Home Health & Hospice Week

HHAs find a lot to like in the proposed changes, too.

Don't hold your breath waiting for major changes to the proposed prospective payment system revisions.

The Centers for Medicare & Medicaid Services has a tight timeline for issuing a final rule 90 days in advance of the target Jan. 1 implementation date for PPS changes, notes Bob Wardwell with the Visiting Nurse Associations of America.

The shortness of time, with a final rule expected by Oct. 1 to meet the three-month timeframe, "argues against there being many changes," says Wardwell, a former top CMS official who headed up PPS' original design. That especially goes for major structural changes.

CMS may be more likely to make easy substitutions or deletions, Wardwell predicts, such as reducing or eliminating the cut for case mix creep.

PPS clock ticks: That tight timeframe was a favorite topic for many parties commenting on the rule. Home Care Association of Colorado members "are extremely concerned with the administrative burden of the rapid implementation schedule of such complex changes" to PPS, the trade group says in its comment letter on the proposed rule.

The proposed revisions will require major software and OASIS changes from agencies and vendors, the association notes. It's not just HHAs' ability to adapt at issue, says CAHC. Fiscal intermediaries have proven unable to keep up with past changes of this magnitude. "This very tight implementation schedule raises great concern about the potential for claims processing delays and errors," the association warns.

Fallback: The group urges CMS to put a contingency plan in place to ensure providers' cash flow if reimbursement system delays arise due to the changes.

Industry representatives are also concerned with the transition's cost. "Forms and software need to be changed, staff need to be reeducated, and changes in process may need to occur," the Home Care Alliance of Massachusetts tells CMS in its comment letter. "These all cost agencies a great deal of time and resources which equate to money."

Other top comments include:

• Positives. It wasn't all criticism for the PPS changes. Industry reps lauded CMS for numerous revisions, including adding a low utilization payment adjustment (LUPA) add-on; eliminating M0175 and significant changes in condition (SCICs) from PPS calculations; auto-adjusting therapy visit levels for final claims; making PPS more sensitive to patient condition; basing therapy payment on three tiers with individual visit smoothing payments; expanding the diagnoses included in case mix; adding a supplies case mix system; and implementing higher payment for later episodes.

• LUPAs. While trade associations praised CMS for the $92.63 LUPA add-on, they also contended that it wasn't enough to pay for the significant cost of furnishing LUPAs. Medicare cost report data for 2001 to 2004 shows that LUPA payment rates are significantly below visit cost for the most common LUPA visits--nurses and aides, the Home Care Association of New York State says in its comment letter.

Example: New York State's average cost for a home care aide visit was $79.12 for 2004 while the 2008 proposed LUPA rate is $47.91, the group notes. The average 2004 nurse visit cost was $144.30 while CMS proposed a 2008 LUPA rate of $105.76.

And the add-on should apply to all LUPAs, not just stand-alone LUPA episodes, commenters argue. HHAs must continue conducting OASIS and other administrative tasks for all episodes.

Finally, the non-routine medical supply (NRS) payments should apply to LUPA episodes as well, most trade groups say. Wound care and urinary catheter supplies are often required for LUPAs, notes the Connecticut Association for Home Care. Not furnishing the NRS add-on for those may give agencies incentives to not treat those types of patients.

• Supplies. While reps applaud the NRS add-on, they also say it falls far short of agencies' true supplies costs.

Agencies didn't always submit NRS costs on claims because they didn't realize it was necessary when Medicare doesn't pay directly for them, didn't have NRS invoices in time to include costs, and had trouble with the claims system accepting medical supply charges, suggests the Association for Home & Hospice Care of North Carolina.

CMS doesn't include a number of costly supplies in the model, particularly non-bowel ostomies, the New York trade group protests.

CMS should research, identify and include other patient characteristics and diagnoses to the NRS case mix model, the National Association for Home Care & Hospice urges in its comments.

HCANYS asks CMS to delay reimbursing separately for NRS until it works out the problems with the model and gets accurate supplies data information.

• Outliers. Medicare has yet to use its full outlier pool for home health PPS, trade groups note. CMS should lower the outlier threshold to make it easier for agencies to obtain payment for patients who require extra services under PPS.

"CMS itself estimates that the [fixed dollar loss] would need to drop to 0.42 in order to expend the full 5 percent outlier budget," NAHC notes. But CMS still proposes to maintain the FDL at 0.67.

"There is no basis for a conclusion that there will be a sudden influx of outlier eligible episodes when nearly seven years of HHPPS history indicates otherwise," NAHC contends.

• PEPs. CMS proposes to leave partial episode payment (PEP) adjustments unchanged, but trade groups aren't happy.

"The current methodology often underpays in the case of PEP transfers," VNAA maintains. And HHAs frequently front-load visits--a practice encouraged by Quality Improvement Organizations--so costs are higher up front.

"Prorating from first to last billable visit systematically underpays the initiating agency and penalizes agencies who follow QIO advice on front-loading visits to avoid rehospitalization," VNAA criticizes.

Note: The PPS proposed rule is at www.cms.hhs.gov/HomeHealthPPS/downloads/CMS-1541-P.pdf. The comment period closed June 26.