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Home Health & Hospice Week

Industry Notes:

Hospice Payments Up Only 1% In 2005

Published on Thu Sep 02, 2004

Rural hospices see bigger boost.

Hospices won't be getting the 3.3 percent payment increase they had hoped for next year.

The Centers for Medicare & Medicaid Services in August issued hospice payment rates that increased by that amount (see Eli's HCW, Vol. XIII, No. 28, p. 222). But the newly released hospice wage index scales back the increase to just 1 percent for all hospices.

Rural hospices will see a bigger boost, however - 2.9 percent over 2004 levels. "As a result of improvements in how payments are calculated, Medicare payments for hospice services in rural areas will more accurately reflect costs," CMS Administrator Mark McClellan says in a release. "This payment increase helps ensure that beneficiaries in rural areas have access to the quality hospice services that they need."

You won't see the effect of revised definitions for Metropolitan Statistical Areas, new definitions for Micropolitan Statistical Areas or Combined Statistical Areas until 2006, CMS notes in the Aug. 27 Federal Register notice of the new wage index.

The extra boost to rural hospices won't help the industry overall very much, notes the National Association for Home Care & Hospice. "The majority of hospices and their services are provided in urban areas, with 1,469 hospices designated as 'urban' and 916 designated as 'rural,'" NAHC notes.

The biggest wage index swing occurs in the rural East South Central region (Alabama, Kentucky, Mississippi, and Tennessee) with a 6.5 percent increase, NAHC says The biggest index dips are in rural Puerto Rico (-4.1 percent) and rural New England (-0.5 percent).

  • Medicare will conduct more claims data analysis so it can detect and deal with potential fraud and abuse problems quicker. CMS appears to have learned its lesson from power wheelchair fraud that quickly spun out of control, and it promises in a proposed rule in the Aug. 27 Federal Register to increase its efforts to catch improper payments sooner.

    CMS will monitor claims data "on a national level so it can identify problems at the health care provider- and service-specific levels," CMS explains in a release. The agency will use the information to "proactively identify potential problematic utilization spikes so that their underlying cause can be determined."

    CMS also plans to open a satellite office in California, much like the one that already exists in Miami, to "reduce the unusually high rates of improper payments identified" in that state, the agency says.

  • New home health outcomes data hit Medicare's Home Health Compare Web site Sept. 2, CMS says. Check out your newly updated scores on the 11 measures via the link at www.medicare.gov.

  • Regional home health intermediary Palmetto GBA is giving home health agencies and hospices hit by Hurricane Charley some leeway. Palmetto will grant expedited accelerated payments to HHAs and hospices whose cash flow has taken a hit from the hurricane, the RHHI says on its Web site.

    Providers submitting late appeals requests due to the hurricane should cite that reason in their letters. And if agencies are late in submitting ADR records, they should contact the medical review department and it "will consider each situation on a claim-by-claim basis and work with providers who seek assistance."

  • If you're fiddling with the details of the home health advance beneficiary notice form, you could end up being financially responsible for the care you furnish under it. HHAs can customize only one section of the ABN form - the header, RHHI Cahaba GBA warns in its September newsletter to providers.

    Cahaba now must review 100 percent of all home health demand bills, and medical review staff have taken note of ABN forms that agencies have "inappropriately modified." Specifically, agencies have changed the font size and/or font style of the form's text.

    "A home health provider that supplies a defective HHABN" due to improper modification "will not be protected from financial liability," Cahaba cautions. The ABN should be only one page, although that page can be legal-size if your header increases the length past a regular-size sheet of paper, the RHHI advises.

  • Looking for some fall prevention tools? Check out the Veterans Administration National Center for Patient Safety's Web site. Home care providers can access information and tools on fall prevention at www.patientsafety.gov/fallstoolkit/index.html.

  • Critical Home Care Inc.'s losses on its durable medical equipment and mail order pharmacy business lines dragged down its earnings for the quarter ended June 30. Critical, which also furnishes staffing and home care services, reports net income of $347,000 on revenues of $23.1 million for the quarter, compared to an $826,000 profit on $18.2 million in revenues for the same period in 2003.

    But don't count Southfield, MI-based Critical out. "We expect to produce strong shareholder value and marketplace excellence in the coming years," CEO John Elliot says in a release. To accomplish this goal, the company must successfully integrate its Arcadia acquisitions (see Eli's HCW, Vol. VIII, No. 18, p. 144) and capitalize on cross-selling opportunities, he admits.

  • VITAS Healthcare Corp. has entered the Atlanta, GA market with the acquisition of Haven House Hospice, VITAS parent Chemed Corp. has announced. Cincinnati-based VITAS plans further growth and expansion in the market, VITAS CEO Timothy O'Toole says in a release.

  • There's a new home medical equipment player in the diabetes and respiratory business: Global Medical Direct. Denver, CO-based medical technology company U.S. MedSys Corp. has executed an agreement establishing GME, it says in a release.

    GME will furnish diabetes supplies and disease management, plus respiratory equipment and medications. Estimates are "that patients with diabetes have a 20 percent incidence of respiratory illnesses," U.S. MedSys says about the business lines that aim to complement each other.

  • Consumer-directed care, which cuts home care providers out of the Medicaid equation, is gaining popularity. CMS will pony up $1.7 billion over five years to keep California's "In-Home Supportive Services" self-directed care model going, it says. Gov. Arnold Schwarzenegger (R) had threatened to cut the program by one-third in state budget negotiations.

    The program, which allows beneficiaries and their families to control hiring, direction and appraisal of caregivers, will continue under the auspices of an Independence Plus Medicaid waiver. Five other states have such waiver programs, CMS says in a release.

    The agency also pushes consumer-directed care in an Aug. 17  letter to state Medicaid officials, urging them to fund home and community care over instituational care. "These programs ... use an individual budget to provide participants direct opportunities to make personalized decisions about the allocation of available resources," CMS cheers.

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