PROJECT: CASE MIX WEIGHT CHANGE ADJUSTMENT

Overview

This is a request for consideration of a research project that relates to the Proposed Rule issued by the Centers for Medicare and Medicaid Services (CMS) entitled “Home Health Prospective Payment System Rate Update for Calendar Year 2011; Changes in Certification Requirements for Home Health Agencies and Hospices.” The Proposed Rule is found at:75 FR 43236 (July 23, 2010) The National Association for Home Care & Hospice, Inc. (NAHC) is seeking a proposal that would provide: A.) the potential design of the research project; B.) the estimated cost of the project; and C.) the projected completion date. Public comments are due no later than September 14, 2010. NAHC is interested in the receipt of a Final Report by September 1, 2010, if possible.

Background

The Proposed Rule includes a rate reduction of 3.79% in 2011 and 2012 on the basis that the average case mix weight (CMW) has increased in 2006-2008 at a level that does not solely reflect changes in patient characteristics. This rate reduction follows earlier CMW adjustments in CY2008-2010 at 2.75% each year reflecting changes in CMW from CY2000-2005. That adjustment was originally based on an assessment method that CMS later abandoned and replaced with one devised by Abt Associates, Refinement of Medicare’s Home Health Prospective Payment System: Final Report (April 2008), NAHC had challenged the original approach with the support of an analysis by the Lewin Group (attached). An analysis of the Abt method by Dobson/DaVanzo also found significant flaws (attached).

One significant factor in the change in CMW is the increase of episodes of home health services where the utilization of therapy services equaled or exceeded the therapy threshold(s) for increased reimbursement. CMW also increased due to improved coding accuracy, coding behavioral changes and increased reporting of certain patient diagnoses following a system change in 2008.

Research Project

The research project entails an analysis as to whether the proposed rate adjustment is reliable and accurate relative to a determination as to the level of CMW related to other than changes in patient characteristics. The project would answer five questions:

  1. Is the model for evaluating changes in CMW related to changes in patient characteristics and changes in CMW due to other reasons valid and reliable?
  2. If the model is valid and reliable, is the Proposed Rule an accurate application of the model?
  3. If the model is not valid and reliable, what are the flaws and weaknesses and what impact do the deficiencies have on the outcome of the “real” CMW change calculation?
  4. What evidence exists that demonstrates that the “real” case mix change in home health patients is greater than the level calculated by CMS in its methodology and how much of the change in case mix weights is due to “real” change?
  5. CMS alleges that the reporting of hypertension as a diagnoses increased the CMW without an indication that there was a corresponding change in patient characteristics. CMS proposes to eliminate including hypertension in the CMW scoring effective CY2011. Does, the elimination of hypertension in the CMW scoring process effect the validity of including a permanent rate reduction related to the inclusion of hypertension reporting in CY2008?

Some potential problems with CMS Assessment method

The CMS model for evaluating changes in case-mix weights may be flawed in the following ways:

  • It ignores the reality that the increased use of therapy means that patients have changed rather than providers have up-coded claims
  • It relies too heavily on hospital discharge data when half of all patients are admitted to home health from settings other than a hospital
  • It fails to integrate changes in care delivery and payment methodologies in other provider sectors such as hospitals, nursing facilities, long term care hospitals and rehabilitation hospitals that affect the nature of patients in home health services
  • It fails to account for home health coding policy changes that negate the risk of coding weight increases such as the proposed elimination of hypertension from the coding while CMS proposes a permanent rate reduction related to the impact of hypertension coding
  • It does not consider that certain coding adjustments, e.g. therapy utilization, increase provider costs rather than reimbursement alone
  • It penalizes providers for improved accuracy in patient assessment and coding

References

  1. Home Health Prospective Payment System--Notice of Proposed Rulemaking, 69 FR 58133 (October 28, 1999)
  2. Home Health Prospective Payment System—Final Rule, 69 FR 58133 (July 3, 2000)
  3. Home Health Prospective Payment System; 2008 Payment Rates---Notice of Proposed Rule, 72 FR 25366 (May 4, 2007)
  4. Home Health Prospective Payment System; 2008 Payment Rates---Final Rule, 72 FR 49762 (August 29, 2007)
  5. Home Health Prospective Payment System; 2010 Payment Rates---Notice of Proposed Rule, 74 FR 40948 (August 13, 2009)
  6. Home Health Prospective Payment System; 2010 Payment Rates---Final Rule, 74 FR 58078 (November 10, 2009)
  7. Home Health Prospective Payment System; 2011 Payment Rates---Notice of Proposed Rule, 75 FR 43236 (July 23, 2010)
  8. Abt Associates, Inc., Refinement of Medicare’s Home Health Prospective Payment System: Final Report (April 2008),
  9. Abt Associates, Inc.Analysis of 2006-2007 Case Mix Change (August 20, 2009)
  10. Lewin Study