HCFA says proposed PPS rule on track; industry voices concern

By MATTHEW HAY

HHBR Washington Correspondent

WASHINGTON – The Health Care Financing Administration’s (HCFA; Baltimore) Bob Wardwell said at the Home Health Services and Staffing Association (HHSSA; Washington) annual meeting last week that the agency still plans to publish the proposed rule for the home health prospective payment system (PPS) as scheduled next month. But he added that as publication of that rule nears, he is able to volunteer less about the precise form it will take.

"I guess the only thing that was a surprise is that really nothing much has changed since they gave us their last briefing," said HHSSA counsel Jim Pyles. "I think the folks at HCFA are well intended and are trying to come up with a system that they think is a good system," he added. "But my very grave concern right now is that the system they are working on and planning to propose is far too complex for home health and simply cannot be monitored."

Another industry executive close to the process was even less compromising, describing HCFA’s most recent description of its PPS proposal as a "jalopy." Said the executive: "I bet it will come out on time and there will be a general uproar. It is not going to be an acceptable proposal, and reimbursement rates will be woefully inadequate in the eyes of providers."

High on Pyles’ list of concerns is the fact that even the agency admits that no insurance program has ever used anything similar to the Outcome and Assessment Information Set (OASIS) as the basis for a reimbursement system. "OASIS was never designed to be a reimbursement tool," argued Pyles, "and therefore the predictability that they have found in OASIS for resource consumption has not been tested when it is used as a reimbursement tool."

Pyles predicts that as soon as the incentives of reimbursement are imposed on it, the predictability will radically change. "We know from every reimbursement system that has ever been in place under Medicare that providers always conform to the incentives of the reimbursement system," he said.

Pyles said he is also concerned that a case mix system that includes 80 often subjectively defined case mix categories will be difficult to implement and impossible to monitor. "The classification of a patient is based on a subjective observation by a nurse at a point in time," he said. "The next day the patient’s condition could change and there is no way for the government to go back and audit and see if the nurse was in fact correct."

The agency is scheduled to publish a final rule early next year.