Home Care and Hospice: Payment and Reimbursement Update: AHLA Institute on Medicare and Medicaid Payment Issues

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1 Home Care and Hospice: Payment and Reimbursement Update: 2014 AHLA Institute on Medicare and Medicaid Payment Issues William A. Dombi Vice President for Law National Association for Home Care & Hospice March 28, 2014 Medicaid Home Care Rebalancing of LTC spending continues ACA incents home care States increasing Medicaid home care audits and oversight Big focus on caregiver qualifications by OIG Documentation weaknesses on care plans ad authorizations Major movement to managed care Medicaid LTSS Duals Agency model vs. Self-directed care (or both) 1

2 Medicaid New HCBS Rule January 16, 2014: outlines the new HCBS option benefit that allows states to avoid the administrative burdens attached to waiver programs. permits the combination of the existing three waiver target groups into a single waiver program to streamline the waiver process. Medicaid New HCBS Rule implements a provision in the ACA that authorizes a 5-year duration on demonstration projects or waiver programs that combine dualeligible Medicare and Medicaid beneficiaries. establishes a limited exception to the general provider payment rules by permitting state Medicaid programs to make payments to other parties to benefit the provider for items that are normally considered employee fringe benefits such as health insurance. clarifies the standards for determining which residences meet the home and community-based setting requirements to qualify for HCBS payment on the variety of HCBS programs. sets out standards for HCBS person-centered plans of care, process requirements for public input on changes to HCBS waiver programs and payment rates, and the individual s right of choice of care setting. 2

3 MEDICARE HOSPICE FY2014 rates (October 1, 2013) 1.7% MBI update 0.3% MBI reduction under ACA 0.5% Productivity adjustment reduction Continued phase-out of the BNAF (approx impact of.7) New Payment Model is still in development (no earlier than October 2014) U-shaped payment distribution Site of service adjustment Routing home care rebased rates Claims oversight increasing Medicare Hospice: Regulatory developments Hospice face-to-face rule Terminal illness documentation New Cost report Hospice and the nursing facility resident 3

4 2015 MedPAC Hospice Recommendations No inflation update Accelerate new payment model U-Shaped reimbursement Reduce reimbursement for patients in nursing facilities Provide hospice within MA Plans Home Health Reimbursement Update/Issues HHPPS 2014 rule Face to Face rule PECOS New Medicare CoP sanctions New ABN Moratorium on new HHAs 4

5 2014 Medicare Home Health Rate Final Rule CMS Proposed Rule (July 3, 2013) /pdf/ pdf CMS Final Rule (December 2, 2013) /pdf/ pdf Rebased payment rates Full cut (3.5%) allowed under law (14 points total) Recalibrated case mix weights Limits increases in LUPA visit rates average cost calculation Outlier eligibility remains same despite low spending Remember 2% payment sequestration (February 1 and later payments) Remember wage index changes (net reduction of $30M in expenditures) 2014 Medicare Home Health Rate Final Rule: Assessment CMS chose unfavorable calculation method Used proxies for episode revenue and costs Better alternatives available Ignored cost increases and costs not on cost report Telehealth F2F; therapy assessment Silo-ed rebasing rather than aggregation Failed to include capital needs 5

6 HHPPS 2014: Rebased payment rates Rebasing Changes in the nature of the services provided during the 60 day episode of care along with what it perceived to be overpayments for services Required by the ACA Phase in over 4 years Average cost compared to average payments Difference = % Decrease rates by 3.5 % for the next four years Final HHPPS base rate Estimated average cost to average reimbursement for 2013 Estimated Cost $ to estimated reimbursement - $ % Minus 3.5 % of 2010 rates for rebasing 2.3 market basket increase Plus other factors Base rate in $ Base rate in 2013 $

7 Final HHPPS rebasing Case mix weights decreased by 25.8 % Average weight should be 1 Average weight in 2012 Coding changes impact average weight adjustment made Base rate in $ Base rate in 2013 $ HHRG = C1F1S $ X.8186 =$ $2, X.6080 = $ % decrease in base rate 2.0% Sequestration Final HHPPS LUPA Rates 3.5% increase over the next four years Capped at 3.5% of 2010 rates LUPA add-on not a single rate, but calculated depending on the discipline Non-Routine Supplies Reduce by 2.58% next four years Conversion factor $53.65 for 2014 $

8 Impact of Methodology Issues As a result of the above, Medicare margins for home healthcare are projected to drop to a negative (9.77%) by It is further estimated that 72.9% of all home healthcare agencies will be operating below cost by HHPPS -2014: Other Changes 170 Diagnosis codes eliminated Too acute No increase in resource utilization Wage Index--Labor portion and non labor portion remain the same No change in outlier qualification formula 8

9 2015 MedPAC Home Health Recommendations Repeat 2014 recommendations Accelerate rebasing No inflation update Add copay on community admission episodes Institute a hospital readmission penalty Establish a common PAC patient assessment Supports PAC bundling Face to Face Physician Encounter Revisions 2013 Allow facility-based NPP to perform encounter Require communication with the physician with whom collaborating (i.e. inpatient or community) Allow the facility-based physician to complete the F2F and either certify or communicate findings to the certifying physician in the community Documentation title and date Allow any party to title and date F2F documentation 9

10 Other important considerations Checkboxes created by the physician are acceptable Home health agencies may not create, transcribe, add to, or alter F2F documentation F2F samples may not be patient specific Start of Care may be revised if late encounters Count back 30 days Realignment of SOC: may use original OASIS, updated Delete original OASIS Realignment of SOC due to late F2F requires realignment of therapy 13 and 19 F2F MLN Clarification on documentation: Education/Medicare-Learning-Network- MLN/MLNMattersArticles/Downloads/S E1405.pdf Not very helpful 10

11 Medicaid F2F Proposed rule July 2011 Unified Agenda - October 2013 Some States have a F2F requirement MEDICARE HOME HEALTH: Alternative Sanctions Applies to condition level deficiencies Sanctions include: Directed corrective action Temporary management Payment suspension Civil monetary penalties $500-$10,000 Per diem/per instance Termination Informal dispute resolution possible CMPs and payment suspension no earlier than 7/1/14, Appeal rights w/o penalty suspension 11

12 Physician Enrollment: PECOS ACA and regulation requires all home health certifying and ordering physicians be enrolled in Medicare Medicare requires an approved enrollment record in PECOS HHAs only have access to ordering and referring file Physician name and NPI as they appear in PECOS on the claim Edit effective with SOC January 6, 2014 Watch for expanded enrollment focus in claims reviews PECOS Full Implementation of Edits Set for January 6, Learning-Network- MLN/MLNMattersArticles/Downloads/SE1305.pdf See also 8441 : Home Health Agency Reporting Requirements for the Certifying Physician and the Physician Who Signs the Plan of Care - Effective July Guidance/Guidance/Transmittals/Downloads/R2789CP.pdf 8356:Handling of Incomplete or Invalid Claims once the Phase 2 Ordering and Referring Edits are Implemented Guidance/Guidance/Transmittals/Downloads/R2767CP.pdf 12

13 Additional Claims data Effective JULY 1, 2013 Place of service code Q5001: Hospice or home health care provided in patient s home/residence Q5002: Hospice or home health care provided in assisted living facility Licensed facilities? Q5009: Hospice or home health care provided in place not otherwise specified HIPPS Codes on MA plan claims Directive to the MA plans from CMS Plans are required to direct HHAS Plans are to be submitting with data effective July 1, 2013 MA plan encounter data will be rejected beginning December 1,

14 ABN No change in policy ABN CMS-131 for financial liability protection Replaces Option Box 1 Home Health Change of Care Notice (HHCCN) prior to reducing or discontinuing care related HHA reasons Prior to reducing or discontinuing care related to physician orders New form replaces Option BOX 2 and Option Box 3 Mandatory December 9, Information/BNI/HHABN.html Moratorium on New HHAs Home Health January 31, months Miami Dade, FL; Cook County (Chicago area) (additional 6 months) Detroit, Fort Lauderdale, Houston, Dallas (new) New providers Branches included 14

15 Medicare Home Health and Hospice: Risk/Reform Areas Home Health: inflation update reduction on PAC services bundled PAC services home health copay/uniform cost sharing Accelerated rebasing Hospice: Reduced MBI Include hospice in MA benefit package Reduced rates for NF residents CONCLUSION Medicare and Medicaid Home Care and Hospice is ever-changing Range of legal/regulatory issues is endless Significant regulatory energy directed towards home care and hospice Compliance issues/concerns Center of innovation in care is home care; change triggers action 15