Medicare Final Rule: Conclusion

In summary, our CradleMRx agencies need to be prepared for the across-the-board rate reductions that will take effect this year. We will be providing software updates, when necessary, to make sure your agency adheres to all new Medicare and national guidelines and regulations. Please check this section of the website regularly for news and updates within the industry.

Medicare Final Rule: Therapy Clarifications

Medicare has cited studies that support the suggestion that many home health providers are not currently in compliance with already existing therapy documentation requirements, and is allowing additional time for agencies to prepare for the upcoming changes in 2011. Modifications to home health therapy and documentation procedures will take effect April 1st, 2011. New documentation requirements will include describing measurable treatment goals in the plan of care. The patient’s medical record must include objective and progressive measurements, so that the effectiveness of ongoing therapy can be assessed.

The proposed rule suggests that a qualified therapist perform the necessary therapy services and assess patient progress at least once every thirty days. Medicare also refers to studies showing that most therapy patients can achieve their objectives within ten therapy visits. As such, for patients requiring 13 or 19 visits, a qualified therapist, not an assistant, must perform the services for those visits.

At this point, if progress cannot be assessed, Medicare will cease coverage for therapy services unless the documentation provided supports future progress within a reasonable amount of time. For patients with multi-disciplinary treatment, the appropriate qualified therapist for each discipline must assess the patient at a regularly scheduled session that is as close to, but not later than, the 13th or 19th visit.

Additionally, services that do not require the supervision of a qualified therapist will not be considered reasonable and necessary. For example, if a licensed therapist performs a service that could routinely be performed by nursing staff, that therapy service will not be covered by Medicare.

Medicare Final Rule: Rate Adjustments

Due to recently passed regulations under the Affordable Care Act of 2010 (ACA), the Medicare final rule issues adjustments to the home health outlier policy, market basket update, and LUPA rates. The Medicare outlier policy exists for cases in which an episode of care requires more intense or more frequent use of services than the normal 60-day episode payment rate allows for. When the cost of services exceeds a certain threshold, an outlier payment may be made.

In order for an episode to be eligible for outlier payment, the agency must first absorb a fixed dollar loss (FDL). For 2011, the FDL ratio is 0.67. The Final Rule also implements a 10% outlier cap, meaning that the outlier payment may not exceed 10% of the total agency payment. The 2011 market basket increase is 2.1%.

However, the ACA mandates that market basket updates be adjusted to account for a “productivity factor”. This adjustment is based on economic business data regarding productivity. For 2011, 2012, and 2013 it will be reduced by 1%. This allows for a total market basket increase of 1.1% for this year. A “Low Utilization Payment Adjustment” is made by Medicare when a patient has fewer than five visits within a 60 day episode. Due to changes in the outlier policy and because of mandates in the ACA, the total LUPA rate will be reduced for 2011 by 1.4%.

Medicare Final Rule: Case Mix Groups

For home health agencies, the 60-day episode rate encompasses skilled nursing, home health aide, physician therapy, speech-language pathology, occupational therapy, and medical social services. For calendar year 2011, 60-day episode payment rates to home health agencies will be reduced by 3.79%.

This payment rate reduction is, in essence, a recoupment for overpayments in previous years due to somewhat inaccurate case-mix measurement. Medicare has stated that the increase in case-mix volume is not directly related to an increase in patient severity, does not justify higher payment rates, and is a result of changes in coding and documentation. According to the published rule, in order to make adjustments for past overpayments, Medicare would need to recoup a total of 7.43%.

The proposed rule, issued last summer, suggests collecting the remaining amount by reducing rates again in 2012.

Medicare Final Rule: Introduction

Beginning January 1, 2011, the recently settled Medicare final rule will take effect. This rule will greatly impact home health agency reimbursement rates, therapy provisions, and outlier policies. In support of the CradleMRx software, this article will provide detailed guidance to our agencies about the changes taking place in the home health Prospective Payment System. This commentary will be divided into specific sections that will pertain to episode payment rates, therapy provisions and requirements, and changes to other various payment policies. It is our goal to keep our clients well informed of how the Medicare Final Rule for 2011 will affect their agency operations.

Medicare Policy Updates: Face to Face Encounters

Medicare face-to-face encounters

Agencies should be aware of new face-to-face encounter guidelines

The Center for Medicare and Medicaid services recently released updates to some of the provisions issued by the Affordable Care Act. This additional information pertains mainly to the new face-to-face encounter requirement. It was issued February 16th of this year, to be effective January 1st, and implemented March 10th.

At the start of a patient’s home health care, the physician that certifies the plan of care must examine the patient face-to-face and provide adequate documentation to support that the encounter occurred. Certain allowed non-physician practitioners are also permitted to complete the face-to-face visit with the patient. These providers include state licensed nurse practitioners, clinical nurse specialists working with the certifying doctor, state approved nurse midwives, and physicians’ assistants under the supervision of the physician endorsing the plan of care.

The face-to-face requirement must be completed within 30 days after the start of care, or within 90 days before. Within the home health agency’s documentation, evidence of the face-to-face encounter must be included with submission of the certification. The agency’s record of the visit must include the service date and a short statement about why the patient’s observed medical condition requires medically necessary home care. It can be written, dictated, or generated from an electronic health record.

In certain situations, other providers may complete the face-to-face encounter and initial certification that home health care is needed. These include attending physicians in an acute care setting that examine the patient, verify the plan of care needed, and arrange for the patient’s transfer to a local agency.

Medicare also allows the face-to-face examination to be completed via a telehealth system. The encounter must originate at one of the following approved locations:

  • Physicians’ offices
  • Hospitals & Critical Access Hospitals
  • Rural Health Centers
  • Federally Qualified Health Centers
  • Hospital-based Renal Dialysis Centers
  • Skilled Nursing Facilities
  • Community Mental Health Centers

Unless the patient has transferred to another home health agency or been discharged and returns to the same agency for care, a re-certification and new plan of care are required for every 60-day episode.