the national
prospective 60-day episode payment'' to reflect this requirement.
E. Qualifications for Coverage as They Relate to Skilled Services
Requirements
In the proposed rule, for CY 2010, we proposed to clarify what
constitutes skilled services in the home health setting with the
following revisions to Sec. 409.42. We proposed to add a qualifying
instruction to Sec. 409.42(c)(1) to explain that intermittent skilled
nursing services meeting the criteria for skilled services and the need
for skilled services found in Sec. 409.32 (with examples in Sec.
409.33 (a) and (b)) are subject to certain limitations in the home
health setting.
Proposed New Paragraph Sec. 409.42(c)(1)(i)
We proposed to describe the limitations in two new paragraphs,
Sec. 409.42(c)(1)(i) and Sec. 409.42(c)(1)(ii). In Sec.
409.42(c)(1)(i) we proposed that in the home health setting, management
and evaluation of a patient care plan is considered a reasonable and
necessary skilled service only when underlying conditions or
complications are such that only a registered nurse can ensure that
essential non-skilled care is achieving its purpose.
Further, in Sec. 409.42(c)(1)(i) we also proposed to clarify that
to be considered a skilled service, the complexity of the necessary
unskilled services that are a necessary part of the medical treatment
must require the involvement of licensed nurses to promote the
patient's recovery and medical safety in view of the overall condition.
Where nursing visits are not needed to observe and assess the effects
of the nonskilled services being provided to treat the illness or
injury, skilled nursing care would not be considered reasonable and
necessary, and the management and evaluation of the care plan would not
be considered a skilled service.
Additionally, we proposed to further clarify in Sec.
409.42(c)(1)(i) that in some cases, the condition of the patient may
require that a service that would normally be considered unskilled be
classified as a skilled nursing service given a patient's unique
circumstances. This would occur when the patient's underlying condition
or complication required that only a registered nurse could ensure that
essential non-skilled care was achieving its purpose. However, any
individual service would not be deemed a skilled nursing service merely
because it was performed by or under the supervision of a licensed
nurse. Where a service could be safely and effectively performed (or
self administered) by the average non-medical person without the direct
supervision of a nurse, the service could not be regarded as a skilled
service, although a nurse may have actually provided the service.
Proposed New Paragraph Sec. 409.42(c)(1)(ii)
Additionally, we also proposed a new Sec. 409.42(c)(1)(ii), which
would clarify when patient education services as described in Sec.
409.33(a)(3) constituted skilled services in the home health setting.
Currently Sec. 409.32(a)(3) states that patient education services are
skilled services if the use of technical or professional personnel is
necessary to teach patient self-maintenance. However, to address the
concerns and lack of clarity surrounding when educational services are
skilled services as described above, we proposed to add a new
paragraph, Sec. 409.42(c)(1)(ii). In the home health setting, skilled
education services would be deemed to no longer be needed when it
became apparent, after a reasonable period of time, that the patient,
family, or caregiver could not or would not be trained. Further
teaching and training would cease to be reasonable and necessary in
this case, and would cease to be considered a skilled service.
Notwithstanding that the teaching or training was unsuccessful, the
services for teaching and training would be considered to be reasonable
and necessary prior to the point that it became apparent that the
teaching or training was unsuccessful, as long as such services were
appropriate to the patient's illness, functional loss, or injury.
Proposed Change to Sec. 409.44(b)
We proposed to revise the introductory material at Sec.
409.44(b)(1), to refer to the newly proposed limitations of skilled
services in the home health benefit at Sec. 409.42(c)(1)(i) and
409.42(c)(1)(ii). The clauses under the revised paragraphs (i) through
(iv) would remain unchanged.
Proposed Revision to Sec. 424.22(a)(1)(i) and Sec. 424.22(b)(2)
We also proposed to revise Sec. 424.22(a)(1)(i) and Sec.
424.22(b)(2) to require a written narrative of clinical justification
on the physician certification and recertification for the targeted
condition where the patient's overall condition supported a finding
that recovery and safety could be ensured only if the care was planned,
managed, and evaluated by a registered nurse. To clarify for home
health agencies what specific circumstances would necessitate the
involvement of a registered nurse in the development, management, and
evaluation of a patient's care plan when only unskilled services were
being provided, we proposed additions to the home health certification
content requirements as described at Sec. 424.22(a)(i) and
recertification content requirements at Sec. 424.22(b)(2).
Specifically, when a patient's underlying condition or complication
required exclusively that a registered nurse ensure that essential non-
skilled care is achieving its purpose, and necessitated that a
registered nurse be involved in the development, management, and
evaluation of a patient's care plan, we proposed to require the
physician include a written narrative on the certification and
recertification describing the physician's clinical justification of
this need.
Comment: Many commenters appreciated CMS' clarification of skilled
services. However, many opposed CMS' proposal that a physician include
a clinical justification on the certification of need for Medicare's
home health services, in the scenario where a patient's need for
skilled services is met solely because skilled oversight of unskilled
services is required. Commenters urged CMS to reconsider this
requirement, stating that such a requirement would be too burdensome
for physicians to include on the certification, would be too burdensome
for agencies to administer, and would result in fewer patients being
referred to home health. Some commenters stated that the need for
skilled oversight of unskilled services is a determination that the
home health nurse makes at the initial eligibility assessment, and that
this need is better understood by the nurse than it would be by the
certifying physician. Further, commenters stated that this requirement
would muddy issues of nursing practice by requiring more physician
orders for established areas of nursing practice. Other commenters
expanded on this concern, stating that by requiring the physician to
[[Page 58112]]
clinically justify the need for skilled oversight of unskilled
services, CMS was diminishing the role and responsibility of the home
health nurse to makes such an assessment. Some commenters recommended
that CMS instead provide education to providers regarding when
evaluation and management of unskilled services is appropriate. Another
commenter suggested that we develop a national coverage determination
(NCD) to address our concerns. Commenters described the challenges that
home health agencies currently face in getting the physician to sign
orders and plans of care, fearing that this additional physician
documentation requirement could result in physicians not certifying
patients for Medicare's home health benefit, ultimately resulting in
access to care issues for patients. Other commenters stated that this
requirement would have no positive effect; because so few patients meet
the skilled requirement based solely on this need, the narrative
requirement would not enhance program integrity efforts. Commenters
contended that the requirement would increase HHA costs, since HHAs
would need to track the physician's compliance. One commenter suggested
that we instead provide the patient's certifying physician with a list
of services provided to the patient to achieve more physician
involvement with the home health patient. Another commenter suggested
instead of requiring a physician narrative in this scenario, we instead
require that the plan of care contain a clinical justification for the
skilled oversight. Other commenters stated that a narrative requirement
is not the way to achieve more physician involvement and another
commenter stated that a narrative requirement would take away from the
time a physician spends with the patient. Instead, CMS should look to
new OASIS-C process measures which would require the home health agency
to contact the physician more frequently. Another commenter suggested
that we instead require a clear order from the physician for management
and evaluation of the plan of care. Another commenter stated that this
narrative requirement more appropriately belongs in the physician fee
schedule rule, while another commenter stated that should CMS finalize
this requirement, we place the burden of compliance on the physician.
Finally, a commenter stated this requirement is especially problematic
for dual eligible home health patients. The commenter asserted that
Medicaid does not have a comparable narrative requirement. Therefore,
should an agency believe that the payer source for a patient is
Medicaid, it would not obtain the narrative from the physician. If
later the agency determines that Medicare should be the payer for the
services rendered to such a patient, the agency would not be able to
satisfy this narrative requirement.
Response: We thank the writers for their comments. However, we
continue to believe that requiring a physician to complete a clinical
justification on the certification in this targeted scenario addresses
a specific program vulnerability which has been identified by our
Medicare contractors, and is a first step in addressing vulnerabilities
identified by the Office of Inspector General (OIG). We also believe
that this requirement will result in a minimal burden on the physician,
and minimal costs to the HHA, given that this requirement applies only
to the small percentage of patients who require only skilled oversight
of unskilled care. The brief narrative should be a simple task for the
physician because of the physician's responsibility for the clinical
determination of the patient's skilled need as part of the
certification or recertification requirement.
We remind commenters that a physician must certify that home health
services are required because the individual patient needs skilled
nursing care on an intermittent basis, or physical or speech therapy,
or continued occupational therapy in order for a patient to be eligible
for the benefit. We are concerned that many commenters state that a
physician's involvement in this scenario is negligible; that the
physician relies solely on the home health nurse's determination when
certifying the need for the Medicare home health benefit. We remind
commenters that the physician has always been responsible for
certifying that the unique condition of the patient warrants
eligibility for Medicare's home health benefit. A home health agency's
recommendation alone is not sufficient for a physician to certify the
need for the benefit. While our regulations have always required the
physician to review the individual patient's needs and unique clinical
condition as part of the certification and recertification requirement,
we believe the commenters are often correct that the physician may rely
too heavily on the home health staff for the determination of skilled
need for Medicare's home health benefit.
We also would like to assure nurses that this requirement is not an
attempt by CMS to diminish in any way the essential and important role
that skilled nurses play in the assessment of a home health patient's
needs. While the home health nurse is responsible for initiating,
managing and evaluating the resources needed to promote the Medicare
home health patient's optimal level of well-being, this does not
diminish the responsibility of the physician to ensure that the unique
condition of the patient warrants the need for Medicare's home health
benefit. The physician is currently responsible to carefully synthesize
data regarding the patient's condition and assess whether this
patient's unique condition requires Medicare's home health services.
The physician is accountable for the accuracy of the certification of
need for home health services. We agree with the commenter that
providing the physician with a list of patients' home health services
provided may be useful. Similarly, we agree with the commenter that
inclusion of a clinical justification on the plan of care is a good
idea, and that a clear physician order for this service should be
present. We also agree that the OASIS process measures will more
actively involve the physician in some aspects of patient care.
Additional provider education associated with management and evaluation
is something that CMS will consider providing. However, we do not
believe that an NCD is appropriate in this scenario because skilled
services are covered under the home health benefit, and appropriate use
of management and evaluation management of the plan of care is a
skilled service. Regardless, none of these suggestions would replace
the physician's accountability associated with the certification and
recertification of need for Medicare's home health benefit, nor would
these suggestions address the program vulnerability associated with
this specific category of home health patient. And, because the
physician's certification and recertification of the need for
Medicare's home health benefit is fundamental to eligibility, we
disagree with the commenter that this provision would be more
appropriately addressed in the physician fee schedule rule. Regarding
the commenter's suggestion that we hold the physician accountable for
complying with this requirement, we continue to believe that each
agency is responsible for ensuring that the certification and
recertification requirements are met, but we also reiterate the
physician's accountability associated with the certification and
recertification, as they are part of the medical record.
[[Page 58113]]
Therefore, we are finalizing the following policy: When a patient's
underlying condition or complication requires that a registered nurse
ensures that essential non-skilled care is achieving its purpose, and
necessitates a registered nurse be involved in the development,
management and evaluation of a patient's care plan, we will require
that the physician include a written narrative on the certification and
recertification describing the physician's clinical justification of
this need.
Comment: Some commenters encouraged CMS to allow the narrative to
be submitted as an attachment. These commenters believe that home
health agencies and physicians which have electronic medical records
should not be forced to include the narrative on the certification and
recertification forms. Some commenters stated that CMS should provide
examples to help home health agencies and physicians understand the
scope of acceptable responses. Another commenter stated that the
requirement would be meaningless since there are no specific guidelines
for the content of the statement, and there would be no way to
determine that the narrative is completed. Similarly, a commenter
stated that if physicians were required to include a clinical
justification narrative on the certification, the narrative would be
simply a restatement of the nurse's justification, or it would be a
prefabricated statement.
Response: Our intent is for the physician to justify his or her
certification of skilled need in the scenario where only unskilled
services are being provided. We understand that many physicians would
prefer to dictate rather than hand-write their clinical findings, and
we agree with commenters who stated that we should take into account
that some providers have electronic health record systems and may more
easily produce an addendum containing the clinical justification.
Therefore, we have decided that a typed addendum containing the
narrative which is electronically or hand signed by the physician would
be acceptable. We also appreciate the commenter's concern that a home
health nurse may compose the narrative for the physician and that we
should clarify the criteria associated with the narrative requirement.
We expect that the narrative must be composed by the physician
performing the certification or recertification and not by other home
health personnel. Regarding the commenter's concern associated with
dual eligible patients, especially given that Medicaid is the payer of
last resort, we would encourage agencies to ensure that all Medicare
criteria are met if the agency believes that Medicare may be the
appropriate payer for a patient.
We believe that these requirements regarding the certification and
recertification are a first step in ensuring that only home-health
eligible patients receive the benefit. We disagree with the commenter
who suggested we include an illustrative example of narrative language,
since the intent of the narrative is to capture the physician's
synthesis of each patient's unique conditions.
We are modifying our original proposal in that we will allow the
narrative to either be part of the certification and recertification
forms, or to be an addendum to the certification and recertification
forms which is electronically or hand signed by the physician. If the
narrative is part of the certification or recertification form, then
the narrative must be located immediately prior to the physician's
signature. If the narrative exists as an addendum to the certification
or recertification form, in addition to the physician's signature on
the certification or recertification form, the physician must also sign
immediately following the narrative in the addendum. The narrative must
reflect the patient's individual clinical circumstances.
Comment: A commenter stated that CMS should issue specific Medicare
coverage guidelines that clearly differentiate non-covered custodial or
medically unnecessary care under Medicare home health from covered
rehabilitative, acute or curative care.
Response: We thank the commenter for the suggestion. We believe
that the commenter is asking CMS to expand our skilled services
clarification to better clarify CMS' definition of custodial care. We
believe that this is outside of the scope of that which we solicited
comments, which was to clarify CMS' regulations concerning skilled
services in the home health setting. However, we will briefly address
this as it is a related topic. Custodial care is not considered skilled
care. We suggest the commenter refer to regulations at 42 CFR 409.45(b)
and 42 CFR 409.49(d) for some clarification regarding custodial care in
the home health setting. We suggest the commenter refer to regulations
at 42 CFR 409.49(d) where we specifically stipulate the exclusion of
housekeeping services from home health services, and also stipulate
that services whose sole purpose is to enable the beneficiary to
continue residing in his or her home (for example, cooking shopping,
Meals on Wheels, cleaning, laundry) are excluded from home health
coverage. We also note that personal care and some incidental services
can be provided in the course of a covered Medicare home health visit.
42 CFR 409.45(b) defines what constitutes a home health aide visit.
This section explains that the reason for the aide visit must be to
provide hands-on personal care to the beneficiary or services that are
needed to facilitate treatment of the beneficiary's illness or injury.
Please note 42 CFR 409.45(b)(1)(i) provides examples of covered
personal care and 42 CFR 409.45(b)(4) permits an aide to perform
services incidental to a covered visit. These incidental services may
include changing bed linens, personal laundry, or preparing a light
meal. Therefore, a home health aide may perform some incidental
services which do not meet the definition of a home health aide service
(light cleaning, preparation of a meal, taking out the trash, shopping,
etc.). However, the purpose of a home health aide visit may not be to
provide these incidental services since they are not health-related
services, but rather are necessary household tasks that must be
performed by anyone to maintain a home. It is important to note that to
be considered a covered Medicare home health visit, the purpose of the
home health visit cannot be to provide the ``incidental or custodial''
services.
Comment: A few commenters supported the proposed narrative
requirement. One commenter recommended that we require the narrative
for ALL home health episodes, regardless of services ordered, stating
that this would be encourage more physician involvement with the home
health patient.
Response: The commenter has correctly interpreted our interest in
enhancing physician accountability and involvement with the home health
patient. However, at this time we are proposing to require the
narrative for only one targeted nursing service. Program vulnerability
has been identified in this scenario, because the patient is receiving
only unskilled services, which would normally not result in eligibility
to Medicare's home health benefit. Therefore, we believe it is prudent
to require the physician to provide this clinical justification of why
a patient's condition would require skilled nursing management and
evaluation (M&E) of the patient's care plan.
Comment: A commenter recommended that CMS reconsider the
restrictive interpretation of skilled oversight of the plan of care
(POC). Providers are often compelled to
[[Page 58114]]
discharge patients from Medicare based on a very limited interpretation
of skilled oversight when it is apparent that the patient is in
advanced stages of chronic illness and will likely relapse once nursing
oversight is discontinued. Such patients may become stable for several
weeks and under the policy above would be considered non-covered and
discharged from Medicare home health. Patient outcomes could be
improved if such patients were offered continuing care coordination
during periods of stability. The commenter suggested we modify coverage
guidelines to allow home healthcare to continue for observation and
monitoring of a plan of care through periods of relative stability if
the patient is in advanced stages of chronic illness and likely to
deteriorate without skilled care.
Response: We thank the writer for this perspective. However, we are
not excluding beneficiaries in advanced stages of chronic illness from
qualifying for this service. When a chronically ill patient with an
underlying condition or complication requires skilled nursing personnel
to manage the plan of care then this service is indeed indicated until
the treatment regimen has essentially stabilized. If the combination of
the patient's underlying condition, age and immobility creates a high
potential for serious complications which require that only a
registered nurse can ensure that essential non-skilled care is
achieving its purpose then the patient is indeed eligible for this
service. However when the patient's treatment regimen is essentially
stabilized and skilled nursing visits are not necessary to manage and
supervise the home health aide the patient will not require this type
of care and does not meet the definition of needing a skilled service
for purposes of Medicare home health eligibility, per sections
1814(a)(2)(C) and 1835(a)(2)(A) of the Social Security Act.
Comment: A commenter urged CMS to undertake a similar initiative to
set out coverage conditions for therapy services in the home health
regulations.
Response: In response to a commenter's request for CMS to provide
clarification of coverage of therapy services we are referring the
commenter to the following existing section of the Code of Federal
Regulation, 42 CFR 409.44(c). We believe that this section adequately
sets out the circumstances under which therapy services are covered.
However, we thank the commenter for this opportunity to remind HHAs of
their ongoing responsibility to evaluate the patient's need for therapy
and provide all covered home health services (except durable medical
equipment) either directly or under arrangement while a patient is
under a home health plan of care.
Comment: A commenter stated that the revisions proposed by CMS will
make it more difficult for Medicare patients to obtain skilled nursing
management and evaluation of the care plan. The commenter also stated
that the requirement places an unrealistic expectation on a patient or
caregiver to gauge effectively whether non-skilled care is achieving
its purpose, that CMS wrongly hinges coverage on the complexity of
unskilled services, and provides no clear guidance for how to determine
complexity. The commenter further states that the proposed
clarifications add confusion to the current standard.
Response: We disagree with the commenter's statement that the
revisions to the skilled nursing management and evaluation of the care
plan will make it more difficult for Medicare patients to obtain this
skilled service. We also point out that we would expect the home health
agency rather than the patient or caregiver to gauge the effectiveness
of the services being provided. As we stated earlier, the proposed
regulation changes reflect long-standing manual guidance. We also
believe that the commenter's concern about no clear guidance to assess
the complexity of the unskilled services further reveals the need for
the certifying physician to clearly describe what unique aspect about
the patient's condition would require skilled management and evaluation
of these unskilled services. However, we understand the commenter's
concern. The proposed regulation text stated, `` * * * in the home
health setting, management and evaluation of a patient care plan is
considered a reasonable and necessary skilled service only when
underlying conditions or complications are such that only a registered
nurse can ensure that essential non-skilled care is achieving its
purpose.'' (Emphasis added.)
For better consistency with long standing manual guidance, we will
remove the word ``only'' after ``reasonable and necessary skilled
services * * *''. The modified regulation text is more consistent with
long standing manual guidance. The finalized regulation text reads, ``*
* * in the home health setting, management and evaluation of a patient
care plan is considered a reasonable and necessary skilled service when
underlying conditions or complications are such that only a registered
nurse can ensure that essential non-skilled care is achieving its
purpose.''
Comment: One commenter stated that additional physician visits,
phone calls, or paying more for oversight is unlikely to produce
meaningful genuine physician involvement. These proposals do not
address the fundamental problem of too little physician time to fully
support the patient at home. Additional requirements are likely to
produce paper or rote compliance at best and at worst will discourage
some physicians from referring appropriate patients to homecare.
Another commenter stated that the best approach to involving physicians
in homecare rests in new models of chronic care management that
integrate primary care practice that are committed to home-based care
with HHAs into a single, consolidated chronic care service.
Response: We are grateful for the comments. We will consider the
suggestions regarding innovative approaches to increasing physician
involvement in the plan of care in future rulemaking. However, we again
remind commenters that by signing the certification and
recertification, the physician is accountable for attesting that the
beneficiary is in need of Medicare's home health services, and that the
certification and recertification are part of the patient's medical
record. And, Medicare reimburses physicians for their work associated
with the certification, recertification and plan of care oversight.
Comment: Some commenters expressed concerns with CMS' clarification
which described that skilled education services would be deemed to be
no longer needed when it became apparent, after a reasonable period of
time, that the patient, family member or caregiver could not or would
not be trained. Some commenters asked that CMS better clarify
timeframes that would be appropriate for these skilled training
services. Other commenters stated that unless CMS defines what is a
``reasonable period of time'', the clarification isn't helpful. Other
commenters stated that when a patient or caregiver appears incapable of
learning, more training would be justified. Another commenter suggested
that instead of clarifying this in regulation, we should increase the
educational and outreach efforts of our contractors.
Response: This regulation clarification codifies long-standing
guidance which has been present in Medicare's Benefit Policy Manual. We
believe it inappropriate to assign specific timeframes for patient
education services because the length of
[[Page 58115]]
time a patient or family or caregiver needs should be determined by
assessing each patient's individual condition and other pertinent
factors such as the skill required to teach the activity and the unique
abilities of the patient. It is important to know that teaching
activities must be related to the patient's functional loss, illness,
or injury. However, we disagree with the commenter who suggested that
when a patient or caregiver is incapable of learning that more
education is needed. Medicare's home health benefit is not intended to
provide training and education to patients, families, caregivers for an
infinite period of time.
To summarize, we are finalizing a number of provisions as they
relate to skilled services in the home health setting. Specifically, we
are clarifying what constitutes skilled services in the home health
setting with the following revisions to Sec. 409.42. We are adding a
qualifying instruction to Sec. 409.42(c)(1) to explain that
intermittent skilled nursing services meeting the criteria for skilled
services and the need for skilled services found in Sec. 409.32 (with
examples in Sec. 409.33 (a) and (b)) are subject to certain
limitations in the home health setting.
We are revising the introductory material at Sec. 409.44(b)(1), to
refer to the new limitations of skilled services in the home health
benefit at Sec. 409.42(c)(1)(i) and Sec. 409.42(c)(1)(ii). The
clauses under the revised paragraphs (i) through (iv) will remain
unchanged.
We are also revising Sec. 424.22(a)(1)(i) and Sec. 424.22(b)(2)
to require a written narrative of clinical justification on the
physician certification and recertification for the targeted condition
where the patient's overall condition supports a finding that recovery
and safety could be ensured only if the care was planned, managed, and
evaluated by a registered nurse. To clarify for home health agencies
what specific circumstances would necessitate the involvement of a
registered nurse in the development, management, and evaluation of a
patient's care plan when only unskilled services are being provided, we
are finalizing additions to the home health certification content
requirements as described at Sec. 424.22(a)(i) and recertification
content requirements at Sec. 424.22(b)(2).
F. OASIS for Significant Change in Condition: No Longer Associated With
Payment
In the CY 2010 proposed rule we proposed to remove an obsolete
reference to ``new case-mix assignments'' as a result of significant
changes in a patient's condition that appeared in 42 CFR part 484
subpart E at Sec. 484.55(d)(1)(ii). The significant change in
condition (SCIC), as it relates to new case-mix assignments affecting
payment, was an element of the HH PPS at the time of its first
implementation in fiscal year 2000. However, as part of the HH PPS
payment refinements implemented in CY 2008, we eliminated the SCIC
policy, and the assignment of subsequent case-mix assignments under the
HH PPS. However, it should be noted that it was not the SCIC payment
policy that required the HHA to perform the assessment, but rather the
significant change in the patient's condition. In the proposed rule we
did not propose to change that requirement. A HHA would still be
required to perform an assessment in the event that a patient
experienced a significant change in condition. The proposed
modification is only that a new case-mix assignment is no longer
associated with this assessment.
In addition, we proposed to revise Sec. 484.250 to delete an
obsolete reference to Sec. 484.237. Section 484.237 referred to the
SCIC payment policy and was removed in the CY 2008 HH PPS final rule
(72 FR 49879).
Comment: A commenter wrote that since there is no additional
payment for SCICs, there is no incentive for HHAs to do additional,
time-consuming, and costly OASIS assessments. This commenter stated she
disagreed with this requirement, and suggested that if we wanted this
additional assessment, we should increase reimbursement for it.
Response: We believe the commenter has misunderstood the text of
the proposed rule. As noted in the proposed rule, we eliminated the
SCIC payment policy and the assignment of subsequent case-mix
assignments under the HH PPS in our 2007 (CY 2008) final rule. However
it was not the SCIC payment policy that required the HHA to perform the
assessment, but rather the significant change in the patient's
condition. We did not propose any changes this requirement. The
proposed modification was only that a new case-mix assignment is no
longer associated with this assessment. Therefore there was no proposal
for any additional assessments beyond those that have been requirements
for some time now.
We are finalizing the provision to remove an obsolete reference to
``new case-mix assignments'' as a result of significant changes in a
patient's condition that appeared in 42 CFR part 484 subpart E at Sec.
484.55(d)(1)(ii). We are also finalizing the provision to revise Sec.
484.250 to delete an obsolete reference to Sec. 484.237.
G. Payment Safeguards for Home Health Agencies
In the Medicare Program; Home Health Prospective Payment System
Rate Update for Calendar Year 2010, we also proposed several payment
safeguard provisions designed to: (1) Improve our ability to verify
that home health agencies (HHAs) meet minimum enrollment criteria; (2)
ensure that HHAs that are changing ownership meet and continue to meet
the Conditions of Participation for HHAs found in 42 CFR part 484; and
(3) improve the quality of care that Medicare beneficiaries receive
from HHAs.
1. Program Integrity Concerns Involving HHAs
We stated in the proposed rule that the fraudulent business
practices of certain HHAs continue to cost the Medicare program
millions of dollars nationwide. This issue was discussed in a recent
report issued by the Government Accountability Office (GAO) entitled
``Improvements Needed to Address Improper Payments in Home Health''
(GAO-09-185). This report stated that, nationwide, ``spending on the
Medicare home health benefit grew about 44 percent from 2002 through
2006, despite an increase of just less than 17 percent in the number of
beneficiaries using the benefit during that 5-year period.'' It also
stated discrepancies in a number of States between the number of HHAs
that billed Medicare and the increase in the number of Part A
beneficiaries. For instance, between 2002 and 2006, the number of HHAs
that billed Medicare rose in Florida by 100 percent, in Michigan by 62
percent, in Illinois by 59 percent, in Ohio by 42 percent, in Arizona
by 32 percent, and in the District of Columbia by 67 percent. However,
the GAO reported, the increases in the number of Part A beneficiaries
who used HHA services in these six jurisdictions were as follows:
Florida--28 percent; Michigan--19 percent; Illinois--23 percent; Ohio--
14 percent; Arizona--4 percent; and the District of Columbia--2
percent.
The disparity in many jurisdictions between the increase in the
number of HHAs and the rise in the number of beneficiaries is so
overwhelming that it cannot be attributed solely to an aging populace.
The fact that, as shown above, between 2002 and 2006, the number of
HHAs in Arizona rose at a rate 8 times greater than the number of Part
A beneficiaries that use HHA services and that the rate was an
astounding 33 times greater in Washington, DC must raise
[[Page 58116]]
serious questions as to the legitimacy of some of these entities.
As explained in the preamble to the proposed rule, the GAO report
also outlined a number of instances of allegedly fraudulent activities
on the part of HHAs. In a particularly glaring example in Houston,
Texas, the GAO noted the following: ``One PSC (Program Safeguard
Contractor) interviewed 670 Houston beneficiaries who had the most
severe clinical rating and who were patients of HHAs identified by the
PSC as having aberrant billing patterns. The PSC found 91 percent of
claims for these beneficiaries to be in error. Nearly 50 percent of the
beneficiaries were not homebound and therefore were not eligible to
receive any Medicare home health services. The investigators also found
that while 39 percent of the beneficiaries they interviewed were
eligible for the benefit, their clinical severity had been exaggerated.
The PSC concluded that only 9 percent of claims for the 670
beneficiaries were properly coded. In addition, the PSC found that
other home health beneficiaries it interviewed were not homebound; for
instance, some were mowing their lawns when investigators came to
interview them.''
In its report, the GAO also cited a number of court cases and
actions of the Office of Inspector General (OIG) that resulted in the
criminal convictions of or settlements with owners of various HHAs. In
one 2007 case, the owner of a Louisiana HHA was convicted of defrauding
Medicare over a 5-year period and was ordered to pay more than $4.6
million in damages. In 2004, the owner of the two largest HHAs in
California pled guilty to defrauding the Medicare program of
approximately $40 million and filing false tax return to conceal the
income. In 2008, an HHA in Florida, pursuant to an OIG settlement,
agreed to pay $178,000 to settle a case in which it was alleged that
the provider paid kickbacks for beneficiary referrals. In another OIG
settlement, this time in 2005, a Pennsylvania HHA agreed to pay
$300,000 to settle a case in which it was alleged to have paid
kickbacks under Medicare.
In light of all this, the GAO concluded, in part, that ``In the
absence of greater prevention, detection, and enforcement efforts, the
Medicare home health benefit will continue to be a ready target for
fraud and abuse.'' More specifically, it stated that ``gaps in
screening potential and current HHAs may allow problem providers to
enter and remain in the Medicare program.''
The problem of fraudulent activity has been especially acute in the
States of Texas and California. As we stated in the proposed rule, in
Los Angeles County in California, the amount of money for which HHAs in
that county billed Medicare between Fiscal Years 2003 and 2006 rose
from $569 million to $921 million, an increase of 62 percent, and one
that was not accompanied by a similar increase in the county's Medicare
beneficiary population. There has also been an abnormal proliferation
of HHAs in California as a whole. Between October 2002 and May 2007,
the number of HHAs in the State rose by 25 percent--again, without a
concomitant upswing in the number of Medicare beneficiaries in
California, all of which suggested that there may also be an increase
in improper billing. Moreover, we have seen instances--notably, though
not exclusively, in South Florida and Texas--in which specific HHAs
have changed ownership on a frequent basis. The new owners, however,
have been mere nominal figures.
We also stated in the proposed rule that the problems we identified
have been seen with HHAs on a far greater scale than with any other
type of certified provider. The dramatic rise in the number of HHAs in
relation to the increase in Medicare beneficiaries has not been
duplicated by any other certified provider types.
2. Provisions of the Proposed Regulation
We proposed the following payment safeguard provisions:
In Sec. 424.530(a)(8), we proposed to deny Medicare
billing privileges to a prospective HHA if the HHA is determined, under
proposed 42 CFR 489.19, to be sharing, leasing, or subleasing its
practice location or base of operations identified in section 4 of its
Medicare provider enrollment application with or to another Medicare-
enrolled HHA or supplier.
In Sec. 424.535(a)(11), we proposed to revoke the
Medicare billing privileges of an HHA that is determined, under
proposed 42 CFR 489.19, to be sharing, leasing, or subleasing its
practice location or base of operations identified in section 4 of its
Medicare provider enrollment application with or to another Medicare-
enrolled HHA or supplier.
In Sec. 424.540(b)(3), we proposed to exclude home health
agencies from the existing language in Sec. 424.540(b)(3), which
states that the reactivation of Medicare billing privileges does not
require a new certification of the provider or supplier by the State
survey agency or the establishment of a new provider agreement.
In Sec. 424.540(b)(3)(i), we proposed to require that an
HHA whose Medicare billing privileges are deactivated under the
provisions found at 42 CFR 424.540(a) must obtain an initial State
survey or accreditation by an approved accreditation organization
before its Medicare billing privileges can be reactivated.
In Sec. 424.550(b)(1), we proposed to require that if the
owner of a home health agency sells (including asset sales or stock
transfers), transfers or relinquishes ownership of the HHA within 36
months after the effective date of the HHA's enrollment in Medicare,
the provider agreement and Medicare billing privileges do not convey to
the new owner.
In Sec. 424.550(b)(1)(i), we proposed that in the
situation described in proposed Sec. 424.550(b)(1), the prospective
owner of the HHA must instead enroll in the Medicare program as a new
HHA under the provisions of Sec. 424.510.
In Sec. 424.550(b)(1)(ii), we proposed that in the
situation described in proposed Sec. 424.550(b)(1), the prospective
owner of the HHA must obtain a State survey or an accreditation from an
approved accreditation organization.
In Sec. 489.12(a)(5), we proposed that CMS deny a
provider agreement to a prospective HHA that is determined to be
sharing, leasing, or subleasing its practice location or base of
operations identified in section 4 of its Medicare provider enrollment
application with or to another Medicare enrolled HHA or supplier in
violation of the HHA space sharing prohibition set forth in proposed
Sec. 489.19.
In Sec. 489.19(a), we proposed that an HHA be prohibited
from sharing its practice location or base of operations identified in
section 4 of its Medicare provider enrollment application with another
Medicare-enrolled HHA or supplier.
In Sec. 489.19(b), we proposed that an HHA be prohibited
from leasing or subleasing its practice location or base of operations
identified in section 4 of its Medicare provider enrollment application
with another Medicare-enrolled HHA or supplier.
We also solicited comments on whether there were legitimate
business reasons for a Medicare-enrolled HHA to share space with
another Medicare-enrolled HHA or supplier when there is common
ownership. Likewise, we solicited comments on whether there were
legitimate business reasons for a Medicare-enrolled HHA to be co-
located with another Medicare-enrolled HHA or supplier when there was
no common ownership. Finally, we solicited comments on whether there
were
[[Page 58117]]
legitimate business reasons for a Medicare-enrolled HHA to engage in
leasing or subleasing arrangements with a Medicare-enrolled supplier
when there was common ownership.
3. Analysis of and Responses to Public Comments
We received approximately 20 timely public comments in response to
the proposed payment safeguard rule. The following is a summary of the
comments received and our responses:
a. Sharing and Leasing of Space
Comment: Several commenters opposed the space-sharing provision in
proposed 42 CFR 489.19(a). These commenters contend that this provision
could preclude arrangements in which an HHA also provides unrelated
services from a single location, for example, influenza vaccine clinics
under a supplier number; outpatient therapy services under Medicare
Part B; preventive nutrition services; hospice services; DME; and
infusion supplies and services. One commenter stated that many health
systems operate out of a single practice location in the provision of a
broad array of items and services. Another commenter, too, stated that
corporations often operate multiple provider and supplier types out of
the same location; an HHA, for instance, might operate a DMEPOS
supplier and a hospice out of the same site. Another commenter noted
that arrangements in which an HHA, hospice and DMEPOS share a common
location would be known to CMS via the respective providers'/suppliers'
completion of the applicable CMS-855 application, which already enables
CMS to monitor such arrangements closely; the commenter added that
neither CMS nor the OIG has demonstrated a compelling basis to disrupt
such arrangements if they are currently in compliance. Yet another
commenter noted that a number of HHAs are commonly owned and operated
as a result of organizational mergers and are involved in completely
legitimate arrangements; the commenter did not understand why such
arrangements should be disrupted.
Response: Based on these and other comments received regarding
proposed Sec. 489.19(a) and our concern that a broad-based prohibition
on co-location policy may negativity impact the health care delivery
for some services, we have decided not to include this provision in the
final rule. However, we continue to have concerns about these
arrangements and will consider our administrative remedies to address
our concerns. We are especially concerned about an HHA that maintains a
practice location in one State and furnishes services to Medicare
beneficiaries in another State. We are also concerned about the HHAs
that have merged or consolidated their operations into a single
practice location, but continue to operate as distinct entities.
As indicated in the preamble, having multiple HHAs at a single site
makes it extremely difficult to determine which HHA is in operation at
a given time, which HHA has actual control over certain aspects of the
practice location, etc. If an HHA thus does not have a valid practice
location, it is considered to be non-operational and, by extension, out
of compliance with the HHA conditions of participation and with 42 CFR
424.510(a)(6). If the HHA thereafter bills for services out of that
non-operational site, it does so inappropriately.
Comment: Several commenters stated that the ability of HHAs to
share a practice location and centralized back office operations with
other HHAs--or other Medicare providers and suppliers--improves
efficiency and helps to keep down the costs associated with these
operations by reducing rent and enabling the sharing of, for instance,
billing staff and computer systems. One commenter added that such co-
located entities allocate costs separately to each provider and
supplier in the same way that hospitals do for their departments.
Several other commenters stated that to require these HHAs and
suppliers to move to separate locations if proposed 42 CFR 489.19(a)
were finalized, would be unduly burdensome and costly to them; it
would, for instance, require each formerly co-located provider or
supplier to have separate staffs and computer systems.
Response: Based on these and other comments received regarding
proposed Sec. 489.19(a), we have decided not to finalize this
provision in the final rule.
Comment: One commenter stated that having a shared practice
location for various providers and suppliers is a normal, cost-
efficient method of health care delivery without any program integrity
concerns. The only reason these shared practice locations have more
than one provider or supplier number is that Medicare operates an
enrollment system that requires separate numbers. In this same vein,
another commenter stated that a centrally located organization has been
forced to obtain several provider numbers in order to cover its entire
service area. In other cases, the commenter, added, HHAs that deliver
services across State lines (for decades, in some cases) are currently
forced to obtain separate provider numbers because the States that they
served have decided not to establish reciprocity agreements with
bordering States.
Response: As stated above, based on these and other comments
received regarding proposed Sec. 489.19(a), we have decided not to
finalize this provision in the final rule.
Comment: Several commenters stated that, under proposed 42 CFR
Sec. 489.19(a), a hospital-based HHA would not be able to share space
with a DMEPOS supplier that is also owned and operated by the hospital.
The commenter suggests that such arrangements pose little risk to the
Medicare program.
Response: As stated above, we have decided not to finalize proposed
Sec. 489.19(a) in the final rule.
Comment: One commenter urged CMS to identify more effective ways to
identify the few fraudulent providers and suppliers that apply for
multiple Medicare numbers for the same location. The commenter believed
that CMS should establish a vetting process rather than the blanket
denial of co-locations. By the same token, this vetting process must do
more than allow use of the same address with separate suite numbers, as
that would not be a sufficient deterrent to fraudulent providers.
Response: As stated above, we have decided not to finalize proposed
Sec. 489.19(a) in the final rule.
Comment: Several commenters urged CMS to refine its proposed 42 CFR
489.19(a) to allow HHAs to share a practice location with other
licensed and certified entities to use a shared practice location as
long as the co-location arrangement is not used or has not been used
for fraudulent or abusive purposes.
Response: As stated above, we have decided not to finalize proposed
Sec. 489.19(a) in the final rule.
Comment: One commenter urged CMS to eliminate its proposal in 42
CFR 424.535(a)(11) to allow contractors to revoke the Medicare billing
privileges of an HHA on the grounds that it shares a practice location
with another entity that is a Medicare-certified HHA. The commenter
also stated that due process procedures should be used in instances
where an existing HHA is discovered to share a practice location with
another HHA or supplier, and that it would be unreasonable to revoke
the HHA's billing privileges on that ground if there is no concern
about fraud or abuse by the organization.
Response: As stated above, we have decided not to finalize proposed
Sec. 489.19(a) in the final rule.
[[Page 58118]]
Comment: Several commenters stated that HHAs should be able to
share practice locations with other HHAs and suppliers if there is
common ownership involved.
Response: As previously stated, we have decided not to finalize
proposed Sec. 489.19(a) in the final rule.
Comment: Several commenters requested that CMS clarify the specific
situations in which an HHA may be co-located with another entity.
Another commenter stated that the space-sharing prohibition smacked of
too much government interference into how HHAs do business and would do
nothing for patient care.
Response: As stated above, we have decided not to finalize proposed
Sec. 489.19(a) in the final rule.
Comment: One commenter disagreed with our prohibition on leasing
arrangements in proposed Sec. 489.19(b). The commenter contended that
there are a variety of services that one agency may not be equipped to
handle and must rely on relationships with other vendors to meet the
full needs of their patients. The proposed prohibition could,
therefore, hinder beneficiary access to required services.
Response: Based on these and other comments received regarding
proposed Sec. 489.19(b), we have decided not to finalize this
provision in the final rule.
Comment: One commenter agreed with our proposal to prohibit an HHA
from sharing space with another HHA, stating that this practice raises
questions as to the viability and legitimacy of the HHA and could
confuse surveyors by rendering it difficult for them to identifying
which HHA they are actually evaluating.
Response: While we appreciate the commenter's support, we have
decided not to finalize proposed Sec. 489.19(a) in the final rule.
Comment: Another commenter supported proposed 42 CFR 489.19(a), but
sought clarification that it would not prohibit an HHA from sharing
space with other types of home health related organizations such as a
long-term home health program, a managed long-term care program, and a
licensed certified home health services agency.
Response: While we appreciate the commenter's support, we have
decided not to finalize proposed Sec. 489.19(a) in the final rule.
Comment: One commenter supported our proposal to prevent HHAs from
sharing practice locations and operations to the extent that there is
no common ownership involved. This commenter went on to say that the
practice of co-location makes it difficult for State surveyors and
accreditors to clearly identify which agency is under review.
Response: While we appreciate the commenter's support, we have
decided not to finalize proposed Sec. 489.19(a) in the final rule.
b. Change of Ownership Provisions
Comment: Several commenters agreed with our proposal to prohibit
the conveyance of a provider agreement to the new owner of an HHA if
the change of ownership takes place within 36 months of the HHA's
enrollment in Medicare. One commenter noted that the proposal would:
(1) Eliminate situations in which HHAs are established for the purpose
of being sold to persons or entities that will ultimately be the
operator, and (2) ensure that persons who will operating HHAs have an
understanding of the business requirements before receiving a provider
agreement.
Response: We appreciate the support of these commenters.
Comment: One commenter supported our proposed change of ownership
provision, acknowledging our concerns about turn-key sales of new HHAs
where there is no assurance that the buyer can maintain compliance with
the conditions of participation.
Response: We agree with this commenter.
Comment: One commenter suggested that CMS allow transactions
involving sales and transfers of ownership of HHAs currently enrolled
in Medicare for less than 3 years that are in process as of January 1,
2010 to proceed.
Response: We disagree and believe that an HHA change of ownership
application that is pending as of January 1, 2010 should be subject to
the provisions of this final rule.
Comment: Another commenter requested CMS to establish a
``hardship'' exemption so that legitimate HHA sales can be reviewed and
permitted to proceed. The commenter stated that some HHAs sales are
facilitated for entirely legitimate and unavoidable reasons, such as
when a partner in a partnership dies or leaves the business and a new
entity is created. The requirements of 42 CFR 424.550(b)(1) could force
such a provider to go out of business; the commenter also stated that
the requirements of 42 CFR 424.550(b)(1) could lead to the total
devaluation of certain HHAs, and that purchasers will be unable to bill
for services provided for periods as long as a year after the sale.
Another commenter stated that given the significant investment of
capital needed to start and operate an HHA in the current regulatory
environment, an owner--in selling its HHA for entirely legitimate
reasons--should be able to recoup its investment.
Response: We do not believe that a hardship exemption should be
established, nor do we believe that the three-year period should be
reduced. As previously stated, the purpose of this requirement is to
ensure that HHAs that are sold remain in compliance with Medicare's
conditions of participation. We stress that 42 CFR 424.550(b)(1) in no
way prohibits an owner from selling its HHA. It merely requires that
the HHA enroll as a new provider, undergo a State survey or
accreditation, and sign a new provider agreement prior to being able to
bill Medicare for services once again.
Comment: Several commenters requested that CMS reduce the 3-year
period to 12 months under 42 CFR 424.550(b)(1) so as not to unduly
prohibit legitimate sales of HHAs. One such commenter added that
agencies that undergo changes of ownership that occur within 1 year fit
the CMS description of ``turn-key'' operation.
Response: We do not believe that a change in proposed 42 CFR
424.550(b)(1) is warranted. We continue to believe that a 3-year period
is appropriate. We believe that this change will help to ensure that
individuals establishing a HHA are doing so with a long-term view of
furnishing services, rather than establishing a business for the
purpose of selling it a short time later. In addition, we believe that
this time-frame will allow CMS to assess whether the HHA is operating
in compliance with the conditions of participation and other program
requirements.
We wish to make clear that the intent of 42 CFR 424.550(b)(1) goes
beyond the issue of ``turn-key'' operations. If an HHA undergoes a
change of ownership, CMS--at the current time--generally does not
perform a State survey pursuant thereto. CMS therefore has no sure way
of knowing whether the HHA, under its new ownership and management, is
in compliance with the HHA conditions of participation--regardless of
whether the ownership change occurred 12, 24, or 36 months after the
HHA's initial enrollment. Unless CMS can make this determination, there
is a risk that the newly-purchased HHA, without having been
appropriately vetted via the survey process, will bill for services
when it is out of compliance with the conditions of participation. And
in light of the frequency of inappropriate practices, as outlined in
the GAO report, of HHAs relative to other provider types, we believe it
is imperative that we ensure
[[Page 58119]]
that the newly-purchased HHA be subject to an appropriate level of
review.
c. Deactivation Provisions
Comment: Several commenters expressed concern that the deactivation
provision in proposed Sec. 424.540(b)(3) could disadvantageously
affect HHAs that bill Medicare on either an infrequent basis or not at
all. They stated that since Medicare deactivates a provider's Medicare
billing privileges if the provider has not billed Medicare for 12
consecutive months, HHAs that only sporadically bill Medicare not only
may have their billing privileges deactivated frequently, but will,
under the aforementioned proposed provision, have to undergo a State
survey each time it seeks to reactivate these privileges. This will,
the commenter believes, impose a very significant burden on such
providers. One commenter also: (1) Expressed concern that a
deactivation of its Medicare billing privileges would affect its
ability to bill Medicaid, and (2) asked whether, if it owned an HHA and
a hospice and both were enrolled in Medicare, a deactivation of its HHA
billing privileges would affect its ability to continue billing for
hospice services. Another commenter urged CMS to consult with State
Medicaid programs prior to implementing this proposed provision. Yet
another commenter stated that it was their understanding that the
requirement to obtain an initial State survey under proposed Sec.
424.540(b)(3) would be commensurate to decertification. With long
timelines for obtaining surveys and with Medicare having categorized
HHA surveys as Tier-4 priority, this would put HHAs out of business
and, in turn, impact Medicaid-only businesses that require Medicare
certification--with the end result, the commenter stated, of harming
Medicaid patients. Similar concerns were expressed by a commenter
regarding HHAs that only bill Medicare Advantage plans.
Response: We recognize that proposed Sec. 424.540(b)(3) could
delay an HHA's ability to reactivate its Medicare billing privileges,
especially if the HHA bills only sporadically and is thus susceptible
to frequent deactivations. However, we believe that this is outweighed
by the strong need to verify that HHAs whose billing privileges were
deactivated after 12 consecutive months of non-billing remain in
compliance with Medicare's conditions of participation and other
regulatory provisions. We also believe that this approach will help
ensure that Medicare beneficiaries receive services from qualified HHA
providers.
CMS does not currently conduct a State survey when a provider seeks
to reactivate its Medicare billing privileges. As is the case with
ownership changes, CMS therefore has no sure way of knowing whether the
HHA, after not billing Medicare for at least a 12-month period, is
still in compliance with the HHA conditions of participation; indeed,
it is possible that the period of non-billing was due to the fact that
the HHA was not in operation at the time. Unless CMS can determine
whether the HHA is in compliance with the conditions of participation,
the HHA may have its billing privileges reactivated and begin billing
for services again without having been appropriately reviewed via the
survey process. This could lead to inappropriate billings if HHA is
indeed out of compliance with such conditions. As with 42 CFR
424.550(b)(1), we believe that 42 CFR 424.540(b)(3)(i) will help close
the gap noted by the GAO in ``screening potential and current HHAs'' by
ensuring that the new owners in an HHA ownership change are properly
screened. With respect to the commenters' concerns related to Medicaid
and Medicare Advantage billing under Medicare, the deactivation of a
provider's Medicare billing privileges does not mean that the provider
is no longer enrolled in Medicare. In fact, the Medicare provider
agreement remains in effect. Accordingly, a deactivated HHA is still
certified as a Medicare HHA. Deactivation simply means that the
provider, prior to having its Medicare billing privileges reactivated,
must: (1) Submit the information requested in Sec. 424.540(b)(1) and
(2) undergo a State survey or obtain accreditation to ensure that it
remains in compliance with the applicable conditions of participation.
Indeed, as previously indicated, there have been instances where HHAs
are sold to nominal owners when the real operators are individuals who
were later found to be engaging in fraudulent activity. Our current
inability to conduct a State survey for most changes of ownership
hinders CMS's ability to fully vet and review the HHA, its new owners,
and the new operations, and makes it more likely that such sham
operations can continue to exist.
With respect to situations in which a provider owns an HHA and a
hospice and the billing privileges of the HHA are deactivated for 12
consecutive months of non-billing, this does not affect the billing
privileges of the hospice; the hospice's billing privileges remain
intact, as the HHA and the hospice are separate providers, are
separately enrolled, and have separate provider agreements.
Finally, we do intend to notify State Medicaid agencies about the
implementation of this provision.
Comment: Another commenter stated that proposed Sec. 424.540(b)(3)
would require those HHAs that primarily or even exclusively bill
Medicaid but who are required to be enrolled in Medicare as a
prerequisite thereto to submit at least one Medicare claim per year or
see their Medicare billing privileges rescinded.
Response: As we previously stated, the deactivation of a provider's
Medicare billing privileges is not the same as the revocation of these
privileges. A deactivated provider remains enrolled in Medicare,
whereas a revoked provider loses its Medicare billing privileges and is
no longer enrolled in the program.
Comment: Several commenters suggested that for providers enrolled
in Medicare and Medicaid, CMS not deactivate a provider's Medicare
billing privileges for non-billing if the provider has submitted a bill
for or been paid by Medicaid within that same 12-month period.
Response: The regulatory provisions in 42 CFR 424.540 regarding 12
consecutive months of Medicare non-billing do not allow for the level
of Medicaid billings to be a consideration in the deactivation of a
provider's Medicare billing privileges. This is because Medicare and
Medicaid are two completely separate health programs. If we expanded 42
CFR 424.540 to allow a provider's billing history with other health
plans to be a factor in determining whether to deactivate a provider's
Medicare billing privileges, a situation could arise where a provider
has not submitted a bill to Medicare for a 10-year period but has not
been deactivated because the HHA has billed another program each year
within that span. This would, in our view, defeat the purpose of 42 CFR
424.540. Besides, and as already stated, the deactivation of Medicare
billing privileges does not mean that Medicare billing privileges have
been revoked.
Comment: One commenter noted that the revised 42 CFR 424.540(b)(3)
appears to require a new certification, but the unaltered 42 CFR
424.540(c) regarding the effective (date) of deactivation still
provides that deactivation does not have any effect on a provider's
participation agreement. The commenter suggested that we consider
revising paragraph (c) to correlate with the changes to paragraph (b).
Another commenter understood the
[[Page 58120]]
changes Sec. 424.540 to mean that we now equate the requirement to
obtain an initial State survey with decertification. In light of the
extremely long timelines for obtaining initial surveys from States and
accrediting organizations, the commenter stated such a requirement
would put many legitimate home health agencies that are part of the
2,000 agencies that CMS estimates will be deactivated out of business.
Response: We agree that there is a discrepancy. We have therefore
not included our proposed revision to Sec. 424.540(b)(3) in the final
rule. We believe that this change will eliminate the perception that
deactivation and decertification are one in the same.
Comment: One commenter expressed support for our proposed changes
regarding space sharing, ownership changes, and deactivations, stating
that the instances of fraud and abuse reported by CMS justify changes.
The commenter suggested, however, that CMS consult with the HHS Office
of Inspector General, the Government Accounting Office, and the U.S.
Department of Justice for alternative perspectives on the appropriate
length of billing inactivity that warrants a State survey or
accreditation prior to reactivation.
Response: We appreciate both the commenter's support for our
proposed provisions and the suggestion regarding the consultation of
other law enforcement bodies. We have, in fact, consulted with other
agencies in the past regarding the 12-month deactivation policy
outlined in Sec. 424.540(a)(1). However, we believe that they would
support every effort on our part to ensure that HHAs remain in
compliance with Medicare's conditions of participation before their
Medicare billing privileges are reactivated. We further believe that 12
consecutive months of non-billing by the provider--a lengthy period in
and of itself--constitutes sufficient justification for CMS to attempt
to reconfirm that the provider meets the HHA conditions of
participation.
d. General Comments
Comment: One commenter believed that CMS, in its proposed program
safeguard initiatives, was attempting to use a ``broad brush'' approach
to combating fraud, that CMS seems to view all home health providers as
fraudulent, and that the proposed initiatives will harm honest HHAs.
The commenter also stated that the States with the highest levels of
HHA fraud do not have significant barriers to entry, such as a State-
mandated certificate of need (CON). The commenter stated that CMS
should consider the correlation between CON states and the frequency of
fraud and abuse. Finally, the commenter recommended, in lieu of the
proposed program integrity initiatives, increased funding of survey and
certification efforts and urged CMS to seek out the root cause of
fraudulent behavior.
Response: We recognize that the vast majority of HHAs participating
in the Medicare program are honest. However, the information cited in
the preamble to the proposed rule--as well as the conclusions drawn by
the Health and Human Services' Office of Inspector General--provide
reason and concern for us that HHA fraud is a prevalent problem that,
and in our view, warrants additional review and action to address this
issue.
Comment: Several commenters expressed concern about the impact of
proposed Sec. 424.540(c) and Sec. 424.550(b) on State survey agencies
and accreditation organizations. They contended that these agencies and
organizations have experienced--and, in some cases, are still
experiencing--major backlogs in the number of pending HHA request for
certification or accreditation. Some State agencies, another commenter
stated, are not conducting new HHA surveys at all at the current time.
Requiring a new survey/accreditation pursuant to each change of
ownership and reactivation of Medicare billing privileges will result
in even larger backlogs, which in turn will further delay the ability
of HHAs to obtain a survey or accreditation in a prompt fashion. One
commenter stated that it will be impossible for State survey agencies
and accrediting bodies to resurvey 2,000 CHOWs that CMS reports occur
annually.
Response: We understand the commenters' concern regarding workload
implications for State survey agencies and deemed accrediting
organizations. We believe that HHAs undergoing an ownership change or
having their billing privileges reactivated must meet the conditions of
participation and other program requirements in order to participate in
the Medicare program.
Comment: One commenter recommended that CMS appropriately fund
State agencies to handle the increased survey workload.
Response: As stated above, we understand the workload implications
for State agencies and deemed accrediting organizations. Moreover, we
are aware of the potential funding issues raised by the commenter.
Comment: One commenter stated that CMS must reevaluate its
projections for the number of HHAs that will be impacted by the
proposed CHOW requirements (2,000) and deactivation requirements
(2,000). If these numbers are correct, CMS' proposals will result in
requiring resurvey of 40% of the 9,500 home health agencies annually.
Response: We believe that the projections contained in the proposed
rule are accurate and that the final rule is sufficiently clear as to
the number of surveys that would have to be performed.
Comment: One commenter supported the proposed changes regarding
space-sharing and changes of ownership, and added that CMS should begin
even more active enforcement. This should include ensuring that all new
enrollment applicants have a timely, thorough on-site review of
clinical, operational and financial policies and processes prior to
being granted enrolled status.
Response: We appreciate the commenter's support and note that we
are undertaking a number of efforts to reduce fraud and abuse.
Comment: One commenter made a number of recommendations to CMS with
respect to the combating of fraudulent activity in the HHA arena. These
included: (1) Expanding educational efforts regarding compliance; (2)
establishing a Federal requirement that administrators of home health
are credentialed by a nationally recognized body; (3) establishing
certification requirements for financial managers; (4) enacting a
targeted moratorium on new HHAs; and (5) working with the industry to
ensure that reports of fraudulent activities are acted upon promptly.
Response: We appreciate these suggestions and will take them under
advisement.
Comment: One commenter suggested that CMS: (1) Enhance the Provider
Enrollment, Chain and Ownership System (PECOS) to automatically
identify HHAs located at the same practice location; (2) update section
12 of the CMS-855A form to include questions regarding office space,
similar to the questions contained on the CMS-855B application for
physical therapy and occupational therapy groups; and (3) perform site
visits for some new providers.
Response: We appreciate these suggestions and will take them under
advisement, though we note that CMS has increased the number of site
visits it performs in certain high-risk areas for new and existing
HHAs.
Comment: One commenter suggested that we describe the method by
which HHAs can consolidate under one provider number without financial
[[Page 58121]]
consequence, and that CMS allow HHAs that intend to consolidate up to
12 months to do so.
Response: HHAs with multiple provider agreements for agencies at
the same location can voluntarily terminate a provider agreement and
merge the multiple HHAs into a single organization.
Comment: One commenter suggested that the intent of the States in
requiring a prospective Medicaid provider to be enrolled in and
certified by Medicare was to pass on the cost of the survey and
certification of Medicaid-only agencies to the Federal Government and
suggested that CMS resolve this with the States.
Response: We believe that this comment is outside the scope of this
final rule.
Comment: One commenter asked for clarification on how HHAs are to
be notified when their Medicare billing privileges are deactivated.
Response: In the event a claim is submitted after 12 consecutive
months of non-billing, the claims processing system will place a
message on the remittance notice stating ``This provider was not
certified/eligible to be paid for this procedure/service on this date
of service.'' We do not expect that this message will be implemented
until CY 2010.
Based on the public comments, we are adopting the provisions of the
proposed rule with the following revisions:
We are not adopting Sec. 424.530(a)(8) in this final
rule.
We are not adopting Sec. 424.535(a)(11) in this final
rule.
We are not adopting Sec. 489.12(a)(5) in this final rule.
We are not adopting Sec. 489.19(a) in this final rule.
We are not adopting Sec. 489.19(b) in this final rule.
We proposed to exclude HHAs from the existing language in
Sec. 424.540(b)(3), which states that the reactivation of Medicare
billing privileges does not require a new certification of the provider
or supplier by the State survey agency or the establishment of a new
provider agreement. We have decided not to include this proposed
revision to Sec. 424.540(b)(3) in the final rule. We are also making
it clear that under proposed Sec. 424.540(b)(3)(i), which is included
in the final rule, an HHA undergoing a change of ownership within the
first 36 months after its enrollment remains Medicare-certified and
that its provider agreement has not been revoked. The deactivated HHA's
certification, provider agreement, and status as an enrolled HHA remain
intact. However, it must obtain a new survey or accreditation.
H. Physician Certification and Recertification of the Home Health Plan
of Care
a. Background
Sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act require that a
plan for furnishing home health services be established and
periodically reviewed by a physician in order for Medicare payments for
those services to be made. Our regulations at Sec. 409.43(e)
specifically state that a home health POC must be reviewed, signed, and
dated by the physician who reviews the POC (as specified in Sec.
409.42(b)) in consultation with agency clinical staff at least every 60
days (or more frequently as specified in Sec. 409.43(e)(1)).
Additionally, Sec. 424.22(b) states that a recertification is required
at least every 60 days, preferably at the time the plan is reviewed,
and must be signed by the physician who reviews the home health POC.
These schedules, for the review of the POC and the recertification,
coordinate with the 60-day episode payment unit under the HH PPS. In
implementing the statutory requirement as well as these regulations, we
believed that these requirements would encourage enhanced physician
involvement in the HH POC and patient management, and would include
more direct ``in-person'' patient encounters (as logistically
feasible).
Currently, physicians are paid for both the certification and
recertification of the HH POC under HCPCS codes G0180 and G0179,
respectively. The basis for the payment amounts of these physician
services is the relative resources in RVUs required to furnish these
services. We believe physician involvement is very important in
maintaining quality of care under the HH PPS.
In the HH PPS proposed rule published in the October 28, 1999
Federal Register (64 FR 58196), we had proposed to require the
physician to certify the case-mix weight/home health resource group
(HHRG) as part of the required physician certification of the POC. This
reflected our belief that the physician should be more involved in the
decentralized delivery of home health services. However, in the final
rule published in the July 3, 2000 Federal Register (65 FR 41163), we
did not finalize that proposal and decided to focus our attention on
physician certification and education in order to better involve the
physician in the delivery of home health services.
b. Solicitation of Comments
It has come to our attention that physician involvement in the
certification and recertification of HH POC varies greatly. While some
physicians have direct contact with their patients in the delivery of
home health services, we believe that a significant number of
physicians provide only a brief, albeit thorough, review of the HH POC,
without any direct contact with the patient. We continue to believe
that active involvement of the physician, including ``in-person''
contact with the patient, during the certification and recertification
of the HH POC is essential for the delivery of high quality HH
services.
In the Physician Fee Schedule proposed rule published in the July
7, 2008 Federal Register (73 FR 38578), we mentioned several options to
enhance direct contact between the physician and the patient. First, we
considered a review of the RVUs associated with the certification and
recertification of the HH POC. As a result of that review, the payment
amounts to physicians could be reduced based on a more accurate
determination of the actual RVUs required to provide these services. We
also considered proposing new requirements; for example, a requirement
for ``direct'' patient contact with the physician, to ensure more
active physician involvement in the certification and recertification
of the HH POC. We specifically solicited comments on these policy
options.
In the November 19, 2008 final rule, we expressed our appreciation
for the comments and responded that we would continue to analyze and
consider the comments and suggestions in future rulemaking.
Additionally, as a result of comments received on the above physician
rule, as they relate to physician-patient contact, we are considering
the possibility of requiring physicians to make phone calls to patients
at various times over the course of home health treatment (prior to
recertification), as a means to promote that physician-patient contact
and to help ensure the delivery of high quality HH services to our
beneficiaries.
In the HH PPS proposed rule for CY 2010, we specifically solicited
additional comments on this topic.
Comment: While commenters agreed that increasing physician
involvement in home health patient care was a positive step, they were
not supportive of requiring a face-to-face encounter between patients
and physicians, or of requiring telephone contact, prior to physician
certification or recertification
[[Page 58122]]
of the plan of care. Some felt this would be burdensome to physicians
and would create a significant barrier to patients seeking home health
services. Several pointed out that there was no analysis to suggest
that face-to-face or telephone encounters would improve outcomes, and
questioned the value of such a requirement, given its cost. A few
mentioned that the underlying problem was inadequate payment to
physicians; some stated that without reimbursement, physicians were not
likely to be cooperative; one wrote that this suggestion did not
address the fundamental problem of too little physician time to support
patients at home.
One commenter wrote that the level and frequency of physician
contact with patients should be determined by the physician, based on
the patient's medical needs. A few commenters noted that such a
requirement would interfere with the professional judgment of the
physician, failed to recognize that nurses and therapists provide OASIS
assessment of all patients prior to physician certification, and noted
that homebound, infirm or disabled patients should not be forced to
leave home for a doctor's visit. They noted that leaving home may be a
considerable and taxing effort for homebound patients, especially in
rural areas, when there are weather issues, or where patients have no
caregiver or transportation. One commenter asked what would happen if
the patient refused to go.
Several commenters pointed out that existing laws already establish
serious criminal and civil sanctions for physicians who knowingly and
falsely certify that a patient is homebound and needs home health.
Additionally, they stated that there are no reports of quality of care
problems related to the absence of a face-to-face physician encounter.
While a telephone contact could be more convenient, commenters felt
that it would not accomplish much other than confirm to the physician
that the patient exists and possibly hear the patient express things
about his or her condition or needs. They noted that it would be
difficult for the home health agency to validate that a call actually
occurred if the agency were not a direct party to it. Others noted that
physicians would have to make such calls after hours, given their busy
schedules, and this could be disruptive to homebound patients, many of
whom are elderly and retire early.
A commenter mentioned that some beneficiaries don't have
telephones, particularly in remote rural areas. Another wrote that
patients could barely get needed prescriptions called in timely. Some
commenters also wrote that requiring an encounter could be a serious
claims processing issue, akin to the former M0175 component of the
HHRGs. Commenters believed that the agency would not be in a position
to consistently or comprehensively understand the encounters.
Commenters suggested a number of alternatives. One commenter felt
the best approach to involving physicians more in home care is in new
models of chronic care management that integrate primary care practices
committed to home-based care with home health agencies in a single,
consolidated chronic care service. This commenter is working on pilot
projects with Medicare Advantage patients, and welcomes the opportunity
to develop a demonstration program.
One commenter suggested we study the role of physicians in home
care and determine which factors enhance the physician's ability to
conduct oversight activities, ensure appropriateness of care, and work
collaboratively with home health agencies without burdening
beneficiaries. Another commenter recommended we consider ways to
improve communication between physicians and home health agencies,
particularly as it relates to follow-up when a patient's condition
changes. One commenter suggested we consider the comments received upon
solicitation in the Physician Fee Schedule rule, which encouraged a
wider range of mechanisms to increase involvement, such as telehealth,
photographic evidence, telephone, and use of advanced practice nurses
(APNs) or physician assistants (PAs). Others suggested we continue the
dialogue with physicians' groups and with home health agencies about
this issue. Several commenters echoed the suggestion to allow APNs or
PAs, within State practice guidelines, and noted that these
professionals are more accessible, more open to discussion of patient
issues than physicians, would reduce the burden on physicians, and
improve access.
Another commenter suggested we test proposals to require encounters
in demonstration projects, and establish whether the outcomes improve
enough to merit the increase in costs. This commenter also suggested we
consider requiring a Medicare Director, similar to those in hospice
programs. In considering alternatives, another commenter wrote that
physician home visits are unrealistic. This commenter noted that under
current care plan oversight (CPO), physicians can count time for
telephone interactions, and suggested we see if this method of
oversight is widely used. He added that CMS should review practices
that cannot be counted toward CPO time and consider allowing these. He
also suggested that surveyors focus more on the 60-day summary to
physicians.
Several commenters recommended that CMS conduct a comprehensive
study on the impact and value of physician encounters as a qualifying
element of Medicare home health services. These commenters suggested
that in the interim, physician payment rules could be modified to limit
payment for care plan recertification to those physicians who can
document a face-to-face encounter with the patient prior to care plan
certification.
Response: We appreciate the comments from the public on this matter
and will continue to address our concerns surrounding this issue, and
analyze and consider those comments and suggestions in future
policymaking and future rulemaking.
I. Routine Medical Supplies
HHAs have expressed to the HHS Office of the Inspector General
(OIG) some confusion regarding routine medical supplies and how we
account for the cost of those supplies. Therefore, in the proposed rule
we reiterated our policy regarding routine medical supplies and how
they are reimbursed under the HH PPS.
Section 1895(b)(1) states that ``all services covered and paid on a
reasonable cost basis under the Medicare home health benefit as of the
date of the enactment of this section, including medical supplies,
shall be paid for on the basis of a prospective payment amount * * *''.
The cost of routine medical supplies was included in the average cost
per visit amounts derived from the audit sample. These average cost per
visit amounts were used to calculate the initial HH PPS rates published
in the July 3, 2000 HH PPS final rule (FR 65 41184). Because
reimbursement for routine medical supplies is bundled into the HH PPS
60-day episode rate and the per-visit rates, HHAs may not bill
separately for routine supplies.
As noted in Chapter 7--Home Health Services of the Medicare Benefit
Policy Manual (Pub. 100-02), sections 50.4.1.2 and 50.4.1.3, routine
supplies are supplies that are customarily used in small quantities
during the course of most home care visits. They are usually included
in the staff's supplies and not designated for a specific patient.
Routine supplies would not include those supplies that are specifically
ordered by the physician or are essential to HHA personnel in order to
effectuate the plan of care. Examples of supplies
[[Page 58123]]
which are usually considered routine include, but are not limited to:
A. Dressings and Skin Care
Swabs, alcohol preps, and skin prep pads;
Tape removal pads;
Cotton balls;
Adhesive and paper tape;
Nonsterile applicators; and
4x4s.
B. Infection Control Protection
Nonsterile gloves;
Aprons;
Masks; and
Gowns.
C. Blood Drawing Supplies
Specimen containers.
D. Incontinence Supplies
Incontinence briefs and Chux covered in the normal course
of a visit. For example, if a home health aide in the course of a
bathing visit to a patient determines the patient requires an
incontinence brief change, the incontinence brief in this example would
be covered as a routine medical supply.
E. Other
Thermometers; and
Tongue depressors.
There are occasions when the supplies listed in the above examples
would be considered non-routine and thus would be considered a billable
supply, that is, if they are required in quantity, for recurring need,
and are included in the plan of care. Examples include, but are not
limited to, tape, and 4x4s for major dressings.
Comment: A commenter requested clarification in the final rule on
some routine medical supplies that were not included in the
clarification in section III.I, such as wound care supplies and
colostomy supplies. Additionally, the commenter was seeks clarification
of the statement, ``There are occasions when the supplies listed * * *
a billable supply, that is, if they are required in quantity, for
recurring need, and are included in the plan of care'' on page 40974 at
the end of section III.I. The commenter asked if this represents a
change from current practice.
Response: The law governing the Medicare home health prospective
payment system (HH PPS) effective October 1, 2000 requires that while
the patient is under a home health POC, the HHA must bill and receive
payment from Medicare for all covered home health services including
routine and non-routine medical supplies, except DME Medical supplies,
under the consolidated billing requirements. Routine, and non-routine
medical supplies, are bundled into and paid for under the HH PPS rates
and are subject to home health consolidated billing, which means that
Medicare will not pay separately for these items for a beneficiary who
is in an open home health care episode of care. Section 50.4 of Chapter
7, ``Home Health Services'' of the Medicare Benefit Policy Manual (Pub.
100-02) defines medical supplies as ``items that due to their
therapeutic or diagnostic characteristics, are essential in enabling
HHA personnel to conduct home visits or to carry out effectively the
care the physician has ordered for the treatment or diagnosis of the
patient's illness or injury''. All supplies which would have been
covered under the cost-based reimbursement system are bundled under the
home health PPS. There is no limit on the number of supplies that a
patient may receive from the HHA as long as the supplies are covered,
reasonable and necessary and documented by the physician and kept in
the patient's record by the HHA.
Miscellaneous Comments
Comment: A commenter wrote that most claims have Non-routine
Supplies (NRS) level 1 or 2, and almost none have NRS level 5. This
commenter wrote that there was no information in HH PPS to capture the
need for expensive pleurex catheters. The commenter felt that changes
in the NRS methodology may be needed to more accurately reflect supply
needs.
Another commenter was concerned that certain non-routine supplies
were being added to the HH PPS bundle, but were not represented in the
original cost basis for PPS supply payment without appropriate payment
increases. He felt this was a disincentive to adopt new technology, and
fosters the use and application of older and less efficacious
alternative treatments and supplies. This commenter expressed specific
concern over a Pleura-evac and sophisticated but expensive wound care
products, and noted that the application of these technologies cost
more than the NRS allowances. He suggested we re-evaluate the
classification of Pleura-evacs and establish a process to adjust the
NRS allowance to accommodate the accretion of new, more expensive, NRS.
Response: We appreciate the comments on this topic, but we are not,
as part of this rule, refining either the case-mix model or the NRS
severity model for the HH PPS. We will consider the comments received
in future rulemaking.
Comment: In the proposed rule, CMS indicated that the 60-day
episode rate was based on 25.5 visits. This is incorrect because it
uses LUPAs that had 4 or fewer visits that are not paid using the full
60-day episode rate. Rather 31.6 visits per episode is the correct
number of visits per episode, as the initial factor used by CMS in
computing the 60-day episode rate back in 2000. CMS should clarify how
the 25.5 visits per episode relates to the 31.6 visits per episode that
was the basis for the 60-day episode base rate.
Response: The commenter is correct that 25.5, which was the
actuarial projection for FY 2001 for all episodes as spelled out in the
July 3, 2000 HH PPS Final Rule, was not the proper number to use for
comparison with the current non-LUPA visits per episode; we regret the
error. The 31.6 was for CY 1998 (the last historical year for which
data were available for the Rule), and trends at the time indicated
that visits per episode were declining. While the July 3, 2000 HH PPS
Final Rule did not explicitly state the projection for FY 2001 non-LUPA
visits per episode, it can be gleaned mathematically from other numbers
published in that final rule, and turns out to be a few visits lower
than 31.6.
Comment: A few commenters wrote that LUPA rates were still less
than an agency's cost of providing a visit, and asked that the rates be
reviewed and increased. One commenter suggested we apply the LUPA add-
on to all LUPA episodes. Another could not find support for the
prediction that LUPA episodes would drop from 15 percent to 5 percent,
and noted that the most recent data for his State suggested LUPA
episodes were running at just over 14%.
Response: Rebasing rates is not part of this final rule. A
description of the analysis supporting that the LUPA add-on apply only
to first or only LUPA episodes can be found in the CY 2008 final rule
(72 FR 49762). It can also be noted that an individual agency's cost of
providing a visit will differ from agency to agency, however, we
believe that the LUPA rates, on average, are sufficient. One should
note that LUPA incidence can vary greatly from agency to agency and
area to area. We intend to monitor the trend in incidence of LUPA
episodes in view of the change we made to LUPA payments (the LUPA add-
on) that became effective in CY 2008. It is worth noting that,
nationally, the percentage of LUPA episodes continues to drop, our most
recent data indicating that LUPA episodes have dropped to around 10
percent. As stated in a response to a previous comment, we believe that
the appropriate time and place to deal with
[[Page 58124]]
any re-estimates, in these multiple areas, is if and when a rebasing
for the rates were to take place.
Comment: A commenter felt that the proposed rule fell short of
adopting essential reform to home health payment model and regulatory
processes as suggested by MedPAC and described in the Senate Finance
Committee's Chairman's Mark. The commenter believes the proposed rule
can be strengthened to be consistent with health care reform goals and
avoid serious consequences for Medicare, its beneficiaries, and avoid
undermining access to quality home health agencies. Various commenters
stated that home health is an effective approach to reducing hospital
admissions and managing the long term nature of chronic diseases such
as heart failure, chronic respiratory diseases, and unstable diabetes,
and that many patients, including those who are not homebound, could
benefit from ongoing management at home. One of these commenters stated
a concern that the proposed rule focuses on costs of home care without
factoring in the overall cost of care to Medicare. Another commenter
urged us to appreciate the services that HHAs provide, and how home
health is a cost-effective, quality alternative to rising health care
costs.
Response: We appreciate the commenters' suggestions regarding
broader reform associated with the home health benefit. We agree with
the commenter that home health care may be an effective approach to
reducing hospitalizations and overall Medicare costs. However, the
commenters' suggestions are outside the scope of the proposed
provisions which we solicited comments about in the CY 2010 proposed
rule. The commenter is suggesting a broader scope of benefit than that
which is currently statutorily mandated for Medicare's home health
benefit.
Comment: A commenter felt that the actions of a few agencies are
driving policy decisions for the entire home health program. The
commenter was concerned about the proliferation of agencies in pockets
of the country, and the negative behavior of many of these HHAs. The
commenter wrote that we should work directly with States to address
appropriate growth and minimize risk to Medicare without impacting
access. He hopes that we will be sensitive to the impact policy
decisions aimed at managing the few have on the majority of providers.
Finally, the commenter appreciated our continued open dialogue through
teleconferences and open door forums.
Response: Data so far suggest the problem of growing, suspect
outlier payments has been associated with individual agencies and
specific areas of the country. Our proposal for addressing the outlier
payment problem considered the impact on agencies generally; thus, we
have proposed an outlier cap at a level, 10 percent, that far exceeds
the typical agency ratio with respect to outliers. We have addressed
other parts of our proposed, and finalized, policies in other responses
to public comments in this final regulation.
Comment: A commenter suggested we seek new types of healthcare
systems and promote innovation in this area. Another commenter
suggested we implement policies and guidance to maximize utilization of
electronic health records and other forms of health information
technology within the home health setting. Another commenter wrote that
because of the HIPAA law, hospitals are not providing home health
agencies with needed discharge information; this impacts the patient's
transition to home and leaves the agency to rely on patient recall.
Response: CMS is aware that some home health agencies have
implemented new technology to assist in patient services already. They
have been able to make such investments under the current payment
system. We urge continued investments in these technologies in the
interests of improving care management and efficiency in the home
health industry. CMS is committed to improving health setting
transitions to minimize unnecessary errors and burdens on patients and
providers. For example, under the QIO program, we will continue to work
with the hospital industry and others to disseminate information about
smoothing transitions.
III. Provisions of the Final Rule
Generally, this final rule incorporates the provisions of the
August 6, 2009 proposed rule (republished on August 13, 2009 with
corrected wage index tables), except as noted in the specific response
to comments in the applicable section of this rule.
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 30-day notice in the Federal Register and solicit public
comment before a collection of information (COI) requirement is
submitted to the Office of Management and Budget (OMB) for review and
approval. In order to fairly evaluate whether an information collection
should be approved by OMB, section 3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that we solicit comment on the following
issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We solicited public comments on each of aforementioned issues for
the information collection requirements discussed below. In this final
rule, we are restating the discussion of the information collection
requirements as it appeared in the HH PPS proposed rule published on
August 13, 2009 (74 FR 40948).
A. ICRs Regarding the Requirements for Home Health Services
In Sec. 424.22 we stated that if a patient's underlying condition
or complication required a registered nurse to ensure that essential
non-skilled care was achieving its purpose, and necessitated a
registered nurse be involved in the development, management, and
evaluation of a patient's care plan, the physician would include a
written narrative describing the clinical justification of this need.
The burden associated with this requirement will be the time and
effort put forth by the physician to include the written narrative. We
estimate it will take one physician approximately 5 minutes to meet
this requirement. We estimate the frequency of such a situation to
occur in about 5 percent of episodes (or about 345,600 episodes a
year); therefore, the total annual burden associated with this
requirement will be 28,800 hours for CY 2010.
Comment: Two commenters wrote that the time and burden estimates
presented in section IV. of the proposed rule were underestimated. One
noted that these regulations would increase costs of operation. For
section IV.A., the other wrote that the time to educate the physician
regarding the type of documentation needed to support unlicensed care
from a Management and Evaluation perspective would be astronomical, in
addition to the time required trying to obtain the documentation from
the physician. She added that the time physicians must spend collecting
information on each client to document medical necessity was greater
than 5 minutes.
[[Page 58125]]
Response: We disagree that the time to educate the physician
regarding the type of documentation that would be needed to fulfill the
requirement for a physician's written narrative, in these rare
instances, as astronomical. Nor do we agree that the time required to
obtain the narrative will be excessive. The physician should already
have considered what his/her clinical justification is for the
certification or recertification of the beneficiary to receive
Medicare's home health benefit, as well as the ordering and approving
of these skilled services on the plan of care. Consequently, the
physician should have already synthesized their clinical justification,
and need only to record it into the certification or recertification.
The requirements and associated information collection burden
contained in Sec. 424.22 will be submitted to OMB for approval. As
part of the approval process, we will seek public comments in an
additional notice separate from this final rule.
B. ICRs Regarding Deactivation of Medicare Billing Privileges
In Sec. 424.540(b)(3)(i), an HHA whose Medicare billing privileges
are deactivated under the provisions found in Sec. 424.540(a) must
obtain an initial State survey or accreditation by an approved
accreditation organization before its Medicare billing privilege can be
reactivated. The burden associated with this requirement will be the
time and effort put forth by the HHA to obtain a State survey or
accreditation. We estimate it will take the prospective provider/owner
60 hours to obtain a State survey or accreditation. We estimate that
there will be 2,000 such occurrences annually. (We believe that this
figure is an extremely high-end estimate, but will utilize it for
purposes of this final rule so as to ensure that we do not
underestimate the potential burden on HHAs. Therefore, the total annual
burden associated with this requirement will be 120,000 hours.
Comment: Two commenters wrote that the time and burden estimates
presented in section IV. of the proposed rule were underestimated. One
noted that these regulations would increase costs of operation. For
section IV.B, a commenter wrote that the time required to receive an
initial survey was months from an accrediting organization since in her
State, the State survey agency was no longer performing initial
surveys.
Response: With respect to the estimated survey timeframe, the
calculation is based on the total amount of time the provider spends:
(1) In undertaking specific activities in preparation for the survey,
and (2) undergoing the survey itself. The calculation does not include
the time waiting for the survey to take place.
The requirements and associated information collection burden
contained in Sec. 424.540(b)(3) will be submitted to OMB for approval.
As part of the approval process, we will seek public comments in an
additional notice separate from this final rule.
C. ICRs Regarding Prohibition Against Sale or Transfer of Billing
Privileges
At Sec. 424.550(b)(1) we require that an HHA undergoing an
ownership change will have to obtain an initial State survey or
accreditation by an approved accreditation organization if the change
takes place within 36 months after the effective date of the HHA's
participation in Medicare. Between April 2008 and April 2009,
approximately 2,000 Medicare-enrolled HHAs--or 22.5 percent of the
9,000 total number of HHAs enrolled in Medicare--underwent a change of
ownership. Naturally, the magnitude of the ownership changes varied by
HHA, but the fact that almost one-quarter of all Medicare-enrolled HHAs
changed ownership in some form within the past year is, for the reasons
outlined in the preamble to this rule, significant.
It is also important to note that of the 2,000 ownership changes,
approximately 20 percent occurred in Texas, another 20 percent in
Florida, and 14 percent in California, meaning that over one-half of
all changes in ownership occurred in three States. Though it is likely
that, once this provision is implemented, the number of total annual
ownership changes will decrease, we will assume for purposes of this
final rule that the figure of 2,000 will remain constant so as to
ensure that we do not underestimate the potential burden on HHAs.
The burden associated with this requirement in Sec. 424.550(b)(1)
is twofold. First, the HHA will need to complete and submit a Medicare
enrollment application (paper or electronic) as an initial applicant.
This can be done electronically via the Internet-Based Provider
Enrollment, Chain and Ownership System (PECOS) or by using the paper
CMS-855 enrollment application. The estimated burden of completing the
entire application as a new enrollee is 3 hours. Thus, the estimated
annual burden for the approximately 2,000 HHAs that will change
ownership will be 6,000 hours. Second, the provider will need to
undergo a survey (or obtain accreditation in lieu of a survey) and
perform administrative activities associated therewith. We estimate
that the total hourly burden to the HHA for stated activities will be
60 hours, for an annual burden of 120,000 hours (2,000 HHAs x 60
hours).
Therefore, we estimate that the total annual burden of compliance
with Sec. 424.550(b)(1) will be 126,000 hours (120,000 hours + 6,000
hours).
The requirements and associated information collection burden
contained in Sec. 424.550(b)(1) will be submitted to OMB for approval.
As part of the approval process, we will seek public comments in an
additional notice separate from this final rule.
Comment: Two commenters wrote that the time and burden estimates
presented in section IV. of the proposed rule were underestimated. One
noted that these regulations would increase costs of operation. For
section IV.C, one of the commenters believed that the time to complete
the enrollment form needed when a sale/transfer of ownership occurs is
far greater than 3 hours, taking several days to complete the form and
gather all required documentation. Additionally, if a deficiency in
completing this complex form is noted, the time to correct it is not
factored in.
Response: We believe that the timeframe we have used for the
completion of the form is both accurate and consistent with past
estimates that CMS has used for the completion of the Medicare
enrollment application (for example, CMS-855A).
D. ICRs Regarding Patient Assessment Data
Section 484.210 will require an HHA to submit to CMS the OASIS data
described at Sec. 484.55(b)(1) and (d)(1) in order for CMS to
administer the payment rate methodologies described in Sec. Sec.
484.215, 484.230 and 484.235.
The burden associated with this is the time and effort put forth by
the HHA to submit the OASIS data. This burden is currently accounted
for under OMB 0938-0761.
[[Page 58126]]
----------------------------------------------------------------------------------------------------------------
Number of Total annual
OMB No. Requirements respondents Burden hours burden hours
----------------------------------------------------------------------------------------------------------------
0938-NEW....................... 424.22............. 345,600........... 1/12.............. 28,800.
None........................... 424.540(b)(3)(i)... 2,000............. 60................ 120,000.
None........................... 424.550(b)(1)...... 2,000............. 63................ 126,000.
0938-0761...................... 484.210............ N/A............... N/A............... N/A.
----------------------------------------------------------------------------------------------------------------
If you comment on these information collection and recordkeeping
requirements, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this rule; or
2. Submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Attention: CMS Desk Officer,
CMS-1560-F, Fax: (202) 395-6974; or E-mail: [email protected].
E. ICRs Regarding Annual Update of the Unadjusted National Prospective
60-Day Episode Payment Rate
Section 484.225(i) requires the submission of quality measures as
specified by the Secretary. As part of this requirement, each HHA
sponsoring a Home Health Care CAHPS (HHCAHPS) Survey must prepare and
submit to its survey vendor a file containing patient data on patients
served the preceding month that will be used by the survey vendor to
select the sample and field the survey. This file (essentially the
sampling frame) for most home health agencies can be generated from
existing databases with minimal effort. For some small HHAs,
preparation of a monthly sample frame may require more time. However,
data elements needed on the sample frame will be kept at a minimum to
reduce the burden on all HHAs.
The burden associated with this requirement is the time and effort
put forth by the HHA to prepare and submit the file containing patient
data on patients. The survey instrument and procedures for completing
the instrument are designed to minimize burden on all respondents. No
significant burden is expected for small agencies beyond providing
their contracted vendor with a monthly file of patients served.
Initially, we estimate it will take one HHA 5 hours for the first
month to meet this requirement. The subsequent monthly burden is
estimated to be 30 minutes per HHA. We estimate approximately 7,000
HHAs will be submitting this data annually. Based on that number, the
burden associated with the first month is estimated at 35,000 hours.
The burden will decrease to 2,100 for subsequent months. Therefore, the
total annual burden for the first year will total 58,100.
The burden associated with the home health patient's submission of
the HHCAHPS survey is currently pending OMB approval (CMS-10275/
OMB 0938-NEW). Once OMB approval has been obtained, we will
revise the package to include the burden on the HHAs as discussed
above.
Comment: Two commenters wrote that the time and burden estimates
presented in section IV of the proposed rule were underestimated. One
noted that these regulations would increase costs of operation. For
section IV.E on the HHCAHPS, one commenter wrote that time and burden
were severely underestimated as HHAs must implement both procedural and
technological changes which are not included in the estimates.
Response: In the beginning, it will take HHAs a little time to set
up their files to retrieve the needed patient information on a monthly
basis for their respective survey vendors. However, from several years
of experience with Hospital CAHPS, we have observed that the
participating hospitals are able to deliver their monthly files to
their respective survey vendors with minimal effort. Regarding section
IV.E of the Information Collections Requirements, CMS is adopting three
changes to the proposed HHCAHPS implementation that may alleviate some
of the ``burden'': (1) Delayed HHCAHPS linkage to CY 2012 payment and
not to CY 2011 payment; (2) the eligible patient list that HHAs need to
give to their survey vendors include only Medicare and/or Medicaid
patients; (3) HHAs may give V Codes to their survey vendors if ICD-9
codes are unavailable; (4) HHAs will have the opportunity to
voluntarily implement HHCAHPS for a year (October 2009 through
September 2010) for ``practicing'' the implementation procedures before
data collection ``counts'' toward an annual payment update.
V. Regulatory Impact Analysis
A. Overall Impact
We have examined the impacts of this final rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993) the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L.
96-354), section 1102(b) of the Social Security Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order
13132 on Federalism (August 4, 1999) and the Congressional Review Act
(5 U.S.C. 804(2)).
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for rules with economically significant
effects ($100 million or more in any 1 year). We estimate that this
rulemaking is ``economically significant'' as measured by the $100
million threshold and hence also a major rule under the Congressional
Review Act. Accordingly, we have prepared a Regulatory Impact Analysis,
which to the best of our ability, presents the costs and benefits of
the rulemaking.
1. HHA Provisions Regarding Ownership Changes and Reactivation of
Billing Privileges
For the proposed rule, we estimated that a total of 2,000
deactivated HHAs and 2,000 HHAs undergoing a change of ownership may be
affected annually by our proposed payment safeguard provisions. Yet we
believe that the actual budgetary impact will be minimal, as these
estimated figures were very high-end estimates and were used so as not
to underestimate the potential burden on HHAs. The reality is that the
annual number of deactivated HHAs that will seek to reactivate their
billing privileges will very likely be substantially less than 2,000.
This is primarily because the requirements in 42 CFR 424.540(b)(3)(i)
will encourage some deactivated HHAs to remain in a deactivated status
rather than undergo a State survey, especially if they plan to only
infrequently bill Medicare after the reactivation of their Medicare
billing privileges. It is for this same reason that we believe that the
number of ownership changes will be less than 2,000. Some entities and
individuals
[[Page 58127]]
may be reluctant to sell or buy a Medicare-enrolled HHA if they know
that the HHA will first have to undergo an initial Medicare enrollment
and survey. While it is not possible for us to place a precise figure
on the number of HHAs that will forgo reactivation or an ownership
change due to the survey requirement, we do believe that it will be
significant enough to mitigate the overall budgetary impact.
Moreover, and as previously stated, we believe that these changes
are necessary to ensure that currently enrolled and prospective HHAs
are billing for the services provided and are in compliance with the
conditions of participation in 42 CFR Part 484, and all other Medicare
requirements.
As for the issue of beneficiary access, the number of affected HHAs
is such that we do not believe that beneficiaries will be adversely
impacted by these provisions. To the contrary, any reduction in the
number of enrolled HHAs that will result from the implementation of
these provisions will be more than offset by the assurance that those
HHAs that cannot meet Medicare requirements and quality standards are
no longer in the program.
We are unable to determine the exact extent to which currently
enrolled and prospective HHAs would be able to meet the requirements
outlined in the provisions. In addition, as a result of a dearth of
quantifiable data, we cannot effectively derive an estimate of the
monetary impacts of these provisions. Accordingly, we are seeking
public comment so that the public may provide any data available that
provides a calculable impact or any alternative to these provisions.
2. CY 2010 Update
The update set forth in this rule applies to Medicare payments
under HH PPS in CY 2010. Accordingly, the following analysis describes
the impact in CY 2010 only. We estimate that the net impact of the
proposals in this rule, including a 2.75 percent reduction to the
national standardized 60-day episode payment rates and the NRS
conversion factor to account for the case-mix change adjustment, is
approximately $140 million in CY 2010 savings. The estimated $140
million impact reflects the distributional effects of an updated wage
index (-$10 million) as well as the final 2.0 percent home health
market basket increase (an additional $350 million in CY 2010
expenditures attributable only to the CY 2010 home health market
basket), and the 2.75 percent decrease (-$480 million for the third
year of a 4-year phase-in) to the HH PPS national standardized 60-day
episode rates and the NRS conversion factors to account for the case-
mix change adjustment under the HH PPS. The $140 million is reflected
in column 5 of Table 7 as a 1.03 percent decrease in expenditures when
comparing the current CY 2009 system to the CY 2010 system.
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Most hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of $7 million to $34.5 million in any 1 year. For the purposes
of the RFA, approximately 75 percent of HHAs are considered to small
businesses according to the Small Business Administration's size
standards with total revenues of $13.5 million or less in any 1 year.
Individuals and States are not included in the definition of a small
entity. Excluding HHAs in areas of the country where high and suspect
outlier payments exist, this rule is estimated to have an overall
positive effect upon small entities (see section V.B ``Anticipated
Effects'', of this final rule, for supporting analysis).
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis, if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. This rule applies to home
health agencies. Therefore, the Secretary has determined that this rule
will not have a significant economic impact on the operations of a
substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of about
$100 million or more in 1995 dollars, updated for inflation. That
threshold is currently approximately $133 million in 2009. This final
rule is not anticipated to have an effect on State, local, or tribal
governments, in the aggregate, or by the private sector, of $133
million or more.
Executive Order 13132 established certain requirements that an
agency must meet when it promulgates a final rule that imposes
substantial direct requirement costs on State and local governments,
preempts State law, or otherwise has Federalism implications. We have
reviewed this final rule under the threshold criteria of Executive
Order 13132, Federalism, and have determined that it will not have
substantial direct effects on the rights, roles, and responsibilities
of States, local, or tribal governments.
B. Anticipated Effects
This final rule sets forth updates to the HH PPS rates contained in
the CY 2009 notice (73 FR 65351, November 3, 2008). The impact analysis
of this final rule presents the estimated expenditure effects of policy
changes in this rule. We use the latest data and best analysis
available, but we do not make adjustments for future changes in such
variables as number of visits or case-mix.
This analysis incorporates the latest estimates of growth in
service use and payments under the Medicare home health benefit, based
on Medicare claims from 2007. We note that certain events may combine
to limit the scope or accuracy of our impact analysis, because such an
analysis is future-oriented and, thus, susceptible to errors resulting
from other changes in the impact time period assessed. Some examples of
such possible events are newly-legislated general Medicare program
funding changes made by the Congress, or changes specifically related
to HHAs. In addition, changes to the Medicare program may continue to
be made as a result of the BBA, the BBRA, the Medicare, Medicaid, and
SCHIP Benefits Improvement and Protection Act of 2000, the MMA, the
DRA, MIPPA, ARRA, or new statutory provisions. Although these changes
may not be specific to the HH PPS, the nature of the Medicare program
is such that the changes may interact, and the complexity of the
interaction of these changes could make it difficult to predict
accurately the full scope of the impact upon HHAs.
Table 7 represents how home health agency revenues are likely to be
affected by the policy changes described in this rule. For this
analysis, we used linked home health claims and OASIS assessments; the
claims represented a 20-percent sample of 60-day episodes occurring in
CY 2007. Column one of this table classifies HHAs according to a number
of characteristics including provider type, geographic region, and
urban versus rural location.
For the purposes of analyzing impacts on payments, we performed
three simulations and compared them to each other. Based on our
assumption that
[[Page 58128]]
outliers, as a percentage of total HH PPS payments, will be no more
than 5 percent in CY 2009, the 2009 baseline, for the purposes of these
simulations, we assumed that the full 5 percent outlay for outliers
will be paid under our policy in 2009 of a 0.89 FDL ratio. As described
in section III.A. of this final rule, given our CY 2010 policies of a
0.67 FDL ratio and a 10 percent cap on outlier payments, we will return
2.5 percent back into the national standardized 60-day episode payment
rates, the national per-visit rates, the LUPA add-on payment amount,
and the NRS conversion factor, and then estimate outlier payments to be
approximately 2.5 percent of total HH PPS payments in CY 2010. All
three simulations use a CBSA-based wage index reported on the 2007
claims to determine the appropriate wage index.
The first simulation estimates CY 2009 payments under the current
system (to include the 2009 wage index). The second simulation
estimates CY 2009 payments under the current system, but with the 2010
wage index. The second simulation produces an estimate of what total
payments using the sample data will have been in CY 2009 without any of
the provisions in this rule, except for that of the 2010 wage index.
The third simulation estimates CY 2010 payments with the 2010 wage
index, incorporating our maintaining of the 2.75 percent reduction to
the HH PPS rates, as well as all the provisions of this rule.
These simulations demonstrate the effects of: a new 2010 wage
index, a 2.75 percent reduction to account for the increase in nominal
case-mix, a 2.0 percent market basket update, a 2.5 percent increase to
account for a new outlier target of 2.5 percent, a 0.67 FDL ratio, and
a 10 percent cap on outlier payments. Specifically, the second column
of Table 7 shows the percent change due to the effects of the 2010 wage
index. The third column of Table 7 shows the percent change due to the
combined effects of the 2010 wage index, our maintaining of a 2.75
percent reductions to the rates to account for the increase in nominal
case-mix, the 2.0 percent home health market basket update, the 2.5
percent increase to the HH PPS rates to account for an approximate 2.5
percent target for outliers as a percentage of total HH PPS payments, a
0.67 FDL ratio, and a 10 percent outlier cap.
The overall percentage change, for all HHAs, in estimated total
payments from CY 2009 to CY 2010 is a decrease of approximately 1.03
percent. Rural HHAs, however, are estimated to see an increase in
payments from CY 2009 to CY 2010 of about 3.27 percent. On the other
hand, urban HHAs are expected to see a decrease of approximately 1.81
percent in payments from CY 2009 to CY 2010.
Voluntary non-profit HHAs (3.36 percent), facility-based HHAs (3.72
percent), and government owned HHAs (2.94 percent) are estimated to see
an increase in the percentage change in estimated total payments from
CY 2009 to CY 2010. Proprietary and freestanding HHAs, on the other
hand, are estimated to see decreases of 3.32 percent and 1.90 percent,
respectively, in estimated total payments from CY 2009 to CY 2010.
Freestanding HHAs, broken out, show that voluntary non-profit and
governmental HHAs are estimated to see increases of 3.47 percent and
3.48 percent, respectively, in estimated total payments from CY 2009 to
CY 2010.
HHAs in the North and Midwest regions are expected to experience a
percentage change increase in the estimated total payments from CY 2009
to CY 2010 of 3.66 percent and 3.48 percent, respectively. HHAs in the
South and West regions of the country are estimated to experience
decreases in the percentage change in estimated total payments from CY
2009 to CY 2010 of 4.19 percent and 1.70 percent. We believe that the
major contributors to the estimated decreases in payments in these
areas of the country are those with high and suspect outlier payments.
Breaking this down even further, it is estimated that New England,
Mid Atlantic, East South Central, East North Central, West North
Central, and Mountain area HHAs are all expected to experience
increases in their payments in CY 2010 ranging from almost 2 percent to
almost 5 percent. Conversely, South Atlantic and Pacific HHAs are
expected to experience decreases, 11.84 percent and 3.09 percent
respectively, in the percentage change in estimated total payments from
CY 2009 to CY 2010. Again, we believe that the major contributors to
the estimated decreases in payments in these areas of the country are
those with high and suspect outlier payments.
The last section of Table 7 shows the percentage change in payments
by agency size, as determined by the number of first episodes. The
agency size categories, for this rule, are based on the number of first
episodes in a random 20 percent beneficiary sample of CY 2007 claims
data. Initial episodes, under the HH PPS, are defined as the first
episode in a series of adjacent episodes (contiguous episodes that are
separated by no more than a 60-day period between episodes) for a given
beneficiary. Initial, or first, episodes are a good estimate of agency
size, because this method approximates the number of admissions
experienced by the agency based on approximately one-fifth of the total
annual data. The size categories were set to have roughly equal numbers
of agencies, except that the highest category has somewhat more
agencies because added detail amongst the large size category was not
needed. As such, the size categories for these impact analyses are:
less than 19 first episodes, 20 to 49 first episodes, 50 to 99 first
episodes, 100 to 199 first episodes, and 200 or more first episodes.
Larger HHAs (those with 200 or more Medicare home health initial
episodes per year) are estimated to experience an increase in payments
from CY 2009 to CY 2010 of approximately 2.27 percent. Mid-size to
small agencies are expected to see a decrease in their payments in CY
2010, ranging from 1.95 percent to 16.08 percent. However, we believe
that the major contributors to the estimated decreases in payments for
mid-size to small agencies are those agencies in areas of the country
with high and suspect outlier payments. Consequently, as we did in the
proposed rule, we have provided a more detailed discussion, and
analysis in Table 8 below, that demonstrates where, in the country,
these estimated large decreases for mid-size to small agencies are
occurring.
BILLING CODE 4120-01-P
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BILLING CODE 4120-01-C
Given the overall large negative impact observed by smaller
agencies, we performed more detailed analysis targeted at identifying
where the large negative impacts were occurring. Table 8 below presents
the results of the regional analysis for small agencies. Column 1, of
Table 8, shows the regional and agency size classifications similar to
those in Table 7. In column 2 we repeat the overall impacts (from Table
7) for those classifications. In columns 3 through 7, we drill down in
our analysis, looking at those classifications by the size of the
agency (as defined by the number of first episodes). It is clear from
this analysis that, for smaller agencies, the vast majority of the
negative impact is occurring in areas of the country (such as the South
and South Atlantic) where there exist high and suspect outlier
payments. Specifically, in columns 3, 4, and 5 of Table 8, for the
South Atlantic area of the country (which includes Miami-Dade,
Florida), the negative percentage impacts in payment ranging from
around 40 percent to just over 53 percent are evidence that it is the
high and suspect outlier payments in areas such as this, that are
skewing the results of the overall impact analysis. Estimated impacts
for small agencies in the South (negative impacts ranging around 15
percent to 22 percent) and the Pacific (negative impacts ranging from
around 12 percent to 17 percent) areas of the country, reflect similar
results. Conversely, small HHAs in most other parts of the country are
estimated to see increases in payments in CY 2010, ranging from 0.20
percent to almost 5 percent. Consequently, we believe that small HHAs
without high and suspect outlier payments, on average, will see a
positive impact on their payments in CY 2010. We do not believe there
will be any significant impact on beneficiaries, as a result of the
provisions of this rule. Areas where negative impacts have been
estimated for HHAs, are primarily urban, and thus we believe that
beneficiaries have a reasonable pool of HHAs from which to receive home
health services.
[[Page 58132]]
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C. Accounting Statement and Table
Whenever a rule is considered a significant rule under Executive
Order 12866, we are required to develop an Accounting Statement showing
the classification of the expenditures associated with the provisions
of this rule.
Table 9, below provides our best estimate of the decrease in
Medicare payments under the HH PPS as a result of the changes presented
in this rule based on the best available data. The expenditures are
classified as a transfer to the Federal Government of $140 million.
Table 9--Accounting Statement: Classification of Estimated Expenditures,
From the 2009 HH PPS Calendar Year to the 2010 HH PPS Calendar Year
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers......... Negative transfer--Estimated
decrease in expenditures: $140
million.
From Whom to Whom...................... Federal Government to HH
Providers.
------------------------------------------------------------------------
D. Conclusion
In conclusion, we estimate that the net impact of the proposals in
this rule, including a 2.75 percent reduction to the national
standardized 60-day episode rates and the NRS conversion factor to
account for the case-mix change adjustment, is approximately $140
million in CY 2010 savings. The $140 million impact reflects the
distributional effects of an updated wage index (-$10 million) as well
as the final 2.0 percent home health market basket increase (an
additional $350 million in CY 2010 expenditures attributable only to
the CY 2010 home
[[Page 58133]]
health market basket), and the 2.75 percent decrease (-$480 million for
the third year of a 4-year phase-in) to the national standardized 60-
day episode rates and the NRS conversion factor to account for the
case-mix change adjustment under the HH PPS. This analysis above,
together with the remainder of this preamble, provides a Regulatory
Impact Analysis.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 409
Health facilities, Medicare.
42 CFR Part 424
Emergency medical services, Health facilities, Health professions,
Medicare, Reporting and recordkeeping requirements.
42 CFR Part 484
Health facilities, Health professions, Medicare, Reporting and
recordkeeping requirements.
0
For the reasons set forth in the preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR chapter IV as set forth below:
PART 409--HOSPITAL INSURANCE BENEFITS
0
1. The authority citation for part 409 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
2. Section 409.42 is amended by revising paragraph (c)(1) to read as
follows:
Sec. 409.42 Beneficiary qualifications for coverage of services.
* * * * *
(c) * * *
(1) Intermittent skilled nursing services that meet the criteria
for skilled services and the need for skilled services found in Sec.
409.32. (Also see Sec. 409.33(a) and (b) for a description of examples
of skilled nursing and rehabilitation services.) These criteria are
subject to the following limitations in the home health setting:
(i) In the home health setting, management and evaluation of a
patient care plan is considered a reasonable and necessary skilled
service when underlying conditions or complications are such that only
a registered nurse can ensure that essential non-skilled care is
achieving its purpose. To be considered a skilled service, the
complexity of the necessary unskilled services that are a necessary
part of the medical treatment must require the involvement of licensed
nurses to promote the patient's recovery and medical safety in view of
the overall condition. Where nursing visits are not needed to observe
and assess the effects of the non-skilled services being provided to
treat the illness or injury, skilled nursing care would not be
considered reasonable and necessary, and the management and evaluation
of the care plan would not be considered a skilled service. In some
cases, the condition of the patient may cause a service that would
originally be considered unskilled to be considered a skilled nursing
service. This would occur when the patient's underlying condition or
complication requires that only a registered nurse can ensure that
essential non-skilled care is achieving its purpose. The registered
nurse is ensuring that service is safely and effectively performed.
However, a service is not considered a skilled nursing service merely
because it is performed by or under the supervision of a licensed
nurse. Where a service can be safely and effectively performed (or self
administered) by non-licensed staff without the direct supervision of a
nurse, the service cannot be regarded as a skilled service even if a
nurse actually provides the service.
(ii) In the home health setting, skilled education services are no
longer needed if it becomes apparent, after a reasonable period of
time, that the patient, family, or caregiver could not or would not be
trained. Further teaching and training would cease to be reasonable and
necessary in this case, and would cease to be considered a skilled
service. Notwithstanding that the teaching or training was
unsuccessful, the services for teaching and training would be
considered to be reasonable and necessary prior to the point that it
became apparent that the teaching or training was unsuccessful, as long
as such services were appropriate to the patient's illness, functional
loss, or injury.
* * * * *
0
3. Section 409.43 is amended by revising paragraph (e)(1)(ii) to read
as follows:
Sec. 409.43 Plan of care requirements.
* * * * *
(e) * * *
(1) * * *
(ii) Significant change in condition; or
* * * * *
0
4. Section 409.44 is amended by revising the introductory text of
paragraph (b)(1) to read as follows:
Sec. 409.44 Skilled services requirements.
* * * * *
(b) * * *
(1) Skilled nursing care consists of those services that must,
under State law, be performed by a registered nurse, or practical
(vocational) nurse, as defined in Sec. 484.4 of this chapter, meet the
criteria for skilled nursing services specified in Sec. 409.32, and
meet the qualifications for coverage of skilled services specified in
Sec. 409.42(c). See Sec. 409.33(a) and (b) for a description of
skilled nursing services and examples of them.
* * * * *
PART 424--CONDITIONS FOR MEDICARE PAYMENT
0
5. The authority citation for part 424 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
6. Section 424.22 is amended as follows:
0
A. Revising paragraph (a)(1)(i);
0
B. Revising paragraph (b)(2).
Sec. 424.22 Requirements for home health services.
(a) * * *
(1) * * *
(i) The individual needs or needed intermittent skilled nursing
care, or physical or speech therapy, or (for the period from July
through November 30, 1981) occupational therapy. If a patient's
underlying condition or complication requires a registered nurse to
ensure that essential non-skilled care is achieving its purpose, and
necessitates a registered nurse be involved in the development,
management, and evaluation of a patient's care plan, the physician will
include a brief narrative describing the clinical justification of this
need. If the narrative is part of the certification or recertification
form, then the narrative must be located immediately prior to the
physician's signature. If the narrative exists as an addendum to the
certification or recertification form, in addition to the physician's
signature on the certification or recertification form, the physician
must sign immediately following the narrative in the addendum.
* * * * *
(b) * * *
(2) Content and basis of recertification. The recertification
statement must indicate the continuing need for services and estimate
how much longer the services will be required. Need for occupational
therapy
[[Page 58134]]
may be the basis for continuing services that were initiated because
the individual needed skilled nursing care or physical therapy or
speech therapy. If a patient's underlying condition or complication
requires a registered nurse to ensure that essential non-skilled care
is achieving its purpose, and necessitates a registered nurse be
involved in the development, management, and evaluation of a patient's
care plan, the physician will include a brief narrative describing the
clinical justification of this need. If the narrative is part of the
certification or recertification form, then the narrative must be
located immediately prior to the physician's signature. If the
narrative exists as an addendum to the certification or recertification
form, in addition to the physician's signature on the certification or
recertification form, the physician must sign immediately following the
narrative in the addendum.
* * * * *
0
7. Section 424.540 is amended by revising paragraph (b)(3) to read as
follows:
Sec. 424.540 Deactivation of Medicare billing privileges.
* * * * *
(b) * * *
(3) Except as provided in paragraph (b)(3)(i) of this section,
reactivation of Medicare billing privileges does not require a new
certification of the provider or supplier by the State survey agency or
the establishment of a new provider agreement.
(i) An HHA whose Medicare billing privileges are deactivated under
the provisions found at paragraph (a) of this section must obtain an
initial State survey or accreditation by an approved accreditation
organization before its Medicare billing privileges can be reactivated.
(ii) [Reserved]
* * * * *
0
8. Section 424.550 is amended by adding paragraph (b)(1) and adding and
reserving paragraph (b)(2), to read as follows:
Sec. 424.550 Prohibitions on the sale or transfer of billing
privileges.
* * * * *
(b) * * *
(1) If an owner of a home health agency sells (including asset
sales or stock transfers), transfers or relinquishes ownership of the
HHA within 36 months after the effective date of the HHA's enrollment
in Medicare, the provider agreement and Medicare billing privileges do
not convey to the new owner. The prospective provider/owner of the HHA
must instead:
(i) Enroll in the Medicare program as a new HHA under the
provisions of Sec. 424.510, and
(ii) Obtain a State survey or an accreditation from an approved
accreditation organization.
(2) [Reserved]
* * * * *
PART 484--HOME HEALTH SERVICES
0
9. The authority citation for part 484 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395(hh)).
Subpart C--Furnishing of Services
0
10. Section 484.55 is amended by revising paragraph (d)(1)(ii) to read
as follows:
Sec. 484.55 Condition of participation: Comprehensive assessment of
patients.
* * * * *
(d) * * *
(1) * * *
(i) * * *
(ii) Significant change in condition; or
* * * * *
Subpart E--Prospective Payment System for Home Health Agencies
0
11. Section 484.210 is amended by revising paragraph (e) to read as
follows:
Sec. 484.210 Data used for the calculation of the national
prospective 60-day episode payment.
* * * * *
(e) OASIS assessment data and other data that account for the
relative resource utilization for different HHA Medicare patient case-
mix. An HHA must submit to CMS the OASIS data described at Sec.
484.55(b)(1) and (d)(1) in order for CMS to administer the payment rate
methodologies described in Sec. Sec. 484.215, 484.230 and 484.235.
0
12. Revise Sec. 484.250 to read as follows:
Sec. 484.250 Patient assessment data.
An HHA must submit to CMS the OASIS data described at Sec.
484.55(b)(1) and (d)(1) in order for CMS to administer the payment rate
methodologies described in Sec. Sec. 484.215, 484.230, and 484.235.
Authority: (Catalog of Federal Domestic Assistance Program No.
93.773, Medicare--Hospital Insurance; and Program No. 93.774,
Medicare--Supplementary Medical Insurance Program)
Dated: October 15, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: October 29, 2009.
Kathleen Sebelius,
Secretary.
Note: The following addenda will not be published in the Code
of Federal Regulations.
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[FR Doc. E9-26503 Filed 10-30-09; 4:15 pm]
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