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CMS Finalizes 2016 Medicare Payment Rules for Physicians, Hospitals & Other Providers

CMS Finalizes 2016 Medicare Payment Rules for Physicians, Hospitals & Other Providers | Healthcare and Technology news | Scoop.it

The Centers for Medicare & Medicaid Services (CMS) issued final rules this week detailing how the agency will pay for services provided to beneficiaries in Medicare by physicians and other health care professionals in 2016 that reflects the administration’s commitment to quality, value, and patient-centered care. Payment rules for the 2016 calendar year for End-Stage Renal Disease Prospective Payment System, the Hospital Outpatient Prospective Payment System, Home Health Prospective Payment System, and the Physician Fee Schedule were all finalized this week.


“CMS is pleased to implement the first fee schedule since Congress acted to improve patient access by protecting physician payments from annual cuts. These rules continue to advance value-based purchasing and promote program integrity, making Medicare better for consumers, providers, and taxpayers,” said CMS Acting Administrator Andy Slavitt. “We received a large number of comments supporting our proposal to allow physicians to bill for advanced care planning conversations and we are finalizing this rule accordingly.”

Key policies finalized in the 2016 payment rules include:

  • Finalizing the Home Health Value-Based Purchasing model. This model, authorized under the Affordable Care Act, is designed to improve health outcomes and value by tying home health payments to quality performance. All Medicare-certified home health agencies that provide services in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee will participate in this model starting January 1, 2016. Compared to the proposed rule, the maximum payment adjustment in the first year of the model was reduced from 5 percent to 3 percent. This was part of the Home Health Prospective Payment System final rule.


  • Finalizing updates to the “Two-Midnight” rule. The rule clarifies when inpatient admissions are appropriate for payment under Medicare Part A. This continues CMS’ long-standing emphasis on the importance of a physician’s medical judgment in meeting the needs of Medicare beneficiaries by providing clearer guidelines and a more collaborative approach to education and enforcement. This was part of the Hospital Outpatient Prospective Payment System final rule.
  • Finalizing the End-Stage Renal Disease Quality Incentive Program. The End-Stage Renal Disease final rule will apply payment incentives to dialysis facilities to improve the quality of dialysis care. Facilities that do not achieve a minimum total performance score with respect to quality measures, such as anemia management, patient experience, infections, and safety, will receive a reduction in their payment rates. 
  • Beginning the new physician payment system post the Sustainable Growth Rate (SGR) formula and supporting patient- and family-centered care. This is the first final Physician Fee Schedule final rule since the repeal of the SGR formula by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Through the final rule, CMS is beginning implementation of the new payment system for physicians and other practitioners, the Merit-Based Incentive Payment System, required by the legislation.
  • Finalizing provision to empower patients and their families regarding advance care planning. Consistent with recommendations from a wide range of stakeholders and bipartisan members of Congress, CMS is finalizing its proposal that supports patient- and family-centered care for seniors and other Medicare beneficiaries by enabling them to discuss advance care planning with their providers.
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Robust Technology Platforms and Medicare Home Health Providers

Robust Technology Platforms and Medicare Home Health Providers | Healthcare and Technology news | Scoop.it

The home care industry, in its various forms, represents an $82 billion market with a population of potential customers that is growing by the minute. In fact, within the next five years, 20 percent of Americans will be eligible for Medicare services and many of them will avail themselves of home health services that will be funded by Medicare. Last month, the Centers for Medicare and Medicaid Services (CMS) released the 2015 Home Health Final Rule (Final Rule), which sets forth the details of the second year of payment rebasing under the Patient Protection and Affordable Care Act (ACA) together with other new rules, clarifications of previous rules and discussions of things to come. CMS makes it clear that its goal is to more closely align payment for services with the cost of providing them.

Interestingly, while physicians and hospitals were included in CMS’ meaningful use EHR Incentive Programs that began in 2011, home care providers were excluded from incentive opportunities. However, even in the absence of financial incentives for technology adoption, implementation of robust technology platforms capable of gathering, organizing, processing and protecting patient health and financial information is still crucial. Consider the following top five reasons for why technology adoption is not optional for Medicare certified home health providers.

  • First, there are 1,836 potential Health Insurance Prospective Payment System (HIPPS) Codes that form the basis for Medicare home health reimbursement. There are 3,273 counties represented for which an applicable wage index has been established for purposes of calculating reimbursement. That yields a potential universe of payment values in excess of $6 million.
  • Second, even the most straightforward of the episode payment calculations has at least three steps and the most cumbersome, outlier calculations, has over a dozen. Imagine trying to manually arrive at accurate calculations for each episode.
  • Third, newly proposed Medicare Conditions of Participation place increasing emphasis on the quality and coordination of patient care supported by detailed clinical records. Significant survey emphasis for home health providers is now being placed on reconciliation of medications as well as the adequacy of other clinical documentation. Technology greatly assists in creating efficient ways of achieving the desired end result of coordinated, cohesive and locatable clinical documentation.
  • Fourth, in order to justify payment, home health agencies must be able to schedule visits based on physician ordered care plans, record when visits are made or missed, and aggregate visit notes that are responsive, in the main, to ordered interventions. And, not incidentally, visit times must be translated into unit-based increments for claim submission purposes.
  • Finally, as the 2015 Final Rule demonstrates, the calculation rules and values change every year.

The operational needs and payment changes put into place for home health agencies are significant and have far reaching implications not only for agencies, but also for the whole industry. As the importance of post-acute care modalities grows in a countrywide effort to regulate costs and improve health outcomes, strong home health providers will play a key role in our general success in this area whether or not they are incentivized to adopt technology through meaningful use programs.

In order for home health agencies to continue building business momentum while ensuring top-quality care and health outcomes, they will need to be able to fully and quickly implement new regulations that change each year and adapt operational procedures correspondingly. Calculations, functions, decision support tools, up-to-the minute informational dashboards and reports will be a must for any home health provider that expects to thrive in what will be a very challenging and intricate operating environment. Fortunately, just as intricacy in processes will increase, there is also an increasing amount of cost-efficient and cloud-based technology alternatives available to providers to enable them to manage effectively the required details of providing home health services.


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