Home Health & Hospice Week

Reps pull out all the stops to argue against the slash to your Medicare reimbursement.

By this October, you should find out whether your Medicare payment rates will rise or fall next year.

The Centers for Medicare & Medicaid Services wants to cut home health agency payment rates 2.75 percent each year for three years due to supposed PPS upcoding, it said in its prospective payment system refinements proposed rule issued April 27.

CMS is likely to issue the PPS refinements final rule in September or October to make possible its targeted Jan. 1 implementation for the changes, notes Bob Wardwell with the Visiting Nurse Associations of America. Budget pressures will help ensure the rule's timely arrival, predicts Wardwell, a former top CMS official.

Up in arms: In submitted comment letters, trade groups across the nation argue vociferously against the proposed cut for case mix creep. The cut is "unfounded," charges the Minnesota Home Care Association. The Connecticut Association for Home Care blasts the reduction as "baseless" while the Home Care Alliance of Massachusetts dismisses CMS' ra-tionale for the cut as "weak."

The upcoding charges CMS levels at the industry are "speculative," says the Home Care Alliance of Maine. The resulting cut is "egregious," the alliance's Vickie Purgavie tells Eli.

CMS attributes the increase in average case mix from 1.0 in 1997 to 1.23 in 2003 too heavily toward "bad behavior" by agencies, protests Casey Blumenthal with MHA... An Association of Montana Health Care Providers. "All are punished by drop in base rate," Blumenthal says.

Innocent suffer most: If you buy CMS' argument that agencies' upcoding caused the case mix creep, then an across-the-board cut actually hurts most those agencies that did not upcode, VNAA points out in its comment letter. "By using the average case mix weight in this period as the measure of case mix creep adjustment, CMS is equally cutting payment to both high and low average case mix agencies," VNAA says.

Patients Really Did Change, Reps Argue

But many commenters on the rule did not buy CMS' rationale for the payment reduction due to the alleged case mix creep. The Home Care Association of New York State didn't even agree with CMS' estimate of the increase. Data shows that taking intermediary denials and downcodes into account brings the increase down to 1.15, the trade group contends in its comment letter. That's 15 percent instead of 23 percent.

Much if not all of the change in case mix was due to real changes in home care patient conditions, argues the National Association for Home Care & Hospice in its comments. Therapy use is a patient characteristic like the other PPS elements and CMS should consider its changes valid, the association says.

Patient changes also caused HHAs to increase more episodes from C2 to C3 clinical domain classifications, HCANYS says.

HHAs served patients with high acuity as PPS progressed because:

• Medicare and other payors gave hospitals, skilled nursing facilities and inpatient rehabilitation facilities incentives to discharge patients earlier to home care, CAHC maintains. Patients came to HHAs "sicker and quicker," the VNAA points out. And they came requiring therapy, which led to the case mix increase.

• Medicare beneficiaries are older now. "The age of the Medicare home health patient has increased, with a growth in the percentage of patients over 85 increasing from 17 to 23 percent nationally," the Association for Home Care & Hospice of North Carolina says in its comment letter.

• Medicare managed care plans attract the lowest acuity patients, notes the Massachusetts group. "Strong evidence exists that the nature of M+C and MA plan enrollees left higher need, higher cost Medicare beneficiaries within the traditional Medicare program," NAHC adds.

• PPS encouraged therapy use. "CMS has vigorously promoted the use of therapy to achieve maximum self-sufficiency in a population of long-term chronically ill patients," maintains Vincent Caracci of Sta-home Health Agency in the Jackson, MS agency's comments. "Improving the functionality and achieving outcomes in these patients demanded significant increases in occupational and physical therapy. Therapy is expensive. More therapy equals higher case mix. Average case mix weight increased exactly as expected."

Home care's goal under PPS changed, NAHC says. Under the incentive to be efficient, HHAs strove to get patients independent as quickly as possible with therapy and achieve shorter patient lengths of stay.

Bottom line: "There were simply too many factors driving change in real case mix during this period and too many flaws in the CMS approach to accept the CMS estimate" of coding creep, VNAA concludes.

Where's The Fire?

Because the therapy utilization increase was legitimate, CMS should exclude any case mix increase due to the therapy change from the case mix calculation for the cut, the Connecticut association argues.

A case mix creep adjustment that primarily reflects growth in therapy is unnecessary and a "double-cut," the New York trade group comments.

CMS should reject the cuts because with the incentive to maximize therapy greatly reduced under the PPS refinements, any coding creep will "self-correct," the Massachusetts association predicts.

At least delay the cuts until PPS changes are in place and their impacts known, VNAA urges CMS.

Cutting home care and driving patients back into the higher-cost institutional settings is short-term thinking and bad for the overall Medicare program, the Minnesota trade group suggests. After all, the average case mix increase hasn't increased Medicare per patient expenditures, NAHC points out.