Home Health & Hospice Week

Contractors' $700 million savings for Medicare could spell bad news for providers.

Home care providers that have been safe from Recovery Audit Contractors' clutches may not be much longer.

RACs recovered nearly $700 million in improper Medicare payments from providers between 2005 and 2008, the Centers for Medicare & Medicaid Services crows in a release.

The vast majority of the funds--85 percent--came from inpatient hospitals. Another 6 percent came from inpatient rehab facilities and 4 percent from outpatient hospital departments, CMS says.

Providers appealed only 14 percent of RAC determinations, CMS says. About one-third of those were successful.

CMS has learned some important lessons from the three-year RAC demonstration that it will apply when the program becomes permanent by 2010, says CMS Acting Administrator Kerry Weems. For example, CMS will retain a validation contractor to review RACs' decisions, will require RACs to hire medical directors and will limit retrospective reviews to three years.

While home care providers have been exempt from RAC review under the demonstration, the potential for recoveries is bound to put them under scrutiny once the contractors become permanent, industry veterans predict.

But that permanence may be in question. House Democrats have requested that the Government Accounting Office review the RAC program to make sure CMS makes improvements.

Providers have complained that RACs use unqualified personnel to review claims and deny claims in violation of Medicare rules and policy, says the letter authored by House Democratic leaders, including Ways and Means Health Subcommit-tee Chair Pete Stark (D-CA).

And providers have claimed RACs are glorified bounty hunters, since they receive a contingency payment based on the amount of recoveries they make.

CMS has overstated the RAC program's savings as well, the letter adds. Many claims counted toward the figure are still in the appeals process, which has a pretty high success rate.

More information on the RAC program, including the demonstration evaluation report with the savings figures, is at www.cms.hhs.gov/RAC.

• Suppliers of CPAPs may see increased demand after a shift in Medicare coverage policy. CMS has approved coverage of continuous positive airway pressure devices based on home testing, according to July 3 Transmittal No. 86 (CR 6048).

Formerly, Medicare covered CPAPs based only on sleep lab testing. Now it covers the devices based on a positive result with a Type II, Type III, or Type IV unattended home sleep monitoring device.

The specific criteria for a positive result are in the memo at www.cms.hhs.gov/transmittals/downloads/R86NCD.pdf. A related MLN Matters article which includes home sleep testing G codes is at www.cms.hhs.gov/MLNMattersArticles/downloads/MM6048.pdf.

The coverage applies for service dates of March 13, 2008 and later.

• You have another few months to switch to the new CMS 855 form. "CMS has issued an extension allowing Medicare contractors to continue accepting the 2006 Version of the CMS-855 for all providers and suppliers, except specialty hospitals, through September 2008," regional home health intermediary Cahaba GBA says in an email message to providers. CMS originally planned to require the new form by July 1.

CMS made some modifications to the new enrollment form in response to provider complaints. For example, it no longer requires the National Provider Identifier notification from NPPES (see Eli's HCW, Vol. XVII, No. 17).

• If presumptive Republican presidential nominee John McCain wins the election in November, providers may expect to see some big changes to Medicare. Sen. McCain (AZ) recently pledged to balance the U.S. budget by 2013 in part by overhauling Medicare.

The "only way to keep the budget balanced is successful reform of the large spending pressures in Social Security, Medicare and Medicaid," Mc-Cain said in a policy paper released July 7. However, the paper didn't specify Medicare reform details.

• The OIG is hammering Medicare drug prices by making unfair market comparisons, industry observers charge. Because CMS combined payments for inhalation drugs albuterol and levalbuterol, it paid 13 times the widely available market price for albuterol, the OIG says in a July report (OEI-03-07-00190).

CMS has since separated the payment rates for the drugs, the OIG points out. The report is at http://oig.hhs.gov/oei/reports/oei-03-07-00190.pdf.

• Only four states spent more than 50 percent of their Medicaid long-term care dollars for home and community based services for the elderly, according to a new report from the AARP. Nationally, 75 percent of LTC funding goes to institutions such as nursing homes, the report says.

Medicaid programs do a better job of funding home care for residents with developmental disabilities, the AARP notes.

For LTC, Medicaid requires nursing home funding but not home care funding. "This is backwards," says report co-author Susan Reinhard in a release. "People are entitled to costly nursing home care, but not to often more cost-effective services in their homes. Clearly home and community-based services are preferred by older residents," says Reinhard, with the AARP Public Policy Institute.

The report is at www.aarp.org/research/longtermcare/programfunding/inb161_ltc.html.

• Say goodbye to the Statistical Analysis DME Regional Carrier (SADMERC) and hello to the Pricing, Data Analysis and Coding (PDAC) Contractor. New PDAC Noridian Administrative Services will take over SADMERC functions from current SADMERC Palmetto GBA, including assisting with DME pricing and fee schedules and furnishing HCPCS assistance.

The transition will take place by Aug. 18, but the new PDAC Web site won't be up for a while. Until www.dmepdac.com is launched, use www.palmettogba.com/sadmerc, CMS instructs.

• Bad behavior among colleagues is compromising patient care, and the Joint Commission is targeting it. Intimidating and disruptive behaviors are the focus of the Commission's latest Sentinel Event Alert, says the accrediting body formerly known as JCAHO.

"The Joint Commission is introducing new standards requiring ... organizations to create a code of conduct that defines acceptable and unacceptable behaviors and to establish a formal process for managing unacceptable behavior," says the Oakbrook Terrace, IL-based company. The standards will take effect in 2009.

• Regional chain LHC Group Inc. is continuing its history of joint ventures with hospitals. The Lafayette, LA-based company has entered into a partnership with Grant Memorial Hospital in Petersburg, WV, to provide home health and hospice services in Petersburg and the surrounding areas. Annual revenues for the agency are just above $550,000, LHC says in a release.

• A Jacksonville, FL-based rehab provider has purchased the city's largest HHA for undisclosed terms. Brooks Rehabilitation has purchased Home Care Advantage, which has more than $10 million in annual revenues.

Brooks has a 143-bed acute rehabilitation hospital and 25 outpatient centers throughout Central Florida and South Georgia, the company says in a release. It is expanding its services to home health and has named the new division Brooks Home Care Advantage.

"The real goal with all that we do is try to get people home, and not have them be institutionalized," Brooks CEO Doug Baer told the Jacksonville Business Journal.