New 'early/later' question could pose major billing problems under revised PPS.
Home health agencies M0175 payment troubles are nearly behind them, but there's a brand new OASIS question on patients' prior home health episodes that will cause agencies similar billing turmoil.
In its finalized prospective payment system revisions, the Centers for Medicare & Medicaid Services cuts OASIS item M0175 on patients' prior inpatient stays from the case mix calculation, but adds OASIS item M0110 on prior home health episodes. The question reads "Episode Timing: Is the Medicare home health payment episode for which this assessment will define a case mix group an 'early' episode or a 'later' episode in the patient's current sequence of adjacent Medicare home health payment episodes?"
Definitions: "Early" means the first or second episode while "later" is a third or later episode. "Adjacent" means episodes don't have to directly follow one another but can be spaced apart up to 60 days, CMS confirms in the just-released final rule. And the definitions apply whether the subsequent or adjacent episodes take place at one HHA or across multiple agencies.
CMS will pay HHAs more for third or later episodes than early episodes. Despite industry arguments that initial episodes cost more due to administrative and visit frontloading, HHA cost report data shows more intensive costs in third and later episodes, CMS contends.
"M0175 is old news," insists reimbursement consultant Melinda Gaboury with Nashville, TN-based Healthcare Provider Solutions. For more accurate payment, agencies should begin focusing on getting M0110 correct once PPS revisions take effect Jan. 1.
Get To Know Your Patients Even Better
M0175 got HHAs into a lot of billing and compliance trouble, with millions of dollars in M0175 overpayments per year and a string of HHS Office of Inspector General reports on the item.
M0110 is likely to rival, if not surpass, the M0175 accuracy headaches, experts predict.
When the PPS revisions first take effect and agencies have to deal with the brand-new question, there's bound to be confusion and "some inevitable missed calls," forecasts Bob Wardwell with the Visiting Nurse Associations of America.
HHAs will actually have more difficulty answering M0110 than the expiring M0175, expects William Dombi, vice president for law with the National Association for Home Care & Hospice. That's because the question will require "agencies to have knowledge as to the patient's home health services use for as much as 121 days (two episodes plus a day)," Dombi tells Eli. And it actually may encompass more time, since the "adjacent" episodes can be up to 60 days apart themselves.
In contrast: M0175 requires patient history for only 14 days prior to admission.
Adjacent episodes will be even more difficult to determine than HHAs may think, warns Abilene, TX-based reimbursement consultant Bobby Dusek. The definition "looks at the end of the 'episode,' not the discharge date, unless there is a [partial episode payment] adjustment in an earlier episode," Dusek points out.
Expect Billing Delays When PPS Hits
Even once your billers figure out how to count adjacent episodes, there's no guarantee that the prior episode information will be in the Common Working File. "The same issues apply to using the CWF as for the M0175 question," Dusek cautions. "There is a lag from the time the services are provided to when they are billed, paid and reflected in the CWF."
That time lag may be even worse when the PPS revisions hit, predicts consultant M. Aaron Little with BKD in Springfield, MO. That's because HHAs grappling with the PPS changes, including potential software and claims system glitches, may delay submitting requests for anticipated payment (RAPs) and final claims in the first months of 2008.
"The CWF is only as accurate as the claims that are received, if they are received at all," Little observes. "Delayed billing by any provider will always be a much more significant problem than it has been in the past" thanks to M0110.
HHAs may also bill incorrectly based on inaccurate M0110 information because staff aren't up to speed on why the OASIS item is important or how to answer it. Lines of communication between billers and clinicians must be more open than ever to get this M0 question right from the start.
CMS Heads Off 110 Pileup on PPS Highway
Good news: Agencies often won't have to pay the price for their M0110 mistakes in the long term. "Fortunately, CMS had the foresight to establish an automatic edit and adjustment on M0110," Dombi lauds.
"The CWF will automatically adjust claims up or down to correct for episode timing (early or later, from M0110)," CMS says in the final rule.
Because of those automatic adjustments, millions of dollars in M0110 overpayments won't pile up as they did with M0175 in the first years of PPS, experts cheer. That may be enough to keep the OIG off HHAs' backs over the case mix item.
Even with the auto-adjustment, agencies will still face an uphill battle in keeping their M0110 reimbursement straight. "The biggest difficulty will likely be just keeping track of adjustments and anticipating ongoing payment reconciliation that might impact on revenue recognition and cash flow," Dombi says.
"There will be some surprise upcodes and downcodes," predicts Wardwell, a former top CMS official who headed up PPS' original design. But the M0110 problems "should not be anything like the M0175 mess," he says.
Many of the surprise adjustments will be due to prior agencies not filing their RAPs and final claims timely, Little forecasts. In those cases, agencies will have no way to know the patient was in a prior home health episode if the patient herself doesn't tell them.
Rely On Your Own M0110 Resources
Don't count on the auto-adjustment to keep your payments straight. The untried adjustment mechanism may malfunction, just like the partial episode payment (PEP) adjustment mechanism failed in the early years of PPS, Little reminds agencies.
At least most home health patients don't use more than two episodes, so the M0110 adjustments will apply to a smaller number of patients, Dombi notes.
Even the much heralded auto-correction for M0110 might not be enough to keep OIG scrutiny at bay. "The OIG may suspect that some HHAs are upcoding M0110 just to have the temporary financial benefit," Dombi notes--agencies will receive higher RAP payments if the episode total is projected higher, as with third or later episodes. If the OIG holds this suspicion, "you can count on some audits," he predicts.
Example: In the case of M0175, the OIG audited a visiting nurse association that had most of its M0175 mistakes fixed by the prepayment audit CMS put in place for the OASIS item in 2005. That didn't stop the investigation.
