Impact of ACA (Obamacare) on Home Health Agencies

http://www.whitehouse.gov/sites/default/files/omb/assets/oira_0938/0938_06182013-1.pdf

http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_b_hha.pdf

REGULATORY IMPACT ANALYSIS FOR HOME HEALTH PPS PROPOSED RULE:

REQUIREMENTS UNDER EXECUTIVE ORDER 12866

Status

The Home Health Prospective Payment System Proposed Rule for CY 2014 (CMS-1450-P) was received at OIRA
on May 30, 2013 and is listed as “economically significant,” which is defined as a regulation that may “have an
annual effect on the economy of $100 million or more or adversely affect in a material way … State, local, or
tribal governments or communities.”
ACA Section 3131 [Section 1895(b)(3)(A)(iii) of the Social Security Act]
• Section 1895(b)(3)(A)(iii)(l) requires the standard prospective payment amount for the home health
PPS “be adjusted by a percentage determined appropriate by the Secretary.”
• Section 1895(b)(3)(A)(iii)(ll) requires the Secretary to “provide for a 4-year phase-in (in equal
increments] ofthe adjustment … with such adjustment being fully implemented for 2017.”
Requirements Under Executive Order 12866
• “[A]n assessment, including the underlying analysis, of costs anticipated from the regulatory action
(such as, but not limited to … any adverse effects on the efficient functioning of the economy …) …
together with, to the extent feasible, a quantification of those costs.”
• “[A]n assessment, including the underlying analysis, of costs and benefits of potentially effective and
reasonably feasible alternatives to the planned regulation … and an explanation why the planned
regulatory action is preferable to the identified potential alternatives.”
• Agencies must take into account “the costs of cumulative regulations.”

Analysis
Due to the economic significance of this proposed rule, detailed State-level data analyses appear to be
necessary. For example, previous Home Health PPS rules have analyzed the hardest hit States under the rule
and included related margins analyses. Due to Executive Order 12866 and the statute’s directive that any
rebasing adjustment be implemented in equal increments over 4 years (2014-2017), it also appears necessary
to focus such analyses on each of the four years in question as well as on the cumulative effects.
For example, the annual and cumulative impact under a 0.5% rebasing reduction of the standard home health
prospective payment amount under Section 1895(b)(3)(A)(iii) would be reflected as follows:
Illustration: 0.5% Rebasing Adjustment 2014 2015 2016 2017
Annual Phase-in of 0.5% Rebasing Reduction 0.5% 0.5% 0.5% 0.5%
Cumulative Rebasing Reduction (percent) 0.5% 1.00% 1.50% 2.00%
Cumulative Rebasing Reduction (dollar) $11.33 $22.66 $33.99 $45.32

The Partnership has endeavored to undertake rebasing scenario analyses as well as related State-level margin
analyses and respectfully offers these analyses for consideration. In light of its findings, the statute, and the
above Executive Order, the Partnership respectfully requests that complete analysis of the cumulative impact
of current law payment reductions plus the proposed regulation be conducted for all States over 2014-2017
and that a zero percent rebasing adjustment be included in the NPRM, as well, as an alternative for comment.

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