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TRICARE Reimbursement Manual 6010.61-M, April 1, 2015
Home Health Care (HHC)
Chapter 12
Addendum K (CY 2016)
Annual Home Health Agency Prospective Payment System (HHA PPS) Rate Updates - CY 2016
Revision:  C-1, March 10, 2017
(Final payment amounts per 60-day episodes ending on or after January 1, 2016, and before January 1, 2017 - Continuing Calendar Year (CY) update.)
HHA PPS - Determination of Standard HHA PPS Amounts
Section 1895(b)(3)(B) of the Act, as amended by section 5201 of the Deficit Reduction Act (DRA), requires for CY 2016 that the standard prospective payment amount be increased by a factor equal to the applicable Home Health (HH) market basket update for HHAs.
Rebasing of 60-Day Episode Payment Amount, National Per-Visit Rates, and the Non-Routine Medical Supplies (NRS) Conversion Factor
Beginning in CY 2014, as required by section 3131(a)(1) of the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS), in their Final Rule published December 2, 2013, rebased the national, standardized 60-day episode payment amount, the national per-visit rates, and the NRS conversion factor. The rebasing adjustments will continue through CY 2017. For CY 2016 the rebasing adjustment is $80.95
National 60-Day Episode Payment Amounts - CY 2016
In order to calculate the CY 2016 national standardized 60-day episode, the CY 2015 estimated average payment per 60-day episode of $2,961.38 is adjusted by the wage-index budget neutrality factor, a case-mix weights budget neutrality factor, an adjustment for nominal case-mix growth, the rebasing adjustment, and the home health market basket update, as reflected in Figure 12.K-2016-1.
Figure 12.K-2016-1  CY 2016 National Standardized 60-Day Episode Payment Amounts
CY 2015 National Standardized 60-Day Episode Payment
Wage Index Budget Neutrality Factor
Case-Mix Weights Budget Neutrality Factor
Nominal Case-Mix Growth Adjustment
CY 2016 Rebasing Adjustment
CY 2015 HH Payment Update Percentage
CY 2016 National, Standardized 60-Day Episode Payment
$2,961.38
x 1.0011
x 1.0187
x0.9903
- $80.95
x 1.019
= $2,965.12
National Per-Visit Amounts Used to Pay Low Utilization Payment Adjustments (LUPAs) and Compute Costs of Outlier - CY 2016
To calculate the CY 2016 national per-visit rates, the 2015 national per-visit rates are adjusted by a wage index budget neutrality factor, and are then increased by the rebasing adjustments described in the December 2, 2013, CMS Final Rule. Finally, the rates are updated by the CY 2016 HH market basket update. National per-visit rates are not subjected to the nominal increase in case-mix. The final updated CY 2016 national per-visit rates per discipline are reflected in Figure 12.K-2016-2:
Figure 12.K-2016-2  CY 2016 National Per-Visit Payment Amounts For HHAs
HH Discipline Type
CY 2015
Per-Visit Payment
Wage Index Budget Neutrality Factor
CY 2016
Rebasing Adjustment
CY 2016
HH Payment Update Percentage
CY 2016 Per-Visit Payment
HH Aide
$57.89
x 1.0010
+ $1.79
x 1.019
$60.87
Medical Social Services (MSS)
204.91
x 1.0010
+ 6.34
x 1.019
215.47
Occupational Therapy (OT)
140.70
x 1.0010
+ 4.35
x 1.019
147.95
Physical Therapy (PT)
139.75
x 1.0010
+ 4.32
x 1.019
146.95
Skilled Nursing (SN)
127.83
x 1.0010
+ 3.96
x 1.019
134.42
Speech-Language Pathology (SLP)
151.88
x 1.0010
+ 4.70
x 1.019
159.71
Payment of LUPA Episodes
For CY 2016, as described in the December 2, 2013, CMS Final Rule, the per-visit payment amount for the first SN, PT, and SLP visit in LUPA episodes that occur as the only episode or an initial episode in a sequence of adjacent episodes is multiplied by the LUPA add-on factors, which are: 1.8451 for SN; 1.6700 for PT; and 1.6266 for SLP
NRS Conversion Factor Update
Payments for the NRS are computed by multiplying the relative weight for a particular severity level by the NRS conversion factor. For CY 2016, the 2015 NRS conversion factor was adjusted using the 2.82 rebasing adjustment factor, as described in the December 2, 2013, CMS Final Rule, and then updated by the CY 2016 HH market basket. See Figure 12.K-2016-3.
Figure 12.K-2016-3  CY 2016 NRS Conversion Factor
CY 2015 NRS Conversion Factor
CY 2016 Rebasing Adjustment
CY 2016 HH Payment Update Percentage
CY 2016 NRS Conversion Factor
$53.23
x 0.9718
x 1.019
= $52.71
The payment amounts, using the above computed CY 2016 NRS conversion factor ($52.71), for the various severity levels based on the updated conversion factor are calculated in Figure 12.K-2016-4.
Figure 12.K-2016-4  CY 2016 NRS Conversion Factor
Severity Level
Points (Scoring)
Relative Weight
CY 2015 NRS Payment Amounts
1
0
0.2698
$14.22
2
1 to 14
0.9742
51.35
3
15 to 27
2.6712
140.80
4
28 to 48
3.9686
209.18
5
49 to 98
6.1198
322.57
6
99+
10.5254
554.79
Labor And Non-Labor Percentages
For CY 2016, the labor percent is 78.535%, and the non-labor percent is 21.465%.
Outlier Payments
Under the HHA PPS, outlier payments are made for episodes for which the estimated cost exceeds a threshold amount. The wage adjusted Fixed Dollar Loss (FDL) amount represents the amount of loss that an agency must bear before an episode becomes eligible for outlier payments. The FDL ratio, which is used in calculating the FDL amount, for CY 2016 is 0.45.
Outcome and Assessment Information Set (OASIS)
HHAs must collect OASIS data in order to participate in the TRICARE program. See Addendum G for the OASIS.
Temporary 3% Rural Add-On for the HHA PPS
Section 421(a) of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 (Public Law 108-173, enacted on December 8, 2003, and as amended by Section 3131(c) of the Affordable Care Act) provides an increase of 3% of the payment amount otherwise made under Section 1895 of the Social Security Act for HH services furnished in a rural area (as defined in Section 1886(d)(2)(D) of the Social Security Act), for episodes and visits ending on or after April 1, 2010, and before January 1, 2018. The 3% rural add-on is applied to the national standardized 60-day episode rate, the national per-visit rates, the LUPA add-on payment amount, and the NRS conversion factor when HH services are provided in rural (non-Core Based Statistical Area (CBSA)) areas. The applicable case-mix and wage index adjustments are subsequently applied. Episodes that qualify for the 3% rural add-on will be identified by a CBSA code that begins with ‘999’.
National 60-Day Episode Payment Amounts for Rural, Non-CBSA Areas
In order to calculate the national standardized 60-day episode payment for beneficiaries residing in a rural area, the CY 2016 national standardized 60-day episode payment of $2,965.12 was increased by 3% to $3,054.07.
Per-Visit Amounts For Services Provided In A Rural Area, Before Wage Index Adjustment
The CY 2016 national per-visit amounts were increased by 3% for beneficiaries who reside in rural areas. See Figure 12.K-2016-5.
Figure 12.K-2016-5  CY 2016 Per-Visit Amounts For Services Provided In A Rural Area
HH Discipline Type
CY 2016
Per-Visit Rate
Multiplied by the 3% Rural Add-On
CY 2016 Rural Per-Visit Rate
HH Aide
$60.87
x 1.03
$62.70
MSS
215.47
x 1.03
221.93
OT
147.95
x 1.03
152.39
PT
146.95
x 1.03
151.36
SN
134.42
x 1.03
138.45
SLP
159.71
x 1.03
164.50
CY 2016 NRS Conversion Factor For Services Provided In A Rural Area
The CY 2015 NRS Conversion Factor was multiplied by the 3% rural add-on to result in a NRS Conversion Factor of $54.29 for CY 2016.
CY 2016 NRS Payment Amounts For Services Provided In A Rural Area
The CY 2016 NRS payment amounts for services provided in rural areas are summarized in Figure 12.K-2016-6.
Figure 12.K-2016-6  CY 2015 Relative Weights For The Six-Severity NRS System For Beneficiaries Residing In A Rural Area
Severity Level
Points (Scoring)
Relative Weight
Total NRS Payment Amount For Rural Areas
1
0
0.2698
$14.65
2
1 to 14
0.9742
52.89
3
15 to 27
2.6712
145.02
4
28 to 48
3.9686
215.46
5
49 to 98
6.1198
332.24
6
99+
10.5254
571.42
- END -

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