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Home Health Prospective Payment System Refinements and Rate Update for CY 2010 (CMS-1560-P)

Proposed Rule

Score: 25 / 60

RULE SUMMARY

This proposed rule sets forth an update to the Home Health Prospective Payment System (HH PPS) rates; the national standardized 60-day episode rates, the national per-visit rates, the non-routine medical supply (NRS) conversion factor, and the low utilization payment amount (LUPA) add-on payment amount under the Medicare prospective payment system for home health agencies effective January 1, 2010. In addition, this rule proposes a change to the HH PPS outlier policy and proposes to require the submission of OASIS data as a condition for payment under the HH PPS. Also, this rule proposes payment safeguards that would improve our enrollment process, improve the quality of care that Medicare beneficiaries receive from HHAs, and reduce the Medicare program’s vulnerability to fraud. This rule also proposes clarifying language to the ‘‘skilled services’’ section and Condition of Participation (CoP) section of our regulations. This proposed rule also clarifies the coverage of routine medical supplies under the HH PPS. We are also soliciting comments on: Physician/patient interaction associated with the home health plan of care (POC); a Consumer Assessment of Healthcare Providers and Systems (CAHPS) Home Health Care Survey; the Outcome and Assessment Information Set (OASIS), Version C, effective January 1, 2010; proposed pay for reporting measures for use in CY 2011; and a number of minor paymentrelated issues. We are also responding to comments received as a result of our solicitation in the CY 2008 HH PPS final rule with comment period.

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

CriterionScore

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
0938-AP55 can be found on regulations.gov using the RIN and a keyword search, as well as on the Department of Health and Human Service's website. It can be found by clicking on regulations and guidance under medicare, then on Quarterly provider updates–regulations. Here, search under "QPU July-September 2009." The Department offers a list of proposed rules. However, there is a discrepency in the RIN. On regulations.gov it is A955 and on the department's website it is AP20, yet they appear to be the same regulation. The actual Federal Register notice has the number 0938-AP20.
4/5
2. How verifiable are the data used in the analysis?
Tables at the end show the wage index for urban area and rural areas. Wage index is based on hospital wage index, and the reader is referred to another proceeding to find out how this is calculated. Presumably HHS has the other data used in the calculations, but they are not explicitly sourced.
2/5
3. How verifiable are the models and assumptions used in the analysis?
An underlying technical report commissioned from Abt Associates is cited and linked. Data on profit margins and growth of home health care agencies, which support the assumption that the proposed payment cuts will not reduce availability of care, are from the MedPAC Annual Report; no full citation or link is given. A GAO study that apparently supports HHS's position is cited but not linked. Decisions on outlier policy cite CMS's own analysis, but only results are given. Many other "judgment calls" are just presented as judgments.
3/5
4. Was the analysis comprehensible to an informed layperson?
The RIA is largely unintelligible unless one first reads the rest of the Federal Register notice. It makes more sense after reading the notice, but the notice is still tough going due to jargon, technical terms, acronyms, turgid writing, etc. Calculations are explained step-by-step.
2/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
1/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
The RIA does not name outcomes for the principal part of the regulation it addresses, the expenditures. The introduction to the Federal Register notice recites the legal requirements for HHS to issue this regulation, but does not explain what Congress thought it was achieving. The section discussing quality measures says HHS requires the measures so the public can compare home health agencies and to encourage agencies to improve the quality of care. So, the regulation requiring the outcomes measures does have stated outcomes. The "payment safeguards" section also mentions controlling fraud and improved care as goals of that particular section.
2/5
Does the analysis identify how these outcomes are to be measured?
It only identifies the quality of care measures—but these are presented only as outcomes of the regulation requiring that they be measured, not as a general outcome expected from the rest of the regulation.
1/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
There are a few assertions that some of the regulatory provisions will improve or not harm the quality or availability of care. These are largely side issues.
1/5
Does the analysis present credible empirical support for the theory?
A few facts are cited in support of the claims mentioned above.
1/5
Does the analysis adequately assess uncertainty about the outcomes?
No discussion about uncertainty of outcomes.
0/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
2/5
Does the analysis identify a market failure or other systemic problem?
The closest thing to a public policy rationale is the statement that prior HHS analysis found that 11.75 percent of the increase in case-mix was due to changes in coding practices and documentation rather than changes in patient conditions. So some of the calculations here implement a multi-year plan to reduce payments that HHS believes were excessive. One section discusses fraud and inaccurate payments and details some measures intended to combat them.
3/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
The problem descriptions generally just state, "This problem happens." HHS explicitly rejects a case-by-case approach to excessive payment as too time-consuming. So there is a claim that these are systemic problems but not a theory explaining why.
1/5
Does the analysis present credible empirical support for the theory?
Figures are presented to support the claim that HHS has been over-paying for these services, and studies and figures are cited to support suspicions about fraud.
3/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
There is no acknowledgement of uncertainty.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
3/5
Does the analysis enumerate other alternatives to address the problem?
Principal alternatives are two more severe reductions in payments that reflect more recent data on changes in case-mix or reflect decisions to phase in the reductions more quickly. Costs are also calculated for the wage adjustment only, though this is not really presented as an alternative choice. A few other small tweaks are mentioned and briefly discussed in the text of the Federal Register notice.
4/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
These are fairly narrow alternatives: different ways of calculating payments.
2/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
There are no estimates of effects on health outcomes. Reducing excessive payments was one goal, and the analysis does estimate effects of alternatives on this.
2/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
The analysis is based on past data and does not attempt to adjust for future changes in case mix or number of visits. It does, however, use more recent data that likely more accurately reflect case mix than under the previous approach.
2/5
8. How well does the analysis assess costs and benefits?
2/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
A table shows effects of updating the wage index only, updating the wage index combined with some alternative reductions, and the full proposal. These calculations estimate incremental effects on federal expenditures only. It is not clear in the RIA whether the alternatives are alternative regulatory proposals or sensitivity analyses, or something else.
3/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
It identifies federal expenditures, but no others.
3/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
Only in the sense that the calculations determine how much HHS will pay for care.
2/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
The notice cites statistics on home health care profit margins and growth in the number of home health care agencies in support of its claim that the reduced payments will not reduce availability of care. Similarly, it considers whether reducing the percentage of dollars going to "outlier" payments would reduce availability of care to patients who are more expensive to serve. It dismisses this concern because most of the representative group of providers are in urban areas, "and there is not an access problem with regard to receiving home health services in urban areas." So it considered a few incentive issues but concluded they were negligible.
3/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
A paragraph notes that the analysis does not account for future changes in legislation or other changes to Medicare that might alter the results. These appear to be the main types of uncertainties acknowledged.
1/5
Does the analysis identify the alternative that maximizes net benefits?
Since the analysis does not calculate outcomes or benefits, it did not calculate net benefits.
0/5
Does the analysis identify the cost-effectiveness of each alternative considered?
Since the analysis does not calculate outcomes or benefits, it did not calculate cost-effectiveness.
0/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
A table shows effects on providers broken down by type of facility, location, urban/rural, size, etc. Another table shows effects on providers of different sizes broken down by location, urban/rural, etc.
4/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
Since benefits are not calculated, incidence of benefits is not calculated. Taxpayers save some money. Quality of care and effects on patients are mentioned a few times.
2/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
Analyses of overpayments and fraud appear to have had some effect on the decisions in this regulation. The analysis also had an effect to the extent that the calculations determine what providers will be paid.
4/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
Benefits are not measured, so net benefits could not be calculated.
0/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
Home health agencies must report 54 quality measures. The analysis enumerates 12 that are publicly reported; about two-thirds of these measure ultimate outcomes. The purpose of the measures, however, is to enable the public to compare home health agencies and encourage agencies to improve the quality of care—not to evaluate the effects of Medicare regulations. The regulation establishes no goals for these measures.
1/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
Outcome data could perhaps be used to evaluate the effects of this regulation.
1/5
 
Total25 / 60

Additional details

Agency
Department of Health and Human Services
Regulatory Identification Number
0938-AP55
Agency Name
Department of Health and Human Services
Rule Publication Date
08/13/2009
Comment Closing Date
10/26/2009