Home Health & Hospice Week

Growth of Medicare-certified agencies slows this year.

Home health agencies aren't the only ones noticing how important diagnosis coding will be under the prospective payment system refinements.

"The new system substantially expands the role of coding practices in payment," said Evan Christman with the Medicare Payment Advisory Commission during its Dec. 7 meeting in Washington, DC.

"We expect agencies to change their coding practices as a result of the new system," Christman told MedPAC commissioners. That change will result in a 1.6 percent increase in Medicare payment for HHAs in 2008, Christman predicted.

Bad news: That prediction, combined with the projected 15.4 percent Medicare profit margin for agencies, made the commissioners even more disposed to recommend a rate freeze for HHAs in 2008. MedPAC will make its official recommendation in its annual March report.

Meanwhile, Christman noted that the rate of growth of HHAs has slowed so far in 2007. In 2006, agencies had increased by about 7 percent by November. This year, the increase was only 4 percent.

The slowdown is probably due to two main factors, Christman suggested: states such as Texas halting certification of new providers and potential providers waiting to see how the PPS refinements shake out.

The number of HHAs was 8,880 in 2006, up 2.4 percent from the previous year, according to the MedPAC presentation. That's still short of the all-time high of nearly 11,000 agencies in 1997, Christman noted. The number of agencies has grown about 30 percent in the last five years, he added.

CMS instituted a fraud demonstration requiring reenrollment in some of the highest-growth areas in California and Texas (see Eli's HCW, Vol. XVI, No. 37), Christman pointed out. • The HHS Office of Inspector General continues to harp on the M0175 issue, mere weeks before it's rendered moot. In a report released Dec. 10, the OIG reviews whether Partners Home Care in Waltham, MA billed correctly based on patients' prior inpatient stay information in 2004 and 2005.

"The agency improperly coded 231 of these claims as if the beneficiary had not had an acute care stay in the preceding 14 days," the OIG says in the report summary. However, the M0175 edits the Centers for Medicare & Medicaid Services put in place in April 2004 caught 155 of the claims and automatically corrected them. And Partners corrected 28 claims itself, forfeiting more than $13,000 in Medicare payments.

"The 48 remaining unadjusted claims represented overpayments of $16,443," the OIG notes. The watchdog agency calls on Partners to refund the overpayments and train its staff on the OASIS item on prior inpatient stays that led to the billing error.

The rebuttal: The HHA already provided extensive education on M0175, Partners President Christopher Attaya said in a letter responding to the report. "The [...]