Medicare Compliance & Reimbursement

Favorable PRRB decision on therapist compensation won't last much longer.

Home health agencies that have filed an appeal of therapist compensation adjustments may want to prepare for a court battle.
 
That's because the Centers for Medicare and Medicaid Services administrator has reversed decisions favorable to home health agencies in 12 of 14 cases dealing with employee therapists' compensation being limited to salary guidelines for contractor therapists, according to attorney Joel Hamme with Powers Pyles Sutter & Verville in Washington, DC.
 
Since 1988, the Provider Reimbursement Review Board has ruled in favor of HHAs in all 14 cases, Hamme says. The PRRB repeatedly rejects CMS' and the intermediaries' arguments that paying employed therapists on a per-visit basis makes them subject to the salary limits for outside, contracted therapists.
 
But in all but the first two cases, the CMS administrator has overturned the favorable PRRB decisions. At reversal, many providers decide to drop the appeal because they don't have the resources for a court battle or because the reimbursement amount at issue is too small to make litigation feasible.
 
Sure thing: However, agencies that pursue appeals in federal court come out the winner every single time, says Hamme, who currently is handling three separate cases regarding this issue. One appeals court and three federal district courts have ruled in providers' favor on this issue, and CMS settled in one case, Hamme notes. "No court has ruled in favor of the secretary," he stresses.
 
VNA Healthcare Inc. in Centralia, IL, soon is likely to have to decide whether to pursue a federal court appeal. The PRRB decided in favor of the VNA's appeal in a May 13 decision (2005-D37).
 
Regional home health intermediary Cahaba GBA disallowed more than $80,000 in therapist compensation in the VNA's cost report year ending in April 1998 by applying the contractor guidelines to employed therapists' compensation, according to the decision.
 
"The decision will be overturned," predicts cost report consultant Tom Boyd with Rohnert Park, CA-based Boyd & Nicholas. "And I assume that the VNA is going on to the courts or why bother with the appeal?" The $80,000 at issue is likely a strong enough incentive to proceed with a further appeal, Hamme agrees.