Home Health & Hospice Week

PRRB gives thumbs up to agencies' therapist compensation.

Two home health agencies recently won battles over their therapist compensation, but they aren't declaring victory quite yet.

The Provider Reimbursement Review Board ruled in favor of Broomfield, CO-based Colorado Home Care Inc. and Kingston, PA-based Erwine's Home Health Care Inc. in decisions handed down Sept. 1 and Aug. 31, respectively. Both agencies fought adjustments from regional home health intermediary Cahaba GBA for per-visit compensation to physical therapists.

Colorado disputed an adjustment of more than $10,000 in its 1995 cost report year, while Erwine's contested adjustments totaled nearly $18,000 in its 1996 and 1997 cost report years. Both agencies paid physical therapists per visit, causing Cahaba to apply Salary Equivalency Guidelines for outside therapist contractors to the compensation, according to the decisions (Nos. 2005-D63 and 2005-D61). The RHHI also argued the agencies' therapist payment costs were unreasonable.

As the PRRB has ruled in a string of similar cases, it upheld the agencies' compensation and said Cahaba improperly applied the contractor guidelines to bona fide PT employees' payment.

"We're pleased with the decision," says Colorado's attorney Julie Bowman with Copeland, Cook, Taylor & Bush in Ridgeland, MS. "It's right on point with the law."

"The decision is clearly consistent with the regulations and prior decisions of the PRRB and the district and appellate courts," adds Colorado's attorney Thomas Kirkland Jr., also with Copeland, Cook, Taylor & Bush. "Not only was the use of Salary Equivalency Guidelines inappropriate, the provider proved that its therapy costs were reasonable."

Reversals Seem Inevitable

But the HHAs aren't celebrating quite yet. The Centers for Medicare & Medicaid Services Administrator has reversed all recent PRRB decisions on this topic. "I fully expect that the Administrator will reverse the Board's decisions in the Colorado Home Care and Erwine's cases," predicts Erwine's attorney Joel Hamme with Powers Pyles Sutter & Verville in Washington, DC.

Both Colorado and Erwine's will proceed with an appeal in federal district court if such reversals materialize, Hamme and Kirkland tell Eli. CMS has lost or settled favorably for providers all appealed court cases on this issue, Hamme reminds.

The main thing keeping HHAs from appealing Administrator reversals is that the cost of the lawsuit outweighs the reimbursement amount at issue. But providers should keep in mind that the government would owe interest in these cases if it loses, Hamme advises. "And, since many of the cost report periods go back some time, the amount of interest itself would be pretty sizable in relation to the underlying amounts at issue," he notes.

Providers also have a good argument that attorneys' fees should be awarded under the Equal Access to Justice Act, Hamme counsels. That's because "there is no substantial justification for the government's position in these cases," he maintains.

Hamme's clients plan on reducing their court costs by combining their cases on this issue, he says.