One of the biggest changes in CMS’ Home Health 2017 Final Rule involves the outlier payment methodology, and these changes will certainly impact many agencies.
Current Methodology
Outlier payments are made for episodes whose estimated costs exceed a threshold amount for each Home Health Resource Group (HHRG). Currently, the episode’s estimated cost is the sum of the per-visit payment amounts for all visits delivered during the 60-day episode. For example, if the agency provided 14 skilled nurse (SN) visits, 16 physical therapist (PT) visits, 10 occupational therapist (OT) visits and 18 home health aide (HHA) visits in a 60-day period, the total estimated cost would be:
14 visits X national SN per visit rate +
16 visits X national PT visit rate +
10 visits X national OT per visit rate +
18 visits X national HHA per visit rate
= Total estimated cost
This amount is then added to a fixed-dollar loss (FDL) amount, which is the same for all case-mix groups.
CMS has a limit on the number of outlier payments an agency can receive. Currently, the total amount of additional payments or payment adjustments for outlier episodes may not exceed 2.5 percent of the estimated total payments for that year. Outlier payments are also capped at 10 percent of total payments for each home health agency.
CMS Sees Variations In Visit Lengths by Disciplinewatch full Lights Out film
CMS has commented in the final rule that their analysis of claims data indicates that there is a “significant variation in the visit length by discipline for outlier episodes. Those agencies with 10 percent of their total payments as outlier payments are providing shorter, but more frequent SN visits than agencies with less than 10 percent of their total payments as outlier payments.”
Because of this analysis, they went on to state concerns that the current methodology provides a financial disincentive for providers to treat medically complex beneficiaries who require longer visits (but assumedly fewer visits). Patients with multiple complicated wounds, or post-stroke patients who require multiple therapy visits, are examples.
Because the total of visits multiplied by per-visit rates may not trigger an outlier payment, agencies will sometimes choose to pass on these referrals because they lose so much money on the care of these acutely ill patients. Clinically complex patients generally use more services, take more man-hours and follow up, need more assistance with ADL’s, require social services and community resources, and dictate more complex medical care overall. However, we know that home health is a more cost-effective way to deliver this complex care while decreasing complications like facility-obtained infections and delivering best outcomes.
New Methodology Beginning in January
CMS has announced that beginning January 1, 2017, the methodology for determining outlier payments will use a cost-per-unit approach rather than a cost-per-visit approach. For this new methodology, the national per-visit rates per discipline are converted into 15-minute unit rates. These new per-unit rates per discipline will be used along with the visit length data per discipline (reported on the home health claim in 15-minute increments) to determine the estimated cost of an episode to determine if the episode cost meets outlier payment thresholds.
In determining units per discipline for outlier consideration, CMS is implementing a cap on the amount of time per day that will be counted toward the estimation of the episode’s cost for outlier purposes. The maximum amount of time per day (for all disciplines) that will be counted toward outlier calculation is a total of eight hours or 32 units per day. The 2.5 percent and 10 percent agency outlier payment caps will remain in place. The Fixed Dollar Loss (FDL) ratio in outlier qualification methodology was increased from 0.45 to 0.55 for FY 2017.
Be Smart In Treating Possible Outlier Patients
While these changes may tempt agencies to lengthen their visits on suspected outlier patients, caution should be observed as CMS has analyzed 14 years of data and found that until now visit lengths have stayed stable. CMS will be monitoring for changes in the reporting of visit lengths and “may investigate HHAs with suspect billing patterns.”
Any agency that reports false information on a claim will be in violation of the False Claims Act and could face civil penalties, damages, and/or criminal prosecution. However, taking acute patients with legitimate needs such as Total Parenteral Nutrition or TPN therapy, complex wound care, or other acute needs is now a viable option for which agencies can now potentially be paid at a higher rate. Documenting the patient’s needs and providing accurate descriptions of time and care delivered for these high acuity patients will validate the information submitted on records.
The implementation of a thorough and accurate, yet user-friendly software platform is a necessity in today’s home health environment. Documentation at the point of care is shown to improve the accuracy of documented services. Axxess’ AgencyCore provides such a tool, allowing clinicians to quickly and easily document the care delivered, and allowing for quick review and processing of bills, which keeps the agency’s payments flowing so that resources are available to deliver the highest-quality care for all patients.
Our next article in this series will focus on changes to the Home Health Value Based Purchasing model for 2017.
