Prospective Payment System:
Major PPS Changes Scheduled To Hit In 2007
Published on Tue Apr 19, 2005
Don't expect the lucrative therapy threshold to remain the same. Hold onto your hats - the first overhaul of the prospective payment system is slated to take effect in a-year-and-a-half.
The Centers for Medicare & Medicaid Services this December will issue a proposed rule containing big PPS changes, CMS says in the Department of Health and Human Services' latest semiannual regulatory agenda. "This rule proposes the first major refinements to the payment system since its implementation in October of 2000," CMS says in the agenda published in the May 16 Federal Register.
While the proposed rule is scheduled to come out in December 2005, the changes wouldn't take effect until January 2007, CMS notes.
A CMS official outlined possible changes at the National Association for Home Care & Hospice's April policy conference in Washington, DC, according to NAHC's Mary St. Pierre. Expected revisions include refining the case-mix (HHRG) categories, changing the therapy threshold, addressing medical supplies, and adjusting reimbursement for subsequent episodes, St. Pierre reports. CMS might change the therapy threshold quite dramatically to take into account patient characteristics rather than the number of therapy visits, she adds.
The home care industry has been expecting a PPS refinement - and especially one targeting the significant therapy threshold increase - for years, says Abilene, TX-based reimbursement consultant Bobby Dusek. "No one every tested the HHRGs" or the system overall, Dusek points out.
Because HHAs see an increase of around $2,000 when they go from furnishing nine to 10 therapy visits, it's a sure-fire area for scrutiny, Dusek says. HHAs have responded to the strong financial incentive by furnishing more therapy visits. "They'd be stupid not to," he maintains.
If CMS doesn't want to switch away from using a therapy threshold altogether, the agency might make the visit threshold higher (14 visits has been rumored), count therapy minutes (PPS originally called for eight hours instead of 10 visits) or create multiple thresholds (for five to nine visits, 10 to 14 visits, etc.) with more moderate payment increases attached, Dusek suggests. Subsequent Episodes, Supplies Ripe for Change St. Pierre expects CMS to increase reimbursement for PPS episodes following the initial one, but Dusek thinks the agency is more likely to actually decrease subsequent episode payments. That's because often agencies barely exceed the low utilization payment adjustment (LUPA) threshold on the second episode, he says. Also, HHAs have a lot of the administrative activities for the patients out of the way by the second episode.
Dusek welcomes a change to the supplies procedures, because Medicare currently isn't capturing most supply costs, he believes. Many agencies don't report supplies costs on their claims and cost reports because there is no financial impact tied to the activity. That failure was reinforced when Medicare [...]
