The final PPS rule has arrived!
The final PPS rule has arrived!
Positive changes, some disappointments, and remaining concerns
The new — and final — prospective payment system (PPS) rule has finally arrived, and with it comes a host of changes. The Health Care Financing Administration (HCFA) did make strides in addressing and correcting some problems discovered under the interim payment system (IPS), among them increases in the low utilization payment adjustment (LUPA) rate and refinements to the case-mix adjuster. If you summarized the lengthy tome, more than 400 pages in all, it would boil down to these points:
- The payment split for home health agencies will be 60/40.
- The national standard rate is up, but only slightly.
- The 14-day claims hold was eliminated for initial claims.
- Per-visit rates were increased significantly.
- The definition of a visit was limited to in-person contact.
- HCFA did not recognize the medical review delay.
- PPS payments still are not taking into account a lack of caregivers.
Despite the many changes, there are problems that remain. The greatest of those is the lack of overall funding for the home health care benefit. A payment system, no matter how good, will not make up for a dearth of funds. Medical supplies — and more important, who pays for them — are another concern. Regardless, the regulations are here and must be dealt with.
Hospital Home Health spoke with two members of our editorial board: Greg Solecki, vice president of Henry Ford Home Health Care in Detroit; and Lorraine Waters, RN, C, BSN, CHCE, MA, director of Southern Home Care in Jeffersonville, IN. We asked them for their views on how the final PPS regulations will affect the home health care industry. Here’s what they had to say.
HHH: Now that the final PPS regulations have been published, how do they compare with what you were expecting? Are they better or worse? How so?
Solecki: Although I was hoping for the best, as a realist (and cynic), I was not really expecting much to improve. I did expect the physician certification of home health resource groups to be eliminated. Let’s face it, we have a difficult enough time chasing them for signed orders. I had also expected the home medical equipment consolidated billing requirement to go away, and I’m happy that it did. I don’t think either of these changes surprised anyone, but I’m happy nonetheless.
I feel the increase in the national standardized base rate, the 60/40 payment split, the improvement of wound care scoring in the clinical domain, and the increased weighting of the clinical domain, in general, are all positive changes.
I also feel that while few, if any, of the changes appear worse than what was proposed in October 1999, there are some disappointments, such as the lack of significant improvement in medical supply obligations — home health agencies have always struggled with supplies — and the lack of any significant acknowledgement that secondary and tertiary diagnoses play a huge role in the case mix of patients, especially for agencies that have prided themselves on caring for the sickest and poorest patients.
Co-morbidities are a fact of life in home care and contribute to the true cost of caring for patients. I was also disappointed there was little recognition of the upfront intensity of service and associated costs when calculating Partial Episode Payment and Significant Change in Condition.
Waters: Some of the changes were more or less expected. I recently attended the Palmetto Government Benefits Administration PPS conference, at which Bob Wardwell (in the best HCFA-speak I’ve ever heard) alluded to some of the changes we might expect. I figured a 60/40 split, for instance, and some type of improvement in the Grouper to include some of the more expensive home care cases.
Since all is budget-neutral, HCFA giveth, and HCFA taketh away. Generally, I think they responded fairly well to comments on the proposed system.
HHH: Is there one thing in particular that surprised you about the new regulations, be it good or bad? And if so, what was it?
Solecki: The major surprise, and relief, for me was the increase in LUPAs. Henry Ford Home Health Care has worked hard to develop pathways, streamline processes, and manage utilization, and we would have been hit hard by the proposed LUPA as it stood.
We would have taken the hit rather than game the system, and I commend HCFA for reconsidering this issue.
Waters: Even though the "soft" supplies were clarified, there are many issues with this. I take exception to the statement, "Once a home health patient chooses a particular home health agency, he or she has clearly exercised freedom of choice with respect to all items and services included within the scope of the Medicare home health benefit (except DME)." This is a spurious statement, at best. At worst, it increases the expense for the agency without any return on investment, something I don’t believe any of us need or want.
HHH: Can you see any benefits coming from the final rule?
Solecki: From an agency-specific perspective, the benefits we hope to achieve under PPS will be the ability to continue many of our pathways as well as the possibility of seeing some financial reward for being prudent and responsible. From an industry perspective, I’m hoping PPS will level the playing field and eliminate the acrimony that has grown between different auspices (free-standing, provider-based, government, and so forth). We now have the opportunity to be united as an industry again.
Waters: Yes, it will make budget planning easier, and as long as an agency has a good feel for its current and historical case mix, combined with excellent staff education, we should fare pretty well. For agencies who have not done the math, they will be as susceptible to failure as they were under IPS.
HHH: What do you foresee as being the biggest problem for home health care as a result of these final regulations?
Solecki: The biggest problem in my mind continues to be the burden of the Outcome and Assessment Information Set (OASIS) and other unwieldy paper requirements, which not only continue to drive up the cost of providing care, but drive staff away from an industry that is already experiencing a severe labor shortage. I am disappointed that OASIS wasn’t pared down a bit further.
Another administrative problem related to PPS is budgeting. The next fiscal year budget for our agency will be a challenge since we have no prior experience with episodic reimbursement. Of course, we’ll get through the learning curve just fine, but it won’t be easy.
The third problem is medical supplies. We must do a better job as an agency handling our medical supplies. We have convened a work group to address supply issues and, hopefully, standardize supply acquisition, storage, dispensing, and documentation processes.
Waters: Some of the questions are still out there, mainly with significant change in conditions, partial episode payments, and outliers. I can see a cottage industry developing for lots of education/ analyzing/consulting persons and seminars. I should also think that it will be necessary to track usage on a weekly basis. Does that equal fewer staff? Of course not, just more expense, even with a good software system in place.
HHH: What’s your best bit of advice for adjusting to the new PPS regulations?
Solecki: 1. Put patients first. When in doubt, err on the side of quality patient care. The worst thing that could happen is to have clinicians inadvertently game their care delivery to benefit the agency. This is not to say we don’t want clinicians to have the financial understanding necessary to help contain costs. We want to continue to cultivate a learning environment so the entire agency can be on the same page, but sound patient care and concern should prevail.
2. Monitor utilization constantly to ensure visit and cost management. The continued development of pathways should help clinicians strike the balance mentioned above. We have had great success with our pathways in the managed care arena. PPS should be no different.
3. Gain control of paper-intensive processes. The inability to coordinate the flow of information will not only be costly, it will adversely impact patient care and inevitably drive staff away.
Waters: This is not any easy question to answer but I’d have to say that if agencies are not already well into change, they are doomed. IPS was the wake-up call to all of us to radically change our business. That’s not going to change. The good ol’ days have been gone for a long time. Don’t waste time mourning.
What’s more, hospital-based agencies had better be educating those key hospital administrators (actually, they should be well into education by this time). Forward articles, information, opinions, and plans daily!
[For more information, contact:
• Greg Solecki, Vice President, Henry Ford Home Health Care, 1 Ford Place, 4C, Detroit, MI 48202. Telephone: (313) 874-6500.
• Lorraine Waters, RN, C, BSN, CHCE, MA, Director, Southern Home Care, 1806 E. 10th St., Jefferson, IN 47130. Telephone: (812) 283-2602.]
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