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Medicare Home Health CY 2018 PPS Payment Update - Base Rate Analysis

11/15/17 – Dave Macke

The Centers for Medicare and Medicaid Services (CMS) published the Calendar Year 2018 update for Home Health Agencies in the November 7, 2017 Federal Register.  This represents the annual payment rate update for home health.  As part of this annual update, CMS updates the National Standard Rate per episode, case mix weights and wage index values for each CBSA.  The wage index values are based on wage index surveys from IPPS Hospital cost reports for FY 2014.  The case mix weights are based on calendar year 2016 claims data paid as of August 31, 2017.  When looking at the reimbursement impact on your agency, all three of these values need to be taken into account simultaneously as all three values change and can be either positive or negative. 

The national standard rate increased from $2,989.97 to $3,039.64 for Urban CBSA’s.  However, the rural add-on currently expires December 31, 2017.  The standard rate for rural counties actually decreased from $3,079.67 to $3,039.64 (same as Urban).   There is pending legislation (S. 353) to extend the add-on.  The non-routine medical supply add-on amounts were updated with about 1% increase for Urban and 2% decrease for Rural.

In order to look at the potential impact on the payment rates of all of these factors in comparing 2017 to 2018, we computed an adjusted Base Rate for area.  The Base Rate is a combination of the national standard rate, wage index value and a case mix weight value of 1.0000.  The effect of this is to normalize the amounts in comparing the two years.  The calculation of the Base Rates exclude adjustments for the non-routine medical supply add-on and the 2% reduction for Sequestration.

For a county by county listing for the State of Ohio, please click the link below.       

CY 2018 Comparison of Base Rates - Ohio by County