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(Editor’s note: The following letter was sent by the American Home Care Association Inc. to President Bush’s transition team earlier this year at the behest of the new administration.)
To: George Bush transition team
The following are priority issues of concern to the home health industry for 2001:
The home health industry needs further refinement of the new Medicare prospective payment system (PPS) so that cash flow is not disrupted by glitches in the fiscal intermediaries’ (FIs) operations. The Health Care Financing Administration (HCFA) worked diligently to ensure that all systems were ready for the Oct. 1, 2000, implementation of PPS.
Some FIs, however, are seriously lagging in payments to providers, thereby endangering their financial viability. Home health agencies experiencing cash flow disruptions must be able to obtain accelerated payments from their FIs. In addition, eliminating the mandated 14-day delay before payment can be made is essential to ensuring adequate cash flow.
The Balanced Budget Act of 1997 (BBA) has resulted in a decrease in home health expenditures of over 50%. The BBA also called for an additional 15% reimbursement reduction, which Congress has now postponed for the second time. The cut is currently scheduled for implementation on Oct. 1, 2002. An additional blow of this magnitude would further destabilize the home care infrastructure and threaten access to care for numerous Medicare home care patients. Home health providers are united in support of permanent elimination of this gratuitous reduction.
The PPS methodology mandated by the BBA 1997 makes it difficult for home health agencies to provide services to Medicare beneficiaries who are most in need of such care, in particular longer-term, medically complex, and high-cost patients. Per BBA, only 5% of expenditures are set aside for "outliers." PPS requires that home health agencies (HHAs) lose over $2,300 on an outlier case before receiving 60% of the loss beyond that threshold amount.
Providers can afford to admit few if any beneficiaries fitting this profile without risking financial destabilization. The industry supports infusing funding back into the benefit so that access will be restored for outlier patients who, in the absence of home health, will be forced to seek care in institutional settings at a much higher cost to the U.S. taxpayer.
Home care providers support removal of non-routine medical supplies from the base PPS reimbursement rates, a requirement mandated by the BBA 1997. In lieu of "consolidated billing," they advocate payment on a fee schedule basis. This change is essential to protect patients with high-cost medical supply needs.
Currently, all PPS rates include the average cost of nonroutine supplies. However, the cost of some supplies, e.g., wound care and ostomy items, far exceeds the amount included in the base payment.
The current methodology overpays agencies for patients who have no supply requirements and discriminatorily underpays for beneficiaries with complex medical needs.
Home care agencies feel besieged by HCFA contractors, who are not held accountable for the accuracy of their decision making or for honoring the due process rights of providers. Failure to penalize this behavior leads to arbitrary claims denials and cost report disallowances, as well as to citations for alleged condition of participation (COP) deficiencies not substantiated by the record. Providers urge action to address this situation, by:
• Delineating in writing the due process rights of health care providers.
• According providers the right to exhaust appeals prior to decertification by a state survey agency and before recoupment of funds from the universe of claims in audits involving statistical sampling.
• Establishing an alternate dispute resolution process for COP surveys, akin to the process accorded skilled nursing facilities, through which the survey agency and the HHA can resolve COP disputes.
• Holding contractors accountable for accuracy and for fair and ethical treatment of providers; requiring contractors to pay interest, and in some cases penalties, to providers wrongly deprived of their reimbursement.
• Establishing a HCFA oversight board, consisting in part of representatives of the different segments of the health care industry.
• Establishing a body of independent certified public accountants to perform peer review on cost report audits performed by HCFA’s contractors.