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Medicare finalizes home health payments for 2014

Medicare finalizes home health payments for 2014
Changes promote lower costs for beneficiaries and taxpayers

The Centers for Medicare & Medicaid Services (CMS) today issued the final calendar year (CY) 2014 home health care payment rule.  The final policies in this rule better align Medicare payments with home health agencies’ costs providing care, while lowering costs to taxpayers and the 3.5 million Medicare beneficiaries who receive home health services nationwide.

The CY 2014 final rule reduces Medicare payments under the Home Health Prospective Payment System (HH PPS) by 1.05 percent. This amount reflects the combined effects of an increase in the home health payment update percentage of 2.3 percent, offset by a decrease of 2.7 percent—the result of rebasing the adjustments required by the Affordable Care Act—and a 0.6 percent decrease due to a refinement of the HH PPS Grouper.   

As required by the Affordable Care Act, CMS must begin phasing in rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit payment rates and the NRS conversion factor to reflect changes since the inception of the HH PPS, such as change in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other relevant factors.  Prior to the Affordable Care Act, rates were based on analyses of home health agency cost and service utilization data available in 2000, when the HH PPS originally was implemented.

“CMS is confident that Medicare beneficiaries will continue to receive quality home health services across the country under our final policies,” said CMS Principal Deputy Administrator Jonathan Blum.  “We will vigilantly monitor payment claims and other metrics to ensure that access remains strong as we phase-in this new payment adjustment.”  

The final rule adds two new quality measures, which will require HHAs to report unnecessary hospital readmission rates and preventable trips to the emergency room. These measures support critical reforms laid out in the Affordable Care Act.  The final rule reduces the number of home-health quality measures reported by home health agencies.  

For additional details on CMS-1450-F please see the fact sheet at:

For more information about the Home Health Prospective Payment System, visit:

The final rule [CMS-1450-F] can be viewed at: This link will change once the final rule is published in the Federal Register on December 2, 2013.