Home Health & Hospice Week

MedPAC casts doubt on 10-visit threshold.

Smart HHAs should be ready to adapt to a new PPS twist, if policymakers heed recent advice.

"Some [home health] agencies are providing more therapy than is medically necessary," the Medicare Payment Advisory Commission notes in its March 1 report to Congress. "Overuse of therapy is consistent with the incentives of the [prospective] payment system."

MedPAC refers to the series of therapy audit reports the HHS Office of Inspector General has issued, disallowing from 22 percent to 88 percent of claims reviewed with 10 to 12 therapy visits (see Eli's HCW, Vol. XV, No. 5). Medicare pays about $2,500 more for an episode that hits the 10-visit mark, the report claims. But that figure is really closer to $2,000, Abilene, TX-based consultant Bobby Dusek notes.

The influential advisory body to Congress plans to study the therapy issue in its wider exploration of PPS payment accuracy. "We might find that payments for episodes that meet the therapy threshold are particularly misaligned with costs, which would suggest that the therapy threshold policy should be refined," the report says.

Therapy options: "A case-mix system with multiple, graduated thresholds might be more accurate than a single-threshold system," MedPAC offers. Or, "a case-mix system without any thresholds could perform even better if therapy could be predicted accurately."

HHAs are more likely to see the graduated threshold actually come to pass, predicts Bob Wardwell with the Visiting Nurse Associations of America. The Centers for Medicare & Medicaid Services has said a three-threshold system, as opposed to a way to predict therapy need rather than usage, "may be the best it can do," Wardwell reports.

Threshold Change Welcome

MedPAC's focus on the therapy threshold isn't surprising, considering the OIG's spotlight on the problem, notes Cindy Krafft, director of rehabilitation for OSF Home Care based in Peoria, IL. "The current system has created such an incentive to get that tenth visit, that agencies are stretching things out to get there," Krafft believes.

"There are considerably more 10-therapy-visit episodes that eight- or nine-visit episodes," Dusek says. "The payment system ensures that by the very large difference in the tenth visit."

HHAs also may appear to be overutilizing therapy now because the service was so little used under the old cost-based reimbursement system, Krafft notes. Therapy use "took such a leap in PPS that it looks like a manipulation of the system, when in many cases it was finally getting people the therapy they need."

Considering the extreme financial incentive to reach the 10-visit therapy threshold, a change to the therapy-based reimbursement differential is "necessary," Krafft tells Eli.

"Multiple thresholds would be beneficial to agencies," Dusek agrees. PPS currently "is an 'all or nothing' system providing no additional funds for the patient that needs some therapy, but not 10 visits."

Krafft hopes CMS will keep some incentive for furnishing therapy in PPS. "If the threshold is completely eliminated ... the industry will stop paying so much attention to therapy utilization and we could go backwards, with patients losing access to needed services because of cost," she worries. "Therapy has a critical role to play in an outcomes-driven environment."

Timeline: It may be a while before HHAs see this change come to pass, even if MedPAC pushes it. CMS originally said it would propose PPS refinements in January of this year, but Wardwell now expects to see PPS changes proposed in late 2006 or early 2007.