The Centers for Medicare & Medicaid Services (CMS) formally published the Proposed Rule on the 2011 Medicare home health payment rates in the Federal Register July 23. Effective January 1, 2011, the Proposed Rule includes a proposed case mix coding "creep" adjustment of 3.79 percent for 2011 and 2012, an increased from the scheduled 2.71 percent reduction in 2011. Today, we will share the reasons behind the case mix coding weight adjustment provided by the National Association for Home Care and Hospice (NAHC Report, 7/23/10):

CMS is authorized to adjust home health services payment rates if the change in coding weights relates to changes in coding rather than changes in patient characteristics. According to CMS, there has been a 19.40 percent increase in the average case mix weight since the inception of HH PPS in 2000 through 2008. Of the 19.40 percent increase, the Agency estimates that only 10.07 percent is associated with actual changes in patient characteristics. The rest, CMS says, is due to changes in coding practices and documentation rather than treatment of more resource-intensive patients.

The national average case mix weight rose in 2008 to 1.3085, a 19.4 percent increase from the interim payment system baseline of 1.0959. After accounting for changes in patient characteristics, CMS concludes that coding weights increased by 17.45 percent due to behavioral changes, coding practice changes, and improved coding.

Originally, CMS planned to impose a case mix "creep" adjustment of 2.71 percent in 2011. However, with the extended coding review in 2008, a one-year adjustment would rise to 7.43 percent. Instead of capturing the adjustment in a single year, CMS proposes a two-year adjustment of 3.79 percent in 2011 and 2012. At the same time, CMS states that future adjustments for coding weight changes in 2009 and later will be done in a single year instead of a multi-year phase-in.

The CMS model for distinguishing between coding changes and changes in patient characteristics classifies increased use and intensity of therapy services as a coding change rather than a patient change. In addition, improved coding accuracy is considered a coding change. Finally, true patient "upcoding" is considered a coding change.

Of the coding changes that occurred in 2007 and 2008, CMS estimates that 38 percent relate to increased per-patient utilization of therapy services. The 2008 HHRG model replaced the 10-visit therapy threshold with a 6-, 14-, and 20-visit model. CMS reports that in 2008, "the large shift towards therapy visit levels of 14 or higher was unexpected." For example, the share of episodes with 20 or more visits increased from 4 percent in 2007 to 5.3 percent in 2008. In contrast, the percentage of episodes with 10-13 visits decreased from 32 percent to 21 percent. Overall, the average number of therapy visits per episode increased from 5.63 to 5.83.

Beyond the impact of therapy utilization on the alleged case mix creep, CMS explains that 62 percent of the total change in the overall average case mix weight from 2007 to 2008 was due to an increase in the average weight at each level of therapy visits per episode. One explanation appears to be the reporting of a diagnostic code reflecting comorbidities in M0240. An illustration is the reporting of hypertension. CMS states that reporting of diagnostic codes on hypertension "grew exceedingly quickly in 2008" with a "sudden jump of approximately 12 percentage points." CMS plans to drop hypertension from the HHRG scoring model because it no longer is associated with an increase in clinical resource use.

The imposition of a coding weight adjustment and the elimination of hypertension from the code weight scoring calculation should be considered a "double hit" in that the coding creep adjustment is a permanent payment rate reduction while the elimination of hypertension from the scoring results in a further decrease in payments to providers.

What Does this Mean for Home Health Agencies?
"Agencies should take precautions right now. With the staff being overwhelmed from all the OASIS-C changes, PECOS, intense surveys and dwindling staff plus the upcoming annual coding changes, this change from CMS can be devastating for agencies that are already behind the curve," said Melissa Kimble, RN, BSN, CWCN, CCM, HCS-D, COS-C. "Coding and episode management can start at the Intake department by having a Registered Nurse review the appropriateness of the referral. This insures the agency has appropriate resources to manage the patient's care. This RN should be familiar with the typical HHRGs associated with the comorbidities presented by the patient.

Agencies should immediately get accurate clinical software and supporting resources (books/coding programs) that will support the education of the staff. In addition, the review staff should calculate the HHRG and profit margin immediately upon locking the OASIS so that any resources can be restructured to accommodate the financial and clinical outcomes desired by the agency, staff and referral source. It takes years to be an expert at this, but if you can teach your staff a few of the coding sequence and OASIS rules, you will immediately enhance accuracy and often improve reimbursement just by understanding the rules set forth by the coding guidelines and CMS."