Home Health & Hospice Week

CMS agrees to hold off long-delayed recoupments if provider appeals.

If your OASIS information-gathering was lacking when PPS began, you'll soon have to pay the price.

The recoupment and refund process for incorrect answers to OASIS item M0175 will begin in January, a Centers for Medicare & Medicaid Services of-ficial tells Eli. The regional home health intermediaries will make M0175 adjustments for the first year of the prospective payment system only, stresses a spokesperson for RHHI United Government Services.

CMS originally planned for the recoupments to begin last November. But the agency held off on the takebacks when the industry protested they wouldn't comply with appeals rules contained in the Medicare Modernization Act.

How it will work: Between now and Jan. 18, 2007, the intermediaries will process all the M0175 adjustments but won't yet initiate takebacks or refunds, according to Oct. 20 Transmittal No. 1079. Then on Jan. 18, the RHHIs will issue demand letters for overpayments via first class mail.

Sixteen days after the intermediary sends a letter, it will initiate recoupment of the overpayment by withholding it against current claims payments, the memo spells out. However, the intermediary will delay withholding if it receives a "valid and timely request" for a contractor redetermination -- the first Medicare appeal level.

If the contractor upholds the overpayment, the intermediary can start recouping the amount between 30 and 45 days after the redetermination notice is issued. If the provider appeals to the next level, the Qualified Independent Contractor (QIC), the takeback is again put on hold.

If the QIC upholds the overpayment and the agency appeals to the third level, the Administrative Law Judge, the intermediary still will make the recoupment. The Medicare Modernization Act requires that Medicare hold off on recouping overpayments only through the second, QIC level of appeal.

While the memo doesn't spell out the particulars, it appears RHHIs will take back M0175 overpayments for fiscal year 2001 in one lump sum, observes William Dombi with the National Association for Home Care & Hospice's Center for Health Care Law.

Cash Flow Threatened

Intermediaries UGS and Palmetto GBA have not calculated how much the total recoupments and refunds will be for fiscal year 2001, representatives for each intermediary tell Eli. That figure should be available once they process the adjustments.

When intermediaries first issued the overpayment information last year, some agencies were looking at six-figure recoupments while others had only a few thousand dollars, Dombi notes. But for some small agencies, even a few thousand dollars will have a huge impact on cash flow, he warns.

Because CMS agreed to give back money for M0175 mistakes in agencies' favor as well as recoup for mistakes that resulted in overpayments, some agencies will even see refunds, points out consultant M. Aaron Little with BKD in Springfield, MO. Those agencies can look forward to "a nice little bonus in a near future remittance advice."

Step In Right Direction

There are a lot of positives about the new M0175 adjustment instructions, experts allow. The new procedure adheres to the MMA appeal rules, meaning agencies won't have to pay back related money until they get through two levels of Medicare appeals, Dombi says.

HHAs that received more money than they were supposed to get have "had the use of that money" for five years, notes consultant Rick Ingber with VantaHealth Consulting in Jenkintown, PA. And if they appeal, they will have it a little while longer too.

One step at a time: "Limiting the initial wave of recoupments to the first year of PPS may make the process more manageable," Little adds. Reclaiming the money in a staggered fashion will keep agencies from getting hit with one big overpayment demand at once.

And while HHAs are likely to still find the M0175 recoupment process confusing, the new demand letters should help agencies sort out their adjustment status, Little hopes.

Timeline Chokes Providers

But plenty in the new instructions leaves industry veterans dissatisfied. The 16-day timeline for first-level appeals is way too tight, protests Bob Wardwell with the Visiting Nurse Associations of America.

The fact that the clock starts ticking when the intermediary sends the letter, not when the provider receives it, makes the deadline even worse, Dombi maintains. "A provider would have to file an appeal very, very quickly" to hold off recoupment.

Confusion persists: The memo doesn't go into much detail about what agencies will see in their demand letters and accompanying report of claims adjustments, Dombi adds. If the report is like the vague adjustment information intermediaries released last year, it still will be time-consuming and confusing for providers to figure out how they're affected.

Nothing in the instructions "make(s) it any easier to figure out if any particular recoupment action was valid," Wardwell adds.

Dombi is also disappointed that CMS failed to give way on the issue of without-fault mistakes. If providers tried hard to discern a hospital's status but could not because the hospital gave them incorrect information or was named misleadingly (for example, with "rehab" in the name when they don't qualify as a rehab hospital), they should get a bye on the recoupments, NAHC argued. The instructions don't address the issue.

M0175 Stumbling Block In OASIS Path

In fact, providers continue to have a tough time figuring out the answer to M0175, Ingber criticizes. "You can't be 100 percent," no matter how much effort you put into answering the question correctly, he insists.

"If the government knows the answer, why rely on the providers to tell them to begin with?" he asks. CMS should just automate that part of payment itself, he suggests.

Or the agency should toss the question altogether, urges Wardwell, who headed up PPS' design when he was a former CMS official. "Why set up a system that is destined to produce problems if you don't absolutely need to?" he asks.

Major PPS refinements are due out in a proposed regulation this year, and Wardwell hopes scrapping M0175's payment impact is one of them.

It's not over yet: NAHC is still considering filing a lawsuit over M0175 recoupments, Dombi tells Eli. "I don't think this is the last word." 

Note: The M0175 memo is at www.cms.hhs.gov/transmittals/downloads/R1079CP.pdf. CMS soon will issue a related Medlearn Matters article at www.cms.hhs.gov/MLNMattersArticles.

For tips on facing the M0175 adjustments, see next week's issue of Eli's Home Care Week.