2016 Final Home Health Rule

2016 will turn into a very memorable year for many agency owners, administrators and employees.  The overall cut next year to home health agencies likes yours will total $260 million.  Case Mix Weights for 2016 will not have significant changes like you experienced in 2015. Additional adjustments will be made to LUPA rates and non-routine medical supplies.


The case mix adjustment for 2016 will be felt in 2017 and 2018 as well.  For the next three years, a reduction of .97% will be applied to PPS rates.  The result is a negative adjustment reduction in episodic base rate to $80.95 in 2016.  The net market basket update is 2.3% before the multifactor productivity adjustment of .4%.


Also not changing greatly from 2015 will be the wage index factors.  Slight changes will occur, but huge increases or decreases will not happen.  This is one nice thing that CMS has decided to do for agencies.


9 States be ready for Value Based Purchasing


CMS also finalized the Value Based Purchasing (VBP) model that will effect agencies in 9 states.  For these 9 states (Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, and Tennessee) 2016 will be the first year that data is collected so that quality ratings can be tied to how much an agency is reimbursed.  Agencies in these nine states cannot opt-out of participating in the VBP reimbursement model.


The first few years of the VBP model will be data collection. The full impact of this ‘experiment’ will occur in 2018 when agencies’ reimbursement will either be decreased or increased by 3%.  This reduction or incentive will be based on 10 outcome measures, 6 process measures, 5 HHCAHPS measures and 3 new measures. CMS had originally planned for 29 measures instead of the finalized 24 measures.


8 of the 10 outcome measures come from OASIS data.  The other two outcome measures are taken from claims and are based on unplanned hospitalization during the first episode (60 days) and emergency department usage without hospital admissions.  All 6 process measures come directly from OASIS data.


Home health patient satisfaction survey results are becoming increasingly important.  As 5 measures are coming directly from the opinions of your patients, the need to look at home heath as an actual service to patients versus a smash and grab from the federal government must now be a reality (we all know there are certain agencies that are more interested in money than the actual care a patient receives).  The care a patient receives, the communication your staff provide to patients, how well specific care issues are handled, your overall care of the patient, and recommendation of your agency to someone else are all included.


New measures from which data will be used to factor an increase or decrease include:

  • Flu Vaccination Coverage for Home Health Staff.
  • Reporting if the patient has ever received the Shingles vaccination.
  • Advanced Care Plan.

Agencies must also report this information through a web portal that is to be introduced no later than October 7, 2016 for the third quarter of 2016 and every quarter thereafter.


Overall, it looks as though CMS continues its coddling of home health for 2016.  The target is still on your agency and will be well into the future with the current reforms put in place under ObamaCare.  Let us not forget that all the lobbying efforts and membership dues paid to certain national organizations continue to pay off very well for an industry that provides critical care in a cost effective manner.  Think about this when you get your 2016 renewal form – can your agency really afford to support an organization that was so excited for a law and healthcare model that could force your agency to close?