CMS Publishes Home Health Final Payment Rate for 2014

CMS has published the Final Rule for Home Health Prospective Payment System update for 2014. It will impact home health payments for the next four years.  The current year impact will reduce home health payments by 1.5 percent or $290 million, but the future impact will be much worse.

There are many moving parts to this rule.  We will cover some of the basics in this update, but will follow it with other updates this week to provide more detailed information.  Below is a brief analysis of the episode rate.  To provide a better comparison we have one column with the new adjustment for episode case mix standardization and another column without the case mix standardization. (Episode standardization will move the average episode case mix weight from 1.3464 to 1.0000 by reducing all case mix weights by 34.64 %.)

Description	With Case Mix Adjustment	Without Case Mix Adjustment
2012 National Standardized 60 Day Episode Rate	$2,138.52	$2,138.52
Inflate Case Mix Adjustment (x1.3464)	$2,879.30	$2,138.52
Reduce for Nominal Case Mix Growth 2013 (x.9868)	$2,841.29	$2,110.29
Payment Update Percentage for 2013 (x1.013)	$2,878.23	$2,137.72
Outlier Adjustment (Divide by .975)	$2,952.03	$2,192.53
Outlier Adjustment (x .975)	$2,878.23	$2,137.72
Standardization Factor (x1.0026)	$2,885.71	$2,143.28
Rebasing Adjustment 2014 (Remove $80.95)	$2,804.76	$2,062.33
2014 Market Basket Adjustment (x1.023)	$2,869.27	$2,109.76

Our Calculation of Real Decrease Percentage in Home Health Episode Payment Rates

Description	With Case Mix Adjustment	Without Case Mix Adjustment
2012 National Standardized 60 Day Episode Rate	$2,138.52	$2,138.52
2014 Market Basket Adjustment (x1.023)	$2,869.27	$2,109.76
Decrease	N/A	$28.76
Percent Decrease	N/A	1.34%

Remember your episode case mix rates will be decreased by 34.64% so for example C1F1 with 0 to 5 therapy visits will go from 0.8186 case mix rates in 2013 to 0.6080 in 2014.  There are positive adjustment to LUPA payment rates and negative adjustments to Non Routine Medical Supplies. 

Your episode rates will be reduced by $80.95 for rebasing in 2015, 2016 and 2017.  You will also have a reduction inflation factor adjustment of 1% in 2015, 2016, and 2017.

We sent a Newsletter in the summer titled “It is Time to Step Up or Fall Behind”.  We stated that your home health agency is currently going up the down escalator.  The current momentum of the health care industry is constantly pushing your company down, just like a down escalator is constantly moving down.  To step up to the next stair, you adapt and embrace the changes or place your head in the sand and move further down the escalator. 

If you would like to step up instead of falling behind register for our webinar titled “Home Health PPS Final Rule 2014”.  This will be held live on Wednesday December 4, 2014 at 3:00 – 4:00 PM EST.  It will cover the following items:

1.      CMS Rebasing of Home Health Payments

2.      The Home Health Episode Payment Rates

3.      The LUPA Payment Rates

4.      Medical Supply Payment Rates

5.      The Home Health Agency Case Mix Changes

6.      The Home Health Wage Index

7.      The 170 Codes Removed from the Home Health PPS Grouper

8.      Changes in Home Health Quality Reporting Requirements

Richard Dixon will be the presenter of this webinar.  You will have the opportunity to ask individual questions and obtain the answers.  To keep the webinar on time we will address you questions and answers via email after the event.

The webinar will be held live, but you can also review the Webinar at a later time because it will be recorded.  Your registration fee is only $149 for your entire company.  The registration fee also will include handouts that you will receive via email.  

http://www.dixonhsi.com/PPS%202014%20Home%20Health%20Final%20Rule%20Webinar.pdf

To attend the exciting new webinar follow the link below for the Registration Form and fax it back to us at (888) 577-6932.  We have a very short time frame to register attendees so we request you not use the mail.  We do accept all major credit cards.  Once you register you will not be able to cancel since you or any of your employees can view the recording of the webinar at your leisure. 

For more information use the temporary link below (The final link will be available on December 2, 2013 when proposed rule is published in the Federal Register):

https://s3.amazonaws.com/public-inspection.federalregister.gov/2013-28457.pdf

Inpatient Hospital Billing for Hospice Patients

This change request instructs the CWF and FISS maintainers to deny an inpatient hospital claim when the principal diagnosis on the inpatient claim matches one of the hospice diagnosis codes. Services related to a hospice terminal diagnosis provided during a hospice period are included in the hospice payment and are not paid separately. An inpatient hospital claim will be denied when provider’s bill with a condition code 07 on an inpatient claim and the principal diagnosis on the inpatient claim is found to match one of the hospice diagnosis codes.

This change was identified by the CMS Recovery Audit Contractors when they were reviewing payments for inpatient hospital claims related to hospice patients.  The payments associated with these claims are considered overpayments because the Centers for Medicare & Medicaid Services do not pay separately for an inpatient hospital stay when a hospice terminal diagnosis is listed as a principal diagnosis.  The effective date of this notice is April 1, 2014, but beware that some of the RACs and ZPICs may go back to review previous years and deny claims.

For more information please use the following link:

http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1312OTN.pdf

CMS Turn on PECOS Edits in January

A Christmas gift you do not want, need and cannot return.  CMS is providing bag of coal for home health agencies and other Medicare providers & suppliers by turning on the PECOS Edits on January 6, 2014.  CMS is instructing the Medicare Administrative Contractors (MACs) to turn on Phase 2 of the denial edits.  These edits will check claims for a valid individual National Provider Identifier (NPI) and deny the claim when this information is invalid.  This will impact Home Health Agencies, DME, clinical laboratories, and imaging procedures.

For more information please use the following link:

http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1305.pdf

Claims Processing Issue Causing Overpayments

CGS (a Medicare Administrative Contractor) has identified a claims processing issue that results in an overpayment displayed on your remittance advice (RA). In these cases, the overpayment amount is reflected either in the adjustment to balance field on the standard paper RA or as adjustment reason code 90 on the electronic remittance advice (ERA). CGS is awaiting further direction from the Centers for Medicare & Medicaid Services (CMS) regarding collection of these overpayments. Providers are encouraged to track the dollar amount associated with the overpayment and the RA/ERA paid date, as CGS anticipates a future recoupment may occur. We do not recommend providers reporting this overpayment on their credit balance report. Please monitor future CGS listservs for additional updates on this issue.

For more information please use the following link:

http://www.cgsmedicare.com/hhh/pubs/news/2013/1013/cope23696.html

Widespread Length of Stay Hospice Edits

Each quarter, the CGS Medical Review Department evaluates all current edits to ensure they continue to be effective in selecting the most vulnerable claims, and that resources are used effectively. In evaluating all our widespread edits, we identified edit 5048T, which selects hospice claims with a length of stay of 999 days or more, has shown a significant decrease in error rates. However, analysis of the length of stay among hospice claims for certain states within CGS jurisdiction is still an issue. Additionally, a 2013 report from the Center for Medicare and Medicaid Services (CMS) titled "Medicare Spending Variation: Our Shared Challenge" indicated several states had a higher hospice spending per beneficiary derived from 2012 data. In an effort to identify claims before they become an issue due to length of stay, CGS will be implementing a new widespread edit that will select claims with a length of stay between 150 days and 365 days for providers that bill to CGS within the states of NH, ID, GA, UT, CO, DE, MO, AL, AR, KS, TS, and WV. Widespread edit 5048T will be discontinued once this new edit 5118T is implemented.

In addition, widespread edit 5091T selects claims when the beneficiary resides in a nursing home, the hospice length of stay is greater than 180 days, and the principal diagnosis is debility, unspecified. Last quarter, this edit had the highest denial rate of all four widespread hospice edits at 61%. The top denial reason for this edit continues to be 5PTER, six-month terminal prognosis not supported.

Due to this edit's on-going error rate and based on clarifications made by the CMS in the Fiscal Year 2014 Hospice Final Rule in regards to principal diagnosis coding, the parameters for edit 5091T will be expanded to include any non-oncologic diagnosis code.

Medical records should contain enough clinical factors and descriptive notes to show the illness is terminal and progressing in a manner that a physician would reasonably have concluded that the beneficiary's life expectancy is six months or less. The top denial reason, 5PTER, is related to the common obstacle of documenting a six-month terminal prognosis. The CMS Medicare Benefit Policy Manual (CMS Pub. 100-02), Ch. 9, states an individual is eligible for the Medicare hospice benefit when that individual has a terminal illness with a life expectancy of six months or less if the terminal illness runs its normal course. Documentation is essential for patients that have remained on the hospice benefit for an extended length of time, or for patients that have chronic illnesses or general decline. These diagnoses alone may not support a six-month or less life expectancy; therefore, documentation is depended upon to show why the patient is hospice appropriate. The patient's appropriateness for the hospice benefit must be clearly supported in the medical record from admission and throughout the hospice care provided. To assist providers in improving their documentation, a quick resource tool, "Suggestions for Improved Documentation to Support Medicare Hospice Services" is available on the CGS website.

Suggestion for Improved Documentation to Support Medicare Hospice Services Link:

http://www.cgsmedicare.com/hhh/education/materials/pdf/Hospice%20Documentation%20Tool_H-021-01_07-2011.pdf

CERT Documentation Submission Update

Effective for all initial documentation request letters sent on or after January 1, 2014, providers and suppliers will have 60 days to submit medical documentation in response to initial documentation request for claims selected by the Comprehensive Error Rate Testing (CERT) program.  If no documentation is received by the 60^th day, the claim will be considered a “no documentation” error and recoupment will be pursued.  This information was sent by CGS a Medicare Administrative Contractor.

We have always recommended that you submit your documentation as soon as possible and send it by certified mail return receipt.  We also recommend you send each patient separately and identify on the green return receipt card a patient number.  Do not use patient names or Medicare numbers.  This proves that the record for that medical record number was indeed received.  There have been many cases when documentation was sent timely, but not properly credited as received.

For more information please use the following link:

http://www.cgsmedicare.com/articles/COPE23661.html