Home Health & Hospice Week

HHAs without resources to fight court battles lose out on therapist compensation.

Once again, the Provider Reimbursement Review Board has shot down an intermediary's attempt to limit employed therapists'compensation with salary limits meant for contracted therapists.

Former regional home health intermediary Wellmark imposed the salary equivalency guidelines for therapists "under arrangement" to TIP of Illinois Health Services' physical therapists for cost reporting years ending in 1993 and 1994.

The problem: TIP's PTs were bona fide employees and therefore not limited to the guidelines meant for outside, contracted therapists.

Wellmark argued that because TIP paid some of its therapists on a per-visit basis, that qualified for the "under arrangement" scenario that would trigger the contractor guidelines, according to TIP of Illinois Health Services v. BlueCross BlueShield Association/Wellmark, Inc., PRRB Decision No. 2004-D25, issued June 9.

Wellmark's adjustments to TIP's cost reports cost the agency more than $310,000 over two years.

"The Board finds the guidelines do not apply to employee physical therapists even though they are paid a portion of their compensation on a fee-for-service basis," according to the decision. The PPRB reversed the adjustments, noting that "the physical therapy guidelines apply only to outside contractor compensation."

The Board's ruling isn't surprising, says attorney Joel Hamme with Power Pyles Sutter & Verville. "In a large number of PPRB decisions over the years, the Board has uniformly held that the salary equivalency guidelines are not legally applicable to [bona fide employees'] compensation," says Hamme, who represented TIP in the case.

While the Centers for Medicare & Medicaid Services Administrator generally has reversed the PRRB's decisions on this issue, courts subsequently have ruled in favor of the providers in the cases that went on to the judicial system, Hamme tells Eli.

Former intermediary auditor Tom Boyd with Rohnert Park, CA-based Boyd & Nicholas calls Well-mark's -- now Cahaba GBA's -- use of the PT guide-lines on employees "vicious."

"Time after time Cahaba would lose on this issue but never accepted the PRRB decision or court decision as final," Boyd laments. The intermediary viewed it as "only final to that one case and provider."

Boyd recalls a client disputing this issue who was located only 50 miles from another HHA that had succeeded in court over the guidelines. However, the winning HHA was in Minnesota while Boyd's client was in another state. The intermediary "still told me that the decision only applies to HHAs in the state of Minnesota," Boyd relates.

Hamme hopes CMS will eventually "drop this policy," since it's been reversed so often at the PRRB level and in federal court.

TIP, which has now merged into VNA-TIP based in Alton, IL, will most likely pursue the matter in court if the Administrator rules in the usual fashion, Hamme says. "All court rulings have favored the Provider's position on this issue and the government has settled a number of these cases for 100 cents on the dollar either before the district court ruled or shortly after such a ruling," he points out.

Because the CMS Administrator usually reverses the PRRB's favorable ruling, it is agencies without the financial resources to go to court that lose out, Boyd charges. The intermediary "has more money than the providers," he notes.

Editor's Note: The PRRB decision is at www.cms.hhs.gov/providers/prrb/2004D25.pdf.