Home Health & Hospice Week

HHAs that can't afford costly legal fees are stuck with unfair compensation for therapists. 

It's become a familiar refrain - the Provider Reimbursement Review Board rules in favor of a home health agency's physical therapy compensation appeal, only to have the Centers for Medicare & Medicaid Services Administrator overturn it.

The result: Unless an agency wants to appeal the CMS decision in federal court, the agency is stuck with the intermediary's reductions to its PT salary costs.

That's what Charlie Wilson, owner and administrator of Pocono Medical Home Care Inc. in Stroudsburg, PA, fears may happen to his small HHA, he tells Eli.

On July 16, the PRRB handed down a decision reversing regional home health intermediary Cahaba GBA's $30,000 cost report adjustment to Pocono's 1997 cost reporting year (Pocono Medical Home Care, Inc. vs. BlueCross BlueShield Association/Cahaba GBA, [No. 2004-D31]).

The issue: Pocono paid its therapists on a per visit basis, so Cahaba applied the salary limits for contracted therapy staff to the therapists' compensation.

A long string of PRRB decisions and a number of federal court decisions spell out that it is not appropriate for Medicare to limit bona fide PT employees' salaries to contractor levels just because agencies pay them on a per-visit basis, notes Tom Boyd with Rohnert Park, CA-based Boyd & Nicholas. But Cahaba (previously Wellmark) continues to make the adjustments, and the CMS Administrator continues to reverse the PRRB decisions favoring the provider.

Because the CMS Administrator "has the power to overturn the decision, what difference does it make?" says a frustrated Wilson. "It's a foregone conclusion that it will be overturned."

And when that likelihood becomes reality, Pocono will have to decide whether it is worth it to go to court over the adjustment's $30,000 reimbursement impact. "It is very expensive to go to court," Wilson says. But "we are keeping our options open - we haven't really decided."

Pocono couldn't choose a different payment method for its employed therapists because "the market dictates per-visit pay," Wilson says.

Missed Taxes Lead to Cost Report Losses

Meanwhile, RHHI United Government Services has emerged the victor in a tangle over accounting practices for back taxes, according to July 16 decision Global Home Care, Inc. vs. BlueCross BlueShield Association/United Government Services, (No. 2004-D30).

Troy, MI-based Global Home Care Inc. was unaware it owed Michigan Single Business Tax from 1995 to 1998, then learned of its tax liability in 1998, the PRRB decision says. Global accrued the taxes in the fiscal year it found out about them, 1998. But the HHA didn't actually pay the taxes until FY 1999.

When Global tried to claim the tax costs - more than $70,000 - in its FY 1998 report, UGS cried foul. The RHHI said Global had to claim the costs in the year it liquidated them, 1999.

And the PRRB sided with the intermediary. Normally, agencies can claim costs the year they incur them as long as they pay the amount in a timely manner, according to regulation. But Global failed to pay the taxes timely in the years it incurred them, 1996-1997, because the company didn't know about them.

When providers don't pay timely, they then have to claim the costs in the year they liquidate them - in this case, 1999, the PRRB concluded.

In a situation like this, Boyd would recommend reopening the cost report years the taxes were incurred and claiming the tax costs in those years (1995-1997), since the PRRB implied that would be acceptable.

The fact that Global failed to take that route indicates perhaps it was over its utilization or cost limits for those years, Boyd suspects. Global and its counsel didn't respond to inquiries for this story.

"UGS is being somewhat kind for a Medicare Intermediary," Boyd notes. "I would not have been surprised to have seen UGS reject the costs before 1998 as not being applicable to 1998 or 1999."

Cases like this are prime candidates for PRRB mediation, Boyd recommends.