July 5, 2011 / 9:12 PM / 6 years ago

UPDATE 2-CMS proposes 3.35 pct cut in 2012 HHA payments

* CMS estimates net decrease of $640 mln to HHA

* Proposes 5.06 percent cut in PPS rates (Adds details)

July 5 (Reuters) - The United States Centre for Medicare & Medicaid Services (CMS) has proposed a 3.35 percent cut in Medicare payments to home health agencies (HHA) for 2012.

The CMS estimates a net decrease of $640 million to HHA from last year, affecting providers such as Amedisys , Gentiva , Almost Family and LHC Group .

The payment cut also includes a $950 million decrease in the prospective payment system (PPS) -- that pays higher rates to care for those patients with greater needs.

The proposal also seeks to reduce PPS rates by 5.06 percent to account for the increase in the case-mix.

Last year, CMS announced a rate cut of 4.89 percent for 2011 and had finalised a 3.79 percent case-mix creep.

Shares of Gentiva closed at $20.98 on Tuesday on Nasdaq while Amedisys shares closed at $26.75 on the same exchange. (Reporting by Shravya Jain in Bangalore; Editing by Joyjeet Das)

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