August 30, 2011 News

Medicare Home Health Care Rates Proposed

Medicare reimbursement rates for home health agency (HHA) 60-day episodes will decrease by 3.3% in 2012, according to prospective payment system rates proposed by the Centers for Medicare and Medicaid Services (CMS).

The proposed rule, "Home Health Prospective Payment System Rate Update for Calendar Year 2012," appeared in the Federal Register on July 12.

Status Coding Inaccuracies 

The proposed rates include an increase tied to inflation; this increase, however, has been negated by CMS's determination of widespread inaccurate patient health status coding by HHAs from 2000 to 2008 that may result in $950 million in 2012 payment deductions and more reductions in the future. For example, CMS determined that HHAs coded many patients without preceding inpatient stays as needing the same level of services as patients recently discharged from acute care or rehabilitation facilities. The net proposed reduction in HHA payments, after inflation adjustments, is 3.3% for 2012.

Payment Redistribution 

Under the prospective payment system (PPS), reimbursement for occupational therapy, physical therapy, and speech-language treatment is made in tiered levels of therapy visits in each 60-day episode. Episodic payments vary based on episode number (first, second, or third) and clinical and functional severity (high, medium, or low).

CMS proposes a payment reduction for high-therapy episodes (i.e., more than 20 therapy visits in 60 days) because payments have consistently surpassed costs by higher margins than those for low-visit episodes. Conversely, episodes that comprise only three to five therapy visits have been underpaid and will be adjusted. The CMS proposal redistributes payments from high-therapy episodes to low-therapy episodes.


Confusion over changes in the 2011 regulations regarding scheduled reassessments—including when they are to be performed and by whom, especially when a patient is receiving more than one type of therapy—should be resolved with the proposed 2012 regulation (see The ASHA Leader, Nov. 3, 2010). The proposed regulation more clearly identifies that "Where more than one discipline of therapy is being provided, the qualified therapist from each discipline must provide the therapy service and functionally reassess the patient [in accordance with regulations] during the visit which would occur close to but not later than the 19th visit per the plan of care." The reassessment must occur during a regularly scheduled visit and must also meet the CMS rule that patients be reassessed at a minimum of every 30 days. After each discipline's reassessment is conducted, a new 30-day reassessment window begins.

The reference to the "plan of care" refers to the overall HHA plan of care approved by a physician. As described in regulations, the patient's function must be periodically reassessed by a qualified therapist, of the corresponding discipline for the type of therapy being provided, using a method that would include "objective measurement."

Fixed Payments 

If a home health episode includes fewer than five home health visits, the PPS payment is replaced by a fixed payment per visit. The proposed 2012 per-visit rates are $134.25 for speech-language pathology, $123.50 for physical therapy, and $124.40 for occupational therapy (geographically adjusted). These figures represent a 1.5% increase for each discipline.

The 2012 proposal also includes a revision to the 2011 requirement that a physician meet face-to-face with the patient prior to HHA admission. HHAs strongly protested this requirement; the proposal allows a physician who treated the patient in an acute or post-acute setting to inform the HHA's certifying physician of the patient's qualifying conditions. 

Mark Kander, director of health care regulatory analysis, can be reached at

cite as: Kander, M. (2011, August 30). Medicare Home Health Care Rates Proposed. The ASHA Leader.


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