Home Health & Hospice Week

Agencies protest lack of information.

If all goes as planned, you should start receiving new Medicare payment rates by Feb. 10.

Whether that means a reimbursement increase or decrease depends on where you furnish services.

After Congress passed the Deficit Reduction Act Feb. 1, the Centers for Medicare & Medicaid Services directed the regional home health intermediaries to hold all 2006 final claims for home health agencies, a CMS official confirms.

The legislation mandates a rollback to 2005 payment levels for agencies, plus a one-year 5 percent add-on for rural home health patients (see Eli's HCW, Vol. XV, No. 5).

RHHIs have held the claims while they tested the new payment rate software, an intermediary source tells Eli. The new rates also waited on President Bush to sign the DRA into law, which he did Feb. 8.

If software testing is successful, intermediaries expect to implement the new rates by Feb. 10, the intermediary official says.

Medicare contractors have held claims "to simplify claims processing so that providers would not have to reconcile two payments for the same claim," RHHI Associated Hospital Service says in a message that identifies only physician and ambulance claims as held. CMS also aims to "minimize the number of claims requiring reprocessing," AHS says.

Panic mode: Some agencies served by RHHI Cahaba GBA became worried when they saw all their claims--requests for anticipated payment (RAPs) and final claims--held initially. But Cahaba has released and paid all RAPs held in error, a Cahaba official confirms.

Continuing to pay RAPs while holding final claims has helped agencies maintain cash flow, notes consultant Rick Ingber with VantaHealth Consulting in Jenkintown, PA. CMS was paying RAPs at the old rate that took effect Jan. 1, but the final claim for the episode will account for the rate increase or decrease mandated by the DRA, the CMS source explains.

However, agencies have been in the dark about what's holding their claims, since neither CMS nor the intermediaries have issued any information about the development, Ingber protests. CMS and the RHHIs "should have had the courtesy of telling providers" what was happening, Ingber contends.

CMS says providers shouldn't have noticed the change. "CMS anticipates that holding claims will be transparent to providers because of the payment floor," AHS notes. "So far, we haven't held anything longer than the payment floor period and we hope not to," the CMS official tells Eli.

Brace For Coming Overpayments

After the new rates take effect, intermediaries will process "mass adjustments to recoup any overpayments for claims that were not hooked for the dates of service affected by the new payment rates," one intermediary staffer tells Eli. "We don't know the volume of the adjustments that are needed."

Some agencies may see a mixture of over- and underpayment assessments, predicts the National Association for Home Care & Hospice. If an HHA services patients in both rural and non-rural areas, it'll see increases for rural patient claims and decreases for non-rural patient claims.

NAHC estimates agencies' January overpayments resulting from the loss of the 2.8 percent inflation update will total $31 million. In contrast, the rural add-on will increase HHA payments by only $12 million per month, the association predicts.

Baton Rouge, LA-based HHA chain Amedisys Inc. estimates its reimbursement rates will increase only 0.8 percent overall for 2006, rather than the original 2.8 percent 2006 increase. Wage index and rural area definition changes have taken a bite out of the rural-add on gain for the company, Amedisys explains in a release.

Stay tuned: At press time, CMS planned to issue full instructions on implementation dates and recoupments shortly, the CMS staffer said.