On July 5, 2011, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule which would decrease calendar year (CY) 2012 Home Health Prospective Payment System (HH PPS) rates by 3.35% or $640 million.   On July 5, CMS also released a proposed rule requiring face-to-face encounters for beneficiaries receiving Medicaid home health services but did not specify an effective date for the new requirement.  The Medicaid face-to-face encounter requirement would impose similar timing requirements as Medicare face-to-face encounters.

Effective January 1, 2012, The HH PPS proposed rule would update polices for the national standardized 60-day episode rates, the national per-visit rates, and the low utilization payment amount (LUPA), and outlier payments under the Medicare prospective payment system for home health agencies.   Section 3401 of the Patient Protection and Affordable Care Act (ACA) requires CMS to apply a 1% reduction to the CY 2012 market basket rate, making the net proposed market basket update 1.5% for CY 2012 (representing $290 million).  The proposed rule also reflects an updated wage index of $20 million.  In addition, the HH PPS proposed rule proposes a case mix adjustment of negative 5.06%, representing $950 million, to decrease overall Medicare payments by a total of 3.35% for CY 2012, which represents $640 million in savings to the Medicare program.

Comments to the proposed rules, which have not yet been published, are due to CMS within 60 days following publication in the Federal Register.  The rules are expected to be published on Tuesday, July 12, 2011.

To view the HH PPS proposed rule, click here.  To view the Medicaid face-to-face requirements for home health services proposed rule, click here.