Policy Analysis: Home Care Agencies Could See Drop in 2014 Medicare Payments Per-episode payments would decrease under the proposed rates, but per-visit rates for SLPs would rise by 6 percent. Policy Analysis
Policy Analysis  |   September 01, 2013
Policy Analysis: Home Care Agencies Could See Drop in 2014 Medicare Payments
Author Notes
  • Mark Kander is ASHA director of health care regulatory analysis.
Article Information
Regulatory, Legislative & Advocacy / Policy Analysis
Policy Analysis   |   September 01, 2013
Policy Analysis: Home Care Agencies Could See Drop in 2014 Medicare Payments
The ASHA Leader, September 2013, Vol. 18, online only. doi:10.1044/leader.PA3.18092013.np
The ASHA Leader, September 2013, Vol. 18, online only. doi:10.1044/leader.PA3.18092013.np
Proposed 2014 Medicare rules for home health agencies would reduce the 60-day episode rate, increase the per-visit rate for fewer than five visits, remove two categories of diagnostic codes, and add two claims-based quality measures.
The Centers for Medicare and Medicaid Services released the 120-page proposed rule in July. After the public comment period, CMS will review feedback and announce a final rule before the end of 2013.
Home health agency payment rates include speech-language pathology services during renewable 60-day episodes under Medicare Part A.  Audiology services, which are not a core home health service, are billable separately under Part B.
Per-visit payment
If a patient requires fewer than five total home health agency visits in an episode of care, the episode payment is replaced by a fixed per-visit payment that is based on historic cost data for each discipline. The proposed 2014 per-visit rate for speech-language pathology is $144.03; the rate is $132.56 for physical therapy and $133.46 for occupational therapy (geographically adjusted). The proposed figures represent a 6 percent increase for each discipline, a much higher increase than in recent years.
Episode payment
In contrast, the proposal calls for an overall 1.5 percent reduction in the payment rate for 60-day episodes, to $2,860. The proposed base episode rate factors in a 2014 wage index and inflationary adjustments, but no longer includes non-routine medical supplies. The Affordable Care Act allows a reduction of up to 3.5 percent in the episodic rate every year from 2014 to 2017. CMS is implementing the maximum reduction for 2014 because of recent nationwide audits that revealed significantly over-reported costs, but other cost adjustments for inflation result in the average 1.5 percent reduction nationwide.
ICD codes
In preparation for the Oct. 1, 2014, implementation of the 10th edition of International Classification of Diseases, CMS reviewed current ICD-9 codes assigned to home health services, and grouped the codes into three categories: those to keep as a recognized condition for home health services, conditions that are too acute for home health treatment, and conditions that would not required home health intervention. CMS also eliminated codes for non-specific conditions and codes for "initial encounters" when the first encounter should have occurred in the hospital. None of the code changes is directly related to communication, speech or swallowing disorders that would affect SLPs performing home health services.
Quality measures
Home health agencies must continue to complete quality assessments to participate in Medicare. These tools include the Outcome Assessment Information Set Outcome and Assessment Information Set (OASIS, a tool that measures patient outcomes), claims data and patient experience care data. CMS is proposing the continued use of the OASIS and the addition of two claims-based measures: rehospitalization during the first 30 days of home care and emergency department use without hospital readmission during the first 30 days of home care. CMS would publish data from these measures on the Home Health Compare website. Finally, CMS proposes to report measures for the entire episode of care, instead of by the current reporting by length of episode.
In addition to these changes, the proposed rule summarizes an ongoing payment reform study. The study, required by the Affordable Care Act, is in response to concerns that some Medicare beneficiaries have no access to home health services and that the prospective payment system, which is based on per-episode reimbursement, may encourage home health agencies to adopt selective admission policies.
By law, the study must include a review of costs related to the provision of home health services to low-income beneficiaries and beneficiaries in medically underserved areas. An optional area of study is a review of the home health agency prospective payment system and the relationship between the patients' health condition severity and access to care. Analysis of data collected from surveys sent to agencies and physicians earlier this year will be included in the study.
ASHA will continue to inform members of Medicare and other health care policy changes through Headlines, Leader articles and webpage updates.
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September 2013
Volume 18, Issue 9