Home Health Prospective Payment System: Proposed Rules
On October 28, 1999, the Health Care Financing Administration (HCFA) published a proposed rule for home health care agencies in the Federal Register . The proposed rule establishes a new prospective payment system (PPS) for home health agencies participating in the Medicare program. Mandated by Congress in the Balanced Budget Act of 1997 (PL 105-33), the new PPS will take effect October 1, 2000. It will replace the controversial interim payment system that HCFA put in place in 1997 during the transition between the previously used cost-based system and the new PPS.
Under the home health care PPS, agencies will be paid under a complicated formula based on case-mix, or the severity of a patient's illness, for each 60 day episode of care. At the end of the first 60 day episode of care, the beneficiary's plan of care can be recertified and be renewed every 60 days as long as the beneficiary remains eligible for Medicare. Agencies would receive half of their payment at the beginning of the 60 day episode, helping to prevent cash-flow problems for providers, HCFA said. Medicare would require at least 5 visits to a beneficiary's home to receive the full 60 day payment but would provide funding for fewer visits under a different payment calculation. In addition rate adjustments could also be made if there is a significant change in the condition of the beneficiary during the 60 day period.
According to HCFA, the system could accommodate up to 80 possible combinations of case-mix groups based on three broad categories of clinical severity, functional status, and service intensity. Home health care providers will utilize the Outcome and Assessment Information Set (OASIS) as the data collection tool for beneficiary assessment and as the basis for the case-mix adjustment. The OASIS data will identify patient characteristics to predict resource use during the 60-day episode period. Area wage rate adjustments will also be made to the 60 day episode of care payment.
A home health PPS final rule is anticipated to be published in the Federal Register in July 2000 with full implementations scheduled for October 1, 2000. Public comments to HCFA on the proposed rule are due on December 27. Currently, ANA is in the process of analyzing the rule and its impact on home health care providers and will provide comments to HCFA.