Home Health & Hospice Week

Wide variety of commenters furnish hundreds of pages of PPS rule recommendations.

Home health agencies are fighting an uphill battle against the payment cut, due to alleged case mix creep, proposed in the prospective payment system refinements.

The Centers for Medicare & Medicaid Services proposed a 2.75 percent cut to HHA Medicare payments every year for three years (see Eli's HCW, Vol. XVI, No. 16). The cut is needed because the average case mix under PPS has risen 8.7 percent, CMS says.

The overwhelming majority of commenters on the PPS rule denounced the cut, from trade groups (see Eli's HCW, Vol. XVI, No. 25) to individual nurses to multi-million-dollar publicly traded companies. The commenters provided hundreds of pages of explanations and evidence refuting CMS' rationale for the cut.

Uh-oh: But one important commenter played music to CMS' ears. The Medicare Payment Advisory Commission noted that "case-mix increases attributable to coding improvements are common when new payment systems are implemented." CMS found the same thing with inpatient hospitals, inpatient rehabilitation facilities and long-term acute care hospitals.

"An adjustment for home health is consistent with the experience in other systems," MedPAC says.

The influential advisory body to Congress does stop short of fully endorsing the cut, however. CMS' upcoding analysis "makes the best use of currently available data," MedPAC says. "But for the future it would be beneficial to have a more systematic approach to measuring changes in coding practices."

For example: CMS might try conducting OA-SIS assessments independently and comparing them to agencies' assessments, or visiting agencies "to check agency coding practices," MedPAC suggests.

Other hot topics addressed include:

• Early/late episodes. Reaction to this new provision was mixed. CMS wants to pay more for third or later "adjacent" episodes under the revisions (see Eli's HCW, Vol. XVI, No. 20). Adjacent episodes occur within 60 days of one another and may take place at multiple providers for the same patient.

Basing payments on episode number will help adequately reimburse HHAs for long-term patients, praises the Home Care Association of New York State in its PPS comments.

But many providers came out against the payment differential, including the Home Care Network of Jefferson Health System in Radnor, PA. The designation adds unnecessary complexity to the proposed PPS system, the Network insists in its comment letter.

And except in rare cases, home care costs are generally front-loaded into the early episodes, the Network contends.

In fact, three-fourths of all Medicare patients receive all their care in the first or second episodes, claims national chain Gentiva Health Services Inc. in its comment letter. And the early/late episode differential may "reward overutilization" and encourage dependence in patients, the company argues.

Data dilemma: Providers also fear incorrect episode information in new OASIS item M0110 leading to incorrect payments, similar to the M0175 payment problems HHAs have experienced.

Providers have up to 18 months to submit claims which will update the Common Working File for M0110 purposes, notes Mary McCusker of Care-Group Home Care in Watertown, MA. "The clinician doing the [start of care] OASIS is placed in the position of guessing as to whether an episode is early or late," McCusker chides in her comment letter.

CMS should auto-adjust for the M0110 information and not make HHAs try to answer it correctly when only the CWF has the accurate information, she contends.

Bright spot: CMS has told the National Association for Home Care & Hospice that it plans to auto-adjust both upward and downward for the early/late episode information, NAHC cheers in its comment letter. "This action will alleviate the burden on home health agencies that would otherwise exist if they had to conduct ongoing monitoring of the CWF for adjacent episodes," notes NAHC, which supports the pay differential. Agencies also won't have to "withdraw and resubmit revised claims should errors be discovered" thanks to auto-adjustment, the trade group says.

Still, agencies may see payments taken back when other HHAs submit their claims months after an episode concludes, experts point out.

• Wage index. Many commenters also railed against the inequitable wage index disparities between hospitals and HHAs. "Because home health agencies and hospitals compete for the same staff in a given geographic area, their wage indices should be comparable," criticizes the Home Care Alliance of Massachusetts.

The hospital wage index is inappropriate for use on HHAs for a number of reasons, contends regional chain LHC Group Inc. Hospital cost-shifting and dropping critical access hospital data from calculations in 2004 are just a few of the many problems, the Lafayette, LA-based company says in its comments.

Even MedPAC takes up the argument. Med-PAC has recommended a new wage index system for hospitals, and CMS should apply the system to HHAs as well, the commission urges. "Under this system home health agencies and hospitals in the same market would have the same wage index."

• Dual eligibles. Providers had a hard time be-lieving CMS' assertion that Medicaid eligibility didn't make a significant difference in home care patient costs.

"Our experience shows us again and again that Medicaid/Medicare dual eligibles consume, on average, a disproportionate level of resources," maintains the Visiting Nurse Associations of America.

"The additional per episode costs of Medicaid patients are due to the unmeasured effects of: multiple chronic illnesses, patient non-compliance and tendency to live alone," asserts the Connecticut Association for Home Care in its comment letter. "While some of the proposed refinements begin to address these issues ... we remain concerned that many dual eligible cases will continue to be under-reimbursed."

"Our experience stands at such odds with the CMS conclusion, we can only ask that this issue be revisited and reexamined before the final rule is published since we fear something may be amiss in the analysis," VNAA pleads in its comments.

Patients dually eligible for Medicare and Medicaid skew outcomes data too, the New York trade group cautions. This could cause payment reductions for agencies serving those patients when pay for performance eventually begins.

Note: Comment letters on the proposed PPS refinements are at www.cms.hhs.gov/eRulemaking/ECCMSR/list.asp --search by Docket ID "CMS-1541" or by Comment Period Closed date of 6/26/2007.