[Code of Federal Regulations]
[Title 12, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR484.215]

[Page 586-587]
 
                         TITLE 42--PUBLIC HEALTH
 
  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 
                 HEALTH AND HUMAN SERVICES--(Continued)
 
PART 484--HOME HEALTH SERVICES--Table of Contents
 
     Subpart E--Prospective Payment System for Home Health Agencies
 
Sec. 484.215  Initial establishment of the calculation of the national 60-day episode payment.

    (a) Determining an HHA's costs. In calculating the initial 
unadjusted national 60-day episode payment applicable for a service 
furnished by an HHA using data on the most recent available audited cost 
reports, CMS determines each HHA's costs by summing its allowable costs 
for the period. CMS determines the national mean cost per visit.
    (b) Determining HHA utilization. In calculating the initial 
unadjusted national 60-day episode payment, CMS determines the national 
mean utilization for each of the six disciplines using home health 
claims data.
    (c) Use of the market basket index. CMS uses the HHA market basket 
index to adjust the HHA cost data to reflect cost increases occurring 
between October 1, 1996 through September 30, 2001.
    (d) Calculation of the unadjusted national average prospective 
payment amount for the 60-day episode. CMS calculates the unadjusted 
national 60-day episode payment in the following manner:
    (1) By computing the mean national cost per visit.
    (2) By computing the national mean utilization for each discipline.
    (3) By multiplying the mean national cost per visit by the national 
mean utilization summed in the aggregate for the six disciplines.

[[Page 587]]

    (4) By adding to the amount derived in paragraph (d)(3) of this 
section, amounts for nonroutine medical supplies, an OASIS adjustment 
for estimated ongoing reporting costs, an OASIS adjustment for the one 
time implementation costs associated with assessment scheduling form 
changes and amounts for Part B therapies that could have been unbundled 
to Part B prior to October 1, 2000. The resulting amount is the 
unadjusted national 60-day episode rate.
    (e) Standardization of the data for variation in area wage levels 
and case-mix. CMS standardizes--
    (1) The cost data described in paragraph (a) of this section to 
remove the effects of geographic variation in wage levels and variation 
in case-mix;
    (2) The cost data for geographic variation in wage levels using the 
hospital wage index; and
    (3) The cost data for HHA variation in case-mix using the case-mix 
indices and other data that indicate HHA case-mix.