Editor’s note: (This article originally appeared in the D Healthcare Daily).
For providers in the $81.6 billion home health industry, surviving a quickly changing environment will hinge on three main factors: adapting to new regulations, improving patient outcomes and expanding capacity to address unprecedented growth. The home health industry currently serves 8 million people, a figure that is expected to increase significantly in coming years due partly to an aging population who, according to the AARP, prefer to receive healthcare at home.
Policy changes resulting from the Affordable Care Act (ACA) are at the root of much of the evolving landscape; and home health agencies that don’t properly prepare for regulatory requirements and the increased focus on home healthcare will be at a disadvantage and face challenging business hurdles.
Prepare for audit risks.
To help reduce healthcare costs, the Centers for Medicare & Medicaid Services (CMS) is making a sustained effort to reduce improper payments and is increasing its scrutiny of documentation through its Recovery Audit Program. Even though only a small fraction of audits uncover actual fraud, they do reveal unintentional errors in claims preparation and processing.
Agency operators who take proactive measures to eliminate errors will more likely emerge from an audit without having to repay funds received in error. Agencies that implement turn-key technology solutions to catch potential noncompliance issues before an audit occurs will reduce disruptions to their operations, decrease the potential for returning reimbursement payments and, ultimately, protect the agency’s bottom line.
Proper documentation and correct coding through the use of the latest home health software are the best ways to reduce audit risk. When integrated with an electronic visit verification feature, the software improves an agency’s ability to accurately document the care they provided and prove that the care was performed in the patient’s home at the scheduled time.
Get ready for code changes.
On October 1, CMS will implement a new medical code set, ICD-10. Healthcare providers will transition from ICD-9 to this more detailed coding system for all claims covered by HIPAA, Medicare and Medicaid. This transition will significantly impact home health agencies.
Because of the increased complexity of the new coding system, it will take longer to code and process documents and claims accurately. Agency operators who invest in training resources to understand the new code set, as well as software that can effectively accommodate the new code set, will transition more efficiently, with less disruption to reimbursements and overall cash-flow management.
Go for performance.
Next year, CMS intends to begin testing a value-based purchasing (pay-for-performance) program for home health providers, similar to its hospital program with financial incentives, in an attempt to further control Medicare healthcare costs while improving patient health outcomes, according to Final Rule CMS-1611-F.
To successfully transition from a fee-for-services program to a pay-for-performance program in the coming years, home health agencies need to start now to deploy an interoperable, comprehensive Electronic Health Records (EHR) solution. In addition to functionalities such as HIPAA compliance, streamlined charting, scheduling, communications, billing, payroll and other foundational features, the EHR will need to share patient information with other healthcare providers, effectively coordinate patient care and streamline reporting in accordance with new requirements.
Keep looking ahead.
As components of the ACA continue to roll out across the healthcare industry, combined with an increased demand for home health services from a large segment of the population aged 65 and older, home health agencies need to adopt technology solutions now that will not only position their organization to survive the changing landscape, but also to thrive as viable businesses.
