Home Health & Hospice Week

Rollback to 2005 rates hits agencies.

If you're a little confused about your Medicare payment rates, just wait--it could get worse.

The home health agency rate changes mandated by the eleventh-hour Deficit Reduction Act, coupled with a lack of information issued by the Centers for Medicare & Medicaid Services or the regional home health intermediaries to HHAs, are breeding perplexity among providers.

"Any time the rates change there seems to be a general wave of confusion among providers," observes consultant M. Aaron Little with BKD in Springfield, MO. But this transition is especially problematic because it involves held claims, reprocessed claims, overpayments and underpayments.

While CMS hasn't issued instructions to providers, it has sent a Feb. 10 transmittal to the RHHIs detailing some of the DRA changes.

After President Bush signed the DRA into law Feb. 8, CMS instructed the intermediaries to stop holding home health and other provider claims, RHHI Associated Hospital Services explains in a message to providers. Intermediaries began holding the claims as soon as Congress passed the DRA Feb. 1 (see Eli's HCW, Vol. XV, No. 6).

New rates: Intermediaries are in the process of releasing all held claims and paying them at the new, DRA-mandated payment rates, a CMS official tells Eli. That's 2005 levels for non-rural claims, with a prospective payment system episodic base payment rate of $2,264.28, CMS notes in Transmittal No. 211. For claims for patients in rural areas, that's a 5 percent add-on to 2005 rates for an episodic base payment rate of $2,377.28. (See box, this page, for per-visit rates.)

Bottom line: The rate change means HHAs in rural areas will see a 2 percent increase over the 2006 rate increase they had been receiving prior to Feb. 1, Little notes. Agencies in urban areas will see a 3 percent decrease from the rates they had been receiving.

"All agencies are taking a major hit with the rollback to 2005 rates," laments Bob Wardwell with the Visiting Nurse Associations of America. "Even rural agencies that benefit from temporary relief will be falling behind in the longer term, as the rural add-on is only for one year and does not compound."

"This kind of a freeze and rollback undercuts the real budgets of agencies that were developed months ago," protests Wardwell, a former CMS top official. "Now drastic measures have to be taken to stay out of the red. Real people are getting fired, real services are being cut back, real patients will not be getting services." Brace For Claims Reprocessing Intermediaries are taking different amounts of time to release the held claims, the CMS source notes. Cahaba GBA reports that it already has released all held claims, while United Government Services expects to finish releasing all claims by Feb. [...]