Home Health & Hospice Week

Submitting NRS costs is a pain now, but should help you later.

Get ready for a whole new revenue component under the prospective payment system changes--and it’s not one you can opt out of.

Under the PPS final rule released Aug. 22, the Centers for Medicare & Medicaid Services sets out a new requirement--reporting non-routine medical supplies (NRS) costs on home health agency claims.

And to “provide a stronger incentive” for HHAs to do so, “claims that do not report NRS costs, unless explicitly noted [on the claim] by the HHA that NRS was not provided, will be returned to the provider (RTP),” CMS says in the final rule. The agency must then resubmit the claim with either the NRS costs reported or the fact that NRS were not provided noted on the claim, CMS explains.

Grace period: CMS will have a grace period for this change, the final rule reports. CMS plans to monitor the accuracy of the new method of reimbursing NRS and explore alternative methods, the agency says.

“It is unclear at this time the amount of detail that will be required when reporting supply charges,” notes the National Association for Home Care & Hospice in its newsletter for members.

CMS is implementing this drastic change to address industry concerns that NRS reimbursement does not adequately compensate for agencies’ supplies costs--a common complaint among the comment letters submitted about the proposed rule.

History: HHAs have encountered problems with clinicians keeping track of supply costs, says consultant Debbie Dawson with HealthCare Strategies Inc. in Chattanooga, TN. HHAs also neglect reporting NRS costs on claims because of an attitude of “we don’t get paid for them, so why bother,” she tells Eli.

To make matters worse, the claims system for a while wouldn’t accept NRS costs on claims, so many HHAs that originally submitted them under PPS stop-ped doing so for good during that claims system crisis.

“The HHAs did it to themselves by not billing after 2000,” laments reimbursement consultant Tom Boyd with Rohnert Park, CA-based Boyd & Nicholas. “Many that had been billing quit.”

More than 40 percent of the cost reports CMS reviewed before proposing the new NRS reimbursement rates did not contain any costs for NRS, reports consultant Judy Adams with Charlotte, NC-based LarsonAllen. This causes inadequate NRS reimbursement at least until CMS revisits this issue, she says.

Starting Jan. 1, expect a direct reimbursement penalty for that missing information. “It will be clear that HHAs that do not bill [NRS] will suffer directly for not doing so,” Boyd notes.

“The approach to the NRS payment is still a long way from where it needs to be,” laments consultant Mark Sharp with BKD in Springfield, MO. “But it is a step in the right direction to try to get payment for supplies to those episodes that utilize supplies.”

Bright horizon: Sharp hopes supplies reimbursement will improve as the NRS claims requirement results in more and better supplies data reported.

“The new billing requirement may be cumbersome for some agencies,” NAHC allows. “But it will aid in developing better payment reforms in the future.”

CMS Adds $551 Level

In the final rule, CMS eliminates the NRS reimbursement contained in the PPS base rate and instead pays NRS separately based on six severity ratings. That’s up from five in the proposed rule. “We believe that adding a sixth severity group better recognizes episodes with higher NRS costs,” CMS says.

CMS received many comments expressing worry about “those really high-cost episodes with NRS,” noted CMS’ Randy Throndset in the Aug. 29 Open Door Forum for home care providers. “To be res-ponsive to those concerns, we did add that sixth level.”

Most episodes (63.7 percent) will fall into the lowest severity rating, CMS expects. That level will pay $14.12 for NRS for an episode. Only 0.3 percent of episodes will score at the highest severity level, CMS predicts in the rule. That level will pay $551.00 for the episode’s NRS.

Take note: The Category 6 NRS payment will be a huge percentage of some patients’ episodic payment, points out consultant Pat Laff with Laff Associates in Hilton Head, SC.

For example: A patient with Stage 3 and 4 decubitus ulcers who has a case mix weight of 1.07 (C3F3S1 in early episodes) and an NRS level of 6 will have a regular payment of about $2,436 and an NRS payment of $551.

That means the NRS payment would be a whopping 23 percent addition to the payment, stresses Lynda Laff, also with Laff Associates. “The emphasis is placed on supplies,” Laff tells Eli. “CMS has really redistributed the dollars.

Result: Pat Laff expects to see HHAs stop minimizing wound care patients under the new NRS payments. “It opens up a whole new realm.”

How NRS Scoring Works

NRS reimbursement under the final rule combines a number of OASIS items. A selection of case-mix diagnoses provides some points toward reimbursement. For example, a patient with a primary diagnosis (M0-230) of anal fissure, fistula and abscess--ICD-9-CM codes 565.x and 566--will score 16 points. Anal fissure, fistula and abscess as a diagnosis other than primary will score 9 points.

Additions: CMS added V codes for three ostomies to the NRS point list. The NRS scoring system also added points for diabetic ulcers and refined how it counts pressure ulcer staging, NAHC explains.

Responses other than “0” to M0450 (Current number of pressure ulcers at each stage) can add from 12 to 143 points. M0 items concerning stasis ulcers, surgical wounds, ostomies, infusions and catheters also add NRS points. And point values may differ depending on whether the episode is an “early” or “later” episode in the patient’s current sequence of adjacent episodes.

Tip: Points for NRS are additive, the final rule explains, “but points may not be given for the same line item in the table more than once. Points are not assigned for a secondary diagnosis if points are already assigned for a primary diagnosis from the same diagnosis/condition group,” CMS adds.

Example: A patient with four early/partial granulation stasis ulcers (M0470 and 476) would garner 52 points. If the patient also has a urinary catheter, add 17 points for a total of 69 points, Adams explains. The additional points for the catheter move the patient from NRS Severity Level 4 to Severity Level 5, for additional reimbursement of $112, she illustrates.

NRS add-ons are not subject to wage index adjustment, NAHC points out.

Plus: HHAs will be able to determine their NRS score and payment as soon as the OASIS assessment is complete, Sharp says.

Caveat: These NRS calculations do not apply to low utilization payment adjusted (LUPA) episodes, the final rule clarifies. CMS plans to continue studying the issue of NRS associated with LUPAs, Adams says.

“CMS should accelerate its efforts to refine the new model,” NAHC contends. “It falls far short of a fair payment distribution approach.”

Note: NRS information begins on page 252 of the final rule at www.cms.hhs.gov/homehealthPPS/downloads/CMS-1541-FCdisplay.pdf.



For tips on how to cope with the new NRS payments, see next week’s issue of Eli’s Home Care Week.