Question: What are the implications of the August 20th CMS commissioned Abt Associates study of home health case-mix weight (CMW) changes?

Answer: First, let's be clear on why the study was initiated. Case-mix weight is going up. Higher CMW means higher initial payments, higher acuity, and most likely higher final payment. Abt Associates was commissioned to find out why.

The first thing Abt Associates discovered was that "between 2000 and 2007, average case-mix increased by 15.03%, from 1.10 in the baseline period to 1.26 in 2007. There was a 1.09% increase in average case-mix between 2006 and 2007, with the average case-mix weight increasing from 1.25 to 1.26."

Second, despite extensive study and after looking at numerous variables, Abt reported that very little of the increase was due to changes in patient characteristics. In other words, the increase in CMW was due to something other than patient characteristics (e.g. changes in agency coding and assessment practices.) The study goes on to look at other factors that they found to influence CMW. Click here to view the report.

It is important to note that while agencies would agree that CMW is going up, they would quickly point out that the causes are more likely due to more experienced clinicians, more accurate assessments, and patients leaving the hospital sooner with greater acuity. Whatever the reason, one thing is clear - case mix weight is going up, and according to Abt Associates the average CMW for all agencies was 1.26 as of 2007 - most likely higher now.

Implications to Home Care Agencies

So, what does all this mean to home care agencies? The answer is - lots of things. But here are two worth noting.

First, given that CMW is increasing along with overall reimbursement, there will be increased attention being placed on the level of overall growth in the national home care budget. With health care reform, there is the likelihood that this greater scrutiny will lead to overall reduction in reimbursement. Agencies who are already underscoring and not receiving the full reimbursement that an accurate assessment would call for may suffer further.

Second, agencies need to place greater attention on generating accurate assessments. Given that the national average CMW at RAP is 1.26 for 2007, if your CMW is below that average, it means one of two things: either you are serving patients whose needs are less than the national average, or you are underscoring your OASIS assessments. If it is the latter, it means your quality scores may be impacted, you may not be getting the proper reimbursement, and the quality and financial viability of your agency may be at risk. You are clearly losing in three ways.

What is the impact of inaccurate, lower OASIS scores on your reimbursement? Check out the following chart:

If your CMW is low, particularly if it is below 1.20, consider an audit and/or training. Make sure it includes OASIS C so that you address your present assessment problems while preparing yourself for the future. As a quick alternative, you can also consider webinars and other training tools. Remember, OASIS C will become the new reality for home care on January 1, 2010. Addressing both issues now makes sense from a time and financial perspective, as well as a quality improvement perspective.

In many ways, the Abt Associates report is not a total surprise. We know that CMS is concerned and looking at our CMW, and we know that health care reform is coming. By paying attention to reports like this, we can stay ahead of the curve and take the kind of action that will position us for changes that are no doubt coming.