Home Health & Hospice Week

Four-digit codes are out, five-digit codes are in.

Here's one New Year's resolution you'll want to keep: Bill correctly for new wage index designations.

If you use the old Metropolitan Statistical Area code instead of the new Core-Based Statistical Area code for episodes ending Jan. 1 or later, you'll see that claim returned to provider (RTP'd).

If you use the wrong new CBSA code, you could be shorting yourself on reimbursement, or claiming more than you're entitled to.

Experts predict home health agencies will encounter a variety of problems in billing the new CBSA codes come Jan. 1. Heed this advice to keep your billing transition as smooth as possible:

1. Get the facts straight. Know your basics by reviewing the 2006 PPS final rule. Understanding that the old four-digit MSA codes are out and the new five-digit CBSA codes are in is key, stresses consultant M. Aaron Little with BKD in Springfield, MO.

2. Use the right code. HHAs will be tempted to look up the new CBSA code for their patient's residence and be done with it. But not so fast--the Centers for Medicare & Medicaid Services has implemented a one-year transition to the CBSA codes, so some areas have a special code for the blended wage index this year, explains Abilene, TX-based consultant Bobby Dusek.

But CMS has made this simpler for HHAs, Little cheers. In the final rule in the transition wage index table (Addendum A), CMS put a column titled "Number that goes on the claim in the CBSA field." Sometimes the code is the same as the CBSA code and sometimes it is a transition code.

"That's possibly the most descriptive heading I've ever seen in a Federal Register notice," Little quips. That column clearly "indicates the actual code to use in place of the MSA code on [requests for anticipated payment] and final claims."

3. Focus on the county. The new CBSAs focus on the county in which a patient lives rather than the city, Little notes. You should "familiarize your billing and other office staff with the special claims processing codes for all counties in your state, as identified in the Federal Register," Little advises. Then, prior to billing claims, compare the patient's address and county of residence to the list and confirm whether you have used the appropriate code on the claim.

And don't fall into the trap of thinking your county is staying in the same rural or urban category it's always been in, Little warns. CBSA classifications assign many counties "unique wage index adjustments and claims processing codes." For example, your formerly rural county may now be grouped into a larger CBSA and have a blended transition code, he notes.

4. Bill RAPs and final claims correctly. As in previous years, the wage index code doesn't have to match on RAPs and final claims when the episode spans the start of the new year. "Episodes that begin prior to Jan. 1, 2006 will have RAPs billed and paid using MSA codes, but the final claims will be billed and paid using CBSA codes," Little reminds providers.

5. Don't cut off episodes early. If a patient's episode stretches into the new year, Medicare will pay the entire episode at the higher 2006 amount, Dusek notes. That means you shouldn't cut off your episodes earlier than necessary to avoid spanning Jan. 1.

Of course, the new 2006 rates may not be as favorable as those published in the prospective payment system final rule. Congress has passed legislation implementing a rate freeze for HHAs in 2006, although it would also reinstate a 5 percent rural add-on. Observers are waiting to see if the freeze and add-on become finalized in law.

6. Check your software. Verify whether your vendor has modified its software to accept the five-digit code, Little advises. "Some vendors didn't anticipate the use of codes greater than four digits and are having to make special programming changes to properly store and transmit the five-digit code," he notes.

If you're using free government software, you'll have to enter the new codes manually, regional home health intermediary Palmetto GBA instructs.

While you're at it, make sure your vendor is also updating the software for the new wage-index adjustment values and new episode and low utilization payment adjustment (LUPA) rates, Little adds. Updating the rates may be especially important if Congress changes them at the last minute.