Home Health & Hospice Week

Your episode calculations are about to get a lot more complicated.

Home health agencies expecting a drastic change in how Medicare reimburses for home health therapy won't be disappointed by the prospective payment system refinements rule issued April 27.

As expected, the Centers for Medicare & Medicaid Services proposes changing the current 10-visit threshold to a staggered threshold at six, 14 and 20 visits. Further, CMS calls for "smoothing" payments for different visit levels within the three therapy categories, notes consultant Mark Sharp with BKD in Springfield, MO.

17 therapy categories: When combined with the other case mix change of paying differently for "early" (first and second episode) and "later" (third episode and beyond) visits, the result is a very complicated therapy reimbursement system. The new service domain will have five severity levels (S1-S5) based on visits that receive different payments over five episode and threshold increments, totaling 17 different payments for different levels of therapy.

"On the surface, it is difficult to decipher how [the new thresholds] will contrast with the prior 10-visit therapy threshold as far as payment rates go," says Sharp, who's presenting an Eli-sponsored teleconference on the PPS changes Thurs. May 17 (for details, go to http://goto.elinetwork.net/go/6766. Use coupon code PPSSAVE10P to receive 10 percent off the conference price).

CMS Ponders Therapy Alternatives

CMS knew it needed to change the therapy threshold when it saw how much therapy utilization changed pre- and post-PPS, the agency says in the rule. It saw a "marked shift" in therapy delivery, from a concentration under 10 visits to a concentration over 10 visits. Current PPS clearly provides "undesirable incentives" with the single 10-visit trigger for a significant payment increase.

CMS looked at using items other than therapy visits to determine payments, including "pre-admission status on activities of daily living (ADL), more diagnoses with a focus on conditions such as stroke, and more OASIS variables," it says. But none of those proved successful in predicting the amount of therapy furnished.

The agency also rejected using straight therapy visit or time amounts because it didn't want to undermine the bundled nature of PPS.

Review target: Regulators settled on the six, 14, 20 stagger because it found six to 13 visits reasonable for most episodes, it says. Intermediary medical reviewers will find it easier to discern medical necessity for 14 or more therapy visits than for 10, while episodes requiring 20 or more visits will be quite rare and will receive significantly more payment.

"By avoiding a therapy threshold within [six to 14 visits], we hope to reduce the influence of payment incentives on treatment decisions," CMS says.

Note: The proposed rule is at www.cms.hhs.gov/HomeHealthPPS/downloads/CMS-1541-P.pdf.