Home Health & Hospice Week

Industry growth alarming, congressional advisors imply.

If you're like most home health agencies, outlier patients are a huge drain on your finances. But the Medicare Payment Advisory Commission is worried they could become a cash cow.

"The outlier provision could be manipulated by some agencies," MedPAC staffer Sharon Cheng said in the Nov. 16 meeting of the influential advisory body to Congress. "The fact that agencies max out the number of visits in an outlier episode could suggest that there is an incentive to maximize the number of visits."

 If an HHA's cost to furnish a visit is below the outlier per-visit rate, "agencies could have an incentive to provide the maximum number of visits once they've qualified for an outlier episode," Cheng continued.

 There's one problem with that scenario, home care experts say - the per-visit payment rate for outliers is way below agencies' costs for furnishing the visits.

Suggesting agencies want to manipulate outlier visits "is so absurd as to be ridiculous," scoffs consultant Tom Boyd with Rohnert Park, CA-based Boyd & Nicholas. Not a single one of Boyd's clients has a per-visit cost under the outlier payment rate, which is based on the low utilization payment adjustment (LUPA) rate, he says (see 2005 LUPA rates at Eli's HCW, Vol. XIII, No. 38, p. 299).

Outlier per-visit rates "are absolutely nowhere close" to agencies' costs, agrees consultant Pat Laff with Laff Associates in Hilton Head, SC. "Our VNAs have been taking a financial bath on outlier cases," adds Bob Wardwell with the Visiting Nurse Associations of America.

HHAs see no advantage by running up outlier visits, notes consultant M. Aaron Little with BKD in Springfield, MO. "Our typical clients' costs per visit are higher than the LUPA rates, so adding visits for those agencies would mean losing money on the episode," Little notes.

"Every visit [agencies] make would cost them money," Laff stresses. In light of that fact, MedPAC's concern is "paranoia," he contends.

No agency wants outliers, Boyd says. In fact, they go to great lengths to avoid them when clinically appropriate. And agencies lose money on every PPS payment method except the straight-up episode, Boyd notes - LUPAs, outliers, PEPs and SCICs are all losers.

MedPAC is concerned about outliers in part because proprietary agencies record a higher incidence of the cases - 3.3 percent - than other types of agencies, Cheng pointed out in the meeting.

There is so little money tied up in home health outliers that it hardly seems worth MedPAC's time to look at the issue, Little notes. Since outliers make up only 2.6 percent of episodes according to the commission, "it seems like a rather small population of episodes to be 'concerned' about," he says.

"It's a tempest in a teapot," Laff charges. [...]