Home Health & Hospice Week

Will the budget ax fall on agencies' necks?

An influential member of Congress is looking for places to trim the Medicare budget, and home health agencies are looking like an ever-juicier target.

In a May 15 hearing of the House Ways & Means Health Subcommittee, Chair Pete Stark (D-CA) warned that he is considering across-the-board cuts to Medicare providers if they can't help Congress pinpoint places to cut the budget, reports the American Association for Homecare.

The House and Senate in their joint budget resolution passed May 17 call for $50 billion over five years to reauthorize the State Children's Health Insurance Program (SCHIP). And lawmakers have made clear they want to avert the 10 percent cut to physicians' Medicare payments slated for Jan. 1.

That leaves lawmakers looking for places to make cuts to compensate for those increases. "Home health could be targeted for a freeze or significant cuts," warns the National Association for Home Care & Hospice in its newsletter to members.

President Bush's call for a five-year HHA rate freeze and hospice inflation update reductions (see Eli's HCW, Vol. XVI, No. 6), coupled with the Medicare Payment Advisory Commission's recommendation to freeze HHA payment rates in 2008 (see Eli's HCW, Vol. XVI, No. 6), puts HHA Medicare reimbursement at grave risk, industry veterans warn.

The 2.75 percent "case mix creep" cut included with the prospective payment system final rule (see Eli's HCW, Vol. XVI, No. 16) piles on yet another threat, NAHC notes.

Industry fights back: In hearing testimony, NAHC representative Christine Chesny of the Michigan Home Health Association decried the proposed cuts. "Over the past 10 years, the Medicare home health benefit has been cut nearly every year," Chesny said. "Once comprising 8.7 percent of Medicare spending, today it is 3.2 percent and is projected to drop 2.6 percent by 2015."

Home care is much more cost effective for the Medicare program than other types of institutional care, stressed the Visiting Nurse Associations of America's Andy Carter in a prepared statement submitted to the committee. As the ranks of Medicare beneficiaries swell, home care should be considered as an efficient way to care for them.

NAHC urged the committee to hold off on any cuts or freezes until after PPS refinements have taken effect. With one-third of HHAs seeing negative Medicare margins, the payment system flaws must be fixed first, the trade group argued.

Threat looms: But home care will have to do some fast talking to evade cuts this year, considering MedPAC's report of 16 percent average profit margins, observers note.

• You may see fewer Medicare Advantage headaches, if Congress gets its way. The Senate Special Committee on Aging looked into illegal and unethical sales practices by MA sales agents in a May 16 hearing.

Wisconsin Insurance Commissioner Sean Dilweg testified that 37 out of 43 states in a recent survey have received complaints that MA plan sales agents have used confusing or misleading marketing practices, according to press reports. Insurance regulators in 31 states also have reported "cross-selling"--when agents first discuss Medicare prescription drug plans with seniors and then attempt to sell them other plans such as full MA plans, Dilweg added. That's a common complaint for home care patients.

Committee members warned insurers to clean up their act or face their wrath. "I am not going to work 10 years to get this corrected--we are going to drain this swamp," Sen. Ron Wyden (D-OR) threatened.

Insurance trade group America's Health Insurance Plans and its members have adopted voluntary practices to prevent marketing abuses and strengthen sales agents' training, AHIP says.

State insurance commissioners chastised Centers for Medicare & Medicaid Services officials for not safeguarding the vulnerable Medicare beneficiary population from MA sales and enrollment abuses.

• Updates to the Provider Reimbursement Manual reflect the fact that you must report your flu vaccine costs differently. The cost of administering flu and other vaccinations is now reimbursed under the outpatient prospective payment system, but the cost of the vaccines themselves is still cost-reimbursed for HHAs, CMS says in May 2007 Transmittal No. 13. The revised manual also includes the switch to Core-Based Statisti-cal Areas (CBSAs), CMS notes in the transmittal.

• It may get easier to fix a medically reviewed claim that you failed to submit documentation for. Medical review units must "re-open claims that the MR staff have denied due to no documentation rather than requiring providers to go through the appeals process," CMS says in May 18 CR 5246.

That's part of a 2003 law's requirement to es-tablish a process for the correction of minor errors and omissions, the transmittal notes.

• If you've received a returned claim with reason code 32103 from Cahaba GBA, it's probably because your National Provider Identifier number and legacy OSCAR number don't match. All regional home health intermediaries began that edit for NPIs this month (see Eli's HCW, Vol. XVI, No. 17).

But if you submitted the claim before May 14, it could be a claims processing error instead, Cahaba says in a message to providers. Some claims sent to Cahaba's Birmingham, AL office incorrectly RTP'd to status/location T B9997. And some claims submitted to its Des Moines office suspended in status/location S M15PV, Cahaba explains.

Bottom line: "Claims in the RTP file with reason code 32103 that were submitted after May 14, 2007, were sent to the RTP file correctly," the RHHI says.

• The Medicare Payment Advisory Commission has appointed three new members, and once again, they don't include any home care industry representatives. Government Accountability Office head David Walker appointed South Dakota physician Thomas Dean, health consultant Jack Ebeler and University of Maryland professor Bruce Stuart.

VNS of New York's Carol Rapheal, the only HHA rep, saw her three-year MedPAC term end in 2005. MedPAC advises Congress on Medicare payment policy and frequently recommends reducing HHA rates.

• Take time now to coach clinicians about drug interactions. A new study suggests a refresher might be in order.

The study from the Agency for Healthcare Research and Quality reveals that spending for medications prescribed in outpatient settings increased from $72 billion in 1997 to $191 billion in 2004. The data covers spending by people who live in the community and not in institutions such a nursing homes.

A billion-dollar increase in drug spending from 1997 to 2004 mostly came from a rise in the average number of prescription drug purchases per year by the elderly aged 65 and older, which increased from 22 to 31 purchases per year.

• VITAS Healthcare Corp. parent Chemed Corp. paints a rosy earnings picture this quarter. Miami-based VITAS saw net income rise from $10.9 million for the quarter ended March 31, 2006 to $15.0 million in the latest quarter. Revenues increased from $166.1 million to $184.0 million during that period.

VITAS has minimized its per-patient cap exposure, Chemed says in a release. "VITAS did not record any billing restrictions related to Medicare cap in the first quarter of 2007," it trumpets. Most of VITAS' programs have a "cap cushion" of 10 percent or more.