Transfer rule fallout may help home care

And patients could benefit, too, one provider says

Although hospitals are bracing for what in all likelihood will prove to be significant cuts in Medicare reimbursement payments, for once home health agencies aren't anticipating a major fallout.

As of Oct. 1, 1998, as set out by the Balanced Budget Act of 1997, the ways in which some discharges are viewed will change. Depending on whether a patient falls into the category of one of 10 pre-determined DRGs (see box, p. 155), what were once considered discharges will now be labeled transfers, and Medicare reimbursements will change accordingly.

Hospitals will no longer be reimbursed on a per-patient basis. Instead, Medicare will compensate hospitals on a per-diem basis, offering twice the going rate for the patient's first day of hospital stay since that is where the lion's share of costs enter in. Whereas up until now, because hospitals were allowed to keep whatever portion of the Medicare reimbursement that didn't go toward patient care, they had a strong incentive to discharge patients to post-hospital care facilities, including home health agencies, as quickly as possible. Now, all that is about to change, especially for hospitals owning home health agencies.

The Department of Health and Human Services' Office of the Inspector General (OIG) conducted a study, examining 120 hospitals and six DRGs comparing average lengths of stays within each category. The results, which were released in August, show that hospitals owning home health agencies reported average lengths of patient stays to be six days, a day less than those reported by hospitals not owning a home health agency.

These results were found to be true regardless of whether the hospital referred a patient to its own agency or an independent one. Moreover, within the DRGs examined by the OIG, patients that qualified as DRG 148 (bowel procedures), DRG 209 (joint replacements), and DRG 88 (chronic obstructive pulmonary disease) experienced significantly shorter stays - four days in the case of bowel procedures and one day for either of the latter two.

With new regulations in effect, hospitals, particularly those with home health agencies, are likely to feel the pinch while home health agencies may get by unscathed. "This really won't affect home care because we will still be paid the usual rate. It's only the hospitals that will be hurt," says Lorraine Waters, BSN, C, MA, director of Southern Home Care in Jeffersonville, IN.

Hospitals, she explains, "will have less incentive to push patients out sooner, and that might not be a bad thing." The way Waters sees it, this could give patients more time to recuperate and adjust, as well as making home health agency workers' jobs a little easier.

"Sometimes we see discharges done on the spur of the moment," she says. "Not that the patient isn't ready to leave, but we tend to get a lot of discharges over the weekend and so we get a lot of patients we've never heard of before coming in late on a Friday afternoon. It makes it difficult for the patients to transition well from hospital to home if we don't really know anything about them."

Under previous rules, says Waters, discharged patients couldn't be seen by a home health care provider until three days after leaving the hospital in order to maintain the discharge status - a situation, she says, that often failed the patient. Now, a decision as to whether a patient will receive home health care must be made within three days of admission.

"Discharge planners will bear the brunt of things, not home health agencies, because we'll take patients referred to us like always. The additional paperwork probably won't be a big thing for them, but they will need to know the midpoint of these DRG groups and arrange care appropriately. Perhaps this will make discharge planning more thorough," she says.

Conceivably, by keeping patients under hospital care longer, some agencies will experience a decrease in case loads. Wound care, which can be taught to patients and family members alike, is a potential example. However, Waters doesn't foresee any major changes. "I'd like to say hospitals will beef up patient teaching activities, but typically they just don't have the time to do that," she says. "Even if they're kept a few days after surgery, the patients will still be groggy and won't be able to learn, and next thing you know, they're discharged."

Exactly how the reimbursement changes pans out for hospitals remains to be seen. But for the time being, it seems that home health care agencies may have one less thing to worry about.