Advanced Search

Home Health & Hospice Week

Legislation:

Providers Win Regulatory Relief In Medicare Bill

Published on Thu Dec 11, 2003

Ability to correct minor errors most helpful. 

If you're drowning in Medicare's administrative quagmire, take heart: Congress has thrown you a lifeline. Buried in the thousands of pages that make up the newly enacted Medicare Prescription Drug, Improvement and Modernization Act of 2003 lie regulatory reform provisions that could ease home care providers' administrative burdens.

The provisions, gathered under the "Regulatory Reform" heading under Title IX of the bill, were signed into law by President Bush Dec. 8 along with the rest of the bill. Probably the most helpful provision will be the one allowing providers to simply correct minor technical errors on claims without going through the timely and costly full-blown appeals process, says the Visiting Nurse Associations of America's Kathy Thompson.

The Department of Health and Human Services will work with both its Medicare contractors and provider representatives to develop a process that will allow those simple corrections to take place, according to Section 937 of the bill.

Technical denials are the most prevalent type for HHAs, points out William Dombi, vice president for law with the National Association for Home Care & Hospice's Center for Health Care Law. That made getting this provision passed a priority for home care lobbyists. "Denials because of the absence of signed and dated orders prior to billing continue to haunt HHAs," Dombi says. "This provision will allow HHAs to resubmit compliant claims without having to pursue an appeal."

Other errors affected by the provision include incorrect dates, beneficiary addresses that change and unexpected hospital stays, explains Thompson. "It affects almost every agency and will really help with cash flow," she cheers.

The new process should be in place by December 2004, the bill indicates.

Among the host of changes, the following provisions are particularly helpful to home care providers:

  • Overpayments (Section 935). Medicare now is restricted from recouping overpayments until a reconsideration decision on the matter is rendered - in other words, until the provider has exhausted the first level of appeals. "The overpayment recoupment postponement is important to home care because of the limited financial resources available to pay off an overpayment and wait for a successful appeal," Dombi notes.

  • Appeals for deceased patients (Section 939). Because home care providers serve many frail, older beneficiaries, patients often don't live through the appeals process timeline, Dombi says. The provision, which took effect upon enactment, allows providers and suppliers to appeal claims determinations when a patient dies and there is no other party to take up the appeal.

  • Extrapolation limits (Section 935). Medicare is prohibited from extrapolating overpayment amounts unless the provider has a high level of payment errors or "educational intervention" fails to correct the problem, the bill says. "This is very good," enthuses Ann Howard with the American Association for Homecare. It moves contractors away from punishing recoupments and places more emphasis on provider education.

    But opponents of extrapolation are likely to think the provision doesn't go far enough in limiting the controversial practice, in which a small number of claims are reviewed and the error rate is projected out to the provider's universe of claims for the same time period to generate an overpayment amount. "It doesn't go to the core of the problem," says attorney Bill Sarraille with Sidley Austin Brown & Wood in Washington, DC.

  • Contractor responses (Sections 921 and 903). The bill gives intermediaries and carriers a 45-day time limit to respond in writing to written inquiries they receive from providers and beneficiaries. And it protects providers from penalties if they follow Centers for Medicare & Medicaid Services or contractor written guidance that ends up being wrong.

    This provision reinforces "the need for providers to make sure that they do not rely on verbal guidance/direction from regulators," stresses Burtonsville, MD-based health care attorney Elizabeth Hogue. Providers should write a letter to regulators confirming conversations. "The letter should indicate that providers will rely on the contents unless regulators notify them in writing that something in the letter is incorrect," Hogue instructs.

    The provision spells out that guidance "transmitted electronically" is included in this protection. But Hogue deems it usually "better to talk to regulators and then write a confirmatory letter. E-mail communications sometimes lack the degree of clarity that is needed for reliance by providers."

  • Pre-payment review (Section 934). Starting a year from now, contractors may conduct random pre-payment review only if they are developing system-wide error rates or are working under other narrow circumstances, the bill mandates. And CMS must publish regulations spelling out the requirements for terminating non-random pre-payment review.

  • Retroactive application of policies (Section 903). The law prohibits CMS from applying "substantive changes" retroactively. There are two loopholes that would allow retroactive application however: if the change complies with a statutory requirement, or if it's in the "public interest."

  • Regulation timeline (Section 902). CMS can't drag its feet any longer when it comes to issuing regulations, at least not without a good excuse. The agency can't let three years elapse from proposed rule to final regulation unless it justifies publicly the reason for the delay. And new material can't be introduced in a final rule unless it is a "logical outgrowth" of what was originally proposed, the provision says.

    The regulatory changes have been largely overlooked because "the rest of the bill was so monumental," Howard notes. The newly created prescription drug benefit in the law grabbed most of the front-page headlines. And even home care industry experts have been focused on other pressing items for home health agencies (copayments, the rural add-on) and durable medical equipment and respiratory suppliers (competitive bidding, rate freezes).

    Plus CMS has taken a "kinder, gentler approach" to regulating health care providers under the Bush Administration, Sarraille notes. That more reasonable attitude has lessened some of the urgency attached to the regulatory relief provisions.

    "A lot of balance has been introduced in the last few years ... at CMS," Howard agrees, making regulatory reform less of a hot spot.

    Editor's Note: The full bill text is at http://thomas.loc.gov/cgi-bin/bdquery/z?d108:h.r.00001:.

    • Other Articles in this issue of

    Home Health & Hospice Week

    View All