Home Health & Hospice Week

Background: When the home health prospective payment system began in 2000, all Part B therapy services furnished during a home health episode were bundled into the PPS payment, notes the HHS Office of Inspector General in a report released May 13. But after protests from physicians who wanted to bill therapy services during home health episodes, the Centers for Medicare & Medicaid Services issued a May 2003 transmittal stating "that therapy services are not subject to the home health consolidated billing requirement when performed by a physician," the report says.

At the time, CMS didn't adjust the HH PPS payment rate "because CMS officials believed that the effort to determine the extent of physician-provided therapy included in the base rate did not justify the perceived benefit in improved payment accuracy," the OIG recounts.

The result: "When a physician bills Part B for therapy provided to a beneficiary during a home health episode, Medicare pays twice for the same service: once to the physician under Part B and again to the home health agency under the HH PPS," the watchdog agency says. In 2008, Medicare paid physicians $13.5 million for therapy services performe during a home health episode.

Now the OIG wants CMS to change its tune, and the agency is receptive. "We recommend that CMS eliminate any duplicate payments when rebasing home health payments by adjusting the HH PPS rate to exclude physician-provided therapy services or by making physician therapy services subject to the consolidated billing requirement again," the OIG says. CMS is required by the Affordable Care Act to rebase HHA payment rates starting in 2014 anyway.

When rebasing HH PPS rates in accordance with ACA, "CMS will take into account only those therapy services provided ... by the home health agency and reported on the home health claim," CMS says in its comments on the report. "The costs of providing physician-provided therapy will not be included in the rebased HH PPS rates."

But CMS should take a second look at the OIG's advice, maintains Bob Wardwell, former top CMS official in charge of PPS. "Any adjustment to the base rate to exclude what little may have been originally included in the base for physician therapy will be challenging to identify to the point of being speculative and relatively small," Wardwell tells Eli. "Given the nature of the data collection back then, it's hard to know how accurate it was."

The statistics the OIG cites may not be 100 percent accurate either, Wardwell suggests. If it is counting home health episodes as 60 days from the start of care, they'll miss times that a patient is discharged early because she's not homebound, for example. In those cases, "the lucky ones get fully rehabbed in an outpatient setting," he notes. Patients who don't have the capacity to get to non-home health outpatient therapy "get cut short of their full rehab potential."

There are too many unknowns in this scenario, says consultant Tom Boyd with Rohnert Park, Calif.-based Boyd & Nicholas. The OIG couldn't determine how much of the physician therapy billing related to "therapeutic exercises, neuromuscular reeducation, therapeutic activities, manual therapy and massage therapy," Boyd says. "I question how much, if any, of these are billed by a HHA."

CMS should cast a critical eye on the OIG's argument, Wardwell insists. "Studies like this are cheap for OIG to produce and claim hypothetical savings that it can use to justify the expenses of the staff that produce them," he says. "Their practical significance is something less than what appears in their self-congratulatory reports."

Even if the results do have some validity, the effect will be small, points out William Dombi with the National Association for Home Care & Hospice. "The impact per episode is less than $2," Dombi tells Eli.

And the true impact may be even less, Dombi adds. Of the $13.5 million in physician therapy Medicare paid in 2008, more than $5.2 million was due to one physician accused of fraudulent billing of the service. "The physician in question was recently indicted for billing therapy services that were not provided," the OIG report admits.

In 2008, Medicare spent $16.9 billion on HHAs, Boyd points out. So physician therapy billing (minus the indicted doc's claims) would account for just one-half penny on every $10 spent, Boyd emphasizes. And that would put the rebasing impact at about $1.36 per episode, Boyd calculates.

Note: The report is at http://oig.hhs.gov/oas/reports/region1/10900530.pdf.