Home Health & Hospice Week

More than $60,000 rides on the answer. 

A Utah home health agency owned by an Illinois consulting firm is appealing a decision recently handed down by the Provider Reimbursement Review Board.

At issue is whether a lone HHA can have a home office, and therefore use the pooled allocation method to distribute costs to the provider and home office. Regional home health intermediary Cahaba GBA said "No way" in the case of West Valley, UT-based West Valley Home Health Inc., owned by Lansing, IL-based Medicare Training & Consulting Inc.

The RHHI disallowed $62,000 on West Valley's 1997 cost report, according to the PRRB decision issued Sept. 24 (No. 2003-D60). It instead allocated costs based on the amount of time MTC president Jim Plonsey worked for the entity. The time period at issue was still under cost-based reimbursement, before the prospective payment system took effect.

The PRRB agreed with West Valley and MTC that regulations allow use of pooled allocation to a home office, even when there's only one other HHA. But it upheld the disallowance because it said West Valley and MTC failed to document the home office costs subject to allocation.

West Valley is appealing the decision in district court. "The real issue was 'did the FI err in denying a home office?'" notes Plonsey, even though the Board upheld the disallowance based on inadequate documentation.

The agency and MTC offered supporting documentation to the RHHI in the process, but the intermediary refused to accept it, claims attorney Lucian Bernard with Covington, KY-based Pear-son & Bernard. West Valley will seek for the U.S. District Court to remand the issue back to Cahaba with instructions to appropriately apply the pooled cost method to the amounts supported by documentation MTC will furnish, says Bernard, who is representing the companies in the case.

MTC continues to own West Valley, Plonsey tells Eli.

The Board upheld two smaller issues in the case, with a $2,000 and $1,400 impact respectively. First, the PRRB approved an auto allowance paid to West Valley's administrator and nursing administrator. Secondly, the Board reversed all but $177 of the disallowance for Plonsey's travel expenses.

Don't Look At Us, Board Says 

Meanwhile, the PRRB said it lacked jurisdiction to decide a case in which an HHA wanted the Board to compel an RHHI to pay a settlement amount to it instead of to a successor organization. Home Care PRN transferred its provider agreement to another HHA, New Pathways Healthcare Services, in 1996. New Pathways entered bankruptcy and was dissolved and liquidated, according to the Oct. 14 decision (No. 2004-D1).

Home Care PRN paid $1.5 million to Medicare in September 2000, but a later settlement agreement with RHHI Associated Hospital Service of Maine said $1.2 million of that was overstated. When AHS applied that amount to New Pathways' overpayments instead of paying it back with interest to Home Care PRN, the HHA cried foul.

But the PRRB says it lacks jurisdiction to decide who is the proper payee in the settlement. The attorney representing Home Care PRN in the case didn't respond to inquiries for this story.