CMS Pub. 100-02, ch. 7, § 10.2

A. Case-Mix Adjustment

A case-mix methodology adjusts the 30-day payment rate based on characteristics of the

patient and his/her corresponding resource needs (e.g., diagnoses, functional impairment

level, and other factors). The 30-day period payment rate is adjusted by a case-mix

methodology based on information from home health claims, other Medicare claims, and

data elements from the Outcome and Assessment Information Set (OASIS). The claims

information and OASIS data elements are used to group 30-day periods of care into their

case-mix groups.

The following case-mix variables are obtained from home health or other Medicare

claims:

• Admission Source-Institutional (i.e., acute hospital, inpatient rehabilitation

facility, skilled nursing facility, long-term care hospital, inpatient psychiatric

facility) or Community;

• Timing-Early (the first 30-day period of care) or Late (all subsequent 30-day

periods of care, unless there is a gap of more than 60-days between the end of

one period of care and the start of another),

• Clinical Group-As determined by the principal diagnosis reported on home

health claims; 30-day periods are assigned to one of 12 clinical groups

describing the primary reason for the home health encounter:

Clinical Groups

The Primary Reason for the Home Health Encounter is to

Provide:

Musculoskeletal Rehabilitation Therapy (physical, occupational or speech) for a musculoskeletal

condition

Neuro/Stroke Rehabilitation Therapy (physical, occupational or speech) for a neurological

condition or stroke

Wounds – Post-Op Wound Aftercare and

Skin/Non-Surgical Wound Care

Assessment, treatment & evaluation of a surgical wound(s);

assessment, treatment & evaluation of non-surgical wounds, ulcers,

burns, and other lesions

Behavioral Health Care Assessment, treatment & evaluation of psychiatric and substance

abuse conditions

Complex Nursing Interventions

Assessment, treatment & evaluation of complex medical & surgical

conditions including IV, TPN, enteral nutrition, ventilator, and

ostomies

Medication Management, Teaching and

Assessment (MMTA)

MMTA –Surgical Aftercare Assessment, evaluation, teaching, and medication management for

surgical aftercare

MMTA – Cardiac/Circulatory Assessment, evaluation, teaching, and medication management for

cardiac or other circulatory related conditions

MMTA – Endocrine Assessment, evaluation, teaching, and medication management for

endocrine related conditions

MMTA – GI/GU Assessment, evaluation, teaching, and medication management for

gastrointestinal or genitourinary related conditions

MMTA – Infectious

Disease/Neoplasms/Blood-forming Diseases

Assessment, evaluation, teaching, and medication management for

conditions related to infectious diseases, neoplasms, and blood-forming diseases

MMTA –Respiratory Assessment, evaluation, teaching, and medication management for

respiratory related conditions

MMTA – Other

Assessment, evaluation, teaching, and medication management for a

variety of medical and surgical conditions not classified in one of

the previously listed groups

• Comorbidity Adjustment-As determined by certain secondary diagnoses

reported on home health claims; a 30-day period of care can receive no

comorbidity adjustment, a low comorbidity adjustment, or a high comorbidity

adjustment.

The following case mix variable is determined from responses to certain items on the

OASIS assessment:

• Functional Impairment Level-As determined by responses to certain OASIS

items. A 30-day period of care can be assigned a low, medium, or high

functional impairment level.

Each 30-day period is assigned into one of 432 case-mix groups based on the variables

described above. Each group’s case-mix weight reflects the predicted mean cost of the

group relative to the overall average across all groups.

B. Labor Adjustments

The labor portion of the 30-day period payment rate is adjusted to reflect the wage index

based on the site of service of the beneficiary. The beneficiary's location is the

determining factor for the labor adjustment. The HH PPS rates are adjusted by the pre-floor and pre-reclassified hospital wage index. The hospital wage index is adjusted to

account for the geographic reclassification of hospitals in accordance with

§§1886(d)(8)(B) and 1886(d)(10) of the Social Security Act (the Act.) According to the

law, geographic reclassification only applies to hospitals. Additionally, the hospital wage

index has specific floors that are required by law. Because these reclassifications and

floors do not apply to HHAs, the home health rates are adjusted by the pre-floor and pre-reclassified hospital wage index.

NOTE: The pre-floor and pre-reclassified hospital wage index varies slightly from the

numbers published in the Medicare inpatient hospital PPS regulation that reflects the

floor and reclassification adjustments. The wage indices published in the home health

final rule and subsequent annual updates reflect the most recent available pre-floor and

pre-reclassified hospital wage index available at the time of publication.