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 an estimated $140 million.

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

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

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

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

“The continued improvement in the quality of and access to home health services will be enhanced through this additional public reporting of quality information,” said CMS Acting Administrator Leslie V. Norwalk. “These changes are significant steps toward Medicare becoming an active purchaser of high quality, efficient care.”