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 [...]