HCFA official outlines some likely changes in home health PPS
HCFA official outlines some likely changes in home health PPS
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON The Health Care Financing Administration (HCFA; Baltimore) expects important but mostly minor revisions in the home health prospective payment system (PPS) proposed last year, according to HCFA’s Bob Wardwell, director of the post acute care division, who is responsible for the overall design of the new payment system.
Wardwell recently told a group of providers at the American Association of Homes for the Aging (Washington) conference in Washington, DC, that the proposed rule will soon be heading to the secretary of Health and Human Services (Washington) and then to the Office of Management and Budget (Washington) for final approval. While no wholesale changes are expected, Wardwell cautions that anything is still possible.
Wardwell also reported that while the agency expects to publish the proposed rule as scheduled by July 1, 2000, HCFA will not be publishing revised payment rates based on postponement of the additional 15% cut in home health reimbursement. Notably, he added, there is not much support for the additional cut inside or outside the agency. HCFA is hoping to post the claims format on its Internet site next month, he said.
Wardwell predicted changes in the case mix, as well as changes in payment levels when the final rule is published. He also walked through a series of areas included in the proposed rule that were the subject of considerable interest to home health providers.
Here is a rundown of likely changes home health providers should look for in the final rule based on Wardwell’s observations:
Blending IPS and PPS. According to Wardwell, only one association requested a blending of the interim payment system with PPS. The remainder all urged HCFA to move straight to PPS. But Wardwell noted that the Medicare Payment Advisory Commission recently asked Congress to mandate that in future years, HCFA blend cost-based payment back into prospective payment. It is unclear if Congress will respond to that recommendation.
Split percentage payments. In its proposed rule, HCFA proposed paying home health agencies 50% of the payment up front and the remainder at the end of the 60-day episode. But according to Wardwell, the agency is now considering a more front-loaded payment. He reported that comments received by the agency proposed everything from 60% up front to 100% up front. "To the degree that arguments can be made that there is some front-loading of fixed costs, it is not an entirely invalid concern, at least in the first episode," he said.
Periodic Interim Payment. Wardwell reported that many comments expressed concern about the elimination of periodic interim payment (PIP). But he pointed out that eliminating PIP is a statutory requirement. He also maintained that once home health agencies understand PPS, the need for PIP will largely dissipate. The important exception to that will be during the transition when PIP ends and the first payment under PPS begins, he added.
Low utilization payment adjuster. According to Wardwell, there were numerous comments regarding the low utilization payment adjuster included in the proposed PPS rule. But he signaled that while some change is likely in this area, it may not completely satisfy home health agencies. "There is never going to be a prospective payment system based on an episode that is going to fully reimburse you for every patient that you have," Wardwell said. "You are always going to have patients that are more costly and others that are less costly."
Partial episode payment adjustments. Wardwell reported that some comments objected to the ratio used for partial episode payment adjustments and significant change in revision adjustments included in the proposed rule. He said the agency is working to include changes in the final rule that reduce incentives to provide minimal care.
Case mix. Wardwell said there were hundreds of comments and questions regarding the case mix. But he said most of those changes will require considerably more data than the agency currently possesses.
Physical therapy. According to Wardwell, even though home health agencies are supposed to provide physical therapy directly or under arrangement, some comments asked if they could send patients to get physical therapy under Medicare Part B. That should not be happening, according to Wardwell. "We have actually gone back and burned out one of the HCFA computers trying to find all the physical therapy that has occurred during home health stays, and now we have to figure out what to do with it," he said.
Part B, non-routine medical supply costs. Part B, non-routine medical supply costs included in the cost report and items provided under the home health stay were also included in the proposed rates, noted Wardwell. He said there were many comments that addressed codes that should be included or eliminated, but he would not specify any changes. "We have gone through the entire code with a fine tooth comb," he added.
Physician certification of HHRG. Wardwell reported staunch opposition from home health agencies to the proposal that physicians certify not only everything they certify now, but also the accuracy of the home health resource group. But he defended the expanded role for physicians based on the more precise definition of services required beyond homebound and predicted that doctors will actually welcome this expanded role.
Small rural providers. Wardwell expressed concern for the plight of rural home health agencies under PPS, but said it is very difficult to extract a rural cost factor from the data sets available that is not offset by other variables. Ideally, he said, the agency would like to establish a more precise categorization that might include a "very rural" and "very urban" identifier. In fact, he said, the agency is now attempting to go beyond the simple urban and rural classification by adopting 10 regional gradations used by another federal agency.
OASIS. Wardwell expressed an interest on the part of HCFA to account for costs associated with OASIS. But he said that every time something is added on one side of the equation, the budget neutrality requires an offset. "We could add $1,000 for OASIS on the left-hand side of that formula, and the right-hand side is the budget neutrality factor," he said. "In a way, it becomes almost a moot point."
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