HCFA says PPS on schedule for implementation in 2000
HCFA says PPS on schedule for implementation in 2000
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON The Health Care Financing Administration’s (HCFA; Baltimore) Director of the Office of Chronic Care, Tom Hoyer, told participants in last week’s National Policy Conference here that the agency is working feverishly to complete the prospective payment system (PPS) in time to implement the new system in just over 19 months. He also predicted the new system will be in place for all home health agencies by the Oct. 1, 2000, deadline. But many industry observers believe HCFA has established an unworkable timetable for completing the new system.
Hoyer confirmed that HCFA plans to use an episode definition of 60 days with no limit on the number of episodes a patient could have. "Currently, our case mix methodology uses about 20 patient characteristics and one treatment characteristic," reported Hoyer. "There are a lot of different combinations of characteristics you could look for, and we have attempted to select ones that will give you a reasonable standard of comfort."
Hoyer said that HCFA hopes to use OASIS data for standardization, but acknowledged there will obviously be a "time-crunch" for the proposed rule. "We won’t have as much data for that rule as we would hope," he said. "But we should have a much greater amount of data by the time we get to the final rule, which will assure us of having prices that accurately reflect practice around the country."
When challenged over whether or not the one month of data that will be available from OASIS to set initial prices will be sufficient, Hoyer defended HCFA’s rate setting methodology. "With any luck," he said, "at the time we set the rates in the proposed rule we will have data from 90 agencies in the case-mix study and one month of OASIS data." He added that HCFA should have "significantly more" data by the time the final rule is developed.
Hoyer also confirmed that HCFA plans to have outlier payments for high-cost payments, as well as "payment reductions for very short episodes." Since the law requires consolidated billing, payment to agencies will include all services covered under home health, including durable medical equipment. However, DME will be reimbursed separately under the fee schedule. Hoyer also noted that payments will be pro-rated if two agencies provide the services.
"We are looking at making a significant payment at the beginning of the episode and the remainder of the payment at the end of the episode," Hoyer reported. "We are sensitive to the need for cash flow, and we hope to assure it in that manner."
Hoyer said HCFA is working as fast as it can to complete the PPS system, but added that with "a lot more time and a lot more data, we could certainly make a lot more refinements." He attempted to allay concerns by noting that the PPS system will continue to be refined even after the final regulation is published. "We hope to continue to refine the system and make the payments more accurate," said Hoyer.
He also noted that the home health industry will have the opportunity to hold a "national policy debate" each year based on a single set of assertions and payment data from the past year. This puts decisions on a "real-time basis" and ties them to "real information."
"The real question," the National Association for Home Care’s (NAHC; Washington) Bill Dombi said in response to Hoyer, "is whether or not the database being used for the creation of the case-mix adjustment system and the reimbursement rates are reliable." Asked to explain how the limited case-mix sample of only 90 agencies being used by HCFA can be statistically valid, HCFA’s Ann Meadow said that without knowing how case mix varies, the agency set out to get "as diverse a group of agencies as possible consistent with scarce resources." She said HCFA selected eight states with a wide range of home health utilization patterns. "Given the state of knowledge at the time the project was planned," she said, "I think the sample is a good one."
When asked whether HCFA selected a statistically valid sample, Hoyer said the agency took "very great care" to do "a statistically valid stratified sample" across the country. "They are not all low-cost agencies," he argued. "We took particular care to do it. We wanted to have an absolutely representative sample of agencies, and we are confident we do have that." He added that HCFA "oversampled" to make sure it had extra agencies.
Dombi made it clear, however, that in the industry’s view, there are still many unanswered questions. For example, Dombi queried whether there will be an expedited settlement of cost-reports disputes prior to determining the PPS rates. But that issue was left unresolved.
Dombi also raised questions about whether or not the majority of agencies selected for the 1997 audits are very low-cost agencies. "If the majority are low-cost agencies," said Dombi, "PPS rates may be extremely low and extremely difficult for agencies."
"I am much more encouraged about the quality of this payment system than I was in October 1997," Hoyer said. The 27-year HCFA veteran also discounted rumors that he plans to retire before the program is implemented.
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