Home Health & Hospice Week

Legal negotiations pay off big for chain. If you're frustrated by low -- or no -- payment rates from Medicare Advantage plans, you may have recourse you haven't thought of. That's what one provider-based home health agency chain found out when it evaluated its managed care reimbursement situation. When San Fran-cisco-based Catholic Healthcare West undertook a close examination of its managed care finances, the hospital-based chain with 14 HHAs and six hospices in California, Arizona, and Nevada realized it was losing money on most of them. Those contracts were generally negotiated by the larger hospital system without much regard for home health payment rates, said Paul Giles, the provider's director of home health finance, in an Oct. 13 session at the National Association for Home Care & Hospice's annual meeting in Ft. Lauderdale, Fla. Challenge: Just compiling information on all the chain's contracts with rates, terms and other vital information was difficult, Giles told attendees. CHW eventually determined that it had negative margins on a whopping 90 percent of its contracts under full cost allocations. Fifty percent of the contracts didn't even pay for the direct costs of the services provided, Giles related. Settlement Nets $1.2 Million During the review, CHW found a high volume Medicare Advantage payer sending a standard notice about payment rates for non-contract providers. Upon further research, CHW found a relevant regulation at 42 C.F.R. §422.214, which is a section titled "Special rules for services furnished by noncontract providers." The section reads, in part, "Any provider ... that does not have in effect a contract establishing payment amounts for services furnished to a beneficiary enrolled in an MA coordinated care plan, an MSA plan, or an MA private fee-for-service plan must accept, as payment in full, the amounts that the provider could collect if the beneficiary were enrolled in original Medicare." This provision has been very useful in negotiating and demanding episodic payment at Medi-care rates from MA plans, Giles said in the session. First step: When CHW discovered this regulation, it submitted notice to the MA plan demanding episodic rates based on the language, Giles related. That "got their attention," he noted. The demand was for previous calendar years and in the future. Response: The plan began paying some visits at lower prices and some visits at full charge, Giles explained. Second step: CHW had been billing the plan by the visit. To substantiate the claim, it rebilled the claims with episodes instead of visits. Response: The plan ignored CHW's claims and followup phone calls. Third step: After six months, the HHA kicked the problem "upstairs" to the legal department, which started negotiating with the plan, Giles said. Response: The plan offered low utilization payment [...]