Federal Register: July 23, 2010 (Volume 75, Number 141)
DOCID: fr23jy10-36 FR Doc 2010-17753
DEPARTMENT OF HEALTH AND HUMAN SERVICES
CFR Citation: 42 CFR Parts 409, 418, 424, et al.
RIN ID: RIN 0938-AP88
CMS ID: [CMS-1510-P]
NOTICE: Part II
DOCUMENT ACTION: Proposed rule.
Medicare Program; Home Health Prospective Payment System Rate Update for Calendar Year 2011; Changes in Certification Requirements for Home Health Agencies and Hospices
DATES: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on September 14, 2010.
This proposed rule would set forth an update to the Home Health Prospective Payment System (HH PPS) rates, including: The national standardized 60day episode rates, the national pervisit rates, the nonroutine medical supply (NRS) conversion factors, and the low utilization payment amount (LUPA) addon payment amounts, under the Medicare prospective payment system for HHAs effective January 1, 2011. This rule also proposes to update the wage index used under the HH PPS and, in accordance with The Affordable Care Act of 2010 (The Affordable Care Act), Public Law 111148, to update the HH PPS outlier policy. In addition, this rule proposes changes to the home health agency (HHA) capitalization requirements. This rule further proposes to add clarifying language to the ``skilled services'' section. Finally, this rule incorporates new legislative requirements regarding facetoface encounters with providers related to home health and hospice care.
Health and Human Services Department, Centers for Medicare & Medicaid Services
Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http:// www.regulations.gov. Follow the search instructions on that Web site to view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. EST. To schedule an appointment to view public comments, phone 18007433951.
Table of Contents
A. Statutory Background
B. System for Payment of Home Health Services
C. Updates to the HH PPS
II. Provisions of the Proposed Regulation
A. CaseMix Measurement
B. Hypertension Diagnosis Coding Under the HHPPS
C. Therapy Coverage Requirements
D. Collecting Additional Claims Data for Future HH PPS Enhancements and Soliciting Comments on HH PPS Improvements
E. Outlier Policy
2. Regulatory Update
3. Statutory Update
4. Outlier Cap
5. Loss Sharing Ratio and Fixed Dollar Ratio
6. Solicitation of Comments Regarding Imputed Costs
F. Proposed CY 2011 Payment Update
1. Home Health Market Basket Update
2. Home Health Care Quality Improvement
b. Home Health Care CAHPS Survey (HH CAHPS)
3. Home Health Wage Index
4. Proposed CY 2011 Payment Update
a. National Standardized 60Day Episode Rate
b. Proposed Updated CY 2011 National Standardized 60Day Episode Payment Rate
c. Proposed National PerVisit Rates Used To Pay LUPA's and Compute Imputed Costs Used in Outlier Calculations
d. Proposed LUPA AddOn Payment Amount Update
e. NonRoutine Medical Supply Commission Factor Update
5. Rural AddOn
G. Enrollment Provisions for HHAs
1. HHA Capitalization
2. Change of Ownership
3. Change in Majority Ownership Within 36 Months of Initial Enrollment or Change in Ownership
H. Home Health FacetoFace Encounter
I. Solicitation of Comments: Future Plans To Group HH PPS Claims Centrally During Claims Processing
J. Proposed New Requirements Affecting Hospice Certifications and Recertification
III. Collection of Information Requirements
IV. Regulatory Impact Analysis
A. Statutory Background
The Balanced Budget Act of 1997 (BBA) (Pub. L. 10533) enacted on August 5, 1997, significantly changed the way Medicare pays for Medicare home health services. Section 4603 of the BBA mandated the development of the home health prospective payment system (HH PPS). Until the implementation of a HH PPS on October 1, 2000, home health agencies (HHAs) received payment under a retrospective reimbursement system.
Section 4603(a) of the BBA mandated the development of a HH PPS for all Medicarecovered home health services provided under a plan of care (POC) that were paid on a reasonable cost basis by adding section 1895 of the Social Security Act (the Act), entitled ``Prospective Payment for Home Health Services''. Section 1895(b)(1) of the Act requires the Secretary to establish a HH PPS for all costs of home health services paid under Medicare.
Section 1895(b)(3)(A) of the Act requires that: (1) The computation of a standard prospective payment amount include all costs for home health services covered and paid for on a reasonable cost basis and that such amounts be initially based on the most recent audited cost report data available to the Secretary, and (2) the standardized prospective payment amount be adjusted to account for the effects of casemix and wage level differences among HHAs.
Section 1895(b)(3)(B) of the Act addresses the annual update to the standard prospective payment amounts by the home health applicable percentage increase. Section 1895(b)(4) of the Act governs the payment computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act require the standard prospective payment amount to be adjusted for casemix and geographic differences in wage levels. Section 1895(b)(4)(B) of the Act requires the establishment of an appropriate casemix change adjustment factor that adjusts for significant variation in costs among different units of services.
Similarly, section 1895(b)(4)(C) of the Act requires the establishment of wage adjustment factors that reflect the relative level of wages, and wagerelated costs applicable to home health services furnished in a geographic area compared to the applicable national average level. Pursuant to 1895(b)(4)(C), the wageadjustment factors used by the Secretary may be the factors used under section 1886(d)(3)(E) of the Act.
Section 1895(b)(5) of the Act, as amended by Section 3131 of the Affordable Care Act signed by the President on March 23, 2010 (Pub. L. 111148), gives the Secretary the option to make additions or adjustments to the payment amount otherwise paid in the case of outliers because of unusual variations in the type or amount of medically necessary care. Section 3131(b) revised Section 1895(b)(5) so that total outlier payments in a given fiscal year (FY) or year may not exceed 2.5 percent of total payments projected or estimated.
In accordance with the statute, as amended by the BBA, we published a final rule (65 FR 41128) in the Federal Register on July 3, 2000, to implement the 1997 HH PPS legislation. The July 2000 final rule established requirements for the new HH PPS for home health services as required by section 4603 of the BBA, as subsequently amended by section 5101 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act (OCESAA) for Fiscal Year 1999 (Pub. L. 105277), enacted on October 21, 1998; and by sections 302, 305, and 306 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act (BBRA) of 1999 (Pub. L. 106113), enacted on November 29, 1999. The requirements include the implementation of a HH PPS for home health services, consolidated billing requirements, and a number of other related changes. The HH PPS described in that rule replaced the retrospective reasonable costbased system that was used by Medicare for the payment of home health services under Part A and Part B. For a complete and full description of the HH PPS as required by the BBA, see the July 2000 HH PPS final rule (65 FR 41128 through 41214).
On February 8, 2006, the Deficit Reduction Act of 2005 (Pub. L. 109171) (DRA) was enacted. Section 5201 of the DRA added new Section 1895(b)(3)(B)(v) to the Act, which requires HHAs to submit data for purposes of measuring health care quality, and links the quality data submission to payment. This requirement is applicable for CY 2007 and each subsequent year. If an HHA does not submit quality data, the home health market basket percentage increase is reduced 2 percentage points. In accordance with the statute, we published a final rule (71 FR 65884, 65935) in the Federal Register on November 9, 2006, to implement the payforreporting requirement of the DRA, which was codified at 42 CFR 484.225(h) and (i).
The Affordable Care Act made additional changes to the HH PPS. One of the changes in section 3131 of the Affordable Care Act is the amendment to section 421(a) of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 (Pub. L. 108173) as amended by section 5201(b) of the Deficit Reduction Act of 2005 (Pub. L. 109171). The amended section 421(a) of the MMA requires, for home health services furnished in a rural area (as defined in section 1886(d)(2)(D) of the Act) with respect to episodes and visits ending on or after April 1, 2010 and before January 1, 2016, that the Secretary increase by 3 percent the payment amount otherwise made under section 1895 of the Act.
B. System for Payment of Home Health Services
Generally, Medicare makes payment under the HH PPS on the basis of a national standardized 60day episode payment rate that is adjusted for the applicable casemix and wage index. The national standardized 60day episode rate includes the six home health disciplines (skilled nursing, home health aide, physical therapy, speechlanguage pathology, occupational therapy, and medical social services). Payment for non routine medical supplies (NRS) is no longer part of the national standardized 60day episode rate and is computed by multiplying the relative weight for a particular NRS severity level by the NRS conversion factor (See section III.C.4.e). Payment for durable medical equipment covered under the home health benefit is made outside the HH PPS payment. To adjust for casemix, the HH PPS uses a 153category casemix classification to assign patients to a home health resource group (HHRG). Clinical needs, functional status, and service utilization are computed from responses to selected data elements in the OASIS assessment instrument.
For episodes with four or fewer visits, Medicare pays on the basis of a national
pervisit rate by discipline; an episode consisting of four or fewer visits within a 60day period receives what is referred to as a low utilization payment adjustment (LUPA). Medicare also adjusts the national standardized 60day episode payment rate for certain intervening events that are subject to a partial episode payment adjustment (PEP adjustment). For certain cases that exceed a specific cost threshold, an outlier adjustment may also be available. C. Updates to the HH PPS
As required by section 1895(b)(3)(B) of the Act, we have historically updated the HH PPS rates annually in the Federal Register.
Our August 29, 2007 final rule with comment period set forth an update to the 60day national episode rates and the national pervisit rates under the Medicare prospective payment system for HHAs for CY 2008. For analysis performed on CY 2005 home health claims data indicated a 12.78 percent increase in the observed casemix since 2000. The casemix represented the variations in conditions of the patient population served by the HHAs. Then a more detailed analysis was performed on the 12.78 percent increase in casemix to see if any portion of that increase was associated with a real change in the actual clinical condition of home health patients. CMS examined data on demographics, family severity, and nonhome health Part A Medicare expenditure data to predict the average casemix weight for 2005. As a result of that analysis, CMS recognized that an 11.75 percent increase in casemix was due to changes in coding practices and documentation rather than to treatment of more resourceintensive patients.
To account for the changes in casemix that were not related to an underlying change in patient health status, CMS implemented a reduction over 4 years in the national standardized 60day episode payment rates and the NRS conversion factor. That reduction was to be taken at 2.75 percent per year for three years beginning in CY 2008 and at 2.71 percent for the fourth year in CY 2011. CMS indicated that it would continue to monitor for any further increase in casemix that was not related to a change in patient status, and would adjust the percentage reductions and/or implement further casemix change adjustments in the future.
Most recently, we published a final rule in the Federal Register on
November 10, 2009 (74 FR 58077) that set forth the update to the 60day
national episode rates and the national pervisit rates under the
Medicare prospective payment system for home health services for CY 2010.
II. Provisions of the Proposed Regulation
A. CaseMix Measurement
Since the HH PPS CY 2008 proposed rule, we have stated in HH PPS rulemaking that we would continue to monitor casemix changes in the HH PPS and to update our analysis to measure change in casemix, both nominal and real. We have continued to monitor casemix changes, and our latest analysis continues to support the payment adjustments which we implemented in the CY 2008 HH PPS. As discussed in the CY 2010 rule, the analysis then indicated a 15.03 percent increase in the overall observed casemix since 2000. We next determined what portion of that increase was associated with a real change in the actual clinical condition of home health patients.
As was done for the CY 2008 final rule, we used data from the pre PPS period to estimate a regressionbased, predictive model of individual casemix weights based on measures of patients' demographic characteristics, clinical status, inpatient history, and Medicare costs in the time period leading up to their home health episodes. The regression coefficients from this model were applied to later episodes, allowing estimation of how much of the change in observed casemix is attributable to changes in patient characteristics over time. We classify the sources of casemix change into two major types: predicted and unpredicted. Predicted (or real) change is based on the relationship between patient characteristics and casemix (that is coefficients from the regression model) and changes in the characteristics of patients over time (that is the change in mean values of the model covariates). Unpredicted (or nominal) change is the portion of casemix change that cannot be explained by changes in patient characteristics. Nominal casemix change is assumed to reflect differences over time in agency coding practices.
Our best estimate in the CY 2010 rule was that approximately 9.77 percent of the 15.03 percent increase in the overall observed casemix between the IPS baseline and 2007 was real, that is, due to actual changes in patient characteristics. Our estimate was that a 13.56 percent nominal increase (15.03(15.03 x 0.0977)) in casemix was due to changes in coding procedures and documentation rather than to treatment of more resourceintensive patients.
We have since updated that analysis to include an additional year of data (CY 2008) for this CY 2011 proposed rule. This analysis was based on regression coefficients from CY 2008 episodes that reflect the relationship between model covariates and casemix using the HHRG153 system. We used these regression coefficients combined with changes in patient characteristics to measure the amount of predicted case mix change for 2007 through 2008.
Our analyses indicate a 19.40 percent increase in the overall observed casemix since 2000. Our estimate is that approximately 10.07 percent of the total increase in the overall observed casemix between the IPS baseline and 2008 is real, that is, associated with actual changes in patient characteristics. Specifics regarding this analysis are described later in this section.
The estimate of real casemix change is a small proportion of the total change in case mix since the IPS baseline. With each successive sample, beginning with 2005 data (in the CY 2008 final rule), the predicted average national casemix weight has changed very little because the variables (such as preadmission location, nonhome health Part A Medicare expenditures, and inpatient stay classification, as mentioned above) in the model used to predict casemix are not changing much. At the same time, the actual average casemix has continued to grow steadily. Thus, the gap between the predicted casemix value, which is based on information external to the OASIS, and the actual casemix value, has increased with each successive year of data. Consequently, as a result of this analysis, we recognize that a 17.45 percent nominal increase (19.40 (19.40 x 0.1007)) in casemix is due to changes in coding practices and documentation rather than to treatment of more resourceintensive patients. This 17.45 percent increase in case mix reflects a much larger increase in nominal case mix from the IPS baseline to 2008 than had been previously been occurring under the HH PPS. Specifically, from 2000 to 2007, we observed about a 1 percent per year increase in total average casemix. However, that annual change increased to slightly more than 4 percent between 2007 and 2008.
We wanted to determine how this growth in casemix weight from 2007
to 2008 was affected by the changes implemented with the 2008
refinements. We identified these average casemix values by estimating
the average case mix weight on the 2007 claims of a random 20 percent
sample of HH beneficiaries. We used two groupersthe 80group 2007 grouper
(average = 1.2606) and the 153group 2008 grouper (average = 1.2552). The difference in averages was 0.0054, indicating that the changeover to the new 2008 grouper algorithm itself slightly reduced the average case mix weight.
Next, to assess behavioral changes which may have been incentivized by the 2008 refinements, we estimated the average case mix weights on both 2007 claims data and 2008 claims data for a random 20 percent sample of HH beneficiaries, using the 2008 grouper. (Only nonLUPA episodes are included in this analysis, as LUPA episodes are not paid using case mix weights.) We compared the resulting averages. The total change using the 2008 grouper was 0.0533: the 2007 average was 1.2552 and the 2008 average was 1.3085. It is important to note that this comparison of the 2007 and 2008 claims data uses the same grouper (the 153group system, which includes comorbid conditions), and that this estimate of national average casemix on the 2007 sample differs very little (that is .0054) from the estimate we derived from using the actual grouper in effect in 2007.
We decomposed the change in average casemix weight, 0.0533, into an effect of the 20072008 shift in the distribution of the number of therapy visits per episode, and an effect of the 20072008 change in the average casemix weight at each count of therapy visits in the distribution. The latter is assumed to result mostly from the incentives to report comorbid conditions, stemming from the introduction of the 153 group system.
The former is assumed to result mostly from a behavioral response on the part of agencies to the new system of therapy thresholds introduced in 2008. Prior to 2008, case mix weights were generally highest for episodes that met the single, 10visit therapy threshold. Under the system in place since 2008, multiple thresholds above and below 10 therapy visits were created. By creating multiple thresholds and severity steps between thresholds, we intended to move incentives away from paymentdriven therapy treatment plans to clinically driven ones. However, creating a new set of high therapy thresholds above 13 therapy visits, to adequately compensate agencies for treating the relatively few patients needing such large amounts of therapy, also may have had unintended consequences. One such consequence may have been that agencies responded by padding treatment plans to reach the new, higher thresholds. Episodes which would require such high numbers of therapy visits generally would have very high case mix weights (mostly weights of 2 or higher).
The decomposition method first holds the average case mix weight constant (at the 2007 values) at each level of therapy visits, and measures the effect of the shift to the new distribution of therapy visits. The method then holds the distribution of therapy visits constant (at the 2007 distribution) and measures the effect of the change in average case mix weight at each level of therapy visits. The results were that .0205, or 38 percent (.0205/.0533=.38), of the total change in average casemix weights from 2007 to 2008 was due to the shift in distribution of therapy visits per episode.
Figure 1 illustrates the 2007 through 2008 change in the proportion of episodes delivering each individual number of therapy visits. Several changes are notable. First, the percentage of episodes increased at the new, higher therapy visit thresholds (1419 and 20+). The share of episodes at 20 visits or more increased from 4.4 percent in 2007 to 5.3 percent in 2008, a substantial increase of about 20 percent. The large shift towards therapy visit levels of 14 and higher was unexpected.
Second, the percentage of episodes at the single therapy threshold
(10 visits) that existed before 2008 decreased, as did the percentage
of episodes between 11 and 13 therapy visits. In 2007, as a proportion
of all episodes with at least one therapy visit, episodes with 10 to 13
therapy visits were 32 percent; by 2008, only 21 percent of all therapy
episodes were in this range. (Note: Figure 1 displays percents of total
nonLUPA episodes, not just episodes with at least one therapy visit.)
Third, the proportion of episodes at the new threshold below 10 visits,
which is 6 visits, increased, as did the proportion of episodes with 7,
8, or 9 visits. The system of therapy steps we defined for the 2008
refinements included a step for 79 visits (see Table 4 of The August
29, 2007 final rule [72 FR 49762]). Finally, the proportion of total
episodes receiving any therapy visits increased slightly, from 54
percent to 55 percent. The average number of therapy visits per episode increased from 5.63 to 5.83 (data not shown).
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The remaining .0328, or 62 percent of the total change (.0328/.0533=.62) in overall average casemix weight from 2007 to 2008 was due to an increase in the average casemix weight at each level of therapy visits per episode. Table 1 shows the increases.
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The averages increased for all levels of therapy visits per episode, with the change ranging from 0.02 to 0.05. The percentage changes appear to decline with more therapy visits, because the level of the average case mix value increases with each number of therapy visits; however, there was no rising trend in the absolute change as the number of therapy visits increased.
Looking directly into the reporting of comorbidities, we examined the proportion of episodes that had nonblank diagnoses reported in M0240 (Diagnoses and Severity Index). Our concern was that agencies were reporting more comorbidities, since the refined system allocates case mix points for secondary diagnoses, whereas the system prior to the refinements did not. Longstanding OASIS manual language instructs providers to encode diagnosis on the OASIS only when the condition is unresolved and only when the condition has an impact on the home health care. The data comparing the percentages are shown in Table 2.
The results were a substantial increase in the percentage of episodes with a reported diagnosis code in M0240: A 10.4 percentage point increase from 20072008 in M0240d; a 16.4 percentage point increase in M0240e; and a 19.9 percentage point increase in M0240f. Table 2 also indicates that these changes represented a significantly larger increase in completion rates in these diagnosis fields compared to annual increases of about 3.0 percentage points in 20052006, and about 7.0 percentage points in 20062007. We note that we published the proposed refinements in the May 2007 Federal Register (72 FR 25356). Release of the proposal around midyear could have been a factor in the higher growth of these episodes during the period 2006 through 2007, relative to 2005 through 2006.
We believe it is unlikely that the actual disease burden of home
health patients, as indicated by reported comorbidities, changed so
dramatically in a single year; instead, we believe the incentives to
report more comorbidities under the refined case mix system are the reason for the large increases in reported comorbidities.
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An illustrative instance of diagnosis coding change under the HH PPS refinements is hypertension. Our analysis of 8 years of claims shows that reporting of this diagnosis grew exceedingly quickly in 2008. Table 3 shows the proportion of HH PPS claims reporting essential hypertension, according to ICD9CM hypertension code, for 2001 to 2008. The data indicate a sudden jump of approximately 12 percentage points in reporting of unspecified hypertension when the refined HH PPS added hypertension as a case mix code in 2008. Annual changes in use of this code were small up until 2005 (in the range of 0.1 to 2.4 percentage points), after which there were two years of 6percentage point increases, followed by the 12percentage point increase coincident with the 2008 refinements. Malignant hypertension is unusual; it has been falling as a percentage of episodes. Reporting of benign hypertension, which is somewhat more common than malignant hypertension, has been slowly rising since 2001.
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At the same time, there are indications that the services utilization associated with the most commonly reported hypertension diagnosis code, hypertension, unspecified, no longer is responsible for added resource requirements in home care. Originally, hypertension was selected for inclusion in the refined HH PPS system because data suggested it elevated utilization. Table 4a illustrates the trends; it shows the average number of visits per episode, according to type of hypertension diagnosis code. (We exclude outlier cases because of the effect that growing numbers of outlier episodes may have had beginning around 2005 and 2006; extremely large numbers of visits in the distribution can distort the average.)
Generally episodes reporting malignant or benign hypertension
exhibit a decline in number of visits per episode during the middle of the 8year
period. The averages then rise slightly. The averages for episodes reporting unspecified hypertension declined until 2005, and then stabilized.
Comparing these data with averages for episodes not reporting hypertension, we see that hypertension is generally associated with more visits, especially if the hypertension was reported as malignant or benign. However, in 2007, the unspecified hypertension episodes had an average number of visits equivalent to that of the nonHBP episodes. By 2008, the average number of visits for episodes not reporting hypertension rose slightly, while the average for unspecified hypertension did not. As a result, by 2008, the average number of visits for claims reporting unspecified hypertension is slightly lower than the average for claims not reporting hypertension. Further, the benign hypertension episodes, with a slightly increased share of the sample between 2007 and 2008, exhibited a small reduction in the average number of visits.
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This pattern illustrates an expected effect of nominal coding change. We observe a 12percentage point increase in use of unspecified hypertension, but no longer do these hypertension patients use more resources than others. These results appear possibly consistent with a phenomenon in which agencies increased their reporting of hypertension in situations where it did not meet the home health diagnosis reporting criteria. More generally, the results are suggestive of changed coding practice in which lesssevere episodes are being reported with hypertension in 2008 than used to be the case.
These analyses of the change in the therapy visit distribution, change in average case mix weights at each level of therapy visits, increased use of secondary diagnosis fields, and the change in reporting of hypertension all suggest that the refinements which were implemented in 2008 affected casemix weights, with greater therapy visits and reporting of comorbidities each as contributing factors. However, as described below, the analyses do not indicate a significant increase in real casemix. Experience with previous analyses reported in our past regulations shows that relatively small proportions of the total case mix change since the IPS baseline can be considered real case mix change.
Our estimate that 10.07 percent of the total percentage change in the national average case mix weight since the IPS baseline is due to real change in case mix, is consistent with past results. Most of the case mix change has been due to improved coding, coding practice changes, and other behavioral responses to the prospective payment system, such as more use of high therapy treatment plans. We are therefore proposing to exercise authority to compensate for nominal case mix change by making reductions to the PPS rates, as we have done since 2008.
For this year's analysis, we used the same approach, a model designed to measure real change in case mix, which we developed for the CY 2008 HH PPS final rule (72 FR 49841) and continue to use for HH PPS rulemaking. For this year's analyses, we utilized a fuller version of the 3M APRDRG grouper that allowed us to expand the number of APRDRG related groups in the model. As previously, we included indicators for each APRDRG group's different severity level if at least 25 episodes had the APRDRG/severity combination in the IPS period file. This expanded APRDRG model was used to reestimate the IPS period model of casemix weight.
We also rebased the expanded APRDRG model on CY2008 data, using casemix weights produced by the refined (153group) HH PPS grouper. One slight difference in the rebased model is that because we are using 2008 data, the ``living arrangement'' variables are missing on follow up OASIS assessments. Consequently, we were not able to use this variable in the rebased model.
We used the results of that rebasing to predict real case mix for
2007. The national average case mix weight in 2008 was 1.3085. The
rebased model of real case mix predicts a quantity change in real case
mix of 0.0025 when working backwards from 2008 (1.3085) to 2007
(1.3060). The predicted level of real case mix in 2007, which we
derived from the IPSbased model is 1.1152. To compute a predicted real
case mix level for 2008, we increased the predicted level of real case
mix in 2007, 1.1152, by the percentage growth (1.3085/1.3060) in real
case mix that we estimated from the rebased model. The result is a predicted level of real case
mix in 2008 of 1.1173 ((1.3085/1.3060) x 1.1152 = 1.1173).
To compute the predicted quantity change in real case mix from the IPS baseline to 2008, we subtracted from the IPS baseline average case mix weight from the predicted level the real case mix in IPS, for a quantity change of 0.0214 (1.1173 1.0959 = 0.0214). The total difference in case mix from baseline to 2008 is 0.2126 (1.3085 1.0959 = 0.2126). Therefore, the quantity change from baseline to 2008 in real case mix represents a 10.07 percent increase (0.0214/0.2126 = 0.1007 or 10.07 percent).
The percent change in overall case mix from the IPS baseline to 2008 is 19.40 percent ((1.3085/1.0959) 1 = 0.1940 or 19.40 percent). To estimate the percent growth in case mix due to nominal change (that is, change in case mix not due to actual changes in patient acuity), we reduced the overall 19.40 percent change in case mix by the 10.07 percent increase due to real case mix change, which yielded a residual of 17.45 percent ((1 0.1007) * 0.1940 = 0.1745).
As we fully described earlier in this proposed rule, our August 29, 2007, final rule for CY 2008 finalized a reduction over 4 years in the national standardized 60day episode payments rates to account for an 11.75 percent increase in casemix which was not related to treatment of more resource intense patients. The 11.75 percent increase was based on an analysis of data through 2005. We finalized a 2.75 percent reduction each year for 2008, 2009 and 2010, and 2.71 percent reduction for CY 2011 to account for this growth in casemix. We have stated in HH PPS rulemaking, since the CY 2008 HH PPS proposed rule, that we might find it necessary to adjust the annual offsets (casemix reduction percentages) as new data became available. Because our current analysis reveals that nominal casemix has continued to grow, we are faced with having to account for the additional increase in nominal casemix beyond that which was identified for CY 2008 rulemaking. If we were to account for the remainder of the 17.45 percent residual increase in nominal casemix over CY 2011 and CY 2012, we estimate that the percentage reduction to the national standardized 60day episode rates and the NRS conversion factor for nominal casemix change for each of the two calendar years (2011 and 2012) of the case mix change adjustment would be 3.79 percent per year. If we were to fully account for the remaining residual increase in nominal casemix in CY 2011, we estimate that the percentage reduction to the national standardized 60day episode rates and the NRS conversion factor would be 7.43 percent. Because the Affordable Care Act contains other provisions which have an effect on HH PPS payments, we are not proposing to account for the entire residual increase in nominal case mix in CY 2011, instead we propose to account for the identified increase over CY 2011 and CY 2012. We propose to impose a 3.79 percent reduction per year to the national standardized 60day episode rates and the NRS conversion factor for CY 2011 and CY 2012. Should we identify further increases in nominal casemix as more current data become available, it is our intent to account fully for those increases when they are identified, rather than continuing to phasein the reductions over more than 1 year. We will continue to monitor any future changes in casemix as more current data become available and make updates as appropriate.
B. Hypertension Diagnosis Coding Under the HH PPS
As part of this rule, we are proposing to remove ICD9CM code 401.9, Unspecified Essential Hypertension, and ICD9CM code 401.1, Benign Hypertension, from the HH PPS case mix model's hypertension group, originally reflected in Table 2B of the August 29, 2007, CY 2008 HH PPS final rule (72 FR 49762) (subsequent updates to Table 2B have been provided in HH PPS grouper software releases). In this section we explain the basis for this proposal.
As part of our refinements to the HH PPS, beginning in CY 2008, unspecified hypertension and benign hypertension were included as diagnoses in our HH PPS case mix system. Recent analysis of home health diagnosis coding shows a significant change in the frequency of assigning certain hypertension diagnoses during CY 2008. Specifically, our analysis of HH PPS claims from 2001 to 2008 shows a sudden increase in the reporting of unspecified hypertension and benign hypertension on home health claims in CY 2008 (see Table 3: Percent of episodes reporting hypertension ICD9CM diagnosis codes: 20012008, of this proposed rule).
Classification of blood pressure (BP) was revised in 2003 by the National Heart, Lung and Blood Institute (NHLBI) in their ``Seventh Report of the Joint National Committee on Prevention, Detection, Evaluation, and Treatment of High Blood Pressure'' (the JNC 7 report) and published in the May 21, 2003, Journal of the American Medical Association. These revisions provided specific clinical guidelines for prevention, detection, and treatment of high blood pressure. The guidelines, approved by the Coordinating Committee of the NHLBI's National High Blood Pressure Education Program (NHBPEP), also streamlined the steps by which doctors diagnose and treat patients. A key aspect of the guidelines includes the introduction of a ``pre hypertension'' level for individuals with a systolic blood pressure of 120139 mm Hg or a diastolic blood pressure of 8089 mm Hg. This recognition represented a change from traditional medical views on the implications of blood pressures slightly above 120/80. Traditionally, such low levels were not considered a significant clinical finding. No diagnosis was reportable. There was no medical treatment ordered; nor was a change of lifestyle recommended.
Based upon our review of the revised clinical guidelines, and our review of the ICD9CM classification of essential hypertension, if the patient is considered ``prehypertensive,'' some may conclude that a diagnosis of benign hypertension may be assigned. If an individual is designated as prehypertensive, the guidelines stipulate that this individual will generally require health promoting lifestyle modifications to prevent cardiovascular disease. Additional treatments may or may not be appropriate.
The impact of the new guidelines for hypertension is the reclassification of certain patients to a hypertension diagnosis, whereas prior to the guidelines, no hypertension diagnosis was indicated. Furthermore, under the guidelines, some of the patients deemed hypertensive may not need skilled services. Moreover, as we described above, we see a substantial increase in the reporting of unspecified hypertension, along with some evidence that home health patients with either unspecified or benign hypertension no longer require extra resources. Given the new guidelines for hypertension and their impact on coding, along with coding behavior changes in 2008, we believe including unspecified and benign hypertension in the HH PPS case mix model reduces the model's accuracy. As such we do not believe that we should be including these diagnoses in our casemix system.
We also believe that the developments in clinical guidelines of
recent years may have led to ambiguity in the definition of
hypertension in the ICD9CM classification system. The ``ICD9CM
Official Guidelines for Coding and Reporting'', and the alphabetic and
tabular indexes of the ICD9CM published after May 2003 (effective date
of the ``NHLBI Guidelines for Hypertension''), fail to include the NHLBI Blood Pressure (BP) guidelines and classification terminology. The NHLBI specific BP mmHg measurements and BP terms are not included in the ICD9CM classification system.
In the August 29, 2007, CY 2008 HH PPS final rule, we removed diagnosis codes proposed in the NPRM if the code was assigned to a minor condition or mild symptom that may be found in the elderly population; codes that are nonspecific or ambiguous; and codes that lack consensus for clear diagnostic criteria within the medical community. Due to their unclear relationship with NHLIB guidelines, the unspecified and benign hypertension codes fail to meet the criteria we laid out in 2007.
In summary, continued inclusion of the unspecified and benign hypertension codes in the HH PPS case mix system threatens to move the HH PPS casemix model away from a foundation of reliable and meaningful diagnosis codes that are appropriate for home care. Therefore, we are proposing to remove ICD9CM code 401.9, Unspecified Essential Hypertension, and ICD9CM code 401.1, Benign Essential Hypertension, from the HH PPS case mix model's hypertension group, in order to correlate with the goals of our HH PPS casemix system.
C. Therapy Coverage Requirements
With the inception of the HH PPS, as set forth in the July 3, 2000 final rule (65 FR 41128), patients were grouped according to their therapy utilization status in order to ensure that patients who required therapy would maintain access to appropriate services. In the final rule, we described that we had performed research regarding how to use assessment information to predict how much therapy a patient would need over the course of a 60day period. The research found that the assessment data could not predict the amount of required therapy with sufficient accuracy for use in the payment system. Knowing that under a PPS there is significant risk that providers might skimp on highcost services such as therapy, we decided to establish a therapy threshold to ensure that therapy would not be underprovided. We used clinical judgment to determine what amount of therapy would need to be provided to ensure a meaningful amount of rehabilitation services to patients who could clearly benefit from it. We determined that this amount would be at least 8 hours of therapy services during the 60day episode. Since the average therapy visit was 48 minutes long, it would take 10 visits to provide at least 8 hours worth of therapy. Therefore, we established a corresponding 10visit therapy threshold to identify ``high'' therapy cases, and paid home health agencies significantly more for patients receiving high therapy.
In the years following the adoption of the HH PPS, we have continued to analyze the effectiveness of the 10visit therapy threshold in ensuring that rehabilitation services were being provided to patients who could clearly benefit from them. Our analyses suggested that therapy was not being underprovided, but rather suggested that in many cases therapy was being overprovided. As described in the May 4, 2007 HH PPS proposed rule (72 FR 25356), our analysis of the evidence suggested that the single 10visit threshold offered too strong a financial incentive to provide 10 therapy visits when a lower amount of therapy was more clinically appropriate. In other words, the data suggested that financial incentives to provide 10 therapy visits overpowered clinical considerations in therapy prescriptions. During this time we conducted further research to model therapy need, but it was again unsuccessful. We explained in our proposed rule in May 2007 that a return to pervisit payment for therapy visits did not meet our objectives for having a prospective payment system. Therefore, in the CY 2008 final rule, we established a system of three thresholds with graduated steps in between which met our objectives of retaining prospectivity in the payment system, reducing the strong incentive resulting from a single threshold, restoring clinical considerations in therapy provision, and paying more accurately for therapy utilization below the original 10visit threshold. Those three thresholds are at 6 therapy visits, 14 therapy visits, and 20 therapy visits. As a disincentive for agencies to deliver more than the appropriate, clinically determined number of therapy visits, payment for additional therapy visits between the three thresholds increases gradually, incorporating a declining rather than a constant payment amount per added therapy visit. In our May 4, 2007 HH PPS proposed rule, at 72 FR 25363, we provided further details explaining the selection of these thresholds.
Analysis of CY 2008 data continues to suggest that some HHAs may be providing unnecessary therapy. The 2008 data show a 30 percent increase in episodes with between 69 therapy visits, which suggests that the 2008 changes may have been successful in improving clinical considerations in the volume of therapy provided. In their March 2010 report MedPAC states that 2008 data also reveal a 26 percent increase of episodes with 14 or more therapy visits (MedPAC, Report to Congress: Medicare Payment Policy, Section B, Chapter 3, March 2010, p. 203). The increase in episodes with 14 or more therapy visits is especially evident in areas of the country where home health fraud is suspected, such as MiamiDade, Florida.
While this suggests that the therapy payment policies are vulnerable to fraud and abuse, the swift, acrosstheboard therapy utilization changes suggest another, more fundamental concern. MedPAC wrote that the magnitude of therapy utilization changes and their correlations with the payment threshold changes suggest that payment incentives continue to influence treatment patterns [MedPAC, 2010, p. 206]. The Commissioners believed that payment policy is such a significant factor in treatment patterns because the criteria for receipt of the home health benefit are illdefined. They suggested that improved guidelines that more specifically identify patients who are most appropriate for HH care would facilitate more appropriate and uniform use of the benefit [MedPAC, 2010, p. 203]. To address the concerns of MedPAC, we are proposing to clarify our policies regarding coverage of therapy services at 409.44(c) in order to assist HHAs, and to curb misuse of the benefit.
We believe these clarifications also could slow the casemix growth which is unrelated to real changes in patient acuity (nominal case mix). As we described above in Section A (``Case Mix Measurement''), between 2007 and 2008 we observed a casemix increase of more than 4 percent. An analysis of this growth revealed that approximately 38 percent of the total case mix change between 2007 and 2008 was due to the shift in distribution of therapy visits. By describing more clearly the therapy coverage criteria in the home health setting, thereby enabling providers to better understand when providing therapy to home health patients is appropriate, we believe that beginning in calendar year 2011, a slower rate of nominal casemix growth may be achieved. Proposed Clarifications to 42 CFR 409.44(c)(1)
Regulations at Sec. 409.44(c)(1) mandate that for physical
therapy, speech language pathology, or occupational therapy to be
covered under the home health benefit, therapy services must [[Page 43246]]
relate directly and specifically to a treatment regimen, be established by the physician (after any needed consultation with a qualified therapist), that is designed to treat the beneficiary's illness or injury. A qualified therapist is one who meets the personnel requirements in the CoPs at 42 CFR 484.4. To ensure that therapy services relate directly and specifically to a treatment regimen designed to treat the beneficiary's illness or injury, we are proposing to clarify our coverage requirements. Specifically, we are proposing to revise Sec. 409.44(c)(1) so that, with respect to physical therapy, occupational therapy, and speech language pathology, we may clarify that:
One example of objective measures is functional assessment individual item and summary findings (and comparisons to prior assessment results/clinical findings) from OASIS functional items or other commercially available therapy outcomes instruments. Similarly, another example would be functional assessment findings (and comparisons to prior assessment results/clinical findings) from tests and measurements validated in the professional literature, or used as part of accepted standards of clinical practice that are appropriate for the condition/function being measured.
Proposed Clarifications to 42 CFR 409.44(c)(2)(i)
Current regulations at Sec. 409.44(c)(2)(i) mandate that for physical therapy, speech language pathology, or occupational therapy services to be covered in the home health setting, the services must be considered under accepted practices to be a specific, safe, and effective treatment for the beneficiary's condition.
To clarify what we mean by ``accepted practice'' and ``effective treatment'', we are proposing to clarify home health therapy coverage criteria at Sec. 409.44(c)(2)(i). These clarifications describe our expectations that HHAs would regularly reassess a therapy patient's physical function, and would objectively measure a patient's progress toward therapy goals to determine whether therapy services continued to be effective, or whether therapy ceased to be covered. These clarifications also describe clinical record documentation expectations associated with documenting effective therapy progress.
We are proposing to revise Sec. 409.44(c)(2)(i) as follows: Functional Reassessment Expectations
In order to ensure that a patient receiving home health therapy services appropriately remained eligible for the benefit in accordance with accepted practice, and that the services continued to be effective, the patient's function would be periodically reassessed by a qualified therapist. As we described above, for therapy to be covered in the home health setting, the method used to assess a patient's function would include objective measurement of function in accordance with accepted standards of clinical practice. As such, progress toward therapy goals would be objectively measurable by comparing measurements obtained at successive functional assessment time points. The objective measurements obtained from the periodic reassessment of function would reflect progress (or lack of progress) toward therapy goals, or achievement of therapy goals and the measurements would be documented in the clinical record.
While a qualified therapist could include, as part of the functional assessment or reassessment, objective measurements or observations made by a PTA or OTA within their scope of practice, the qualified therapist would have to actively and personally participate in the functional assessment, and measure the patient's progress.
These reassessments would ensure that the patient was receiving
effective care while also ensuring that, except for covered maintenance
therapy as described later in this section, patients were not remaining
on the benefit and continuing to receive therapy services after the
therapy goals were met, or after improvement could no longer be expected.
Documenting ``Effective'' Therapy Progress
Assistant's Participation in Documenting ``Effective'' Therapy Progress
We are proposing that physical therapist assistants or occupational therapy assistants could objectively document progress between the functional reassessments by a qualified therapist and/or physician. Clinical notes written by assistants are not complete functional assessments of progress.
Only a qualified therapist would be able to document a patient's progress towards goals as measured during a functional reassessment, regardless of whether the assistant wrote other clinical notes. However, notes written by assistants are part of the clinical record and need not be copied into the reassessment documentation. Clinical notes written by assistants would supplement the functional reassessment documentation of qualified therapist and would include:
composed the clinical note, and the date on which it was dictated;
Descriptions would make identifiable reference to the goals in the current plan of care.
Qualified Therapist's Responsibility in ``Effective'' Progress Documentation
In addition to the proposed requirements above for clinical
documentation by assistants, we are also proposing in Sec.
409.44(c)(2)(i) that the patient's progress documentation by a qualified therapist would also include:
Proposed Clarifications to 42 CFR 409.44(c)(2)(iii)
Regulations at Sec. 409.44(c)(2)(iii) presently mandate that for
therapy services to be covered in the home health setting, there must
be an expectation that the beneficiary's condition will improve
materially in a reasonable (and generally predictable) period of time
based on the physician's assessment of the beneficiary's restoration
potential and unique medical condition, or the services must be
necessary to establish a safe and effective maintenance program
required in connection with a specific disease, or the skills of a
therapist must be necessary to establish a safe and effective
maintenance program in connection with a specific disease or the skills
of a therapist must be necessary to perform a safe and effective maintenance program. We would clarify these requirements:
We propose clarifying the regulatory text to clarify that ``material'' improvement requires that the clinical record demonstrate that the patient is making functional improvements that are ongoing and of practical value, when measured against his or her condition at the start of treatment.
We are proposing to clarify that the concept of rehabilitative therapy includes recovery or improvement in function and, when possible, restoration to a previous level of health and wellbeing.
Covered therapy services under the home health benefit shall be rehabilitative therapy services unless they meet the criteria for maintenance therapy requiring the skills of a therapist as described below.
We are proposing to clarify the regulatory text so that if an individual's expected rehabilitation potential would be insignificant in relation to the extent and duration of therapy services required to achieve such potential, therapy would not be considered reasonable and necessary, and therefore would not be covered as rehabilitative therapy services.
We are also proposing to clarify the regulatory text to describe that therapy is covered as rehabilitative therapy when the skills of a therapist are necessary to safely and effectively furnish or supervise a recognized therapy service whose goal is improvement of an impairment or functional limitation.
We are proposing to clarify in regulatory text that therapy would not be covered to effect improvement or restoration of function where a patient suffered a transient and easily reversible loss or reduction of function (e.g., temporary weakness which may follow a brief period of bed rest following surgery) which could reasonably be expected to improve spontaneously as the patient gradually resumes normal activities. Therapy furnished in such situations would not be considered reasonable and necessary for the treatment of the individual's illness or injury, and the services would not be covered.
If at any point in the treatment of an illness, it was determined
that the treatment was not rehabilitative and did not legitimately
require the services of a qualified therapist for management of a
maintenance program as described below, the services would no longer be
considered reasonable and necessary and therapy would cease to be covered.
We are proposing to clarify the existing regulatory text by adding that the specialized skill, knowledge and judgment of a therapist would be required in developing a maintenance program, and services would be covered to design or establish the plan, to ensure patient safety, to train the patient, family members and/or unskilled personnel in carrying out the maintenance plan, and to make periodic reevaluations of the plan.
When indicated, during the last visit(s) for rehabilitative treatment, the clinician may develop a maintenance program for the patient. The goals of a maintenance program would be, for example, to maintain functional status or to prevent decline in function.
We are also proposing to clarify that if a maintenance program was initiated after the rehabilitative therapy program had been completed (rather than by a clinician at the last rehabilitative therapy session), development of a maintenance program would not be considered reasonable and necessary for the treatment of the patient's condition, with one exception. We propose that when a patient qualifies for Medicare's home health benefit based on an intermittent skilled nursing need, a qualified therapist may develop a maintenance program to maintain functional status or to prevent decline in function, at any point in the episode.
The services of a qualified therapist would not be necessary to carry out a maintenance program, and would not be covered under ordinary circumstances. The patient could perform such a program independently or with the assistance of unskilled personnel or family members.
We also are proposing to clarify circumstances under which CMS would cover therapy services for carrying out
a maintenance program. If the clinical condition of the patient were such that the services required to maintain function involved the use of complex and sophisticated therapy procedures to be delivered by the therapist himself/herself (and not an assistant) in order to provide both a safe and effective maintenance program and to ensure patient safety, those reasonable and necessary services would be covered, even if the skills of a therapist were not ordinarily needed to carry out the activities performed as part of the maintenance program. Clarifications to Sec. 409.44(c)(2)(iv)
In order to clarify Sec. 409.44(c)(2)(iv), which mandates that for
therapy to be covered in the home health setting, the amount,
frequency, and duration of the services must be reasonable, we propose to revise Sec. 409.44(c)(2)(iv) to require that:
D. Collecting Additional Claims Data for Future HH PPS Enhancements and Soliciting Comments on HH PPS Improvements
The 2009 MedPAC report recommended that CMS improve the HH PPS to mitigate vulnerabilities such as payment incentives to provide unnecessary services. We believe that we need more specific resource use data to fully address these vulnerabilities. Therefore, we are planning to require HHAs to report additional data on the HH claim beginning in CY 2011. Data collection requirements are handled via a separate administrative process, and are not part of this rulemaking.
In their March 2010 report, MedPAC suggested that the HH PPS case mix weights needed adjustment. Our current therapy weights are calibrated assuming that 79 percent of the time, HH therapy is provided by therapists. We believe that the current mix of therapy services may have changed. To ensure we accurately update the casemix weights, we believe there is a need to collect additional data on the HH claim to differentiate between the therapy visits provided by therapy assistants versus therapists.
We typically consider skilled nursing services to involve direct skilled nursing care to a patient, and therapy services to be restorative therapy. However, in limited situations, regulations deem a set of nursing services which are not direct care skilled nursing as skilled services and also deem a set of therapy services which are not restorative therapy as skilled therapy. Therefore, we are planning to require HHAs to report additional data on the HH claim to differentiate between these deemed skilled services and direct care skilled nursing or restorative therapy. We believe that these data will help us better understand services provided, enabling us to more accurately address overutilization vulnerabilities.
Currently, we use the following Gcodes to define therapy services in the home health setting:
We are planning to
FOR FURTHER INFORMATION CONTACT
Randy Throndset, (410) 7860131 (overall HH PPS).
James Bossenmeyer, (410) 7869317 (for information related to payment safeguards).
Doug Brown, (410) 7860028 (for quality issues).
Kathleen Walch, (410) 7867970 (for skilled services requirements and clinical issues).