Changes to Outlier Payment Policies

Home health agencies (HHAs) receive additional payments (outlier payments) for 60-day home health episodes of care that carry unusually high costs. CMS, in a recently proposed rule, is seeking to cap outlier payments at 10 percent per agency and target total aggregate outlier payment at 2.5 percent of total HH PPS payments. Currently, the target for outlier payment targets is 5 percent of total HH PPS payments. As such, CMS reduces home health rates by 5 percent to fund outlier payments. By lowering the total outlier payment target to 2.5 percent of total HH PPS payments, CMS would increase home health rates by 2.5 percent.

Final Percentage Payment Reminder

The Plan of Care (Form 485) must be signed and dated by a physician before the claim for each episode for services is submitted for the final percentage payment.

Initial Percentage Payment Reminder

If a physician signed Plan of Care (Form 485) is not available at the beginning of the episode, the HHA may submit a RAP for the initial percentage payment based on a physician’s verbal orders OR a referral prescribing detailed orders for the services to be rendered that is signed and dated by the physician. A billable visit must be rendered prior to the submission of a RAP.

DME as covered service by a Home Health Agency

DME must be differentiated from routine and non-routine medical supplies which are bundled to the agency and included in the base rate payment. Durable Medical Equipment (DME) is paid separately from the PPS bundled rate and is excluded from consolidated billing requirements governing PPS. The determining factor is the medical classification of the supply, not the diagnosis of the patient.