Value. Quality. Innovation.

Sign Up for Updates:

CMS finalizes 2015 payment cuts to home healthcare agencies

Published by Modern Healthcare
Paul Demko
October 31, 2014

Medicare payments to home healthcare providers will be reduced by $60 million, or 0.3%, in 2015, according to the CMS. The agency issued a final rule (PDF) Thursday detailing payment policies for agencies that care for homebound patients.

The reduction is part of a four-year phase-in of lower payment rates that was part of the Patient Protection and Affordable Care Act. Providers have warned that the cuts will result in sub-standard care for patients. The National Association for Homecare & Hospice calculated the reductions over four years at 14% and said that more than half of agencies will be paid less than the cost of care by 2017.

“Rebasing as instituted in the 2014 rule and further implemented by this (rule) will have the natural and foreseeable effect of eliminating access to care in much of the country,” wrote the trade association, in comments to the CMS.

But the CMS rejected those dire predictions. The agency cited data from the Medicare Payment Advisory Commission showing that profit margins for homecare providers are typically 12% or higher.

The changes affect 3.5 million Medicare beneficiaries who receive services from 12,000 agencies at an annual cost of $18 billion.

The CMS did back off on a proposal to require therapy reassessments every 14 days for home healthcare patients. In response to criticism, the agency decided that therapy reassessments will only be required every 30 days.

The rule also loosens rules for physician visits required to confirm the necessity of home health care. Currently, doctors are required to provide a written narrative of their visit documenting the need for services. Starting in 2015, they won't need to provide a narrative in order to validate the need for in-home services.

In comments to the agency, patient advocates praised that development and pushed for further changes. “We urge CMS to explore additional mechanisms to simplify this process, including permitting Nurse Practitioners and Physician Assistants working within their state's licensure requirements, to document the face-to-face visit,” wrote the Medicare Rights Center. “Current rules permit these non-physician practitioners to conduct the face-to-face assessment, but documentation must be done by a physician.”

Teresa Lee, executive director of the Alliance for Home Health Quality and Innovation, agreed with that request. “As a country, the big concern is that we're going to be facing an issue of workforce capacity,” Lee said. “In order to meet the needs of patients and the healthcare system we need to be enabling healthcare professionals like advanced-practice nurses and physician assistants to work at the top of their licenses.”