Teach nurses how Medicare reimburses your agency under IPS
Teach nurses how Medicare reimburses your agency under IPS
Give a Show me the money!’ inservice
Let’s face it: No one goes to nursing school to become a millionaire or worry about million-dollar budgets. Some nurse executives might end up with those responsibilities, but most nurses would prefer to spend their lives helping others while making a decent living.
Nurses have shunned anything having to do with health care finances, although home care nurses have been more exposed to that end of the business than others, says Helen Siegel, RN, MS, MBA, regulatory and clinical affairs coordinator at the Home and Health Care Association of Massachusetts in Boston.
Yet these days, home care agencies will not survive if their nurses fail to understand some rudimentary truths about reimbursement and budgeting, experts warn, adding that staff must work together to keep expenses down and productivity high under the current interim payment system (IPS).
By the end of September, about 1,200 home care agencies had closed their doors because of IPS and other changes brought about by the Balanced Budget Act of 1997, says Robert Raible, director of communications for the American Federation of Home Health Agencies (AFHHA) in Silver Spring, MD. "The results of IPS are more devastating than anyone thought," Raible says.
Agencies across the country have had to make some tough decisions to survive, such as screening patients before admission and not accepting cases that likely will cost too much, says Betty Leake, RN, president of AFHHA. Leake also is the executive director of Your Home Visiting Nurse Service in Knoxville, TN. The private, full-service agency serves 24 eastern Tennessee counties with six nursing office locations.
"I’ve spoken to home care people from all over the country, and they say they have no place to cut unless they increase their nurses’ productivity from six or seven patients a day to 10 patients a day," she says. "It’s a horrible mess."
All of the unpleasant news on the national front means agencies will need to make sure their employees learn how Medicare reimburses home care agencies under IPS. "Nurses need to understand how much we get paid to do the visit, which pays their salary, and my salary as the supervisor, and for the lights, rent, and everything else," says Lisa L. O’Loughlin, BS, RN, executive director of Greater Medford (MA) Visiting Nursing Association. The 98-year-old agency serves 14 cities and towns north of Boston. "In home care, we got buried in the paperwork, and then nurses had to learn time management and then case management, and now they have to learn financial management," she says.
So Greater Medford VNA began to hold inservices in February 1998 about the financial end of the business. The agency had to operate under IPS beginning in January 1998. The more nurses and other direct care staff understand the financial pressures on a home care business, the better job they can do, she says.
"We have an open dialogue with our staff and tell them we’re committed to remaining in business," she adds. "We say we want to survive the IPS disaster and still provide the services we want to provide, so this is how we’re going to do it."
O’Loughlin presents nurses with a case study that illustrates how the agency can continue to serve the needs of its chronically-ill patients, while cutting some visits and expenses. (See box, p. 167.)
Now’s the time for inservices
The agency also began the inservices to address how the agency and nurses should handle questionable cases, says Lynne Chamallas, RN, BSN, director of clinical services for Greater Medford VNA. "Some patients were questionable in terms of whether they were justified in continuing to receive services," she says.
The agency followed up the inservices with one-on-one reviews for each admission. All admissions now are reviewed by a nurse and supervisor, and the nurse must explain, for example, why a particular patient needs three nursing visits per week or daily visits by a home health aide, Chamallas adds. To help facilitate that review process, the agency uses a home health aide visit frequency assessment tool that was developed and widely distributed by Massachusetts home care agencies. (See HHA visit frequency tool, inserted in this issue.)
Also, Greater Medford VNA has told nurses to make these one-on-one reviews a priority, she says. "They’ll grab the supervisor when they come into the office, and it takes 10 minutes at most."
If your agency hasn’t held an inservice on home care money matters yet, now may be the time to start. O’Loughlin and Siegel offer these suggestions on what you can teach your nurses about a home care agency’s finances:
1. Define the new IPS issues.
The Home and Health Care Association of Massachusetts held eight regional programs on how agencies can manage their care under IPS. "The point was to get middle managers there so they could hopefully take some of that information back and work with their staff," Siegel says.
She defined these terms for them:
• IPS: The interim payment system was a temporary payment system established by the Balanced Budget Act of 1997. It will be in effect until the Health Care Financing Administration (HCFA) completes its design of a prospective payment system (PPS) for home care. HCFA officials announced last summer that the home care PPS would be delayed because the agency will be too busy in 1999 trying to fix its year 2000 computer problem. This means agencies may have to operate under IPS for more than two years.
• Unduplicated patient count: Regardless of how many times a patient is admitted, the patient is counted only once in an agency’s fiscal year. Siegel offers this example of how it works: Mary Jones is admitted, and Agency XYZ provides her with services for three months before discharging her. Then, after four months, she is admitted again. Agency XYZ must count her as one patient when calculating its per beneficiary cap. "If she goes down the street to another home health agency, then there is going to be a yet-to-be-determined way of prorating how the agency counts her," Siegel adds. "Instead of counting her as a whole person, the agency may count her as a fraction of one beneficiary because the agency down the street is going to get a piece of her cap also."
She says IPS is forcing agencies to face the following challenges:
• They must balance services of high-cost patients with those of low-cost patients so they can stay at or below the per beneficiary cap.
• Agencies with a higher cost per patient in 1994 will have a higher cost limit, and those with a lower one in 1994 will have a lower cost limit. That’s because HCFA has required agencies to base their Medicare cost limits on fiscal year 1993-1994.
"Agencies are going to need admission policies that reflect under what terms they will admit patients," Siegel says.
2. Show them how cost limits are calculated.
"We showed the staff using overheads how Medicare calculated the amount of money we’d be given for each Medicare person and the importance of utilization of our services to provide adequate care," O’Loughlin explains.
Home care agencies under IPS will be reimbursed the lowest of three factors: a cost limit, their actual cost, or a per beneficiary limit in the aggregate, which means it is considered as a whole. Siegel explains how each is calculated:
• Per beneficiary limit: The actual Medicare cost for fiscal year 1993-94 is divided by the 1993 unduplicated patient count, and this equals the per beneficiary limit. If the actual Medicare cost were $6,323,750, and the 1993 unduplicated patient count were 1,861, this is how the calculation would look: $6,323,750/1,861 = $3,398.
Then, take the $3,398 and multiply it by the unduplicated patient count (i.e. 1,500) for fiscal year 1998, and this equals the aggregate amount for Medicare patients (i.e. $5,097,000).
• Cost limit per visit: Take the cost limit per visit as established by HCFA and multiply that by the number of Medicare visits by discipline, including staff nurse, physical therapist, speech therapist, occupational therapist, master’s-level social worker, and home care aide, and this equals the total Medicare allowable cost that an agency can be reimbursed.
• Agency cost per visit: Use the actual allocated cost from the cost report by discipline and divide this by the total visits per discipline and that equals the actual cost per visit by discipline.
• Actual Medicare costs: Take the actual cost per visit by discipline from the cost report and multiply it by the number of Medicare visits for each discipline, and this equals the actual Medicare cost.
Education managers could show these calculations to nurses, using their actual cost and patient visit data. And, by the time they are through, nurses will know what the agency’s reimbursement is likely to be and how that might impact the agency’s budget.
3. Explain the importance of discharge goals.
Nurses should begin to talk about the patient’s discharge from the first day the patient is admitted into home care, O’Loughlin advises. On admission of a new patient, Medford VNA nurses look at possible community resources to help when the patient is discharged from home care. They also tell patients that home care services are short-term with the goal of making them as independent as possible as soon as possible, she says.
At each recertification time, supervisors review a nurse’s goals for that patient and ask the nurse to explain why certain goals were not met or why another nurse was able to meet the same goals in fewer visits. The analysis is intended to be informative, not punitive. O’Loughlin says the purpose is to find answers to the following questions:
• What type of patient has a problem reaching the goals?
• Does a particular nurse need more education on how to meet the needs of the patient?
• Did one nurse use good educational material to instruct the patient, and perhaps the other nurse did not use any educational material?
Also, nurses will need to make sure patients understand how important it is that every visit is used as effectively as possible, Siegel says. "Nurses will have to look at every single visit they are making and be clear why they are there. If a nurse visits a home, and the family for whatever reason didn’t show up, then the nurse can’t say, I’ll come back tomorrow,’ because every time you do that, it costs the agency money."
If a nurse sees that family dynamics are standing in the way of the patient’s ability to follow through with a care plan, the nurse might suggest that a social worker visit the home very early in the process, Siegel says as an example. "All of these kinds of things are strategies that nurses maybe would have thought of eventually, but nobody has the luxury of eventually anymore."
4. Discuss an agency’s hidden costs, such as supplies.
Hospital nurses typically go to a big supply cabinet and take out all of the supplies they need, but home care nurses don’t have that luxury, O’Loughlin says. Medicare and other payers have limited how much they’ll reimburse a home care agency for supplies, and it’s important to emphasize those limits to staff. "We have a hard time getting staff to understand that our supplies are for the initial visit or an emergency situation, but not for providing patients with supplies on an ongoing basis," she says.
Some agencies will order supplies for patients and bill Medicare on their behalf. But other agencies, like Greater Medford VNA, use suppliers who will give patients the supplies directly and then bill Medicare for 80% of the cost and bill the patient for 20%, she explains.
Nurses might feel sorry for patients and think they can’t afford the co-payment. So they’ll grab a few extra rolls of gauze or some other supply and drop it off at the patient’s home. But that cost adds up quickly and can harm the agency’s bottom line, O’Loughlin says.
"When we told nurses how much a roll of gauze costs — $3.50 per roll — they were a little surprised," she adds. Plus, she tells nurses they can help patients cut down on these supply costs by encouraging them to return to health and independence more quickly.
Patients who have to pay part of their own supply costs also will be less likely to see them as an unlimited resource, and they’ll be more likely to work at becoming healthy, O’Loughlin adds. "If it costs them money, they’ll learn to do things for themselves because they won’t want to pay."
sources
• Lynne Chamallas, RN, BSN, Director of Clinical Services, or Lisa L. O’Loughlin, BS, RN, Executive Director, Greater Medford Visiting Nursing Association, 278 Mystic Ave., Medford, MA 02155. Phone: (781) 396-2633. Fax: (781) 391-9877.
• Betty Leake, RN, Executive Director, Your Home Visit ing Nurse Service, 5703 N. Broadway, Knoxville, TN 37918. Phone: (423) 688-1159. Fax: (423) 687-3943.
• Robert Raible, Director of Communications, American Federation of Home Health Agencies, 1320 Fenwick Lane, #100, Silver Spring, MD 20910. Phone: (301) 588-1454. Fax: (301) 588-4732. E-mail: afhha@ his.com. Web: http://www.his.com/~afhha/usa.html.
• Helen Siegel, RN, MS, MBA, Regulatory and Clinical Affairs Coordinator, Home and Health Care Association of Massachusetts, 20 Park Plaza, Suite 620, Boston, MA 02116. Phone: (617) 482-8830. Fax: (617) 426-0509. E-mail: hsiegel@mass-homehealth. org. Web: http://www.mass-homehealth.org.
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