Source: http://www.thefederalregister.com/d.p/2010-11-17-2010-27778
Timestamp: 2013-05-19 03:21:21
Document Index: 489960669

Matched Legal Cases: ['art 7114', 'art 3944', 'art 6726', 'art 140', 'art 5250', 'art 1739', 'art 30206', 'art 514', 'art 9740', 'art 180', 'arts 409']

Health and Human Services Department, Centers for Medicare & Medicaid
14 CFR Part 7114 CFR Part 3944 CFR Part 6726 CFR Part 140 CFR Part 5250 CFR Part 1739 CFR Part 30206 CFR Part 514 CFR Part 9740 CFR Part 180	Federal Register: November 17, 2010 (Volume 75, Number 221)
DOCID: fr17no10-21
FR Doc 2010-27778
CFR Citation: 42 CFR Parts 409, 418, 424 et al.
RIN ID: RIN 0938-AP88
CMS ID: [CMS-1510-F]
SUBJECT CATEGORY: Medicare Program; Home Health Prospective Payment System Rate Update for Calendar Year 2011; Changes in Certification Requirements for Home Health Agencies and Hospices DATES: Effective Date: These regulations are effective on January 1, 2011.
DOCUMENT SUMMARY: This final rule sets 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 updates the wage index used under the HH PPS and, in accordance with the Patient Protection and Affordable Care Act of 2010 (Affordable Care Act), updates the HH PPS outlier policy. In addition, this rule revises the home health agency (HHA) capitalization requirements. This rule further adds clarifying language to the ``skilled services'' section. The rule finalizes a 3.79 percent reduction to rates for CY 2011 to account for changes in casemix, which are unrelated to real changes in patient acuity. Finally, this rule incorporates new legislative requirements regarding facetoface encounters with providers related to home health and hospice care.
SUMMARY: Health and Human Services Department, Centers for Medicare & Medicaid Services
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 (HH) services. Section 4603 of the BBA mandated the development of the home health prospective payment system (HH PPS). Until the implementation of an 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 an HH PPS for all Medicarecovered HH 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 an HH PPS for all costs of HH services paid under Medicare. Section 1895(b)(3)(A) of the Act requires the following: (1) The computation of a standard prospective payment amount includes all costs for HH 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 HH 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 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 HH services furnished in a geographic area compared to the applicable national average level. Under section 1895(b)(4)(C) of the Act, the wage
adjustment 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 Patient Protection and Affordable Care Act of 2010 (The Affordable Care Act) (Pub. L. 111148, enacted on March 23, 2010) 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) of the Affordable Care Act revised section 1895(b)(5) of the Act so that the standard payment amount is reduced by 5 percent and the total outlier payments in a given fiscal year (FY) or year may not exceed 2.5 percent of total payments projected or estimated. The provision also makes permanent a 10 percent agency level outlier payment cap. In accordance with the statute, as amended by the BBA, we published a final rule in the July 3, 2000 Federal Register (65 FR 41128) to implement the [[Page 70373]]
1997 HH PPS legislation. The July 2000 final rule established requirements for the new HH PPS for HH 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 an HH PPS for HH 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 HH 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). Section 5201(c) of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109171, enacted February 8, 2006) added new section 1895(b)(3)(B)(v) to the Act, requiring HHAs to submit data for purposes of measuring health care quality, and links the quality data submission to the annual applicable percentage increase. This data submission requirement is applicable for CY 2007 and each subsequent year. If an HHA does not submit quality data, the HH market basket percentage increase is reduced 2 percentage points. In the November 9, 2006 Federal Register (71 FR 65884, 65935), we published a final rule to implement the pay
forreporting requirement of the DRA, which was codified at Sec. 484.225(h) and (i) in accordance with the statute. 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 of 2003 (MMA) (Pub. L. 108173, enacted on December 8, 2003) as amended by section 5201(b) of the DRA. The amended section 421(a) of the MMA now requires, for HH 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 based on a national standardized 60day episode payment rate that is adjusted for the applicable casemix and wage index. The national standardized 60
day episode rate includes the six HH disciplines (skilled nursing, HH aide, physical therapy, speechlanguage pathology, occupational therapy, and medical social services). Payment for nonroutine 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. of this final rule). Payment for durable medical equipment covered under the HH 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 based on 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. The 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.
That rule included an analysis performed on CY 2005 HH claims data, which 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. Subsequently, a more detailed analysis was performed on the 12.78 percent increase in casemix to evaluate if any portion of the increase was associated with a change in the actual clinical condition of HH patients. We examined data on demographics, family severity, and nonHH Part A Medicare expenditure data to predict the average casemix weight for 2005. As a result of the subsequent detailed analysis, we recognized that an 11.75 percent increase in casemix was due to changes in coding practices and documentation, and not 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 2.75 percent per year for 3 years beginning in CY 2008 and 2.71 percent for the fourth year in CY 2011. We indicated that we 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.
For CY 2010, we published a final rule in the November 10, 2009 Federal Register (74 FR 58077) (hereinafter referred to as the CY 2010 HH PPS final rule) that sets forth the update to the 60day national episode rates and the national pervisit rates under the Medicare prospective payment system for HH services.
In response to the publication of the CY 2011 HH PPS proposed rule, we received approximately 500 items of correspondence from the public. We received numerous comments from various trade associations and major healthrelated organizations. Comments also originated from HHAs, hospitals, other providers, suppliers, practitioners, advocacy groups, consulting firms, and private citizens. The following discussion, arranged by subject area, includes our responses to the comments, and where appropriate, a brief summary as to whether or not we are implementing the proposed provision or some variation thereof. General (Miscellaneous) Comment: A commenter stated that multiple policy changes and payment reductions have led to the industry's inability to apply ``causeandeffect'' analysis when HH care access becomes critical. The commenter recommends applying changes one at a time and phasing them in to allow time to determine the impact of those individual changes. Another commenter stated that as an HHA owner, she is [[Page 70374]]
willing to accept cuts to the Medicare HH benefit but that the cuts need to be incremental so agencies have the time and the resources to implement adjustments in response to payment changes. In addition, there is the growing concern of the ``unknown'' costs associated with implementation of the Affordable Care Act. Another commenter stated that the health insurance costs for their employees have skyrocketed over the past 3 years, and that in conjunction with these cuts, it hinders their ability to hire staff. Response: We have, in fact, been phasing in the reductions to the HH PPS rates for the increase in nominal casemix. As a result of the CY 2008 final rule, we have reduced HH PPS rates by 2.75 percent for 2008, 2009, and 2010 to account for the increase in nominal casemix, that is an increase in casemix not due to actual changes in patient characteristics. However, there still exists significant nominal case
mix increase in the payment system that has not yet been addressed. Consequently, we believe that the casemix adjustments continue to be necessary in order to address the residual increase in the nominal change in casemix that has not yet been accounted for in the payment system. As such, we are moving forward with phasing in our casemix reductions and will be applying a 3.79 percent reduction to the HH PPS rates in CY 2011 (as discussed in the July 23, 2010 proposed rule). In response to comments that we received on our casemix model and its measurement of real casemix, we will further study the concerns raised and are not finalizing the proposed 3.79 percent reduction to the HH PPS rates for CY 2012 at this time. Therefore, in addition to our continuous monitoring of nominal casemix increase, we plan to perform a review of our casemix and NRS models, and address any reductions to the CY 2012 HH PPS payments in next year's rulemaking. The other policy changes and reductions addressed in this rule (that is, outlier provisions and reductions to the market basket update) were mandated by the Affordable Care Act. We are uncertain of the meaning of ``unknown'' costs as referenced by the commenter and therefore are unable to address the particular concern. Comment: A commenter stated that he receives calls from providers who are confused with the language that is used by CMS in determining billing requirements. He believes the proposed changes are a step in the right direction. Response: We appreciate the comment and will continue to work towards providing the industry/public with clear policies, instructions, and guidance as they relate to our payment policies.
Comment: With the increased use of technology and telehealth, funds should be made available to HHAs to include such monitoring to allow patients and their families to be more proactive in the management of their illnesses and to reduce ER visits, primary care physician appointments and hospital stays. Home Health is the area to fund, not to cut, and that medical spending in other areas should be reduced.
Response: We are not opposed to improvements in technology, or the use of telehealth in the HH setting and certainly do not discourage the use of these advances in medicine. However, under section 1895(e) of the Act, telehealth services cannot substitute for inperson HH services ordered as part of a plan of care. However, telehealth can be used to supplement traditional HH services. Section 1895(b)(3)(B) of the Act dictates how HH PPS rates are to be updated annually, and section 3131(a) of the Affordable Care Act, amending this provision, requires the Secretary to rebase HH payments beginning in 2014. At that time, more uptodate costs will be used to rebase payments to HHAs. Comment: A commenter stated that the impact analysis in the proposed rule is useless in that the analysis simply quantifies the percentage cut in rates on a geographic basis. Further, the impact analysis offers little substantive understanding of the individual cost impact of such proposed provisions as the physician facetoface encounter requirement, the revisions to therapy assessment, coverage and documentation standards, coding change proposals, and CAHPS compliance. The estimated costs are vastly understated because they do not include the sizeable administrative expenses that HHAs will incur to implement any of the changes beyond the cost of some of the form revisions. A valid and useful impact analysis starts with an understanding of the results of the combination of rate cuts and cost increases that the proposed policies will bring to HHAs. The commenter further asserts that once these results are fairly and accurately determined, the impact analysis must begin with the highest of priority concerns
impact on access to careas that is the central purpose of Medicare. Second, the commenter believes that the impact analysis should continue with an evaluation of the effect of the proposed policies on total spending for the Medicare program, not just the effect on HH services spending. The commenter provided the example that if the analysis of the proposed policies' impact on access to care shows that thousands of Medicare beneficiaries would no longer have HH care available or that provision of HH services would be significantly delayed, Medicare spending would rise as a result of a shift to higher cost care such as skilled nursing facility services or extended inpatient stays.
The commenter also proposed that the impact analysis should evaluate the impact of the proposed policies on another stakeholder
HHAs as businesses. Such evaluation should start with the ongoing viability of the individual businesses and the industry as a whole. Among the many elements that should be reviewed is whether the business will be paid less than the cost of the delivery of care. Another element is the workforce impactwill health care workers take their talents to other care sectors because of reductions in compensation and benefits. Access to capital is also an important factor to evaluate. If the proposed rule changes restrict access to capital, there may be reduced use of efficiencyrelated technologies or business expansions to achieve economies of scale. Lack of access to capital could also mean an inability to meet ongoing payroll obligations because of cash flow problems. The commenter also claimed there is another flaw in the CMS impact analysis, which is its limited review to a single year. This is particularly concerning to the commenter because the proposed rule extends rate cuts into a second year. An impact analysis that does not evaluate the impact of cuts in payment rates for both of the years as proposed is invalid and in violation of CMS obligations under the Regulatory Flexibility Act. The commenter strongly recommends that CMS conduct a thorough and valid impact analysis, consistent with the concerns referenced above. Another commenter states that in the proposed rule CMS concluded that the proposed rule would not have a significant impact on a substantial number of small entities. Section 605 of the Regulatory Flexibility Act (RFA) requires that if the regulatory agency certifies that the rule will not have a significant impact on a substantial number of small businesses, it must include a statement providing the factual basis supporting the certification. The commenter suggests that CMS failed to provide an adequate factual basis for its certification that there would be no significant impact. In fact, there is no language in the RFA section of the proposed rule that [[Page 70375]]
discloses the reasons why CMS concluded that there would be no substantial impact on small HHAs. CMS should at a minimum have provided the public with information on the number of HHAs and other health care entities likely to be affected by the rule. Further, CMS has guidelines (usually based on small business revenues) in place that the agency uses to determine whether a rule will have a significant impact on a substantial number of small entities. CMS failed to discuss how the impacts of this rule fall within those guidelines. Such a discussion is vital for the purposes of transparency, as affected small entities can use this information to provide CMS with economic impact information on the rule's projected impact on their business. Based on the public input, the commenter asserts that CMS could determine the validity of their decision to certify the rule in the publication of the final regulation. The commenter is concerned that while CMS has certified that the rule will not have a significant impact, the affected HHAs still believe that the regulation will result in a significant burden on their businesses. The commenter believes that there is merit in bringing these small business concerns to the attention of CMS in the hope that they will add to the transparency of the RFA contained in the final rule. Response: The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities for that year. As such, there is no requirement under the RFA to provide impacts for any year(s) beyond that which the rule is updating the rates. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $7 million to $34.5 million in any 1 year. For purposes of the RFA, approximately 95 percent of HHAs are considered small businesses according to the Small Business Administration's size standards, with total revenues of $13.5 million or less in any one year. Individuals and States are not included in the definition of a small entity. As such, this rule is estimated to have an overall negative effect upon small entities (see section IV.B. of this final rule, ``Anticipated Effects'', for supporting analysis). The last section of Table 19 shows the percentage change in payments by agency size, as determined by the number of first episodes. The agency size categories, for this rule, are based on the number of first episodes in a random 20 percent beneficiary sample of CY 2008 claims data. Initial episodes, under the HH PPS, are defined as the first episode in a series of adjacent episodes (contiguous episodes that are separated by no more than a 60day period between episodes) for a given beneficiary. Initial, or first, episodes are a good estimate of agency size, because this method approximates the number of admissions experienced by the agency based on approximately onefifth of the total annual data. The size categories were set to have roughly equal numbers of agencies, except that the highest category has somewhat more agencies because added detail amongst the large size category was not needed. Because our model does not have the data to account for the ``total'' revenue of an HHA, in the proposed rule, and again in this final rule, we have used the number of first episodes as a proxy for agency size. As such, using the facility size categories (based on the number of first episodes), the impact table shows that the difference in impact between smaller and larger HHAs is small and within a 0.05 percentage point range. In fact, smaller agencies have a smaller reduction and fare slightly better than larger agencies represented by the ``200 or more first episodes'' category. In an effort to better demonstrate the impact on small HHAs, as it relates to total revenue, we supplemented our impact analysis by linking to Medicare cost report data, which has total revenues for HHAs. Using total revenues and the $13.5 million threshold of the RFA, we categorized an HHA as being either small or large. To perform this analysis, we were able to match approximately 72 percent of the cost report data to our model. For the remainder of the agencies in the model, we proxy for large agencies as those agencies with at least 750 first episodes. This results in approximately 95 percent of agencies being classified as small and 5 percent of agencies being large, which is reflective of what our cost report files show us. This analysis provides similar results to the one using first episodes as a measure of an agency's size in that small HHAs fare slightly better, 4.84 percent impact, than do large HHAs, which are estimated to experience a 5.01 percent (see section IV.B. of this final rule, ``Anticipated Effects'', for supporting analysis). In a separate, supplemental analysis, as merely an indicator of possible access to care issues, we looked at estimated margins of HHAs, by county, and the estimated effect that the provisions of this rule might have on HHAs. In particular, we look to identify counties that might not be served by at least one HHA with a positive margin as a result of the finalized policies of this rule. The analysis demonstrate that occurrence of such counties is very infrequent; thus, we do not believe that access to care is an issue (see section IV.B. of this final rule, ``Anticipated Effects'', for supporting analysis). Given the profit margins of HHAs that we and MedPAC are seeing in our analyses, we believe that the reductions of this final rule can be absorbed by the majority of HHAs, and that access to care will not be compromised. However, we will continue to monitor the situation to identify any unintended consequences of our policies in this final rule.
Comments Regarding Access to Care
Comment: A commenter stated that additional regulatory responsibilities of oversight, documentation, education, choosing survey vendors, etc., would result in increased costs to HHAs. There is an inherent risk for decreased quality of care and volume of services provided by HHAs. It is possible that HHAs may become more selective in their acceptance of medically difficult patients who are likely to utilize more services. Response: We assume that the commenter is referring to the therapy provisions of this rule. We believe that our clarifications to our therapy coverage requirements do not constitute additional responsibilities, but rather clarify the existing responsibilities of the qualified therapist and the HHA. Similarly, we are clarifying the existing supervision/oversight requirements of qualified therapists in the HH setting. We are also clarifying our coverage requirements for education of the patient and/or family members, and our documentation requirements. We do not consider any of these clarifications to be beyond the current responsibilities of an HHA. We are, as part of this final rule, requiring qualified therapists to perform the needed therapy service, assess patients and measure and document therapy effectiveness at what we consider key points of the episode. We believe that all HH patients who need therapy services would benefit from those services being delivered by a qualified therapist, instead of an assistant, at key points in the course of treatment. We will continue to monitor for unintended consequences of the provisions of this final rule. Comment: Several commenters stated that the payment reductions would result in decreased access to care and force HHAs out of business. The [[Page 70376]]
commenters assert that patients who are moved from acute care facilities to their homes and have major medical problems would not be able to get HH services for their illnesses. These proposed changes would not only endanger access to care but also impede efforts to transition patients to the home and cripple essential community HHAs. Several commenters stated that HH patients would be forced into costly institutional care and increase Medicare spending. Another commenter stated that if these proposed cuts were implemented, many senior citizens who have paid taxes in to the Medicare system for years would be forced to go into assisted living facilities and nursing homes or simply not receive the healthcare they deserve. In addition, their quality of life would be compromised. Response: As discussed in a previous response to a comment, in a separate analysis in the regulatory impact section of this rule, we looked at margins of HHAs, by county, and the estimated effect that the provisions of this rule would have on HHAs. In particular, we studied the number of counties that would not be served by at least one HHA with a positive margin. Our analysis concluded that there were few counties in which no HHAs had positive margins; therefore, we do not believe that access to care will be adversely affected by these case
mix adjustments. Given the data on profit margins that we and MedPAC saw in our analyses, we believe that the reimbursement rate reductions set forth in this final rule can be absorbed by the majority of HHAs, and that access to care will not be compromised.
II. Provisions of the Proposed Rule and Response to Comments A. CaseMix Measurement As stated in the proposed rule published on July 23, 2010, analysis of HH PPS claims shows total average casemix grew at a rate of about 1 percent each year from 2000 to 2007, with 4 percent growth in 2008. Based on our analysis of the proportion of total casemix change due to changes in real casemix severity of the HH user population, the total amount of casemix growth unrelated to real changes in patient severity (nominal casemix) is 17.45 percent between 2000 and 2008. In each of the years 2008, 2009, and 2010, we reduced payment rates by 2.75 percent as recoupment for nominal casemix change. A paymentrate reduction of 7.43 percent would be needed to account for the outstanding amount of nominal casemix change we intend to recoup based on the real casemix change analysis updated through 2008. In the proposed rule, we proposed to increase the planned 2.71 percent reduction in CY 2011 to 3.79 percent, and to make another 3.79 percent reduction in CY 2012. Doing so would enable us to account for the 7.43 percent nominal casemix residual, while minimizing access to care risks. Iteratively implementing the casemix reduction over two years gives HH providers more time to adjust to the intended reduction of 7.43 percent than would be the case were we to account for the residual in a single year. For a complete description of the proposed casemix refinements model and the underlying research, we refer readers to the CY 2011 HH PPS proposed rule (75 FR 43238 through 43244) published in the July 23, 2010, Federal Register. Comment: Commenters stated that we should suspend or drop casemix reductions because the proposal is based on the assumption that agencies intentionally gamed the system. Response: As we have stated in previous regulations, changes and improvements in coding are important in bringing about nominal coding change. We believe nominal coding change results mostly from changed coding practices, including improved understanding of the ICD9 coding system, more comprehensive coding, changes in the interpretation of various items on the OASIS and in formal OASIS definitions, and other evolving measurement issues. Our view of the causes of nominal coding change does not emphasize the idea that HHAs in general gamed the system. However, since our goal is to pay increased costs associated with changes in patient severity, and nominal coding change does not necessarily demonstrate that underlying changes in patient severity occurred, we believe it is necessary to recoup overpayments due to nominal coding change. Comment: Commenters stated that all of the HHAs are being penalized for the corrupt actions of a few HHAs. Many commenters indicated that their agency had casemix weights below the national average. Commenters stated that nominal casemix change reductions should be limited to certain types of agencies (for example, those with high average casemix index (CMI) or large weight increases or forprofit providers) or that CMS should implement different payment reductions by state or by geographical region, suggesting that their region has a lower nominal casemix change than the national average. Other commenters recommended that reductions be proportional to an individual agency's CMI. For example, some commenters suggested that payment reductions be applied to those HHAs with an average casemix above 1.20. Commenters stated that we should not implement payment reductions to all HHAs merely because that policy is easier to implement.
Response: For a variety of reasons, as we have noted in previous regulations, we have not proposed targeted reductions for nominal case
mix change. We have not conducted analysis of how and whether individual agencies' coding practices have changed over time because this is not feasible. One reason is that many agencies have small patient populations, which would make it practically impossible to measure nominal casemix change reliably. Another reason is that we believe changes and improvements in coding have been widespread, so that such targeting would likely not separate agencies clearly into high and low codingchange groups. Table 1A shows average casemix by type of agency in 2000 and 2008. All types of agencies, regardless of region or profit status or size or affiliation, have substantial increases in their average casemix. While forprofit agencies' casemix grew approximately 19 percent, the casemix average for nonprofit agencies also grew considerably (16.6 percent). Casemix grew just over 19.5 percent for freestanding agencies while casemix for facilitybased agencies grew just short of 15 percent. For rural agencies, casemix grew almost 16 percent, while casemix for urban agencies grew just under 19 percent. Rural agencies will receive an additional 3 percent rural addon to their payments, which will help offset the casemix reductions. It should be noted that the agency groups start from different base year values, but in general the percentage change in casemix is roughly similar across these groups, with the possible exception of the Midwest, for which the percentage change is somewhat higher than the other changesabout 23 percent. No group could be said to have trivial casemix change. Therefore, we believe our proposal to make across the board payment reductions is consistent with the data, and making distinctions by type of agency would be inappropriate. [[Page 70377]]
Table 1AEstimates of CaseMix Change by Provider Type
[20002008]
Actual casemix Casemix change 2000 (IPS
period) 2008 Total Percentage
All Agencies.................................... 1.0959 1.3085 0.2126 19.4
Nonprofit...................................... 1.0840 1.2641 0.1801 16.6
Government...................................... 1.0672 1.2291 0.1619 15.2
Forprofit...................................... 1.1202 1.3332 0.2130 19.0
Facilitybased.................................. 1.0834 1.2433 0.1599 14.8
Freestanding.................................... 1.1035 1.3200 0.2165 19.6
North........................................... 1.0422 1.2459 0.2037 19.6
South........................................... 1.1251 1.337 0.2118 18.8
Midwest......................................... 1.0865 1.3431 0.2566 23.6
West............................................ 1.0956 1.2648 0.1692 15.5
Facility Size (Number of 1st Episodes)
< 99 episodes................................... 1.0898 1.2499 0.1602 14.7
100 or more..................................... 1.1057 1.3266 0.2209 20.0
Urban........................................... 1.1097 1.3184 0.2087 18.8
Rural........................................... 1.0478 1.2136 0.1657 15.8
Although we have stated in past regulations that a targeted system would be administratively burdensome, the reasons we have just presented go beyond administrative complexity. Certain comments seem to assume that the level of casemix can precisely identify those agencies practicing abusive coding. We do not agree with the comments, which seem to assume that agencyspecific casemix levels can precisely differentiate agencies practicing abusive coding from others. System wide, casemix levels have risen over time while patient characteristics data indicate little change in patient severity over time. That is, the main problem is the amount of change in the billed casemix weights not attributable to underlying changes in actual patient severity. Moreover, we believe that a policy of varying payment levels according to regional differences in nominal casemix change would be perceived as inequitable by beneficiaries. That is, beneficiaries who might have access only to agencies subject to larger payment reductions might believe Medicare's policies disadvantage them unfairly. Comment: Commenters stated that we should suspend or drop casemix adjustments because they will cause financial distress/bankruptcy among agencies, particularly ``safetynet'' agencies that take patients other agencies reject. Commenters further stated that the proposed payment reductions will cause ``safety net'' providers to have a ``negative operating margin'' and/or cause notforprofit agencies to go out of business. Response: Our analysis of the potential effect of the 2011 payment rate reductions suggests that while negativemargin agencies may increase in number, almost all such agencies are located in counties with other agencies predicted to have positive margins. We also note that predicting the size of the increase in negativemargin agencies is difficult to do because many agencies may find ways to cut costs or increase revenues so that margins do not deteriorate. Identifying the agencies that commenters call ``safetynet'' agencies is not feasible with our administrative data, so we cannot provide any evidence either to support or refute assertions that safetynet agencies are at greatest risk. Our analysis of margins of notforprofit agencies shows that they tend to have lower margins than forprofit agencies. However, we do not agree that notforprofit agencies will necessarily be more likely to exit the HH business than a forprofit agency. We believe the business decision is a complex one with many considerations, such as the organization's mission, the availability of alternate sources of funding, and whether or not the organization is embedded in a larger one. These influential factors are not necessarily associated with the nonprofit or forprofit status of an agency, and therefore, we cannot accurately predict the business decision of an agency based solely on their status. Comment: Commenters stated that we should suspend or drop casemix adjustments because access would be reduced, particularly among hard
toplace patients. Commenters predicted that the payment reductions would have a ``destabilizing effect'' on HHAs and negatively impact patient access to HH care. Response: MedPac has previously recommended to the Congress that HH rates be reduced by 5 percent. (MedPac, Report to Congress: Medicare Payment [[Page 70378]]
Policy, March 2009). We believe HH industry margins are sufficient to support a rate reduction of that size. For example, MedPac projected 2011 margins would remain high, at 13.7 percent (assuming the previously planned rate reduction of 2.71 percent in 2011). MedPac also reported that the number of agencies continues to grow, reaching in excess of 10,400 in 2009. This is a 50 percent increase since 2002, although growth in new agencies has been highly uneven geographically. Notably, access to care was sufficient in 2001, when the number of agencies nationally was much lower than it is today (Office of the Inspector General, Access to Home Health Care after Hospital Discharge, July 2001, and Office of the Inspector General, Medicare Home Health Care Community Beneficiaries, October 2001). Our analysis of cost reports submitted by the end of 2008 indicates that 99 percent of beneficiaries are in counties served by at least two agencies, with more than half of beneficiaries in counties served by at least 11 agencies. Predictions about the number of bankruptcies and effects on access are highly uncertain. Furthermore, we have no indications that payment reductions implemented since 2008 have led to access problems among beneficiaries. During the succeeding period, the total number of agencies has continued to grow, which is indirect evidence that access levels have not deteriorated. We intend to request that the Office of the Inspector General resume investigations of the access impacts of payment reductions. We will continue to monitor access to care in order to identify any unintended consequences of our policies in this final rule. We emphasize that the justification for the nominal casemix payment reductions is not HHA margins but rather is the increase in billed casemix weights, which our analysis indicates, is unrelated to changes in underlying patient health characteristics. Comment: Commenters suggested that we provide funding to HHAs that admit patients that other agencies avoid. Response: We have received comments of this nature over the years. We are unable to definitively characterize such a categorization of HHAs using administrative data. While we welcome information as to the characteristics and identity of such agencies, so that we can study their performance, we would also need to study carefully the implications of making such distinctions on a permanent basis in our payment system. We expect many issues would arise. In future rulemaking we will solicit comment on the various challenges that might arise in administering payments differently to what some commenters called ``full access organizations'' and potentially other categories of agencies that might be capable of mitigating access problems, should they arise. Comment: Some commenters suggested that CMS focus its efforts on the study, which will assess possible changes to the HH PPS in order to ensure access to care. Response: Section 3131(d) of the Affordable Care Act mandates that the Secretary conduct a study to evaluate costs related to providing care to lowincome beneficiaries, beneficiaries in medically underserved areas, and beneficiaries with varying levels of severity of illness. The section directs the study to be focused on ensuring access to care for patients with characteristics associated with especially high costs. We are preparing to launch the mandated study in FY 2011.
Comment: Commenters stated that CMS should suspend or drop nominal casemix change reductions because those payment reductions are contrary to congressional intent in the Affordable Care Act, which implemented payment reductions on a separate basis. Furthermore, commenters stated that the 3.79 percent casemix payment reduction should count as the ``5 percent cut mandated by the [Affordable Care Act]'' and the proposed payment decreases should not be implemented in addition to the Affordable Care Actmandated payment reductions.
Response: Section 3401(e) of the Affordable Care Act mandated a market basket reduction and future productivity adjustments. In the Affordable Care Act, Congress did not make any changes to the pre
existing provision authorizing CMS to reduce payment rates in response to nominal casemix change. Nor did the Congress authorize a substitution of the casemix payment reduction for the Affordable Care Act's five percent payment reduction related to outlier payments (Section 3131(b) of the Affordable Care Act). Therefore, the reductions for nominal casemix changes comply with current law. Comment: Commenters stated that CMS should suspend or drop casemix reductions because CMS should give specific proposals such as therapy documentation and comorbidity casemix weight changes time to work.
Response: Our proposals are intended to recoup excess outlays that have already been made through 2008, outlays that were not justified by changes in patient severity. Going forward, beginning with 2011, we would expect to see a moderation of nominal casemix growth because of the proposals mentioned by the commenters. Such moderation would decrease recoupment, if any, proposed in the future. Comment: A commenter stated that the need for payment reductions in HH care is ``consistent with the experience of coding changes in other payment systems.'' However, the methodology ``used to establish the reduction percentage'' in the inpatient system was flawed and, therefore, the methodology used to establish the payment reduction for HH is probably flawed as well. Response: The payment systems, institutional conditions, data resources, casemix assignment procedures, and many other aspects differ across care settings. Therefore, methodologies must each be judged on their own individual merits. We have explained and justified the methodology in this and in previous regulations cited elsewhere in this preamble. Comment: We received a comment recommending that we focus the application of the casemix change adjustment only to visits beyond the 13th day by changing the OASIS scoring and rate calculation for the extended cases rather than reducing the base rate and affecting all visits as a result. Response: We are unsure of the specific change recommended in this comment, but we would be concerned that any approach to rate reduction based on the length of time in treatment within the 60day episode would affect fundamental assumptions of the HH PPS system. Most notably, the system assumes that the amount of resources within the 60
day period, rather than the timing of their expenditure within that period, is the appropriate variable use to determine payments in the casemixadjusted payment system. Comment: One commenter stated that a recent study that used data from a nationally representative survey (the Medical Expenditures Panel SurveyMEPS) found a change in real casemix between 2000 and 2007.
Response: We thank the commenter for the comments. However, we note that the MEPs analysis appears to be based on all Medicare beneficiaries, not just the subset of HH patients. Home health users are less than 10 percent of the fee for service enrolled Medicare population, so it is not certain that the MEPS study of the entire Medicare population is relevant to the question of worsening health status of HH users. Comment: Commenters stated that CMS should suspend or drop casemix reductions because the data used to determine the reductions do not [[Page 70379]]
recognize real increases in severity due to earlier and sicker hospital discharges. Response: While we recognize that average lengths of stay in acute care are in decline, our analysis shows that agencies are, in fact, caring for fewer, not more, postacute patients. Since 2001, the average length of stay in acute care preceding HH has declined by about one day, from 7 days to 6 days. However, agencies are caring for fewer highly acute patients in their caseloads. The proportion of nonLUPA episodes in which the patient went from acute care directly to HH within 14 days of acute hospital discharge declined substantially between 2001 and 2008, from 32 percent to 23 percent. In addition, the median acute hospital length of stay for these nonLUPA episodes with a 14day lookback period has remained unchanged at 5 days since 2002 (see Table 1B, 50th percentile). Since 2005, the distribution has been stable, except for a 1day shortening of lengths of stay at the 5th, 80th, and 99th percentiles. We believe the declining prevalence of recent acute discharges is due in part to more patients incurring recertifications after admission to HH care, and due to more patients entering care from the community. The shortening lengths of stay at the right tail (high percentiles) of the distribution may reflect changing utilization of longtermcare hospitals during recent years. The conclusion we draw from these data is that while patients on average have shorter hospital stays, agencies are also facing a smaller proportion of HH episodes in which the patient has been acutely ill in the very recent past. Also, the detailed data on the distribution of stay lengths suggest that for the most part lengths of stay for such patients remained stable through 2008, particularly since around 2005.
Table 1BPercentiles of Acute Hospital Length of Stay (days)
[20012008]
Year 5th 10th 20th 30th 40th 50th 60th 70th 80th 90th 99th
2001................................................. 2 2 3 4 5 6 7 8 10 14 32
2002................................................. 2 2 3 4 5 5 6 8 10 14 31
2003................................................. 2 2 3 4 4 5 6 8 10 13 30
2004................................................. 2 2 3 4 4 5 6 7 9 13 29
2005................................................. 2 2 3 3 4 5 6 7 9 12 28
2006................................................. 1 2 3 3 4 5 6 7 9 12 28
2007................................................. 1 2 3 3 4 5 6 7 9 12 27
2008................................................. 1 2 3 3 4 5 6 7 8 12 25
Note: Based on a 10 percent random beneficiary sample of FFS HH users; excludes LUPA episodes and includes only episodes where acute hospital discharge
occurred within 14 days of the fromdate of the 60day episode claim and the patient's first destination postdischarge under Part A was HH care.
Furthermore, we think that acuity of patients has been increasingly mitigated by lengthening postacute stays for the substantial number of HH patients who use residential postacute care (PAC) prior to an episode. Our data show that patients who enter residential PAC before HH admission have experienced increasing lengths of stay in PAC since 2001. Using a 10 percent random beneficiary sample, we computed the total days of stay (including both acute and PAC days) for HH episodes with common patterns of preadmission utilization during the 60 days preceding the beginning of the episode. We included patients whose last stay was acute, or whose nexttolast stay was acute with a followon residential PAC stay, or whose third from last stay was acute followed by two PAC stays. These common patterns accounted for 55 percent of the initial episodes in 2001 and 42 percent in 2008. We found that total days of stay during the 60 days leading up to the episode averaged 12.6 days in 2001, and rose to 12.8 days in 2008. This small change in total days of stay during a period when acute LOS was declining was due to increasing lengths of stay in residential PAC for these patients. For example, within the 30 days before admission, average length of stay in the PAC setting for episodes preceded by an acute stay that was the nexttolast stay, and where the PAC stay was the very last stay before the claimfrom date, increased from 12.7 to 14.3 days. Our interpretation of these statistics is that patient acuity has been increasingly mitigated by longer postacute stays for the substantial number of HH patients that use residential PAC prior to the start of a HH episode. Patient acuity also was mitigated by growing numbers of HH recertifications. Comment: A commenter stated the data and analysis we used to measure real casemix change do not recognize that technology improvements in recent years enable patients with more complex conditions to be cared for at home. Response: We appreciate this comment but possess limited information to evaluate it. The data we do have, from OASIS, suggest that episodes for patients using technological treatments at home are not increasing. OASIS data show that the proportion of episodes involving enteral nutrition has declined from 2.9 percent to 1.6 percent between 2001 and 2008; the proportion of episodes involving intravenous therapy or infusion therapy has stayed stable at around 2.2 percent; and the proportion of episodes involving parenteral nutrition remains at 0.2 percent or less during that period. The proportion of episodes with none of those treatments has increased from 94.8 percent to 96.2 percent. These data are inconsistent with the commenter's assertion, but we solicit commenters to provide us in the future with other types of reliable data on this aspect of patient casemix.
Comment: Many commenters cited improvements in the accuracy of OASIS coding which could more precisely measure patient severity as a reason why we should drop its proposal to address nominal casemix growth by reducing payments. Response: Comments referencing coding improvements, such as increasing accuracy, do not recognize that such improvements are an inappropriate basis for payment. Measurable changes in patient severity and patient need are an appropriate basis for changes in payment. Our analysis continues to find only small changes in patient severity and need. Comment: Commenters stated that the increase in casemix is due to the HHA's diligence in ensuring proper coding; CMS's implementation of payment reductions would therefore penalize HHAs for proper coding, while the agencies who were not ethical or diligent in their coding would not be affected as much. Furthermore, a commenter suggested that part of the [[Page 70380]]
``nominal'' casemix changes were due to HHAs' past failures to code properly. The commenter stated that when the HH PPS system was first implemented in 2000, HHAs undercoded in a manner that generated insufficient resources to adequately care for the patient. After modifications were made to the HH PPS system in 2008, coding was still not adequate for the patient. The commenter stated that, for these reasons, the baseline average casemix is much lower than the actual value. Response: We agree with the commenter's explanation of previous undercoding as a cause of nominal casemix growth. Over the years, we have issued and revised instructions for OASIS to reinforce the importance of complete and accurate coding. As we have stated in previous regulations, however, Medicare should not inappropriately make greater reimbursements for a patient population whose level of severity has changed relatively little over the years, notwithstanding more
comprehensive documentation of the health status of these patients.
Comment: A commenter stated that much of the increase in casemix weights is due to HHAs complying with Medicare instructions regarding patient coding consistent with the 2008 version of the HH PPS.
Response: This comment is difficult to address because the commenter does not cite specifically which documents constitute CMS
issued Medicare instructions ``consistent with the 2008 version of the HH PPS.'' Nor does the comment explain how the increase in casemix weights was driven by such CMS instructions. However, we believe our release in late 2008 of a revision of Attachment D of the OASIS Instruction Manual would not have had the effect suggested by the comment. (Attachment D was intended to provide guidance on diagnosis reporting and coding in the context of the HH PPS.) First, Attachment D reiterated traditional CMS guidance about how to select diagnoses in home health. Attachment D did not deviate from the fundamental and longstanding instruction that reported diagnoses must be relevant to the treatment plan and the progress or outcome of care. Second, Attachment D's release late in the year suggests it would not have had much impact on the 2008 data. Comment: We received a number of comments stating that HH patients now have more complex conditions than previous populations of HH patients and that such patients previously would have been referred to health care facilities, but are now being cared for at home. Moreover, the commenters stated that other healthcare settings have developed stricter admission requirements, thereby increasing the number of HHA patients with high severity levels. One commenter cited as evidence diversion of patients to home care from inpatient rehabilitation facilities due to the CMS 60 percent rule and skilled nursing facilities' (SNFs') technology increases. The commenters point to such changes as evidence that policy incentives favor the home setting over institutional care, and therefore, casemix increases are warranted.
Response: We appreciate the comment, but we have little information with which to evaluate the claim regarding diversion to the home care setting. Possibly relevant is that the proportion of initial nonLUPA episodes preceded by acute care within the previous 60 days has declined between 2001 and 2008, from 70.0 percent to 62.7 percent. This indicates more patients are being admitted from noninstitutional settings, for example, the community. However, our data do not indicate whether the patients coming into home care without recent care in a Part A setting were diverted from entering such settings in favor of homebased care. Postacute institutional utilization data perhaps consistent with the comment suggest a decline in inpatient rehabilitation facilities (IRFs) as a source of HH patients, but this decline may have been partly offset by an increase in SNF utilization as a source. For example, the proportion of initial episodes preceded by an IRF stay that ended sometime during the 30 days before HH admission suddenly declined by more than a percentage point in 2005 and declined another 1.5 percentage points by 2008, while the percentage preceded by a SNF stay increased half a percentage point in 2005 and increased another 0.4 percentage points by 2008 (data based on a 10 percent beneficiary sample of initial, nonLUPA episodes). Furthermore, the fact that acute stays, which normally precede stays in institutional PAC settings, are decreasing in the stay histories of HH patients is inconsistent with the idea that the reduction in IRF stay histories is a sign that more patients are coming to HH as a result of diversion from IRF care. Comment: Commenters stated that the implementation of the payment reductions should be delayed until the validity of data and methods used to calculate the payment reduction can be verified. Response: The real casemix prediction model and its application account for changes in the HH patient population by quantifying the relationship between patient demographic and clinical characteristics and casemix. The relationships in conjunction with updated measures of patient characteristics are used to quantify real casemix change. The characteristics in the model include proxy measures for severity, including a variety of measures, namely, demographic variables, hospital expenditures, expenditures on other Part A services, Part A utilization measures, living situation, type of hospital stay, severity of illness during the stay, and risk of mortality during the stay. Measurable changes in patient severity and patient need, factors mentioned by commenters, are an appropriate basis for changes in payment. Our model of real casemix change has attempted to capture such increases. We recognize that models are potentially limited in their ability to pick up more subtle changes in a patient population such as those alluded to by various commenters. Yet in previous regulations, we presented additional types of data suggestive of only minor change in the population admitted to HH, and very large changes in casemix indices over a short period. We included among these pieces of evidence information about the declining proportion of HH episodes associated with a recent acute stay for hip fracture, congestive heart failure, stroke, and hip replacement, which are four situations often associated with high severity and high resource intensity. We found declining shares for these types of episodes as of 2005 (72 FR 49762, 49833 [August 2007]). We presented information showing that resource use did not increase along with billed casemix (72 FR 49833); stable resource use data suggest that patients were not more in need of services over time, notwithstanding the rising billed casemix weights that suggested they would be. We also analyzed changes in OASIS item guidance that clarified definitions and could have led to progress in coding practice (72 FR 25356, 25359 [May 2007]). We reported rates of OASIS conditions for the year before the beginning of the HH PPS and 2003, and found some scattered small changes indicative of worsening severity but no dramatic changes commensurate with the increase in casemix weights (72 FR 25359). In our discussion, we cited specific instances where agencies' changing understanding of coding could have contributed to the adverse changes. However, as previously stated, Medicare payments should be based on patient [[Page 70381]]
level of severity, and not on coding practices.
In the July 2010 proposed rule, we identified a very large, sudden 1 year change (+0.0533) in the average casemix weight by comparing a 2007 sample that we assigned to casemix groups using the new 153group system and a 2008 sample grouped under the same system. It is unlikely that the patient population suddenly worsened in severity to cause an increase of 0.0533 in the average casemix weight in a single year. Furthermore, we concluded that the large change was not due to our use of the new, 153group casemix algorithm in 2008, because when we applied the previous casemix system and the new system to a sample of 2007 claims, the average weight differed very little (the difference was 0.0054). That is, the algorithms in the previous and new casemix systems provided highly similar casemix weights on the sample of 2007 claims. We further examined the diagnosis coding on OASIS assessments linked to the 20 percent claims sample and found a large increase between 2007 and 2008 in the reporting of secondary diagnosis codes (see 75 FR 43242 [July 23, 2010]). The use of secondary diagnosis codes in the casemix algorithm was introduced in 2008 as part of the new casemix system. We are not delaying the CY 2011 payment reduction because we consider these various analyses to be strong evidence that agencies changed coding practice markedly when faced with the new casemix system in October 2000 and when faced with the refined one in January 2008. The conclusions we reached from the available evidence were that a small amount of real casemix change has occurred; our model measures this amount to be 10.07 percent of the total change in the average weight since the 12month period ending September 30, 2000. The remainder of the total change resulted from sources of nominal casemix change as discussed elsewhere in this preamble. These sources include improvements in coding, changes in therapy prescriptions in response to payment incentives, and changes in such elements of the system as OASIS item definitions and coding guidelines. However, as stated elsewhere in this preamble, we are not finalizing the proposed reduction for CY 2012 pending further study relating to the measurement of real and nominal casemix change. Comment: Commenters stated that we should change our methodology so that coding and documentation, and not therapy utilization, are the only factors used in calculating ``nominal'' casemix changes.
Response: We thank the commenters for their suggestion. However, the model we use is intended to analyze changes in real casemix over time and does not distinguish whether these changes are due to increases in therapy use or other factors mentioned by the commenter. We do not believe that it would be appropriate to include utilization
related variables such as the number of therapy visits as variables in the model predicting real casemix change. In addition, the goal of this analysis was to examine changes in measures of patient acuity that are not affected by any changes in provider coding practices.
Comment: Commenters stated that we should eliminate the proposed payment reductions and rather ``conduct targeted claims review and deny payment for claims where the casemix weight is not supported by the plan of care.'' Response: While we appreciate the commenters' suggestion, we cannot act on it, because our resources are not sufficient to conduct claims review on a scale that woul
Frank Whelan, (410) 7861302, for information related to payment safeguards. Elizabeth Goldstein, (410) 7866665, for CAHPS issues. Mary Pratt, (410) 7866867, for quality issues. Randy Throndset, (410) 7860131, for overall HH PPS issues.
Kathleen Walch, (410) 7867970, for skilled services requirements and clinical issues. Table of Contents I. Background A. Statutory Background B. System for Payment of Home Health Services C. Updates to the HH PPS D. Comments Received
II. Provisions of the Proposed Rule and Response to Comments A. CaseMix Measurement B. Therapy Clarifications C. Outlier Policy 1. Background 2. Regulatory Update 3. Statutory Update 4. Outlier Cap 5. Loss Sharing Ratio and Fixed Dollar Ratio (FDL) 6. Imputed Costs D. CY 2011 Rate Update 1. Home Health Market Basket Update 2. Home Health Care Quality Improvement a. OASIS b. Home Health Care CAHPS Survey (HHCAHPS) 3. Home Health Wage Index 4. CY 2011 Annual Payment Update a. National Standardized 60Day Episode Rate b. Updated CY 2011 National Standardized 60Day Episode Payment Rate c. National PerVisit Rates Used to Pay LUPAs and Compute Imputed Costs Used in Outlier Calculations d. LUPA Addon Payment Amount Update e. Nonroutine Medical Supply Conversion Factor Update 5. Rural Addon E. Enrollment Provisions for HHAs 1. HHA Capitalization 2. HHA Changes of Ownership F. Home Health FacetoFace Encounter G. Future Plans to Group HH PPS Claims Centrally During Claims Processing H. New Requirements Affecting Hospice Certifications and Recertifications III. Collection of Information Requirements