Home Health & Hospice Week

Have you been under the 10 percent outlier cap, but haven't received your outlier payments? You should see some relief -- but it could take until fall or later.

A new transmittal from the Centers for Medicare & Medicaid Services "corrects errors in the calculation of the HH PPS 10 percent outlier limitation and instructs Medicare contractors to perform claim adjustments to ensure provider payments are accurate," it says.

A few different payment system glitches have affected HHA outlier payments, CMS says in May 6 CR 7395.

Underpayment: First, there was an error in how the system calculated the 10 percent limit due to incorrect assumptions about data in value codes 64, 65 and 17. Due to the mistake, "all HHAs' total payment amounts have been understated and therefore certain HHAs have had payments withheld as exceeding the outlier limitation in error," CMS explains.

Overpayment: Second, the system also accumulated outlier totals in a way that led to overpayments, CMS says in the accompanying MLN Matters article. Instead of adding to an agency's year-to-date outlier payment total on a claim-byclaim basis, the system was adding it at the end of a  day's batch of claims. Thus, "when multiple outlier claims are in the same batch, the Medicare systems are not identifying all of the claims that should be identified as exceeding the 10 percent outlier limitation; and HHAs are being overpaid," the article explains.

"CMS suspects that the overpayments resulting from this timing problem have to some degree counterbalanced the underpayments resulting from the error in the basic calculation, masking both problems for much of 2010," the agency says. Another much less significant problem is that the current eight-position field size for agencies' outlier totals doesn't work for the few providers that have outlier payments in excess of $100 million.

HHAs have been complaining of outlier problems for a while. For example, some clients of Astrid Medical Services, a billing company in Corpus Christi, Texas, "have been well under the 10 percent for several of the reconciliation periods and have not had their outliers reimbursed," Astrid's Lynn Olson tells Eli.

But Olson is skeptical that the fixes outlined in this transmittal will help his clients with their outlier problems. "It's not a calculation issue," he maintains. Instead, CMS needs to better inform providers how the quarterly calculation is applied.

For example: Astrid has "a provider who had an outlier payment before they accumulated any non-outlier payments" in early 2010, Olson explains. That provider "still has not been reimbursed for the outlier. She currently is at 2 percent."

 "My providers' biggest concern is when they're paid, how much, and for which patient," Olson says. They'd like to see detailed quarterly reports with this information.

One directive in the transmittal may help them on this count. "For each HHA identified in requirement 7395.4.2, Medicare systems shall create a report of outlier claims currently in paid claims history with outlier payments up to but not exceeding the dollar amount calculated in requirement 7395.4.3," it says. But that will apply only to agencies' identified as exceeding the 10 percent cap.

The claims system will correct the problems identified in the transmittal, but not until Oct. 3, CMS says. The overpayment problem can't be entirely resolved, because the outlier payment can't be added to the year-to-date total until the claim is finalized due to certain risk factors. But the changescan significantly cut down on the problem, the transmittal says.

CMS plans to initiate claims adjustments to correct the under- and overpayments, but it won't initiate the adjustments until January 2012. "For most HHAs, this adjustment process will result in the correction of an underpayment," the transmittal says. "For a limited number of HHAs, the adjustments will result in the collection of any overpayment not offset by other underpayment amounts."