Why are additional funds needed for outlier payments?
With the move to PPS for home health, the future of home care hangs in the balance. The concept behind the new system is to encourage efficient provision of home health services by paying an amount based on the average national cost of treating a home health client for 60 days. Final payments to agencies are based on the average base payment, and adjusted to take into account patient characteristics (case mix) and labor market differences (wage index). An outlier payment is provided for cases that exceed the expected. Because the global budget set for the PPS restricts outlays to what would have been spent if the current system were to continue, the base payment under PPS is substantially below the average national cost of treating a home health client. As a result, the episode payment rates are expected to be inadequate and will perpetuate many of the access problems certain classes of high cost, medically complex patients are experiencing today. Expected to be particularly hard hit a
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