Home Health & Hospice Week

Intermediaries don't have to lend HHAs a helping hand, PRRB decision shows.

If you don't understand the ins and outs of the complex Medicare reimbursement system, don't expect the government to help you out.

Spectrum Home Care Inc. in Warren, MI made a common beginner's mistake when it started up its business in 1993 and 1994. The home health agency counted its start-up costs up to the date it was Medicare-certified (May 26, 1994) instead of the date it saw its first patient (Feb. 17, 1994), according to an Aug. 25 Provider Reimbursement Review Board decision (No. 2004-D46).

"Providers are forever making that mistake," observes Tom Boyd of Rohnert Park, CA-based Boyd & Nicholas, who represented Spectrum in the case. If Spectrum had known about the mistake, it could have claimed start-up costs through Feb. 17 and claimed its operating costs between Feb. 17 and May 29 on its first-year cost report, Boyd explains.

But intermediary United Government Services didn't explain that option to Spectrum, and instead denied the start-up costs after Feb. 17 - with a $54,000 result. And now it's too late for Spectrum to go back and reopen the cost report for 1994 and fix the error, Boyd tells Eli.

The PRRB should have reversed the adjustment because UGS should have advised Spectrum of the appropriate way to handle the costs, the HHA argued to the Board. The argument "fell on deaf ears," Boyd notes, and the PRRB failed to even mention it in the decision, upholding UGS' adjustment.

"It's a very narrow interpretation," Boyd criticizes.