Medicare Compliance & Reimbursement

Hospice billing trickier for new rates.

Oct. 1 ushered in a new fiscal year for the government, and that means new FY 2004 payment rates for home health agencies.

HHAs' rates increased 3.3 percent for the coming year, with a base payment rate of $2,230.65 per episode.

While the base payment rate for home health episodes increased, that doesn't mean every HHA will see higher payment rates starting Oct. 1, points out consultant Melinda Gaboury with Nashville, TN-based Healthcare Provider Solutions. Agencies whose wage indices were lowered this year might find that decrease cancels out the higher base rate.

HHAs should remember that a home health episode's payment rate is based on the date the episode ends, explains consultant Rick Ingber with ZA Consulting in Jenkintown, PA. As in prior years, that means higher FY 2004 rates actually stretch back to episodes that began in August, Ingber says.

For example, an episode that began in August but has its 60th day on Oct. 1 will be paid entirely on the FY 2004 rate, even though 59 days of the episode took place in FY 2003. Intermediaries pay the claim based on the "through" date that is billed on the final claim, explains consultant M. Aaron Little with BKD in Springfield, MO.

Of course, agencies that discharge patients early from their 60-day episodes won't be entitled to FY 2004 rates, even if the episodes would have otherwise run past Oct. 1, Gaboury points out. The last billable visit in the episode is the end date for discharged patients.

When an episode begins in one fiscal year and ends in another, the request for anticipated payment (RAP) and final claim will be paid based on different amounts, Little adds. So agencies can expect more reimbursement in their final claims to make up for RAPs based on lower FY 2003 rates.

Smart Hospices Split Claims 

Medicare payment for hospice claims isn't as friendly as for HHAs. When hospice patient stays span Oct. 1, hospices should split the claims or Medicare will pay the entire stay at the lower, FY 2003 amount, points out consultant Tom Boyd with Rohnert Park, CA-based Boyd & Nicholas.

Hospice rates increased 3.4 percent this October, with a routine home care rate of $118.08.

"We strongly urge you to bill Medicare through ... Sept. 30, 2003 and not carry billing into Medicare's new fiscal year," Boyd & Nicholas said in a message to clients.

The Centers for Medicare & Medicaid Services waited until the eleventh hour to publish hospices' new wage indices, which will also determine providers' FY 2004 rates. The annual update will nudge fiscal year 2004 hospice payments up about 0.6 percent, according to CMS estimates in the Sept. 30 Federal Register index notice.

Pacific region urban hospices and west-south-central region rural facilities are likely to see the biggest hike, at 2.3 percent and 2.6 percent respectively. Rural hospices in Puerto Rico can anticipate a steep decline, with a -5.1 percent fall anticipated for FY 2004.

Overall, CMS projects urban hospice payments to increase 0.6 percent and rural hospice payments to go up 0.9 percent.

Note These HHA Wage Index Corrections

Meanwhile, CMS has a few corrections to its HHA wage index, it announced in a separate Sept. 30 Federal Register notice. Agencies serving the Bremerton and Kitsap, WA areas can breathe a sigh of relief - their wage index will be 1.0944, not the minuscule 0.0994 CMS originally published.

But HHAs serving the Lawrence and Douglas, KS areas won't get as much as first expected. Their wage index should be 0.7923, not 0.7983 as first published, CMS says.

Editor's Note: HHAs' FY 2004 rates and wage indices are at www.access.gpo.gov/su_docs/fedreg/a030702c.html. Hospices new rates are at www.cms.gov/manuals/pm_trans/A03057.pdf. Hospices new wage indices and HHAs' corrected indices are at www.access.gpo.gov/su_docs/fedreg/a030930c.html.