Home Health & Hospice Week

Can your agency afford to lose $40,000? That's the typical amount withheld from home health agencies that saw a sneak preview of the partial episode payment (PEP) recoupments last month, the National Association for Home Care & Hospice reports.

But the takebacks weren't spread evenly over HHAs, New England agencies found out when fiscal intermediary Associated Hospital Service of Maine accidentally made many PEP reductions all at once instead of gradually, as planned. One agency saw more than $400,000 recouped for PEPs (see Eli's HCW, Vol. XII, No. 18, Regulations).

The Centers for Medicare & Medicaid Services estimates the FIs will adjust more than 192,000 claims for PEPs under the takeback project, NAHC notes. It must recover the funds because the Medicare claims processing system often failed to make PEP adjustments for the first two-and-a-half years of the prospective payment system. PEPs occur when a patient either is picked up by another HHA during a 60-day episode or is discharged and readmitted to the same agency.

Those massive recoupments are on hold for now, following a May 14 meeting with industry representatives. CMS is verifying whether possible errors turned up in the accidental AHSM recovery are indeed systemic mistakes, reports the American Association for Homecare. Errors New England providers allegedly saw included PEPs already accounted for, PEP'd patient episodes that showed no evidence of a second HHA picking up the patient, and incorrect visit or discharge dates, according to AAH.

But at press time, CMS had so far found that all the supposedly problematic PEPs brought to its attention really were deserved, reports Bob Wardwell with the Visiting Nurse Associations of America. If CMS continues to find no problems with the AHSM PEP cases brought forward, agencies can expect PEP adjustments to commence in "the near future," Wardwell tells Eli.

If CMS continues to find no problems with the AHSM PEP cases brought forward, agencies can expect PEP adjustments to commence in "the near future," one expert says.

Even if CMS launches the recoupments soon, industry reps may succeed at wresting a more lenient recovery period from the agency. They argued at the meeting that CMS should take the same amount of time to recoup the PEP funds as HHAs took to incur them - two-and-a-half years. The original plan calls for a nine- to 12-month recovery period, NAHC notes.

Once PEP takebacks do begin, many agencies may find themselves in a gray area regarding how to protest questionable adjustments, cautions Wardwell, a former CMS official. The recovery process offers "inadequate opportunities for providers to seek corrections of any erroneous PEP determinations," NAHC challenges.

There seem to be no formal instructions from CMS on how to deal with potential PEP disputes arising from the project, says M. Aaron Little, consultant with BKD in Springfield, MO. That likely will lead to confusion for HHAs and intermediaries alike.

What agencies do know is that PEP adjustments aren't a denial under the Medicare system, Little points out. That means agencies can't go through the normal appeals route they would use for claims and cost reports - intermediary reconsideration, Provider Reimbursement Review Board hearing and, eventually, federal court.

Little's clients have found PEPs generally have been based on correct information and have been appropriate, he says. But agencies shouldn't take that for granted, and should verify any PEP adjustments they experience in the takeback project (see article Billing).

Industry reps expect CMS to announce when and how it will proceed with the PEP recoveries after the two groups meet in late May.