A new PPS proposal arrives with some drawbacks that were expected
A new PPS proposal arrives with some drawbacks that were expected
Watch out for consolidated billing issues!
The long-awaited home care prospective payment system (PPS) proposed rules for Medicare finally arrived in late October with few surprises.
The proposed rule contains basically what home care experts expected, says Mary St. Pierre, director of regulatory affairs the National Association for Home Care (NAHC) in Washington, DC.
"The only major difference we saw was the number of episode exceptions," she says.
Basically, the Health Care Financing Administration (HCFA) has set patient episodes at 60 days based on HCFA’s estimates that 60% of all home health patient episodes are completed within 60 days, and 73% of patients complete care within 120 days, according to an analysis conducted by NAHC.
Billable . . . or not?
Episodes begin with the first billable visit and end on the 60th day from the start of care. The next episode will be from day 61 through day 120 and then from day 121 through day 180, etc.
HCFA’s proposed exceptions to the 60-day period include:
• The patient decides to transfer to another home care agency that is owned by a different company.
• The patient meets all goals and is discharged, and then is later readmitted to the same agency.
• The patient’s condition changes significantly and in an unanticipated way, and the agency must conduct a new OASIS assessment.
When any one of those exceptions occurs, HCFA will adjust the full PPS payment amount to provide instead either a partial episode payment or a significant change in condition adjustment.
Under normal conditions, home care agencies will be paid an episodic payment rate that is adjusted based on:
• Case-mix: HCFA proposes assigning patients to one of 80 patient groups, based on OASIS data.
• Low-level utilization: HCFA is considering requiring a four-visit or six-visit threshold before an agency qualifies for full episodic payment.
• Outliers that have a high cost in delivery of service within the episode: HCFA proposes an outlier payment system that has a budget of no more than 5% of the total home care benefit expenditures;
• Cost of wages in a particular geographical area: HCFA proposes basing this on federal wage index figures.
Achieving outcomes quickly
While HCFA proposes no limit to the number of episodes of care that a home care agency can provide, it does propose reimbursing each episode after the first 60 days at a discounted rate, says John Gaynor of John Gaynor and Associates in Chicago. Gaynor and Associates consults with home care agencies and other health care organizations.
For example, if a patient who has congestive heart failure is admitted to home care, the agency might receive $3,000 for the first 60-day episode. But when the 60 days are up, the agency must recertify that case for another 60-day episode, and the second payment will not be $3,000, Gaynor explains.
"The thrust of PPS in summary is to make it a very short-term benefit and to have home care agencies manage patients to achieve the desirable outcomes in as cost-effective utilization care plan models as they can," he says.
"So it’s going to put a great deal of risk on home health agencies to try to achieve those outcomes very quickly with a patient," he adds. "I can’t see there’s great motivation to want to carry patients for a long period of time."
Another issue will involve a home care agency’s cash flow under PPS payments. Just as home care experts predicted several months ago, HCFA has proposed a split-percentage payment system that will give agencies an initial percentage payment of 50% of the estimated case-mix adjusted episodic payment, according to an NAHC analysis. (See PPS’ explanation on p. 142.)
Then, the second and final payment will equal 50% of the actual case-mix adjusted payment, determined after the 60-day episode expires. The result could be that agencies will not receive a first payment until after most of the visits have been made, and they might not receive a final payment until weeks or months after they’ve already spent thousands of dollars on a case. HCFA wants home care agencies to comment on how this might effect their bottom lines.
Know the rules
But perhaps one of the most confusing issues involves the consolidated billing proposal. This requirement would have home health agencies include durable medical equipment claims in the Medicare claims submitted for home health, for example.
"It puts agencies in a position where medical supplies and equipment that were formerly farmed out to a vendor now have to be put on the home health bill," Gaynor says. "The real question here is whether they are shifting that risk of equipment cost back on the home health agencies."
Gaynor says he is advising his clients to obtain a copy of the rule, read it, and then analyze how it will affect them and how they can make changes to adapt to it.
"We’re going to meeting with our clients to present inservices that bring everybody up to speed on what the new PPS is all about," he says. "They’ll need to put themselves into a new mindset on how to do business in the future."
Home care agencies have until Dec. 27, 1999, to contest the proposed PPS rule through comments sent to HCFA. Their comments will be considered when HCFA writes the final rule that will outline exactly how PPS will be implemented on Oct. 1, 2000.
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