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.