CMS proposes 2.5 percent increase in Medicare home health payment rate

Sunday, July 17, 2005

WASHINGTON -- CMS has proposed a 2.5% increase in Medicare payment rates to home health agencies for calendar year 2006. The increase would bring an extra $330 million in payments to home health agencies next year. CMS proposed the increase July 8.

"This payment increase will substantially help home health agencies to provide the best possible care to beneficiaries, especially a growing demand in rural communities," said Mark McClellan, M.D., Ph.D., administrator of the Centers for Medicare & Medicaid Services, which oversees the new payment system. "An important aspect of this payment system is to ensure beneficiaries have access to high quality home health services."

CMS is also proposing to change HHA reimbursement so that it reflects variations in costs across geographical areas. As part of this proposal, CMS estimates that rural home health agencies will experience a 0.7 percent increase in payments. Also, it is estimated that the combined effect of all changes in this proposed rule will result in a 3.5 percent increase to payments to rural home health agencies and a 2.3 percent increase in payments to urban home health agencies.

To qualify for Medicare home health visits, a beneficiary of Medicare must be under the care of a physician, have an intermittent need for skilled nursing care, or physical therapy, or speech therapy or continue to need occupational therapy. The beneficiary must be homebound and receives home health services from a Medicare approved home health agency.