Medicare Compliance & Reimbursement

Despite numerous Provider Reimbursement Review Board and federal court decisions decreeing that directly employed physical therapists' salaries aren't subject to salary restrictions for contracted therapists, the Centers for Medicare & Medicaid Services is still in denial. In its most recent case, CMS Administrator Tom Scully says regional home health intermediary Cahaba GBA was justified in adjusting 1997 wages paid to PT employees of Langhorne, PA-based SNI Home Care Inc. using the salary equivalency guidelines for contracted therapists. SNI paid the therapists per visit rather than straight salaries. The PRRB had ruled in favor of SNI, determining that since the PTs were direct employees of the home health agency, the guidelines didn't apply to them, according to Scully's Feb. 13 decision in SNI Home Care Inc. v. Cahaba. Further, the intermediary failed to come up with compelling evidence that the agency's per visit costs were out of line by comparing them to those of similarly situated providers. In making the decision, the Board referred to two court decisions regarding the matter - In Home Health v. Shalala and High Country Home Health Inc. v. Shalala. But CMS notes that since SNI's home state of Pennsylvania isn't in the jurisdiction of the 8th U.S. Circuit Court of Appeals, where the In Home Health case was decided, the ruling "is not controlling in this case."

CMS argues in its decision that Congress intended for the salary equivalency guidelines to apply to any per-visit payment arrangements, regardless of whether the employee is considered directly employed under Internal Revenue Service employment rules. The language of the statute doesn't prevent such an interpretation, the agency maintains. And SNI is being disingenuous by claiming its per-visit therapy costs were $68.23, CMS charges. The per-visit cost for the therapists at issue, paid per visit, was actually $233.93, CMS claims, while the per-visit cost for salaried PTs was $45.65. Averaging out the visits makes up the $68.23 number, according to the agency. SNI had said in the case before the PRRB that its costs of $68.23 were in line with what similarly situated providers incurred. Now that CMS has overturned the PRRB decision, the HHA may pursue the matter in federal court. SNI didn't comment for this story.