The Centers for Medicare and Medicaid Services plans to increase Medicare payments to nursing homes by about $690 million in fiscal 2008 while increasing contributions to home health care agencies by $140 million.

Medicare payments would increase 3.3% under new rates proposed by CMS for nursing facilities that give skilled nursing and rehabilitation care to Medicare beneficiaries with long-term health problems.

The agency’s proposed rates for home health care would increase outlays but at the same time cut payments to some providers.

Under the proposed rule, home health agencies that submit required quality data would receive an increase of 2.9%, but those that failed to meet the reporting requirement would see an increase of only 0.9%.

CMS would evaluate home health care quality by measuring reductions in hospital admissions and improvements in such areas as patient mobility, pain reduction, self-care and the condition of wounds.

CMS also proposes to change the way to account for cases of different degrees of severity and to change its methods for paying for non-routine medical supplies reflect home health agency costs more accurately.

The proposed rule is available on the Web