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Home Health Prospective Payment Final Rule - Summary of Key Points

Home Health Prospective Payment Final Rule - Summary of Key Points. Brian D. Ellsworth Senior Associate Director Policy Development Group August, 2000. Structure of Presentation. Context for Home Health PPS Key Components of the Final Rule Operational/Strategic Imperatives.

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Home Health Prospective Payment Final Rule - Summary of Key Points

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  1. Home Health Prospective PaymentFinal Rule - Summary of Key Points Brian D. Ellsworth Senior Associate Director Policy Development Group August, 2000

  2. Structure of Presentation • Context for Home Health PPS • Key Components of the Final Rule • Operational/Strategic Imperatives

  3. Context for Home Health PPS • Major growth in Medicare home health care in the early ‘90s • Imposition of Interim Payment System in 1997 • Restrictions in Medicare home health coverage • Major reductions in Medicare home health utilization from 1998 to present

  4. Trends in Program Payments for MedicareHome Health Agency Services 1988-1998 Number in Millions

  5. Home Health Agency Types Number of Agencies 10-1-97 4-13-99 3-16-00 Source: HCFA - On-Line Survey Certification and Reporting System

  6. Medicare Home Health Agency PPS • Proposed rule issued October 28, 1999 • Final Rule issued July 3, 2000 • Effective October 1, 2000 • Episodic, case mix adjusted payment • Budget neutral on day one

  7. Unit of payment is a 60-day “episode” • Multiple episodes per beneficiary envisioned • PPS rate covers all HHA services & non-routine medical supplies for a 60-day episode • Standard PPS rate: $2,115 • Adjusted for case-mix & wages • Four or fewer visits in an episode paid on per visit basis - low utilization payment adj. • 60% of episode payment made at start of care, 40% at first follow-up (50/50 thereafter)

  8. AHA-supported Changes in the Final Rule • Higher 60-day episode payment rate, further increased in FY 2002 • 25 percent higher per visit rates for low utilization cases • Improved cash flow through increased payment on front-end • Ability to initiate billing based on verbal physician orders

  9. AHA-supported Changes in the Final Rule (Cont.) • Improvements in payments for patients with wounds/skin ulcers and patients with multiple impairments • Higher proportion of costs reimbursed for outlier cases • Fewer medical supplies included in bundled rate

  10. Impact of Home Health Agency PPSFinal Rule

  11. Case-mix adjuster is called “Home Health Resource Groups” • 80 group patient classification system • Payment varies from 53 percent ($1,271) to 281 percent ($6,792) • Three major domains: clinical severity, functional status and service utilization • Points assigned to 22 items from OASIS patient assessment form • 10 or more therapy visits during an episode is a critical case mix factor

  12. HHRGs - Summary of scoring changes Proposed vs. Final rule

  13. Low Utilization Payment Adjustment (LUPA) • Low utilization case defines as four or fewer visits in 60 day episode • Agencies paid on per visit basis for LUPA cases • HCFA expects that five percent of total episodes will be LUPAs

  14. LUPA Per Visit Rates - Proposed vs. Final

  15. Adjustments for events during an episode • Beneficiary-elected transfer to another HHA or discharge from original plan of care and return: in either case the original episode payment is pro-rated & a new 60-day episode begins • Significant change in condition: triggers new case mix category for balance of the original 60-day episode • Issue of payment gaps remains

  16. Outlier adjustment available for very high cost cases • Outlierprovision allows for recovery of 80 percent of costs above set loss threshold • Agency’s actual episode costs estimated from within-episode visit data provided on the claim • Automatically provided if case qualifies

  17. Key Points to Keep in Mind…. • Inaccurate OASIS scoring on any of the relevant items can mean big lost $$$ • Outside of the 10 visit therapy utilization threshold (during the episode), rates are truly prospective • The OASIS form will eventually also be used for outcome analysis

  18. Key Points to Keep in Mind…. (Cont.) • Medicare coverage criteria are unchanged • Obtaining the outcome most efficiently is the future of home health • 15 percent reduction scheduled for FY 2002 is still out there

  19. Home Health PPS – Agency To Do List • Train staff on PPS mechanics & implications • Train staff on importance of OASIS coding rules • Computerize all information processes, update OASIS and billing software, monitor forthcoming HIPAA rules • Educate local physicians on PPS

  20. Home Health PPS – Agency To Do List (Cont.) • Formulate action plan for assessment of caseload during the period prior to start of PPS • Have financial back-up plan in case of cash flow delays • Develop ability to conduct patient-level cost vs. revenue analysis as part of care delivery re-engineering

  21. Strategic Considerations for Hospital-based Home Health: Keys to success • Continuous outcome-based quality improvement strategies using OASIS data • Knowing revenue vs. cost on all patients at key intervals • Accurate coding of OASIS • Well-trained and motivated staff

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