Home Health & Hospice Week

PRRB upholds PT compensation, shoots down non-billable charity visit argument.

Another home health agency will have to head to federal court if it wants to secure its rightful reimbursement for physical therapist compensation.

Regional home health intermediary Cahaba GBA applied salary guidelines for contracted therapists to compensation for directly employed therapists paid per visit. As it has with a string of similar cases, the Provider Reimbursement Review Board reversed that application.

Cahaba disallowed nearly $26,000 on the 1996 and 1997 cost reports of MGH Home Health located in Olney, MD, according to PRRB decision 2006-D25 issued last month. The salary guidelines apply to any PTs paid per visit, the RHHI argued.

Not so fast: The Board disputed using the compensation guidelines for directly employed therapists. "Both the legislative history and regulatory history of the guidelines indicate that they were created to prevent perceived abuse in the practices of outside physical therapy contractors as opposed to provider employees," the decision notes.

MGH has already received a reversal of the PRRB decision from the Centers for Medicare & Medicaid Services Administrator, says MGH's attorney Carel Hedlund with Ober Kaler in Washington, DC. The HHA expected the move, since CMS has reversed similar previous decisions, Hedlund tells Eli.

MGH is deciding whether it will pursue an appeal in federal court, Hedlund says. The agency has 60 days from the reversal notification to appeal.

Three similar cases currently are pending before Washington, DC federal court, reports attorney Joel Hamme with Powers Pyles Sutter & Verville in Washington, DC. In one of them, Hamme is representing three providers that consolidated their appeal to cut down on costs (see Eli's HCW, Vol. XV, No. 15).

Update: The agencies and the feds are in settlement discussions, which Hamme expects to conclude shortly. But at least one of the plaintiffs may proceed with the appeal rather than settle, he expects.

Decision Could Reduce Your Medicaid Payments

Another part of MGH's case could affect HHAs' Medicaid reimbursement today, worries consultant Tom Boyd with Boyd & Nicholas in Rohnert Park, CA. Cahaba disallowed $9,000 related to charity visits that the agency excluded from its 1996 cost report.

MGH should have excluded 115 charity visits from its total visit count on the cost report because they were non-billable, the agency argued to the PRRB. But they were "like-kind" visits that should have gone in the visit total regardless of whether the agency billed them, Cahaba countered. Excluding the visits from the total raised the per-visit rate the HHA received from Medicare that year.

The Board sided with the intermediary. "Excluding the charity care visits from the Provider's total visit statistics would improperly shift the non-reimbursable costs of the charity care visits to the Medicare program," the decision says.

Common mistake: "The decision on the charity visits is scary," Boyd cautions. "I suspect that more than a few HHAs include a few of them in the non-billable classification and not part of the census of total visits."

While HHAs' Medicare cost reports no longer have a direct impact on their reimbursement under the prospective payment system, they do affect agencies' Medicaid reimbursement in many states. "Now CMS will assume all providers are aware of and will comply with [this] decision," Boyd fears.