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Home Health & Hospice Week

Industry Notes:

USE NEW DIAGNOSIS CODES ON THE DOT NEXT MONTH

Published on Thu Sep 23, 2004

ICD-9 updates among HHA changes on tap for Oct. 1.

This is a year of firsts for home health agencies.

2004 is the first year HHAs and other providers will have no grace period for implementing new diagnosis codes. Unlike in previous years, agencies will have to start using the new ICD-9 codes and stop using the old ones on Oct. 1 on the dot (see Eli's HCW, Vol. XIII, No. 20, p. 154). Providers used to have until Jan. 1 to make the transition, until HIPAA prohibited the grace period.

This year is also the first that HHAs' reimbursement update isn't regularly scheduled for the start of the federal fiscal year, Oct. 1. Instead, the Medicare Modernization Act permanently pushed back the home health payment update until Jan. 1 (see Eli's HCW, Vol. XIII, No. 21, p. 162). However, hospice payment rates remain on the FY schedule.

And new hospital diagnosis-related groups that are subject to proration if the patient is discharged to home health take effect next month (see Eli's HCW, Vol. XIII, No. 22, p. 174).

  • Medicare reimbursement rates for inhalation and other drugs under Part B are still up in the air. The Centers for Medicare & Medicaid Services will base the 2005 drug payments on 106 percent of the "average sales price" for the third quarter of 2004. CMS won't have that ASP data until early December, and it'll be a scramble to translate the data into HCPCS codes in time for Jan. 1, 2005, CMS said at the recent Practicing Physicians Advisory Council meeting.

    The final physician fee schedule rule containing drug prices will be based on second quarter 2004 data, which CMS just received. CMS will release this final rule in November, and officials have referred to it as the second of its "dry runs" for figuring out how to translate raw drug data into prices.

    Respiratory and DME company Rotech Healthcare Inc. continues to cast doubt on its ability to furnish Medicare inhalation drugs if the 89 percent cut to them goes through as proposed (see Eli's HCW, Vol. XIII, No. 28, p. 219).

    Orlando, FL-based Rotech is waiting to see "whether CMS will increase fees for services associated with dispensing such drugs" and if the cut really will reach the staggering amount. The answers to these questions "will determine whether or not it is economically feasible for the company to continue to provide inhalation drugs in 2005," Rotech says in a release.

    Physicians at PPAC meeting pleaded with CMS to provide drug prices as soon as possible. "I'm going to have two months to decide which office I'm going to close, which employees I'm going to lay off, what services I'm going to provide," said one doctor.

  • Fewer than one-third of Medicare beneficiaries eligible for diabetes self-managed training are receiving the care they need, the Senate Appropriations Committee says in a recent report (108-345). The committee urges CMS to study the training's effectiveness and obstacles to diabetes care.

  • More than 2,500 home health aides in New York City have agreed not to go on strike as they had threatened. Members of Local 1199 of the Service Employees International Union and Premier Home Health Care Services will take their dispute over hourly wages to binding arbitration, the Associated Press reports. The aides seek $10 per hour salaries, but currently receive an average of $7.60.

    In June, 23,000 NYC aides staged a three-day strike, which resulted in increased wages for about 10,000 aides, AP says.

  • The hospice mergers and acquisitions market continues to stay hot, keeping prices high. In recent deals, including the Beverly Enterprises Inc. purchase of Hospice USA in August, hospices are selling for about two times sales, the Mergers & Acquisitions Report says.

    The high prices are keeping would-be hospice acquirers on the sidelines, the trade journal says. But Housecall Medical Resources Inc., which went on the block two months ago, is still likely to go for two times revenues at $200 million, the Report predicts.

    Some hospice companies are choosing to go the start-up route. For example, in the Dayton, OH market, two long-existing hospices, Hospice of Dayton Inc. and Heartland Home Health Care and Hospice, will soon face competition from two newcomers, reports the Dayton Business Journal.

    Kettering, OH-based Alternate Solutions HomeCare will start offering hospice services under the ComfortBrook Hospice name in January. And Alabama-based SouthernCare Hospice Inc. just secured its state certification in August and is serving six patients, the paper says.

    "Nobody is trying to take over anyone's business," Beth Bush, clinical director at SouthernCare, told the paper. "The market is not tapped into in Ohio."

  • Troubled Med Diversified Inc. will be no more by the end of the year. The U.S. Bankruptcy Court for the Eastern District of New York has accepted Med's liquidation plan, under which it will transfer the assets of Tender Loving Care Health Care Services later this year and cease to exist, the company says. Med was brought down by the collapse of financier National Century Financial Enterprises last year.

  • The Joint Commission on the Accreditation of Healthcare Organizations is increasing fees for 2005. The estimated increase for home care is $880, the Oakbrook Terrace, IL-based accrediting body says.

  • Increased funding for home care will allow an extra 70 people a year in Gaston County, NC to receive services. The county Department of Social Services recently received more Medicaid money and will expand its program to serve about 165 people, reports The Myrtle Beach Sun-News. About 70 people are currently on the waiting list, and 13 people each month request assistance, the paper says.

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