Winning agencies set to fare the best under the proposed 2016 PPS rule are New England (Conn., Mass., R.I., N.H., Vt. and Maine). They will experience a 2.3% increase in Medicare payments compared with 2015, as estimated by CMS. Everywhere else, though, agencies would experience Medicare revenue declines, with Alabama, Mississippi, Kentucky and Tennessee averaging the steepest dip, 2.3%.
 
The principal factors influencing the regional differences are local wage indexes and local variations in care needs of home health patients.
 
Overall, CMS is proposing a base episode rate of $2,938.37 for 2016, down slightly from this year’s $2,961.38. Next year’s figure would reflect the third year of the rate rebasing required by Congress. CMS itself now believes a further 3.44% coding creep adjustment is needed to offset upcoding of claims to levels that don’t reflect patients’ actual condition. To ease the impact, it intends to take half of that adjustment in 2016 and the balance in 2017, the proposed rule states.
 
Taking all the adjustments into account, its rate proposals would lower home health payments by a national average 1.8%, or $350 million, in 2016. What CMS’s proposals don’t mention is the 2% sequestration reduction for all Medicare providers. Under current law, it’s scheduled to expire this year, but its continuation in 2016 is “definitely expected,” says Bill Dombi, vice president for law with National Association for Home Care & Hospice.
 
The effect for proposed LUPA payments includes a 2016 rate for skilled nursing of $134.90 per visit for agencies that meet quality requirements, compare with this year’s $127.83. Physical therapy would rise to $147.47 from $139.75. 
 
 
Type of agency
 
Effect of 2016 policies
Freestanding
Nonprofit
-1.8%
Proprietary
-1.8%
Government
-2.1%
Facility-based
Nonprofit
-1.9%
Proprietary
-2.2%
Government
-2.2%
Area of the country
 
Effect of 2016 policies
New England (Conn., Maine, Mass., N.H., R.I., Vt.)
2.3%
Middle Atlantic (Pa., N.J., N.Y.)
-1.6%
South Atlantic (Del., D.C., Fla., Ga., Md., N.C., S.C., Va., W.Va.)
-1.5%
East South Central (Ala., Ky., Miss., Tenn.)
-2.3%
West South Central (Ark., La., Okla., Texas)      
-2.1%
East North Central (Ill., Ind., Mich., Ohio, Wis.) 
-2.0%
West North Central (Iowa, Kan., Minn., Mo., Neb., N.D., S.D.)
-1.8%
Mountain (Ariz., Colo., Idaho, Mont., Nev., N.M., Utah, Wyo.)
-1.6%
Pacific (Alaska, Calif., Hawaii, Ore., Wash.)
-1.5%
Source: Proposed 2016 PPS rule