Medicare Policy Updates: Partial Episode Payments

Patients must be informed of transfer procedures.

The Centers for Medicare and Medicaid services recently released updates to some provisions within the Medicare Final Rule. These adjustments make minor changes to some of the payment policies regarding Home Health episodes and patient transfers.

This information was released February 16th of this year, to be effective January 1st and implemented March 1st.

An intervening event (as defined by Medicare) occurs when a patient either:

  1. reaches their treatment goals or
  2. transfers to different Home Health agency before the end of the 60-day episode, then returns to the original agency for treatment.

When this situation occurs, several factors can influence which provider will receive payment, and for how much. If a patient has returned for treatment after reaching their goals or transferring, a new 60-day episode begins and a new plan of care and certification are required. Medicare payment for the previous episode is adjusted based on the amount of time the patient was under the agency’s care. This adjustment is the Partial Episode Payment (PEP).

However, if a patient has transferred because of a Skilled Nursing or rehabilitation admission, and returns to the initial agency for treatment within the same 60-day period, Medicare considers this a single episode covering the time from initial certification, including admissions, and the PEP would not apply. Rules regarding transfers between agencies have also been modified to adhere to certain new patient rights requirements. If a Medicare beneficiary elects to transfer to another agency, the receiving agency must document that they have informed the patient that the original agency will no longer receive payment for services rendered after the transfer date.

The new home health agency must also inquire as to whether the patient is currently under an established plan of care, by accessing the Regional Home Health Intermediary system. If so, the receiving agency is required to document that they have contacted the original agency and provided notification of the transfer. If this documentation can be provided by the receiving Home Health agency, the initial agency will not be eligible to receive the PEP or reimbursement for any overlapping care.

If the receiving agency cannot provide this documentation, their final claim will be canceled by Medicare and the original provider of service will receive full payment for the episode. Any disputes occurring between agencies regarding this policy are to be resolved through the Regional Home Health Intermediaries.

Texas Senate Bill 222

Texas flag

Update (5/19/2011): The CBA provision was recently removed from this bill. Thanks to the patients and providers that showed their support through contacting their representatives.

As a home healthcare provider, you may already know that the state legislature is considering several budget cuts this session. Among them is a provision to modify the statute regarding community-based alternative (CBA) programs under the Home and Community Based Care Service waiver, a state-administered service that provides medical and attendant care to consumers.

A community-based alternative program is one designed to provide in-home care to patients at risk of being placed in a nursing home. Services provided include medical, respite, and attendant care. A CBA differs from a Primary Home Care (PHC) program in that the PHC provides in-home assistance with activities of daily living and personal care but does not administer medical care.

Under the new guidelines presented in Section 1 of Texas Senate Bill 222, authored by Senator Jane Nelson (R-Flower Mound), a patient meeting the requirements for receiving attendant services under the community based alternative program must first receive their benefits through a Medicaid program such as Community Attendant Services and Primary Home Care services. The patient would only be eligible to participate in the CBA if the care required is care beyond what the Medicaid program can provide, or the services are altogether unavailable through any Medicaid program.

This new requirement would greatly impact home care services. Our company agrees with others in the industry that argue that it will further deplete an already underfunded program along with increasing cost to consumers and reducing employee pay.  This provision also creates a concern regarding quality of patient care.

In addition to providing solid software solutions, our company is committed to helping you make sense of relevant home healthcare news. Please check our blog frequently for updates on this issue.

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Timely Filing Matters

Each year, professional and institutional providers are required to write-off a portion of their expected payment because of untimely filing of healthcare claims. Whether your contract is with a commercial payer, Medicare, or Medicaid, knowing what is required to submit a timely claim can result in fewer losses and more efficient processing and payment of each claim.

As you probably know by now, the statutory time limit for filing Medicare claims has been adjusted as part of implementing the Affordable Care Act. At one time, providers were given anywhere from fifteen to twenty-seven months to submit a claim for payment, depending on the date services were rendered. However, effective January 1st of 2010, the timely filing period was reduced to a maximum of twelve months from the date of service.

The new filing deadline seems straightforward at first, but there are several details our agencies need to be aware of. There are certain situations in which the timely filing limit may be sooner or later than twelve months from the service date. Knowing the criteria for these exceptions will help your agency fight for accurate reimbursement of any claims erroneously denied for timely filing.

For professional providers billing for services rendered over a specific time span, Medicare will determine timely filing based on the “from” date of service. This ruling prevents Medicare claims processors from issuing line-item denials within the claim, provided it has been submitted within twelve months of the initial treatment date. Alternatively, if the claim’s submission date falls after the twelve months following the first service date, Medicare will split the claim by line item detail and issue individual denials for each date that was not filed timely.

Specific exceptions to the timely filing rule pertain to administrative and patient eligibility issues. In the event of an administrative error on the part of Medicare or its representatives, the timely filing limit is extended to six months from the date that the provider received notice of the error, to allow sufficient time to submit the claim. Additionally, providers are given six additional months to file when patient becomes retroactively eligible for Medicare and services were provided during the retroactive coverage period. If a patient is eligible for Medicaid at the time treatment is rendered, and later becomes retroactively entitled to Medicare, the provider is given six additional months from the time that Medicaid recoups its initial payment to submit a claim. This also applies if the patient is retroactively dis-enrolled from a Medicare managed care plan and the managed care carrier recoups its initial payment.

It’s a good idea to verify the accuracy of all denials you receive from Medicare, as there are instances in which your agency may still be able to recover payment of a denied claim. In the event of a timely filing rejection, check to be certain that none of these special situations apply to your claim. You may be surprised to learn that a simple appeal with adequate documentation can result in payment of a claim that might otherwise be abandoned.

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