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CMS 2016 Home Health Prospective Payment System (HHPPS) Rule





CMS issued a final rule on October 29th that includes the annual payment rate update along with the highly anticipated Value-Based Purchasing (VBP) pilot program. HCAF's #1 priority at this time is to prepare our members so that your agencies can not only survive, but become even more successful under this pilot. Use the left-hand menu find tools that will help you understand and prepare for the proposed rule. Please continue to visit this page as we build our resources available for you.


Key Points for Florida HHA's in 2016 Final Rule:


Value Based Purchasing Pilot

  • CMS officially designated Florida as one of the states in the VBP pilot. This means that in 2016, all certified HHAs in Florida will be forced to participate in and be impacted by a new payment model, aimed at improving and rewarding quality care. Agencies in Florida will have payments adjusted depending on the degree of quality performance achieved.
  • The 9 states included: MA, MD, NC, FL, WA, AZ, NE, and TN.
  • Starts in January 2016 with a 2015 baseline year on performance.
  • Payments will change by 3-8% at risk beginning in 2018. It will be phased in at 3% in 2018, 5% in 2019, 6% in 2020, 7% in 2012, and 8% in 2022.
  • CMS estimates that, with the 8% level, 10% of the HHAs could see a rate reduction of 3% or greater.


Payment Rates

  • The basic PPS rule held no real surprises but continues to put forth more painful cuts. It simply carries out the third year of a four year phase-in of the rate rebasing plan. Congress required that the rate rebasing be done with equal installments over 2014 through 2017. CMS is capped at reducing the base episode rate by no more than $80.95 which is equal to 3.5% each year. So we are facing another 3.5% cut that will be slightly offset by the Market Basket increase. In the end CMS estimates that the net result of all of its rate proposals is a 1.8% reduction in Medicare payments to home health agencies or $350 million in 2016.
  • What was a surprise was CMS’s proposal to reduce rates for perceived “coding creep”. CMS alleges that HHAs have up-coded claims to levels that do not reflect actual changes in patients’ clinical condition. Coding creep adjustments have been imposed in the past. CMS proposes to phase-in the creep adjustment over 3 years at .97% in each of 2016, 2017, and 2018 to penalize agencies for what they call “case mix creep.”
  • While, the final rule does not reference the 2% sequestration cut specifically, it is definitely expected that will continue in 2016 along with all the cuts mentioned above.








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