Home Health & Hospice Week

Diagnosis coding could make or break you in 2008.

The biggest changes to the prospective payment system since its inception will hit next month, so you'd better make sure you're on top of the revisions or risk major financial and operational hardship.

Here are the most critical issues home health agencies should tackle in preparation for the PPS refinements, according to experts:

1. Diagnosis coding. At a recent conference, a Centers for Medicare & Medicaid Services official stressed how much more significantly PPS will count diagnosis codes in M0230/M0240/M0246 toward payment. "It's no longer just primary diagnosis," noted the staffer. "It's not the same as before and it's not simple" (see Eli's HCW, Vol. XVI, No. 40).

In preparing for the PPS changes hitting Jan. 1, HHAs "need to work out how they are going to fine tune their selection and sequencing of diagnoses," advises Chicago-based regulatory consultant Rebecca Friedman Zuber. Coders should represent, in descending order of importance, what the care plan aims to address.

"They will need to do a good job completing M0230/240/246," Zuber instructs.

Do this: Educate your clinicians to identify all co-morbidities that the patient may have, suggests reimbursement consultant Melinda Gaboury with Healthcare Provider Solutions in Nashville, TN. However, those diagnoses must currently and directly affect the plan of care, Gaboury stresses.

Take a look at who is responsible for your coding and decide whether you want to change that, recommends consultant Regina McNamara with Kelsco Consulting Group in Cheshire, CT. Once you've settled on primary and backup coders, send them to get specialized coding instruction, she urges.

You may need to recruit expert coders to assure payment accuracy, suggests consultant Judy Adams with LarsonAllen based in Charlotte, NC.

2. OASIS accuracy. In 2008, how well your clinicians fill out OASIS will determine whether you get your rightful reimbursement more than ever before. "Critically examine your clinical staff's abilities to assess their patients," advises reimbursement consultant M. Aaron Little with BKD in Springfield, MO. OASIS accuracy has always been essential, but the PPS refinements "certainly heighten how crucial it is that the clinicians understand how to use the OASIS as a tool to assess patients," Little says.

"The new case-mix system is much more intricate," Little warns. There's more emphasis on how the M0 items relate to each other rather than how each individual M0 item is scored. That means one inaccurately scored case mix item could torpedo your whole episode's reimbursement.

Tip: If you haven't already done so, set up a regular system of testing staffers' OASIS competency, Adams recommends. "Based on results of the OASIS competency testing, HHAs can design individualized OASIS training on the specific topics needed for each person," she tells Eli. That avoids "subjecting all staff to generalized OASIS training that they may not need."

3. Therapy. One of the biggest changes in the PPS refinements is how therapy utilization affects payment. The system is going from one 10-visit threshold to a three-tier threshold at six, 14 and 20 visits with graduated payments within the tiers (for a breakdown of how much each therapy visit will increase episodic payment, see Eli's HCW, Vol. XVI, No. 33).

Agencies should prepare for two major therapy shifts--evaluation timing and documentation. CMS said at the recent OASIS Certificate and Competency Board annual meeting that agencies should complete therapy evaluations before answering the new M0826 item that asks for the specific number of projected therapy visits.

Try this: HHAs must implement a new policy requiring the eval before answering the M0 item, Gaboury counsels. Then they must actually enforce the policy.

With increased payment tied to higher therapy utilization, providers can bet on tough scrutiny of therapy cases, especially those exceeding the 14- and 20-visit thresholds. "Clearly there are patients who need intensive therapy services," Adams points out. "But these will need to have meticulous documentation to support the medical necessity for that need."

Your therapy notes must justify the number of visits provided, Gaboury says.

Watch out: And if your therapy utilization spikes or falls under the PPS refinements, get ready for even more heat. "HHAs must be prepared for additional scrutiny if their therapy practice patterns change," Adams forecasts.

Big picture: Rather than finding a "right number" of therapy visits, providers must stress to staff that they should focus on providing the appropriate care for each therapy patient, McNamara says.

Pitfall: Reviewers may be especially interested in visit length, McNamara suggests. "Since the length of time for therapy visits will continue to be an issue, ensure that therapists are spending enough time with patients."

4. M0110. The new PPS' designation of episodes as early (first or second) or later (third or later) will determine which grouping step applies to an episode's payment and, therefore, the overall reimbursement amount.

Make sure staff understand why answering the case mix item is so important. Put in place a process for reviewing Medicare eligibility via the Common Working File prior to admission, Little advises.

That's not all: You also have to be sure you have a process for communicating that information to the clinical staff before they finalize the OASIS assessment.

"While prior home health episode information has not been a big issue for most agencies ... it will become critical in January," Little notes. "Now is the time to make sure this process will function smoothly."

Do this: Practice identifying adjacent episodes using the HIQH screens, Gaboury suggests.

5. Supplies. Another major overhaul is how CMS will pay agencies for Non-Routine Supplies (NRS). Supplies will now have their own mini-case mix system that pays agencies at six levels from $14.12 to $551.00.

Agencies must work on tracking NRS and allocating them adequately to patients, Gaboury offers.

And you must know how to report NRS on your claims, Zuber reminds. While CMS is offering a grace period until April 1 on reporting the supplies, you should figure it out well ahead of the deadline to avoid claims returns and cash flow disruption.

Work on a process now for recording NRS and making sure the charges flow to the claims, Little says.

Don't forget: CMS is taking about $40 out of the base episode payment rate to make up the NRS payments, so be sure you are filling out OASIS and billing accurately to receive your rightful supplies reimbursement, Zuber says.

6. Impact analysis. If you haven't done so yet, now's the time to analyze how the new PPS rates will impact your agency's finances, experts urge. CMS just issued newly revised and corrected billing software that should help you make your analysis more accurate.

Be especially cognizant of reimbursement changes due to the therapy shift, Zuber points out.

"Without understanding how your agency will be affected, it will be difficult to adequately prepare," Little cautions. "Conducting this analysis can help determine what internal changes may be needed in order to successfully adapt."

A hard look at your case mix may determine whether you sink or swim under the new system.

"Several types of patients will have significant losses ... such as patients with pressure ulcers," Adams notes. "An agency having a large population of patients in these categories will need to look at their plans of care and develop best practices to manage these patients."

On the other hand: More HHAs may be ready to take on more wound care patients or other diagnoses without as much focus on therapy cases, Adams expects.

However, agencies that will succeed with the modest increase for wound care patients still will need a sophisticated wound care program to manage these resource-intensive patients, McNamara warns. If you don't have an efficient wound care program already in place, "this may not be the best time to implement such a program."

Agencies may want to reconsider their policies for subsequent episodes, McNamara offers. Providers with higher-than-average rates of patients seeking urgent care or hospitalization after discharge in the first episode may want to consider those types of patients for subsequent episodes, now that PPS offers financial support for doing so.

Tip: Telemonitoring would help agencies keep these patients on service and out of more expensive institutional settings, McNamara advises.

7. Training. You should already be well on your way to training staff about the PPS changes, Zuber notes. "The challenge to HHAs will be to determine what information does each level in the organization need to know about the PPS refinements," Adams observes. "If the changes impact a person's job responsibilities or the job responsibilities will impact the agency's success or failure under PPS refinements, they should receive training appropriate to their role." (For more PPS training tips, see Eli's HCW, Vol. XVI, No. 32)

8. Billing. "Take this opportunity to ensure that prebilling and other billing-related processes are adequate," Little counsels. Get your billing in the best shape possible to prevent as many cash flow disruptions as you can once the billing changes hit.

And be sure your software will be updated and ready to go when you are, he adds.

9. Monitor costs. Now is the time to get serious about your financials. Make sure you are monitoring your costs during every episode to better manage care, McNamara says.

Whether you use automated or manual systems to keep tabs, you must know your "fully loaded" costs and balance the cost and reimbursement at admission and throughout the course of the case, Mc-Namara emphasizes.

And don't lose track of the costs during the episode. "This task usually falls to already overburdened clinical supervisors," which means it can slip through the cracks, she cautions.

10. Delegate. Don't plan to get your organization in gear for the PPS changes single-handedly. There are many pieces to the transition and you should delegate responsibility for them to appropriate staffers, McNamara advises.

"There is plenty of work for everyone, but this is not a time to let the potential volume of work overwhelm agencies," she tells Eli.