Home Health & Hospice Week

Your agency will soon see $41 more per episode as first proposed in August, but some anticipated changes are now on hold.

The Home Health Prospective Payment System final rate update for 2010 is slated to be published in the Federal Register on Nov. 10, the Centers for Medicare & Medicaid Services announced on Oct. 30. CMS also offered a sneak peek at the final rule. Here's what you can bank on:

Effective Jan. 1, home health agencies will get a 2-percent increase in market basket rates for home health services. That breaks down to a net 1.75- percent rate increase in payment rates based on a 2 percent inflation update, a 2.75 percent case mix creep adjustment, and a 2.5 percent addition from outlier funds. "This final regulation builds on Medicare'sefforts to refine its payment systems while working to reduce waste, fraud and abuse," explains Jonathan Blum, director of CMS' Center for Medicare Management, in the announcement.

As proposed, CMS reduced the total outlier payment target to 2.5 percent of all HH PPS payments -- down from 5 percent this year -- and capped outlier payments at 10 percent per agency.

Though many commenters decried the outlier modification for fear of wrongly penalizing small agencies or those who have a higher ratio of patients who result in outlier payments (such as diabetics), the overwhelming majority of industry experts agree with the change. "Changes in outlier payments are long overdue in order to combat inappropriate practices in some parts of the country," says Elizabeth Hogue, a healthcare attorney based in Burtonsville, MD.

Result: The changes will be far-reaching, predicts Tom Boyd with Boyd & Nicholas in Rohnert Park, Calif. "The 10 percent cap will affect agencies outside of [the problem areas CMS has pinpointed]. However, they have time to adapt and prepare," he says.

CMS also adopted these proposed changes:

• OASIS as a condition of payment. Agencies will need to submit the new OASIS C tool as a condition of payment. Many commenters on the proposed rule worried that agencies would forfeit reimbursement if they didn't complete the assessment within the required five-day window, but CMS believes the rule will drive agencies to get their OASIS completed in time.

Coding problem: Many agencies electronically submit the OASIS assessments with the wrong HIPPS code, but the final rule offers an easy solution. If you submit an incorrect code, the state OASIS system will send out a warning message that contains the correct code. You should then swap out the original code with the one included in the warning,

CMS instructs in the final rule.

• Evaluation and management of a care plan. CMS used the final rule to clear up confusion over when or how Medicare will cover evaluation and management services. According to the final notice, management and evaluation is only covered when patients require skilled care, and you will need a physician's narrative to certify and recertify patients. (For more details, see Eli's Home Care Week, Vol. XVIII, No. 35, p. 266.)

However, CMS will not require physicians to have face-to-face encounters with patients before certification despite complaints from the Government Accountability Office about inadequate physician involvement with home health care. But the requirement may come anyway. Proposed reforms in both the House and Senate could add in-person encounters to certification standards, notes the National Association for Home Care and Hospice.

Everyone's talking about it, but the final rule is giving you a full year's reprieve on implementing the Home Health Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey.

Rather than going into effect on Jan. 1, 2011, CMS has pushed the start date to Jan. 1, 2012, to give agencies more time to collect the necessary information, according to the final rule.

CMS adopted two other changes to the proposed rule. Agencies will only need to provide lists of their Medicare and Medicaid patients to survey vendors for evaluation and they may give V codes to their vendors if ICD-9 codes aren't available.

The final rule also adopted these modified changes as suggested by commenters:

• Practice sharing and leasing. CMS was worried that multiple home health agencies sharing the same location could allow those agencies to bill Medicare fraudulently, but many commenters on the proposed rule gave viable reasons for the arrangement.

For instance, agencies may offer unrelated

services -- like flu vaccine clinics, outpatient therapy services, or preventative nutrition services -- that make sharing a location a smart decision rather than a potential crime.

In the final rule, CMS listened to commenters and left this provision on the table rather than including it in the update but stated that it continues to "have concerns about these arrangements and will consider our administrative remedies to address our concerns."

• Medicare billing privileges. The proposed update wanted to deactivate agencies that infrequently bill Medicare. Those agencies would need to undergo a full state survey each time they attempt to reactivate billing privileges. Commenters worried that forcing agencies to undergo a survey would cause an unfair delay in payment and that requiring a survey is tantamount to decertification for the Medicare program.

CMS put commenters' fears at ease in the final rule. The agency explained that the survey process is meant to ensure that agencies that haven't been active in 12 consecutive months are still in compliance with the conditions of participation. Further, it emphasized that "deactivation of a provider's Medicare billing privileges does not mean that the provider is no longer enrolled in Medicare."

Bottom line: While you may be resigned to the final rule's updates, many aren't. "Our disagreements with CMS over its case mix creep adjustments continue," said NAHC's Val Halamandaris. "We have asked Congress and the courts to intervene to develop a fair and reliable process for evaluating changes in coding."

And keep in mind that the final rule really isn't as final as it could be, NAHC warns. "The rule may be affected in the near term by legislative activities that could increase the coding creep adjustment in 2010 and eliminate the inflation update," the group points out.

Resource: Read the final rate update at http://federalregister.gov/OFRUpload/OFRData/2009-26503_PI.pdf.