Home Health & Hospice Week

Change will be retroactive to Oct. 1.

An ICD-10 change that is taking money out of your pocket has been corrected in the 2016 Home Health Prospective Payment System Final Rule.

Home health agencies were initially told that under ICD-10, they would never use “A” as a seventh character, indicating an initial encounter.

Home health treatment would always be categorized as a subsequent encounter. But then the official ICD-10 coding guidelines were revised to say “that the designation of an initial encounter is based on whether a patient is receiving active treatment for the condition for which the code describes,” explains the Centers for Medicare & Medicaid Services in the rule published in the Nov. 5 Federal Register. “Based on these revisions, it is possible for a home health agency to use a diagnosis code with a seventh character ‘A’ (an initial en-counter) for certain conditions.”

For example: “A patient who was in the acute care hospital for IV antibiotics for a postsurgical wound infection and who is discharged to home health on IV antibiotics for ongoing treatment of the surgical wound infection … would be considered active treatment as the surgical wound infection requires continued IV antibiotics,” CMS offers in the rule.

The problem: CMS had excluded initial encounter codes from the HH PPS grouper, meaning agencies could not receive case mix points for patients assigned those codes (see Eli’s HCW, Vol. XXIV, No. 20).

“Case-mix points are a critical factor in the complex formula that determines episode payment,” the Visiting Nurse Associations of America said in an Aug. 31 letter to CMS Deputy Administrator Sean Cavanaugh. “Fewer case-mix points results in lower payments for episodes with acutely ill patients who require increased utilization. Under the current Grouper Logic, agencies will not receive accurate and full payment for medically necessary services if they need to code the 7th character.”

The solution: “In determining which diagnosis codes would be appropriate for an HHA to indicate that the care is for an initial encounter, CMS developed and shared a draft list of codes with [industry stakeholders],” the rule says. “Agreement was reached between CMS and the cooperating parties and a revised translation list effective January 1, 2016 will be posted on the CMS Web site.” At press time, CMS had not yet posted the list.

Retroactive: “Also effective, January 1, 2016, the Home Health Prospective Payment System Grouper logic will be revised to award points for certain initial encounter codes based upon the revised ICD–10–CM coding guidelines for M0090 dates on or after October 1, 2015,” CMS adds.

Note: For more on diagnosis coding, subscribe to Eli’s Home Health Coding & OASIS Expert at https://www.aapc.com/codes/.