Home Health & Hospice Week

Tip: You must separate Medicare, Medicaid, and ‘Other’ data. Here's where managed care falls.

If you haven’t been gathering detailed wage data as required by the new home health cost report form, now’s the time to catch up.

Good: In the new home health cost report form released Oct. 2, the Centers for Medicare & Medicaid Services pushes back its effective date. The new rules apply for “Cost Reporting Periods Beginning on or After January 1, 2020 and Ending on or after December 31, 2020,” CMS says in a transmittal updating the Medicare Provider Reimbursement Manual.

Bad: That six-month delay from the last-proposed July 2019 effective data still leaves home health agencies with months of backtracking to do, particularly for providers that have chosen the popular calendar-year-end cost reporting year.

For example, “home health agencies will need to identify mechanisms to capture costs retroactive to January 1, 2020 for the new cost centers as well as develop a methodology for retroactively capturing direct patient care hours for purposes of allocating Nursing Administration,” points out consulting firm The Health Group in Morgantown, West Virginia.

“There are numerous new cost centers created, mainly to match up to the new level of detail for visit reporting and occupational wage data,” notes cost report expert Dave Macke with VonLehman & Co. in Fort Wright, Kentucky. “CMS believes that agencies are already separately reporting these direct care costs on their financial statements, which may not be completely accurate.” New cost centers include Nursing Administration, Medical Records, Telecommunications Technology (formerly proposed as Remote Patient Monitoring), Telehealth, Advertising, Fundraising, Skilled Nursing Care — LPNs, PT Assistants, and COTA.

“It appears that many of the comments on the proposed cost reporting changes were not considered in the determination of the Form CMS-1728-20, especially the retroactive application of the changes,” The Health Group criticizes in its electronic newsletter.

CMS may have found it easy to brush off industry comments, since there weren’t many to disregard. When CMS proposed the latest version of the revamped cost report form back in March, it received only seven comment letters on the proposal, according to regulations.com. When CMS proposed the forerunner to the latest form in 2019, it received only three comment letters — none of them from HHAs themselves.

Why it matters: The data HHAs report will be extremely important, as CMS plans to start using it do decide if Medicare is overpaying agencies based on the difference between their reported costs and Medicare payment rates (see HCW by AAPC, Vol. XXIX, No. 9). Hospices learned that lesson the hard way when they saw Routine Home Care rates reduced by 2.7 percent in fiscal year 2020 based on cost report data.

Although the comments submitted were few, CMS still addressed hardly any of them with the new form. The requirements retain these problems and new burdens:

• Mixing data for 60-day and 30-day episodes, since the Patient Driven Groupings Model began this year. “There will be data in the 2020 cost report that reflects both payment types,” Macke observes in an article on the VonLehman website. “There is no separation of 60-day from 30-day payment data per CMS response.” However, “this is a one-time conversion issue,” Macke acknowledges.
• Separating out data for Medicaid patients on multiple worksheets, which used to get lumped into the “Other” category.
• Reporting Full Time Equivalent (FTE) data separately for direct vs. contract staff.

Changes from the proposal include adding a line, 31.50, for COVID-19 PHE funding. “Enter the aggregate revenue received for COVID-19 Public Health Emergency (PHE) funding including both PRF [Provider Relief Fund] and Small Business Association (SBA) Loan Forgiveness amounts,” the instructions say.

CMS also clarifies some points of confusion, including what constitutes a home office. “Generally speaking, a home office is needed when there is a chain organization consisting of two or more facilities which are owned, leased or controlled by one organization,” Macke offers. “A home office is usually physically and organizationally separate, easily identifiable from the facilities it serves, and provides centralized services to the chain components.”

Do this: “These cost report forms reflect new detailed information that was not previously required,” Macke urges. “We recommend that all agencies review the forms and instructions to determine what is needed for proper completion of the Medicare cost report, especially Worksheet S-3, Part V – Occupational Wage Data.”

Note: Links to the new form and instructions are at www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Transmittals/r1p247. Macke’s detailed summary of the form changes is at https://vlcpa.com/articles/the-cms-releases-new-medicare-cost-report-form-for-home-health-agencies-1728-20-2020106/610.