Hurricane Bill strikes home care coast again
Hurricane Bill strikes home care coast again
The winds of change blow in six-month moratorium
It’s not only the Balanced Budget Act of 1997 that is storming home care’s already rocky coast. Now the Clinton administration has called for a six-month moratorium on the admission of new home health providers to the Medicare program. (See fax bulletin inserted in this issue.)
The storm’s picking up momentum, it seems.
In a September speech to the Service Employees International Union in Washington, DC, Clinton outlined his plans: "Today, I’m declaring an immediate moratorium on the admission of new home health agencies to Medicare, and during this moratorium we’ll develop tough new regulations to ensure that no fly-by-night providers enter or remain in the Medicare program.
"Second, I’m requiring all home health agencies to re-enroll every three years so that they, too, will abide by these standards. Third, we will double the number of audits of home health agencies currently involved in the Medicare program."
That means increasing the number of annual comprehensive audits from 900 to 1,800, and increasing the number of claims review by 25%, from about 200,000 to 250,000.
As part of the re-enrollment process, agencies must submit an independent audit of their records and practices. If agencies fail to meet the new requirements, they will not be recertified, confirmed Health and Human Services (HHS) Secretary Donna E. Shalala.
Although details have not been worked out yet, the re-enrollment process will "probably be some type of hybrid of the current enrollment process," HCFA says.
Re-enrollment is a major concern, says American Federation of Home Health Agencies (AFHHA) executive director Ann Howard. "It is an opportunity for further ratcheting down of home health reimbursement . . . and will have the effect of self-limiting services," she says.
No one is certain what new regulations the HHS will develop during the "time out," as Shalala calls it, but the impact most surely will increase costs.
Jennifer Jenkins, a consultant specializing in regulatory, administrative, and operating issues for Healthcare Concepts of Memphis, TN, says surety bonds will have a large impact. That’s one of the regulations HHS will develop and implement during the freeze. The provision, which was included in the Balanced Budget Act, specifies that home health agencies seeking to enroll or re-enroll in Medicare must post a surety bond of at least $50,000.
Industry consolidation may increase
"If they [agencies] have bad credit, if they’ve borrowed a good bit of money, they may not be able to get that surety bond. That could have the most immediate impact because many agencies will simply go out of business or have to sell out to somebody else. So it will probably result in more consolidation of the industry."
HHS also will require that new agencies "have enough funds on hand to operate for the first three to six months," Shalala says. In addition, HHS will establish a minimum number of patients that agencies must serve prior to enrolling in Medicare. Howard puts the number of patients at 10.
The action comes after the General Accounting Office reported in July that Medicare policing methods are inadequate. According to the report, Medicare’s recertification process has four primary problems:
• HHAs do not have to periodically demonstrate compliance with all of Medicare’s conditions of participation.
• Surveyors do not fully review an HHA’s branch office operations.
• Rapidly growing HHAs do not receive more frequent surveys, even though rapid growth has been linked to difficulties in compliance.
• HHAs repeatedly cited for serious deficiencies identified during a standard survey are rarely terminated or otherwise penalized.
Experts tell Hospital Home Health that while any hospital-affiliated provider would support efforts to eliminate Medicare fraud, once again, the government’s plan goes too far. A moratorium on new agencies is no threat to current providers, nor is the idea of increased claims reviews. But experts say the problem with the latest Clinton proposal is its cost. Re-enrollment or recertification whatever the government wants to call it will mean added expense to an industry already pinned to the wall by cost reductions.
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