Medicare Compliance & Reimbursement

A little research can go a long way for home health agencies.

One of the touchiest billing scenarios under the home health prospective payment system involves patients who transfer from one home health agency to another during their episodes. But if HHAs don't take this reimbursement bull by the horns, it could wreck their rightful payments.
 
Transfers can present problems for agencies on both sides of the billing equation, experts note.

The First Agency HHAs that have a patient switch to another agency mid-episode will see the reimbursement for that episode adjusted with a partial episode payment (PEP), points out Lynn Olson with billing company Astrid Medical Services in Corpus Christi, TX. "The first agency is the one that has potential to lose money" in legit transfer situations, notes consultant Pat Sevast with American Express Tax & Business Services in Timonium, MD.

PEPs can be especially punishing because they span only through the last visit date, notes Vern Peterschmidt with Peterschmidt & Associates in Albuquerque, NM. That means even if a second agency picks up a discharged patient on day 50 of the original episode, if the first HHA's last visit was on day 20 then the first HHA will receive only one-third of the payment for the episode, Peterschmidt explains. Another killer is that agencies spend most of their resources on the patient in the first few weeks of visits, especially completing OASIS and other administrative and assessment tasks, he adds. Peterschmidt urges CMS to adopt a PEP formula much like the one it uses for hospital DRGs -- higher payments for beginning days, lower ones for later days.

Agencies often don't know their patient has even transferred until they submit their final claim and it is denied for overlapping, says Rose Kimball with billing company Med-Care Administrative Services in Dallas.

Try this: When such denials occur, Alacare Home Health & Hospice in Birmingham, AL resubmits the final claim with the correct discharge reason code, says Tena Diliberto, Alacare's director of business operations.

Sometimes agencies don't figure out until much later that a transfer is what caused their PEP, relates consultant Aaron Little with BKD in Springfield, MO. In some cases "a beneficiary transfer situation ... was not known until over a year after the transfer occurred," Little tells MLR.

Act fast: Agencies that patients transfer away from can be shut out of billing altogether if they don't get in their request for anticipated payment quickly enough, experts add. The Second Agency HHAs admitting the transfer patient can have just as many problems. A serious one occurs when they don't realize the patient is under another HHA's care.

Thorough research should be able to alleviate this problem, notes Little. But if the first agency is late in billing [...]