Home Health & Hospice Week

CMS' new explanation of HHA consolidated billing could help your bottom line.

When rehab providers come knocking on your door for payment after their Medicare claims deny due to bundling, don't be so fast to reach for your wallet.

That's the message of a new transmittal ex-plaining home health consolidated billing from the Centers for Medicare & Medicaid Services. The primary home health agency is responsible for providing bundled services, which include outpatient therapy and supplies, either directly or under arrangement, CMS makes clear in Aug. 5 Transmittal No. 635 (CR 3948).

"However, providing services either directly or under arrangement requires knowledge of the services provided during the episode," CMS continues. "An HHA would not be responsible for payment to another provider in the situation in which they have no prior knowledge (e.g., they are unaware of physicians orders) of the services provided by that provider during an episode."

How it works: Outpatient therapy providers - including hospital departments - and suppliers come looking for payment when Medicare denies their claims due to bundling. If the HHA has filed a request for anticipated payment (RAP) before the other provider or supplier submits its claim, the claim gets denied with Reason Code B15 on the remittance advice: "Payment adjusted because this procedure/ service is not paid separately." The RA also includes Remark Code N70: "Home health consolidated billing and payment applies."

If the other provider submits its claim first and  then a RAP comes in for the patient, the intermediary or carrier makes a post-payment denial of the claim and recoups the money from the other provider, CMS explains in the transmittal.

Bundling Chronically Misunderstood

PPS regulations have always made clear that HHAs don't have to pay for services under arrangement if they didn't know about them ahead of time, says consultant Tom Boyd with Rohnert Park, CA-based Boyd & Nicholas. But agencies continue to receive requests for such payments, even five years into PPS.

Bundling "is still one of the most misunderstood components of PPS," notes Abilene, TX-based consultant Bobby Dusek. This transmittal, which finally puts five years of CMS instructions on this topic into the manual, "will help," Dusek predicts.

CMS put together the transmittal due to "some questions from both HHAs and other provider types," a CMS official tells Eli. But the staffer maintains there's been no increase of questions driving the issuance. "It's just a longstanding item from our to-do list that we had an opportunity to get done," the source notes.

To Pay or Not To Pay

HHAs tend to see a problem with bundling outpatient therapy the most, notes the National Association for Home Care & Hospice.

"Too frequently, patients either seek out, or physicians refer patients to, outpatient services that are subject to home health consolidated billing," NAHC says in its newsletter to members. "The outpatient claim is rejected, and then home care providers find themselves fighting to prove to outpatient departments they are not financially responsible."

Now agencies can simply point to this transmittal for proof. The memo spells out that the other provider must determine if the patient is under a home health plan of care before proceeding with services.

Asking the patient is always the first strategy, CMS says. But hospitals can check the common working file (CWF) as well, and suppliers and therapists can call their contractors if they suspect home care is in play.

An agency certainly doesn't have to pay for such services. When a hospital or rehab center calls seeking payment, Boyd advises clients to tell them no way, he says. "They should not have provided the service in the first place or without contacting the HHA."

But in some cases, "the agency needs to consider the value of its relationship with that provider before making any final decisions," advises consultant M. Aaron Little with BKD in Springfield, MO. If the other provider is a good referral source, for example, working out a payment method may be wise.

If you do decide to pay for the services, be sure to gather all the provider's documentation and include the visits on your claim, Little counsels. For outpatient therapy services, the visits may boost your episode to the 10-visit threshold.

Experts split: But Dusek warns against billing for such services. The home health Conditions of Participation require HHAs to have a written contract beforehand for services provided under arrangement, Dusek contends. Without a pre-existing contract, agencies shouldn't bill for services, he advises.

Note These Exceptions

While outpatient therapy is usually a bundled service, therapy furnished by a physician instead of a therapist is not bundled, the transmittal spells out. CMS first clarified that exception in a May 2003 program memo, the CMS official points out.

And although osteoporosis drugs are paid on a cost basis, they still are subject to home health consolidated billing, CMS explains. That means the primary HHA must bill for the drugs, but it can receive separate payment for them under bill type (TOB) 34X. 

Note: The transmittal is at www.cms.hhs.gov/manuals/pm_trans/R635CP.pdf. An upcoming Medlearn Matters article will appear at www.cms.hhs.gov/medlearn/matters/.