Home Health & Hospice Week

Congress will take care of excess payments, CMS responds.

Add the HHS Office of Inspector General to the chorus of voices calling for Medicare to reduce home health agencies' payment rates.

When the Centers for Medicare & Medicaid Services set payment rates for the home health prospective payment system, it based the rates on "unnecessary services and other improper payments," the OIG insists in its latest Red Book, a compendium of cost-saving recommendations for Medicare and other federal programs.

The OIG disallowed "substantial unallowable costs" when it audited HHAs' cost reports for the PPS base years, but CMS didn't adjust PPS rates downward for those disallowances, the federal watchdog grouses in the report online at http://oig.hhs.gov/publications/redbook.html.

Congressionally imposed payment reductions take care of the improper costs figured into PPS, CMS says to the OIG.

• House moderate and conservative Republicans continue to wrangle over whether the 2007 budget resolution will contain Medicare cuts, among other controversial items.

Like the Senate, the House Budget Committee approved a non-binding budget blueprint that did not include Medicare cuts (see Eli's HCW, Vol. XV, No. 13). But conservatives are seeking to include the cuts in the resolution passed by the entire House.

Given the inter-party discord and guaranteed opposition from Democrats, some observers wonder whether the House will pass a 2007 budget resolution at all. However, Republican party leaders say they expect passage by a slim margin.

• Medicare beneficiaries enrolled in a federally approved clinical trial will qualify for broader coverage of home use of oxygen.

The Centers for Medicare & Medicaid Services announced the final national coverage determination on March 24. The CMS-approved clinical trial is sponsored by the National Heart Lung & Blood Institute.

Medicare currently covers home oxygen for beneficiaries with partial pressure measurements at or below 55 mmHg or oxygen saturation at or below 88 percent. If certain other diseases or conditions are present, Medicare coverage kicks in for patients with an oxygen partial pressure of 56 to 60 mmHg or an oxygen saturation of 89 percent.

The trial will include Medicare beneficiaries with arterial oxygen partial measurements from 56 to 65 mmHg or whose oxygen saturation is at or above 89 percent who do not meet the current Medicare coverage requirements for home oxygen.

"This is an important opportunity to improve the care of our seniors, and to get better evidence on how doctors and patients can achieve the best outcomes for this serious and hard to treat condition," says CMS Administrator Mark McClellan in a release.

• CMS has updated its provider guidebook on remittance advices. The RA Guide, which includes advice on how to read RAs,  is available online at www.cms.hhs.gov/MLNProducts/downloads/RA_Guide_Full_03-22-06.pdf.

CMS will issue the guide in print and on CD-ROM later this year, the agency says.

• Providers accredited by the Joint Commission on Accreditation for Healthcare Organizations have a new sentinel event to worry about--tubing misconnections. An April 3 Sentinel Event Alert urges providers to pay special attention to how tubes and catheters are connected to patients.

The Alert urges providers to take steps such as tracing tubes from the point of origin and educating clinical staff on potential tubing dangers. More information is at www.jointcommission.org/SentinelEvents/SentinelEventAlert/sea_36.htm.

• CMS soon will issue instructions on which new local coverage determinations it will adopt nationally, Marie Casey, director of CMS' Program Integrity Group, noted in a March 27 session at the National Association for Home Care & Hospice's annual policy conference in Washington, DC. The Medicare Modernization Act, passed in December 2004, requires the LCD instructions, Casey told attendees.

• Incontinence products might be a "medical device" in Michigan, a legal fact that may soon have big implications for reimbursement under the state's Medicaid program.
 
A March 21 ruling by a U.S. Court of Appeals could limit Michigan Medicaid beneficiaries to a single supplier of incontinence products (Harris v. Olszewski, 6th Cir., Nos. 04-2479, 05-1047, 3/21/06). The court's decision rests on what they consider an ambiguous definition of "medical devices" in the state's Medicaid Act.

Suppliers nationwide should watch the case, observers note. The U.S. filed an amicus curiae brief in the case, stating that Michigan's procedures are consistent with the U.S. Department of Health and Human Services regulations.

• The mergers and acquisition market for home health agencies skyrocketed in 2005, according to M&A firm The Braff Group. Transaction volume grew 27 percent over 2004 levels, to 75 deals, the firm says. The number of higher-dollar acquisitions also grew, with seven transactions with revenue or purchase prices of more than $10 million.
 
• A Florida-based private equity firm is getting into the home care market. Coral Gables-based MBF Healthcare Partners plans in the next 90 days to purchase an unnamed home nursing company, reports the South Florida Business Journal.

MBF bought Stoughton, MA-based supplier Medical Specialties Distributors for about $26 million in December, the Journal says.

• LHC Group Inc.'s earnings are increasing. The Lafayette, LA-based regional provider of post-acute services reports net income of $3.2 million on revenues of $45.3 million for the quarter ended Dec. 31, 2005, compared to a $2.6 million profit on $35.0 million in revenues for the same period in 2004.

Revenues from home care services, as opposed to facility services, grew from $24.1 million to $29.8 million during the time period, LHC says.

• Hospice chain VITAS has opened a state licensed and Medicare-certified office in Northern Virginia, the Miami-based for-profit company says. The Herndon, VA location will serve the city of Alexandria and Arlington, Fairfax, Prince William and Loudon counties, VITAS says in a release.

• Medicare is collecting information on millions of Americans and failing to keep it secure, the Government Accountability Office says in a forthcoming report.

Even as CMS holds you to high standards of security under the Health Insurance Portability and Accountability Act, the GAO claims the agency itself is leaving beneficiary info open to thieves and pranksters, according to USA Today.

The GAO found "significant weaknesses in information security controls," which increase the risk that someone could obtain, modify or destroy Medicare patients' information. HHS spent $5 billion on information technology in 2005, but had absent or out-of-date antivirus software, employees and contractors working without background checks, inadequate control over passwords, and weak physical security.

"Instead of firewalls to safeguard sensitive data, we have Swiss cheese," Senate Finance Committee Chair Chuck Grassley (R-IA) says. HHS responds that the GAO report was too harsh, and that the agency reduced its reportable deficiencies by 57 percent in 2005.