Home Health & Hospice Week

$23 million bill may come due sooner than you think.

Home health agencies now have an idea of how much they'll owe Medicare for incorrect M0175 answers in 2002 and 2003--but not when they'll have to pay up.

When the Centers for Medicare & Medicaid Services last April put in place pre-payment edits for the OASIS item in prior inpatient stays, it also set out an annual post-payment adjustment mechanism. The post-pay edit is aimed at catching hospital stays that don't show up in the Common Working File until after the HHA bills.

Originally, adjustments for the first year of the prospective payment system, estimated at $23 million, were supposed to commence last November (see Eli's HCW, Vol. XIV, No. 42). But CMS called off the adjustments at the last minute due to appeals-related concerns broached by the industry.

Specifically, Medicare Modernization Act section 935 requires CMS to delay recovery of overpayments until the second level of Medicare appeals, which is now the Qualified Independent Contractor (QIC) level.

Since then, CMS and the intermediaries have been working with the industry to fashion an acceptable adjustment strategy, says an official with regional home health intermediary Palmetto GBA. But that effort has hit several roadblocks.

Now a CMS official says the agency is "currently working on revised instructions intended to ensure our recovery process is compliant with the requirements of section 935 of the MMA." The M0175 recoupments for 2001 could start as early as mid-summer, the CMS source tells Eli.

No timeline is yet set for the 2002 and 2003 adjustments estimated by the HHS Office of Inspector General's latest report (see related story included is this issue).

Silver lining: In addition to being on the hook for the millions in M0175 overpayments the OIG has identified, HHAs will also receive underpayment amounts for M0175 errors that weren't in their favor. After intense industry pressure, CMS agreed to make adjustments for both under- and overpayments for the first three years of PPS only.