Home Health & Hospice Week

The road to the 10 percent cap on home health agency outlier payments has been bumpy, but the new limit finally seems on track.

Background: In its 2010 HHA rate update final rule, the Centers for Medicare & Medicaid Services imposed a per-agency 10 percent cap on outlier payments effective Jan. 1. The policy came in response to extremely high percentages of outlier billings in hot spots like Miami, Fla.

The cap was supposed to start applying immediately, but a claims system problem kept the cap from being imposed on some agencies' payments, a CMS official tells Eli. That problem has now been correctedand the cap should be applying to all agencies' payments, the representative says.

Agencies that didn't have their payments limited by the cap were confused, reports Rose Kimball of billing company Med Care Administrative Services in Dallas, Texas. Some HHAs got paid significantly over the 10 percent cap into February or even March, Kimball notes.

HHAs also had a tough time tracking the cap figures because the Direct Data Entry tool to do so wasn't functioning properly, notes Lynn Olson with billing company Astrid Medical Services in Corpus Christi, Texas. That DDE tool has now been fixed, report regional home health intermediaries.

Agencies are now seeing caps applied, Kimball and Olson agree. For some agencies, that means getting about half the reimbursement they used to receive for outlier patients' episodes, Kimball says.

What happens now: In the final rule, CMS set out plans to run a quarterly reconciliation process. That reconciliation will take place in May, the CMS official says.

However, that reconciliation process won't take back outlier funds, the CMS rep explains. It is set up just to pay out outlier money that was earlier withheld (see Eli's HCW, Vol. XIX, No. 1, p. 6 for details on why that occurs).

Agencies that are over the 10 percent cap will go on receiving regular episode prospective payment system payments, but no outlier payments, the CMS official confirms. After their PPS payment total rises enough so that their outlier payment total is under 10 percent again, they will resume receiving outlier payments up to the cap.