CMS PROPOSES 2.5 PERCENT INCREASE IN MEDICARE HOME HEALTH PAYMENT RATES
The Centers for Medicare & Medicaid Services (CMS) today announced a 2.5 percent increase in Medicare payment rates to home health agencies for 2005. The increase would bring an extra $270 million in payments to home health agencies next year.
"For millions of Medicare beneficiaries, reliable, high-quality home health care means the difference between dependence and independence," Mark B. McClellan, M.D., Ph.D, Administrator of the Centers for Medicare & Medicaid Services, said today. "This payment increase helps ensure that beneficiaries have access to the quality home health services that they need."
CMS is also proposing to rebase and revise the home health market basket to ensure it continues to adequately reflect the price of efficiently providing home health services to Medicare beneficiaries by 1) allowing the home health market basket to better track price changes experienced by home health agencies, and 2) reflecting changes in the mix of goods and services that home health agencies purchase in furnishing home health care.
"As a result of improvements in how payments are calculated, Medicare payments for home health services will more accurately reflect costs," said Dr. McClellan.
To qualify for Medicare home health visits, a Medicare beneficiary must be under the care of a physician, have an intermittent need for skilled nursing care, or need 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. These home health services, which in 2004 are expected to account for $10.7 billion in Medicare payments, often allow beneficiaries to avoid more costly inpatient care.
"Modern, high quality home health services often allow patients to leave a hospital more quickly and return to their families, and to avoid more expensive care in a nursing home," said Dr. McClellan. "Paying appropriately for home health services that help patients avoid more costly and less convenient alternatives is a high priority for Medicare. We are doing more than ever to help patients get high quality home health services."
Medicare pays home health agencies under a prospective payment system. The payment system was moved to a calendar year update cycle as a result of the provisions of the Medicare Modernization Act. Under the prospective payment system, Medicare 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.
In an effort to improve the quality of health care that elderly and disabled Americans receive from certified home health agencies, Medicare launched the Home Health Quality Initiative in November 2003. Consumers now have access to quality of care information as part of an ongoing national effort by Medicare to help consumers compare care among nursing homes, home health care agencies and hospitals. Working through its contract Quality Improvement Organizations, Medicare has trained 71% of the 7500 Medicare-certified home health agencies in outcomes-based quality improvement (OBQI).
Quality information and CMS’ proposed CY2005 update to the home health PPS rates are available at Medicare’s consumer web site, www.medicare.gov and through Medicare’s help line, 1-800-MEDICARE (1-800-633-4227).