CMS Announces Medicare Payment Increases and Quality Initiatives for SNFs and HHAs
Recently, the Centers for Medicare and Medicaid Services ("CMS") announced a 3.1% increase in the Medicare payment rates for skilled nursing facilities ("SNFs") and issued a proposal to increase the payment rate for home health agencies ("HHAs") by 3.1%. These payment increases will take effect starting January 1, 2007 and will result in approximately $560 million dollars in additional payments to SNFs and $460 million dollars in additional payments to HHAs.
Along with these payment increases, CMS announced the implementation of several initiatives designed to improve quality of care and eliminate unnecessary spending. With respect to nursing homes, CMS announced that it is in the process of developing a "Nursing Home Value Based Purchasing Demonstration." Under this program, nursing homes will have the opportunity to receive additional payments based upon their performance on quality measures. CMS also intends to initiate a "Nursing Home Quality Campaign" designed to positively impact the quality of life of SNF residents and increase the efficiency of the delivery of SNF services.
While CMS's announcement regarding the SNF increase simply mentioned the creation of quality initiatives, CMS's proposed rate increase for HHAs actually makes the increase contingent on the receipt of quality data. Currently, as mandated by the Omnibus Budget Reconciliation Act of 1987, HHAs collect and report Outcome and Assessment Information Set ("OASIS") data. Under the proposed rule, if an HHA does not submit the requisite OASIS data, CMS will reduce the amount of the HHA's increase by two percentage points.
