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CMS Proposes 2.5% Increase in Medicare Home Health Payment Rates

The Centers for Medicare & Medicaid Services (CMS) announced their proposal of a 2.5% increase in Medicare payment rates to home health agencies for calendar year (CY) 2006. The increase would bring an extra $330 million in payments to home health agencies next year.

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Medicare pays home health agencies through a prospective payment system (PPS), which pays at higher rates to care for those beneficiaries with greater needs. Payment rates are based on relevant data from patient assessments conducted by clinicians, as already required for all Medicare-participating home health agencies.


"This payment increase will substantially help home health agencies to provide the best possible care to beneficiaries, especially a growing demand in rural communities," said Mark McClellan, MD, PhD, administrator of the CMS, which oversees the new payment system. "An important aspect of this payment system is to ensure beneficiaries have access to high-quality home health services."


Home health payment rates are updated annually by either the full home health market basket percentage, or by the home health market basket percentage as adjusted by Congress. CMS establishes the home health market basket index, which measures inflation in the prices of an appropriate mix of goods and services included in home health services. For CY 2006, the proposed estimated home health market basket percentage is 3.3. Section 701(b)(4) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 provided that updates for CY 2005 and CY 2006 will equal the applicable home health market basket percentage increase minus 0.8 percentage point.


CMS is also proposing to adopt revised Core-Based Statistical Area market-area definitions as announced by the Office of Management and Budget. These market-area definitions are used to set payment adjustments to reflect variation in costs across geographical areas. As part of this proposal, we estimate that rural home health agencies will experience a 0.7% increase in payments. Also, it is estimated that the combined effect of all changes in this proposed rule will result in a 3.5% increase to payments to rural home health agencies and a 2.3% increase in payments to urban home health agencies.


To qualify for Medicare home health visits, a beneficiary of Medicare must be under the care of a physician, have an intermittent need for skilled nursing care, or physical therapy, or speech therapy, or continue to need occupational therapy. The beneficiary must be homebound and receive home health services from a Medicare-approved home health agency.


Information regarding CMS' CY 2006 update to the home health PPS rates is available at Medicare's consumer Web site: and through Medicare's help line, 1-800-MEDICARE (1-800-633-4227).


Packaging Alert

The Food and Drug Administration has released this alert regarding a voluntary recall of the AccuSure insulin syringes that are 1 cc, 28 gauge, and 0.5 inch and were distributed between October 2004 and June 2005.

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The 1-cc syringes may be mislabeled as 1/2-cc syringes on the plastic inner wrap holding the 10 individual syringes. A patient or caregiver could inadvertently prepare an incorrect dose of insulin for administration.


The complete MedWatch 2005 Safety summary can be read at


Med Teaching 101

A recent study of four primary care practices revealed that nearly 1 in 7 adults did not know the indication for at least one of the prescription medications they were taking. The results found that 13% of those surveyed (616 patients) did not know the indications for their cardiovascular (12%), asthma (5%), or estrogen therapy (5%).


More details are found in "Understanding of drug indications by ambulatory care patients," by Persell et al. in the December 1, 2004 issue of American Journal of Health-Systems Pharmacy, 61, pp. 2523-2527.


New Renal Function Test Better at Predicting Cardiovascular Outcomes

Cystatin-C, a new blood test for kidney function, is a better indicator of death and cardiovascular risk among the elderly than the standard test of creatinine, according to a National Heart, Lung and Blood Institute (NHLBI) study published by the New England Journal of Medicine in the May 19 issue. This more sensitive test distinguishes those at low, medium, and high cardiovascular risk, which may enable earlier detection.


The study compared the two measures of kidney function, Cystatin-C and creatinine, as predictors of death from all causes, death from cardiovascular causes, and incidence of heart attack and stroke among 4,637 elderly participants in the study.


The 20% of the participants with the highest levels of Cystatin-C had twice the risk of death from all causes and death from cardiovascular disease, and a 50% higher risk of heart attack and stroke compared with those who had the lowest levels of Cystatin-C. In contrast, testing the same participants with creatinine detected a smaller high-risk group-approximately 10%. With Cystatin-C, investigators found that 60% had abnormal kidney function, putting them at medium or high risk for cardiovascular complications.


Additional information about cardiovascular disease and other NHLBI-supported research and educational programs is available online at the NHLBI Web site:


Improving End-of-Life Care for Nursing Home Residents

In the July 13 issue of the Journal of the American Medical Association, an intriguing study has implications for nurses. The study, led by Dr. David Casarett, director of the palliative care unit at the Philadelphia Veterans Affairs Medical Center, described the benefits of offering hospice care to nursing home residents.

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The study found that those choosing hospice care had fewer acute hospitalizations, were more likely to receive better pain management, and had lower rates of inappropriate medications, fewer acute care hospitalizations, and less use of physical restraints than those who do not receive hospice care. Families of those who chose hospice care rated the quality of end-of-life care higher-4.1 on a scale of 5, compared to 2.5 for those who did not.


Home health and hospice nurses can advocate for patients entering long-term care facilities and provide education to patients and their families to assist this passage into the last stage of their lives.


More information


To learn more about hospice care, visit the National Library of Medicine at


Source: Casarett, D., & Fine, P.G. (2005). Journal of the American Medical Association, July 13. Retrieved August 2, 2005 from