Health Insurance Prospective Payment System (HIPPS)

Health Insurance Prospective Payment System (HIPPS) rate codes represent specific sets of patient characteristics (or case-mix groups) by which payment determinations are made under several healthcare prospective payment systems. This system allows for the payment system of different healthcare settings, such as skilled nursing facilities, inpatient rehabilitation facilities, and home health agencies, to be converted to a universal HIPPS code.

Calculating the Episode 

The clinical assessment for home health is known as the OASIS. This assessment is completed at the time of admission. Each question on the OASIS associated with payment has a weight value. The completion of the OASIS assessment calculates the case mix weight to provide the HHRG score.

The Home Health Resource Group (HHRG) code is comprised of the following:

• Clinical domain 

• Functional domain 

• Service domain

• Nonroutine supply

The HHRG code is combined with the episode timing question (M0110) and the total number of therapy services (M2200) provided in the episode to calculate the billing HIPPS code. The HIPPS code is an alphanumeric five-digit code.

The core-based statistical area (CBSA) code is the geographical part of the PPS episode calculation. The codes are assigned by ZIP codes and based on state county. Some of these changed for home health in 2015. Each CBSA code has a wage index. You can find the Medicare calendar year (CY) 2016 CBSA codes, including wage index, at the CMS website, under CMS-1625-F for the CY 2016 Home Health Prospective Payment System Rate Update; Home Health Value-Based Purchasing Model; and Home Health Quality Reporting Requirements (final rule). See Chapter 10 for website information.

The nonroutine supply (NRS) points are calculated from several OASIS questions. The NRS adds additional reimbursement to the base episodic amount depending on the score. There are six NRS levels. The fifth character of the HIPPS code represents the NRS score. If there is supply charges included on the claim, the last character will be alpha (S–X). If there are no supply charges on the claim, the code will be numeric (1−6). The episode is reimbursed the additional payment whether there are supply charges on the claim or not.