Home Health & Hospice Week

CMS plans to propose PPS refinements by year's end.

The way you're reimbursed for therapy under the prospective payment system could change drastically--and sooner than you think.

Revamping the 10-visit therapy threshold is one major change the Centers for Medicare & Medicaid Services is considering when it proposes PPS refinements later this year, report attendees of a March 14 Technical Expert Panel meeting to review possible payment system changes.

PPS contractor Abt Associates is researching a three-tier therapy threshold, which would increase reimbursement in graduated increments at six, 14 and 20 visits, notes the American Association for Homecare. Currently, home health agencies receive an extra $1,800 per episode when therapy visits meet or exceed the 10-visit threshold.

The potential therapy change comes after vocal criticism from the Medicare Payment Advisory Commission and the HHS Office of Inspector General of HHAs' therapy utilization and PPS therapy incentives.

"There was general support for the three-tier therapy system" at the meeting, notes attendee Bob Wardwell with the Visiting Nurse Associations of America. That's because "they were unable to come up with a better way to handle therapy."

Hidden trap: HHAs that game the PPS system by billing every episode at 10 or 11 visits "now have a problem" if the change takes effect, notes consultant Tom Boyd with Rohnert Park, CA-based Boyd & Nicholas. If such agencies reduce visits to six or step them up to 14 or 20, intermediary medical reviewers will pick it up and question the reason for the reduction or increase, Boyd predicts.

Other PPS items eyed for change include:

• Supplies. TEP participants mulled ways to more accurately compensate HHAs for episodes "with the highest non-routine medical supply costs, especially those involving patients with pressure ulcers, wounds and ostomies," AAH notes.

Providers who billed for medical supplies "since day one may now reap some benefit for doing so," Boyd hopes.

• HHRG reweighting. Of PPS' 80 Home Health Resource Groups, seven had negative margins and 15 had margins of more than 40 percent, Abt told TEP members. Abt is exploring options for refining case mix using the predictive power of diagnoses, both alone and in combination, AAH says.

"Abt had put its finger on many of the distributional problems that have evolved in PPS," praises Wardwell, a former top CMS official who spearheaded the PPS design. The potential case mix changes "hold promise to improve the predictive power of the system."

• Other. Significant changes in condition, partial episode payments and presence of a caregiver are all being considered for changes. "The data would seem to provide a way to get out of SCICs and improve PEP payment ratios," Wardwell notes.

CMS has pledged to keep PPS refinements budget neutral. It's good news that CMS will not try to achieve cost savings in the refinement, Wardwell says. But it's bad news that any improvements for underpaid items have to come from reductions in payment for other PPS items.

CMS should continue communicating with the industry "so we are not surprised when a proposed rule is born," Wardwell urges.

The next TEP meeting is set for March 28, AAH reports.