NAHC Offers Changes to Numerous Aspects of CMS Proposed Rule

Washington, D.C.; September 25, 2006 -- The National Association of Home Care & Hospice (NAHC) today made recommendations to the Centers for Medicare & Medicaid Services (CMS) on a sweeping proposed rule that would, in part, establish the Home Health Prospective Payment System Rate Update for calendar year 2007. CMS set the home health market basket index at 3.1 percent, a figure that NAHC said fails to reflect the real world costs of home care agencies.

"Health care for aged, infirm and dying Americans is too important to leave to outdated payment methods or guess work," said NAHC President Val. J. Halamandaris. "In issuing our comments to CMS, we provide a series of solid recommendations that will improve the methodologies used by the federal government to calculate health care costs and will help eliminate large market fluctuations in areas like transportation cost and wages."

NAHC said the proposed CY 2007 home health market index of 3.1 percent falls short, with labor costs pushed up by nursing and therapy staff shortages and by skyrocketing transportation costs. NAHC suggested that market basket index inputs and weighting factors be re-examined every two years and called for a technical review panel to examine the proprietary system CMS uses to project cost increases.

NAHC also expressed serious concerns about the wage index CMS uses to establish home health services payment rates. The Association said the government's approach "will cause significant harm to the stability of the home health care delivery system by providing payment rates that are not reflective of the local health care economy." NAHC said the CMS index has the potential to provide excessive rates for some home health care agencies while disadvantaging others.

Other NAHC comments and recommendations included:

Make any quality data submission requirement penalties prospective rather than retrospective. The CMS proposed rule implements a Deficit Reduction Act of 2005 provision establishing a two percent reduction in the market basket increase for agencies not supplying the necessary quality data and sets the period on or after July 1, 2005 and before July 1, 2006 for making this determination. NAHC said the Act's language makes clear that the obligation is posed as a future responsibility;

Streamline, add specificity to and eliminate some OASIS assessment data. For instance, while instrumental activities of daily living such as laundry or housekeeping are important to the overall well being of beneficiaries, NAHC said these activities do not constitute adequate measures of home health care performance and should be eliminated from the assessment data set. OASIS measures lacking detail include hearing and ability to understand spoken language, surgical wounds, grooming and ability to dress.

Refine the use of adverse events in quality assessment. Specifically, NAHC said re-hospitalization and urgent care do not necessarily reflect the quality of home care services. Such events may instead indicate a premature hospital discharge or be used to describe a hospitalization that occurs long after a home health agency admission. NAHC suggested that CMS institute a more robust evaluation of re-hospitalizations to assure a clearer picture of home health quality.

A copy of the full NAHC comments is available here.

About NAHC
The National Association for Home Care & Hospice, the industry's oldest and most respected trade group, represents the interests of nearly 20,000 home care agencies and hospice organizations (including approximately 11,500 Medicare-certified home health and hospice agencies) that annually serve nearly nine million Americans as well as home care aide organizations, home care giving staff and their clients. NAHC members believe that quality home care and hospice, a humane and cost-effective alternative to institutionalization, are the right of all Americans. Home care and hospice reinforce and supplement the care provided by family members and friends and encourage maximum independence of thought and functioning as well as the preservation of human dignity.