The Center for Medicare and Medicaid Services (CMS) announced a new rate update to the Home Health Prospective Payment System to become effective on October 1, 2002, for Fiscal Year (FY) 2003.
The new rate of $2,159.39 for metropolitan areas and $2,375.33 for rural areas is scheduled and became effective on October 1, 2002.
The 2003 rate change is determined based on the 2002 rate of $2,274.17 (rural areas $2,159.39) minus 4.9%. The 4.9% reduction off the 2002 rates was arrived at based on legislative requirements for:
1. reduction of 15% in the "interim payment limits," which results in an actual reduction of 7%; and
2. increase of 2.1% based on the home health market basket increase of 3.2% minus 1.1%.
An additional 10% is added on for services provided in rural areas through April 1, 2003.
As of the writing of this article, the 15% cut was still being addressed by the home health industry and members of Congress who were campaigning to have the 15% cut eliminated. Strong support in Congress was evident. But if not passed by October 1, 2002, the cuts in the National Episode Rate mentioned above were slated to be in effect.
If the new PPS payment schedule is put into effect and Congress acts after the October 1, 2002, deadline to eliminate the scheduled 15% cut, CMS anticipates several ways in which agencies will be able to receive appropriate payments from CMS until a new valid PPS rate schedule can be published. What this complex process does, however, is make the agency financial operations complex and difficult.
As always, to understand the role that PPS plays in all aspects of agency operation is important for all staff. OASIS and Home Health Conditions of Participation remain the same for now. Therefore, completion of OASIS comprehensive assessments remains the cornerstone of PPS payments for home care. OASIS changes are being contemplated by CMS, as a result of industry and consumer feedback. The changes will attempt to simplify the assessment process, but the PPS items are anticipated to remain the same.
As always, change in a new process will no doubt occur. We in home care must continue to provide quality care by keeping abreast of current information and using that knowledge to maintain appropriate agency practices that enhance quality care and appropriate patient outcomes. As further changes occur, HHN will continue to provide updates on changes that may impact home health practice.
"Have you Mastered PPS?" was published in the May 2002 issue of HHN.Table 1 (pg. 809, top) shows the corrected HHRG rates and payment amounts based on the new National episode rate for FY 2003 which replaces Table 2 (pg. 314) of the article in the May issue. Agencies will still need to apply their individual applicable wage index for further definition of their rates.
In the same Federal Register notice, the LUPA rates are also changed. The policies governing the LUPA and outlier calculations are not changed. The new LUPA rates are adjusted in the same fashion as the HHRG rates. The new FY2003 LUPA per visit amounts are listed in Table 2 (pg. 809, bottom).