Home Health Agency

1. Home Health Agency Medicaid Cost Report Fundamentals September 9, 2008

2. Agenda • Intermittent Services • Overview of services • Basis of payment • Revenue codes • Medicare Limits • Medicaid Limits • Services under Exception to Policy • Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) • Overview of services • Basis of payment

3. Agenda • Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) cont… • Procedure codes • Time Study • Break Time (5-10 minutes) • Medicaid Cost Report • Purpose • Filing requirements • Worksheet overview • EPSDT/Exception to Policy time study • Retrospective Cost Settlement

4. Agenda • Interim Rate Process • Established agencies • Changes in provider billing rates • New agencies • Break Time (5-10 minutes) • Interim Medical Monitoring and Treatment (IMMT) • Overview • Basis of payment • Procedure codes • Establishing rates

5. Agenda • Billing Issues • Questions

6. Overview • Home health services provide medically necessary home care supports to Iowa Medicaid members. • There are two categories of home health services: • Intermittent (regular) services • Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) services • Private duty nursing and personal care • Also called “Care For Kids”

7. Intermittent Services

8. Overview of Services • “Intermittent service” means services for a patient who has a medically predictable recurring need that does not exceed two to three visits per week for two to three hours at a time. • The number of hours of intermittent services shall be reasonable and appropriate to meet an established medical need of the patient that cannot be met by a family member, significant other, friend, or neighbor. • Intermittent services are covered only when provided in the patient’s residence.

9. Overview of Services • Intermittent services include the following: • Skilled nursing • Home health aide • Physical therapy • Occupational therapy • Speech therapy • Medical social services • Medical supplies • These home care services are available for Medicaid eligible persons regardless of age.

10. Overview of Services • Unlike the Medicare program, patients need not first require “skilled” care before they are entitled to home health aide services. • For example, if a patient requires only home health aide services, the patient is entitled to these services under the Medicaid program without respect to the need for skilled services.

11. Basis of Payment • Interim payment shall be made on an encounter (per visit) basis. • An “encounter” is defined as separately identifiable hours which home health agency staff provides continuous service to a patient. • Payment of home health agency intermittent services is based on the service provided rather than the classification of the home health agency employee providing the service.

12. Basis of Payment • Interim encounter (per visit) payment based on revenue code is subject to reasonable cost on a retrospective basis. • Retrospective cost-settlement is made at the lower of: • Average cost per visit • Medicare limit per visit • Medicaid limit per visit • Tentative cost settlement is performed based on the submitted Medicare and Medicaid cost report • Final cost settlement is performed based on the finalized Medicare cost report.

13. Revenue Codes

14. Medicare Limits • The base Medicare limits were established during federal fiscal year 2000. • Base limits may be subjected to an increase equal to the Medicare home health market basket increase on a yearly basis. • Limits are based on the providers fiscal year and Metropolitan Statistical Area (MSA).

15. Medicaid Limits • The current Medicaid limits were based on 97% of the reimbursable costs during state fiscal year (SFY) 2001. • Since the base limits were established, they have received the following increases based on legislative approval:

16. Services Under Exception to Policy • When billing services provided under an exception to policy, follow the instructions in the decision letter. • A current plan of care and a copy of the exception to policy decision letter must accompany each claim. • The claim must include: • Correct primary diagnosis • Revenue or procedure code • Number of hours each service provided • Reimbursement rate identified in the decision letter for each service provided.

17. Services Under Exception to Policy • When the need for services exceeds the intermittent guidelines, a request for an exception to policy may be submitted in writing, by fax (515-281-4597) or by mailing to: Appeals Section Department of Human Services 1305 E. Walnut, 5th Floor Des Moines, IA 50319-0114 • Also may be submitted via internet at www.dhs.state.ia.us

18. Exception to Policy Revenue Codes

19. Early and Periodic Screening, Diagnosis, and Treatment (EPSDT)

20. Overview of Services • Private-duty nursing and personal care services for children with special needs are covered for Medicaid members aged 21 or younger. • These services must be prior authorized and are only available if the child’s medical needs exceed skilled nursing and/or home health aide maximums covered through the intermittent home health services. • Home health agency care for maternity patients and children is a service also included in the EPSDT program. • Members receiving this service would require home care services due to high-risk factors.

21. Overview of Services • These services are intended to: • Promote alternatives to prolonged hospitalizations or institutionalizations by providing for medially necessary and effective home care. • Provide ongoing nursing support to a technology-dependent child or a child with multiple medical needs related to an acute or chronic medical condition in the home environment.

22. Overview of Services • The objectives of the services are: • To provide direct patient care, supervision of family caregivers, and teaching of the necessary skills of care for a medically compromised child at home • To promote quality care and a safe home environment for the patient • To provide for comprehensive and coordinated care in a cost-effective manner • To reduce the number of hours funded and provided by the program to the minimum level necessary to meet the medical needs of the child safely while ensuring that quality care is maintained in the child’s home environment.

23. Overview of Services • Payment for private-duty nursing or personal care services for patients aged 21 and under will be approved if determined to be medically necessary. • Medical necessity means: • The service is reasonably calculated to prevent, diagnose, correct, cure, alleviate, or prevent the worsening of conditions that endanger life, cause pain, result in illness or infirmity, threaten to cause or aggravate a disability or chronic illness, and • No other equally effective course of treatment is available and suitable for the patient requesting a service.

24. Overview of Services • Home health services are directed to support the extra burdens on the parents due to the child’s medical needs. • They are not available to meet a family’s normal needs for child care and supervision, such as while a parent works.

25. Overview of Services • “Personal care services” are services provided by a home health aide which are delegated and supervised by a registered nurse under the direction of the child’s physician. • Services may be provided to a child in the child’s place of residence or outside the child’s residence when normal life activities take the patient outside the place of residence. • Some of the care must be provided in the child’s home.

26. Overview of Services • “Private-duty nursing services” are services provided to a child by a registered nurse or a licensed practical nurse under the direction of the child’s physician. • Services may be provided to a child in the child’s place of residence or outside the child’s residence when normal life activities take the patient outside the place of residence. • Some of the care must be provided in the child’s home.

27. Basis of Payment • Interim Payment to a home health agency for private-duty nursing or personal care services is on an hourly fee-for-service basis. • Only the level of care approved on the prior authorization can be billed. • Enhanced payment under the interim fee schedule will be made available for services to children who are technology-dependent (ventilator dependent or with a medical condition so unstable as to otherwise require intensive care in a hospital).

28. Basis of Payment • Interim payment based on procedure code is subject to reasonable cost on a retrospective basis. • Retrospective cost-settlement is made at the lower of: • Average cost per visit • Medicaid limit per visit • Tentative cost settlement is performed based on the submitted Medicare and Medicaid cost report • Final cost settlement is performed based on the finalized Medicare cost report.

29. Procedure Codes

30. Time Study • The purpose of the time study is to convert the average cost per visit to an hourly unit. • Encounter rate is limited to the lower of: • Actual cost per hour • Medicaid limit per hour • Time study must be completed by home health agency in order to calculate retrospective cost settlement.

31. Break Time (5-10 minutes)

32. Medicaid Cost Report

33. Purpose • The Medicaid cost report provides for the determination of allowable and reasonable costs which are reimbursable under Title XIX, of the Social Security Act. • Allows for determination of a retrospective cost settlement of payments received from Medicaid to reasonable Medicaid costs.

34. Reasonable Cost • Reasonable cost principles are set forth in the following: • Federal Register – 42 CFR Part 413 • Medicare Provider Reimbursement Manual (CMS Pub. §15-I) • Office of Management and Budget (OMB) Circular A-87, Attachment B • Reasonable costs include all necessary and proper costs incurred in furnishing services subject to specific items of revenue and cost. • Cost must be related to the care of Medicaid members.

35. Filing Requirements • Home health agencies are required to submit their Medicare and Medicaid cost report 150 days after the end of the fiscal period. • Home health agencies that provide EPSDT services are required to complete the EPSDT time study.

36. Worksheets • Worksheet C provides for the computation of the average home health agency cost per visit to derive total allowable cost attributable to Medicaid patient care visits. • Total allowable cost is the lower of the following: • Average cost per visit • Medicare limit per visit • Medicaid limit per visit

38. Worksheet C • W/S C, Lines 1-6: • For all patients, enter from the Medicare cost report for each patient service: • total cost (Medicare cost report, W/S B, Col. 6) • total visits (Medicare cost report, W/S S-3, Pt. I, Col. 5) • Calculate average cost per visit • Enter the Medicaid program cost limit per visit in effect for the cost report period for each patient service • If cost report period is not on the state fiscal year of June 30th, there may be two limits in effect during the cost report period. • Enter the Medicare program cost limit per visit for the cost report period for each patient service

39. Worksheet C • W/S C, Lines 8-13: • Enter the current period average cost per visit from W/S C, lines 1-6, for each patient service • Enter the number of Medicaid program visits for each patient service • Calculate the total average cost per visit for each patient service

40. Worksheet C • W/S C, Lines 15-20: • Enter the current period Medicaid program cost limit per visit from W/S C, lines 1-6, for each patient service • Enter the number of Medicaid program visits for each patient service • Calculate the total Medicaid program limit cost per visit for each patient service

41. Worksheet C • W/S C, Lines 22-27: • Enter the current period Medicare program cost limit per visit from W/S C, lines 1-6, for each patient service • Enter the number of Medicaid program visits for each patient service • Calculate the total Medicare program limit cost per visit for each patient service

42. Worksheet C • W/S C, Line 29: • Add the lower of lines 14, 21, or 28 to the total of lines 29 and 30 to calculate reasonable and allowable cost of intermittent home health services.

44. Worksheet D, Pt. 1 • W/S D, Pt. I, Line 1: • Transfer amount from, W/S C, line 31 • W/S D, Pt. I, Line 2: • Enter Medical Supplies allowed charges • W/S D, Pt. 1, Line 3: • Enter Immunization Administration allowed charges • W/S D, Pt. I, Line 4: • Sum of lines 1, 2 and 3

45. Worksheet D • W/S D, Pt. I, Line 5: • Total covered charges for intermittent services • Do not include EPSDT covered charges • W/S D, Pt. I, Line 6: • If W/S D, Pt. I, line 4 exceeds W/S D, Pt. I, line 3 report the difference • W/S D, Pt. I, Line 7: • If W/S D, Pt. I, line 3 exceeds W/S D, Pt. I, line 4 report the difference

46. Worksheet D • W/S D, Pt. II, Line 8: • Transfer amount from W/S, D, Pt. I, Line 3 • W/S D, Pt. II, Line 9: • Transfer amount from W/S, D, Pt. I, Line 6 if cost exceeds charges • Make sure to enter as a negative amount • W/S D, Pt. II, Line 10: • Enter amount of allowable EPSDT/Exception to Policy costs from the calculation at the bottom of W/S D • W/S, D, Pt. II, Line 11: • Sum of W/S D, Pt. II line 8, less line 9, plus line10

47. Worksheet D • W/S D, Pt. II, Line 12: • Enter amount of third party reimbursement applied to Title XIX (Medicaid) claims for dates of service during the cost report period. • W/S D, Pt. II, Line 13: • W/S D, Pt. II, Line 10 less Line 11 • W/S D, Pt. II, Line 14: • Enter amount of Title XIX (Medicaid) reimbursement received for dates of service during the cost report period.

48. Worksheet D • W/S D, Pt. II, Line 15: • W/S D, Pt. II, Line 12 less Line 13 • Negative amount indicates that an overpayment occurred during the cost report period and amount is due to the State. • Positive amount indicates that an underpayment occurred during the cost report period and amount is due to the agency.

49. Worksheet D • EPSDT Calculation: • Enter the amount of hours from W/S E, Pt. II for each patient service • Enter the cost per hour from W/S E, Pt. II for each patient service • Multiply the amount of hours by the cost per hour to calculate total cost per patient service for EPSDT • Exception to Policy Calculation: • Enter the amount of hours from W/S F, Pt. II for each patient service • Enter the cost per hour from W/S F, Pt. II for each patient service • Multiply the amount of hours by the cost per hour to calculate total cost per patient service for exception to policy