Home Health & Hospice Week

Home care could be hit especially hard by the pilot program that rewards contractors for identifying overpayments.

Paying new Recovery Audit Contractors on a contingency basis is a recipe for disaster for home care providers, warn numerous home care experts.

"Compensation for RACs will be provided through retention of a percentage of the overpayment recoveries," the Centers for Medicare & Medicaid Services explains in a Jan. 10 Medlearn Matters article.

This payment structure "gives them an incentive to recoup money," criticizes Gloria Peterson of the California Association of Medical Product Suppliers. "The incentive is there to collect more." The RAC program will pilot in New York, Florida and California starting in May (see story, this page), and may expand nationwide if the feds like what they see.

With a financial reward "to find something wrong ... we wonder about conflict of interest." says Patrick Conole with the Home Care Association of New York State.

"It's scary," insists consultant John Gaynor with Frost, Ruttenberg & Rothblatt in Chicago, IL. "They have the motivation to come back with sizeable adjustments."

Gray Areas Especially Risky

Rewarding recovery contractors for making recoupments in home care is especially risky, maintains Bob Wardwell with the Visiting Nurse Associations of America. "The Medicare home health benefit allows for a great deal of flexibility and interpretation in determining coverage," notes Wardwell, a former CMS official.

Contingency payments "are just not appropriate" in home care, which is rife with gray areas, agrees Gene Tischer with state trade association Associated Home Health Industries of Florida. "There are honest differences of opinions" where clinicians are obligated to make judgment calls, Tischer says.

"It's just wrong" to have contractors get paid for coming down on the other side of such a decision, Tischer insists.

Having it be in contractors' best interest to find a recoupment "whether it's right or not" makes them into "bounty hunters," criticizes Joan Cross, past president of the Florida Association of Medical Equipment Services. "They'll come in here looking for blood," worries Cross, with C&C Homecare Inc. in Bradenton, FL.

Gear Up For More Review Requests

Even if the RACs don't find anything wrong with your claims, responding to additional medical review requests will mean more work for you, points out Conole. The workload impact could be significant depending on how a provider is staffed, he tells Eli.

If an RAC does deny or downcode a claim and you have to appeal it to your usual contractor, that will take even more time and money, Tischer adds.

Learn a Lesson from CERT

Unless CMS, intermediaries and DME regional carriers start a pretty intensive education campaign before the recovery pilot begins in May, many providers probably won't even reply to medical review requests from a contractor they don't recognize, Cross believes.

At the beginning of the Comprehensive Error Rate Testing project, providers pitched CERT letters because they didn't even specify that the reviews were related to Medicare, she notes (see Eli's HCW, Vol. XIII, No. 38).

If you fail to reply, the RAC will be likely to just reject your claim, observers say.

Another problem is that by choosing a contractor that isn't currently an intermediary or DMERC, "novices" could be trying to make complex home care decisions, Tischer fears. "That could be a disaster," he predicts.

"There's no guarantee the contractors will know what they're looking at," warns Pat Laff with Laff Associates in Hilton Head, SC.

However, the MMA language mandating the pilot does require RACs to have or contract with entities that have "the appropriate clinical knowledge of and experience with the payment rules and regulations under the Medicare program."

PPS Honeymoon Is Over

Home health agencies may be hit especially hard by the new medical review because they've enjoyed a period of relatively few audits since the prospective payment system began in October 2000, Gaynor cautions.

With some public companies reporting high profit margins and more and more agencies entering the market, the feds could decide the time has come to crack down, with the RAC pilot as the perfect vehicle to do so.

And HHAs will be hurt more by recoupments because they tend to depend more on Medicare revenues than other provider types, Wardwell points out.

The only hope may be for RACs to "find fertile fields to plow among other providers ... and not lavish a disproportionate amount of their energy on home health," Wardwell notes.

Providers Have More Questions than Answers

Before final evaluation of the pilot can take place, providers need to have a lot of questions answered. For example, there are few details about what kind of audits will take place, notes Carol Napierski with the New York Medical Equipment Providers Association.

Details on how claims will be selected and the volume of review is notably absent, Tischer says. And more information on appealing RAC determinations is necessary, urges Ann Howard with the American Association for Homecare.

Cross wants to know how denials or downcodes could be translated into potential fraud allegations. And Howard asks, "How will CMS evaluate the RACs and hold them accountable for making accurate decisions?"