CMS Proposes 2.5 Percent PPS Update for Home Health Agencies for 2006, USA

Main Category: Caregivers / Homecare
Article Date: 12 Jul 2005 - 13:00 PDT

email to a friend   printer friendly   opinions  

CMS has proposed a 2.5 percent update to Prospective Payment System (PPS) payments for home health agencies for 2006. CMS estimates that this update will result in an increase of $330 million in payments for homecare providers. The proposed rule will be published in the Federal Register later this week. Comments are due by September 6, 2005.

The Medicare Modernization Act of 2003 (MMA) reduced the update for home health agencies by .8 percent for 2005 and 2006. As a result, what would otherwise be an update of 3.3 percent for 2006 is reduced to 2.5 percent under the MMA provision.

"The American Association for Homecare advocates a full market basket update to account for rising costs for skilled nurses, therapists, transportation, and insurance as well as the need to invest in health information technology and other areas," stated Kay Cox, President and CEO.

CMS estimates that overall rural home health agencies will receive an increase of 3.5 percent and urban agencies a 2.3 percent increase. The greater increase for rural agencies will result in part from CMS's proposal to base the labor portion of the PPS payments on the Office of Management and Budget's (OMB) new Core Based Statistical Areas (CBSA). CBSAs include the old Metropolitan Statistical Areas and new Micropolitan Statistical Areas. The latter are defined as having an urban area with a population between 10,000 and 50,000. A metropolitan area has an urban area with more than 50,000 people. MSAs with a population of more than 2.5 million can be further subdivided into Metropolitan Divisions. In total there are 935 CBSAs.

View the 189-page proposed rule .

More details from OMB on CBSAs

AAHomecare Will Work with Newly Appointed Medicaid Commission

Secretary of Health and Human Services Mike Leavitt has announced 13 voting and 15 non-voting members of the Medicaid Advisory Commission created by the Fiscal Year 2006 Budget Resolution. The chair and co-chair of the commission are former governors Don Sundquist, a Republican from Tennessee, and Angus King, an Independent from Maine.

The American Association for Homecare will work with the Commission to underscore the importance of homecare to Medicaid as a cost-effective and clinically effective form of care that is part of the solution to the Medicaid crisis. In an interview published today in the Capitol Hill newspaper Roll Call, Secretary Leavitt said, "The state of practice in long term care is to care for people in their home or community."

As called for in the budget resolution, the commission is charged with making recommendations by September 1, 2005, for $10 billion in Medicaid savings over the next five years. It is also charged with coming up with proposals by the end of 2006 for more comprehensive reform. Included in these latter recommendations will be proposals for providing long-term care to those who need such services. Click here for details

Michael Reinemer, VP, Communications
American Association for Homecare
625 Slaters Lane, Suite 200
Alexandria, VA 22314-1171 703-535-1881
http://www.aahomecare.org

• Additional
• References
• Citations