Home Health & Hospice Week

CMS wants to pay you more for supplies--but will it be enough?

Those costly wound care patients won't be as big of a financial liability under the new incarnation of the prospective payment system.

The Centers for Medicare & Medicaid Services has proposed five new non-routine medical supplies (NRS) payment categories, according to the PPS refinements rule issued April 27.

How it works: Your patient gets assigned points based on diagnosis and OASIS questions on ulcers, wounds, ostomies, infusion therapy and urinary catheterization.

Those points add up and slot the patient into five severity categories, which pay from $12.96 to $367.34.

Example: The highest-point diagnosis code is for post-operative complications (codes 998.1-998.4), which adds 32 points. The highest-point OASIS question is recording five or more pressure ulcers that are stage 3 or 4 in M0450, which adds 143 points.

The supplies amount won't be adjusted for geography and won't apply to low utilization payment adjustments (LUPA), CMS proposes in the rule. It won't include the early/late episode categories used in other parts of the case mix system (see Eli's HCW, Vol. XVI, No. 16).

The supplies payment doesn't include enteral nutrition products, which are not bundled into PPS payments, CMS points out. (For a list of EN products you can bill to your regional home health intermediary separately, see p. 206-207 in the proposed rule.)

The NRS change is good, cheers consultant Pat Laff with Hilton Head, SC-based Laff Associates. It will put more PPS payment where it's deserved.

Even CMS admits PPS has problems where supplies are concerned. "NRS use is unevenly distributed across episodes of care in home health," the rule acknowledges. "While most patients do not use NRS, many use a small amount, and a small number of patients use a large amount of NRS."

Change wanted: Laff would like to see one change to the NRS payments. Instead of awarding $12.96 for zero supplies points in severity category 0, he'd like to see no reimbursement for that category and the $12.96 redistributed to the other four categories, Laff tells Eli. HHAs will have until June 26 to submit such comments on the proposed rule.

Tighten Your Cost Report Practices

Home health agencies could have seen even higher payment rates for NRS, believes consultant Mark Sharp with BKD in Springfield, MO. That's because CMS' PPS contractor Abt Associates based the NRS amounts on claims and cost report data, and there wasn't much of it related to supplies. Abt had to throw out more than half of cost reports because of supplies data problems, CMS says in the rule.

"The industry probably shot itself in the foot," Sharp laments. "Many providers haven't been putting their supplies on their claims." Abt ended up seeing only about 10 percent of home health episodes with supplies utilization, Sharp points out.

"I don't feel Abt Associates had a true picture to really assess NRS to build a proper payment system," Sharp worries. But "they did the best they could given the info they had available."

Lesson learned: "Each individual agency should take the responsibility to file complete and accurate claims, cost reports and OASIS assessment," Sharp urges. That's "so CMS and its contractors can have accurate info to refine payment systems for the future."

CMS makes the same plea in the rule. "We ... urge agencies to provide cost data on cost reports and charge data on all claims (including LUPA claims) with the utmost precision for possible future use in developing payment proposals for NRS under the HH PPS." CMS may implement a LUPA supplies payment in the future, the agency hints.

Note: The PPS refinements proposed rule is on-line at www.cms.hhs.gov/HomeHealthPPS/downloads/CMS-1541-P.pdf. For continuing analysis and news regarding PPS refinements, see upcoming issues of Eli's Home Care Week.