MedPac releases payment report

Look out for copayments again

The Medicare Payment Advisory Commission (MedPac) in March released its report to Congress: Medicare Payment Policy with recommendations for home care. Those recommendations included in the 155-page document are home health copayments, more detailed bills for services, special provisions in the prospective payment system (PPS) for long-term users, and an independent case manager to review care plans.

Blaming poorly defined standards that have given home health agencies too much leeway in interpreting Medicare rules, MedPac follows the same fraud and abuse trail as blazed by the Department of Health and Human Services and the Balanced Budget Act (BBA). The MedPac report supports the BBA's requirement that the Health Care Financing Administration develop normative standards for home health claims denial, for example, the report says, "based on frequency or type of services received."

The report's recommendations are as follows:

· Copayments. "Modest copayments should be introduced for home health services, subject to an annual limit." The Commission reports that it considered the burden copayments would have on beneficiaries and concluded only a "small share of Medicare beneficiaries" would have to pay out-of-pocket. The rest would "likely be covered by Medicaid or other supplemental insurance." The Commission therefore recommended "modest" copayments subject to an annual cap, although it did not say how much the cap should be.

· Home health agency bills should describe the specific services provided during home health visits.

Because agencies have not been required to specify the content or duration of home health visits for Medicare payment, MedPac recommends standardized coding for visits. "Even though the aggregate payment limits apply to visits," the report states, "what constitutes a visit within each of the visit categories is not standardized. That is, visits within each category may vary in length and content within and across home health agencies. This inconsistency precludes accurate cost comparisons of visits across time and agencies. It also creates incentives for agencies to shorten the visits or reduce services provided to keep costs below the aggregate payment limit."

· In developing a prospective payment system for home health services, the secretary may need to make special provisions for long-term users.

Citing the difficulty in developing a single PPS for both acute and long-term beneficiaries, MedPac says a patient classification system must be able to predict resources' needs for the two populations. "Long-term users create a particular challenge because so little is known about the course of their care," the report says. Collecting information is time-consuming. Therefore, it will be easier to develop a patient classification that adequately accounts for the resource needs of short-term users." Long-term users can then be incorporated into the system after additional research, the report says.

· An independent case manager should review the plan of care for Medicare beneficiaries receiving home health services for extended periods to ensure the appropriateness of that care in meeting beneficiary needs.

The report says that PPS alone cannot adequately control home health use by those beneficiaries with chronic needs. Therefore, MedPac recommends an independent case manager review the care plans of chronic beneficiaries "to determine if the services provided are addressing the patient's needs." The case manager would recommend appropriate changes in the plan of care to the certifying physician. The Commission believes a case manager would not only help control Medicare expenditures but would also improve outcomes.