PPS Home Health Reform

1
PPS Home Health Reform

• Revised CMS regulations
• By
• Renee Korb, President
• Korb Consulting, Inc.

2
What we will Learn

• Summary of payment changes
• What C F S stand for
• Formulas Calculations
• Strategies
• Billing and Technical Changes

3
Summary of Payment Changes

• 80 episodes payment rates to 153
• Additional oasis questions effect payment score
• New oasis questions
• Early Late episodes

4
C Clinical Domain

• Drivers
• Diagnosis not just primary
• Clinical Condition

5
F Functional

• Components remain unchanged
• Dressing MO650 or MO660
• Bathing MO670
• Toileting MO680
• Transferring MO690
• Ambulation MO700

6
Clinical Functional

• 45 Clinical Oasis questions are assigned points
  based on the 4 Equation model
• 6 Functional Oasis questions are assigned points
  based on the 4 Equation model
• See Exhibit 1

7
S Service Utilization

• OLD 10 therapy visit cut off

8
S Service Utilization

• NEW
• 6 visits
• 7 to 9 visits
• 10 visits
• 11 to 13 visits
• 14 to 19 visits
• 20 visits

9
The Calculation

• 1st complete the Oasis
• Identify if an early or late episode
• Determine the number of therapy visits
• Score clinical and functional items based on 4
  equation model (Exhibit 1 CMS Table 2A)
• Assign CFS Severity levels based on scores
  (Exhibit 2 - CMS Table 3)

10
The Calculation

• National Rate X Case Mix Weight Case Mix Rate
• Identify Labor Portion (.77082 X Case Mix Rate)
• Adjust for wage index (Labor Portion X Wage index
  for patients location)
• Add Non Labor Portion to wage weighted labor
  portion
• Calculate the NRS amount and add it on

11
The Calculation an exampleAssumptions
National Rate 2,270.32
HHRG C1F3S3
Therapy Threshold 0 - 13 visits
Adjacent Episode number 3
Wages Index 1.0718
Episode start date 1/1/2008
NRS Severity level 4
12
The Calculation an example
National Rate 2,270.32
Case Mix Weight 1.4674
Case Mix Rate 3,331.47
Labor Portion 0.77082
Labor Portion 2,567.96
Wage Index 1.0718
Weighted Labor Portion 2,752.34
Non Labor Portion (3331.47 - 2567.96) Non Labor Portion (3331.47 - 2567.96) 763.51
Payment Rate before NRS 3,515.85
NRS add on 207.76
Total Payment 3,723.61
13
Case Mix Groups

• 153 Case Mix Groups (HHRGS)
• Severity levels are
• C1 to C3
• F1 to F3
• S1 to S5
• Assigned to 5 Groups
• Early Episode (1st 2nd) Low Therapy (0 13
  visits)
• Early Episode (1st 2nd) High Therapy (14 19
  visits)
• Late Episode (3) Low Therapy (0 13 visits)
• Late Episode (3) High Therapy (14 19 visits)
• All episodes 20 therapy visits
• Case weights range from .5827 to 3.4872

14
Case Mix Scoring CMS Table 3
Dimension Dimension 1st 2nd Episodes 1st 2nd Episodes 3rd Episodes 3rd Episodes All Episodes
0-13 Therapy Visits 14-19 Therapy Visits 0-13 Therapy Visits 14-19 Therapy Visits 20 Therapy Visits
Equation Equation 1 2 3 4 (2 or 4)
Clinical (sum of points) C1 0 to 4 0 to 6 0 to 2 0 to 8 0 to 7
Clinical (sum of points) C2 5 to 8 7 to 14 3 to 5 9 to 16 8 to 14
Clinical (sum of points) C3 9 15 6 17 15
Functional (sum of points) F1 0 to 5 0 to 6 0 to 8 0 to 7 0 to 6
Functional (sum of points) F2 6 7 9 8 7
Functional (sum of points) F3 7 8 10 9 8
Service Utilization (number of therapy visits) S1 0 to 5 14 to 15 0 to 5 14 to 15 20
Service Utilization (number of therapy visits) S2 6 16 to 17 6 16 to 17
Service Utilization (number of therapy visits) S3 7 to 9 18 to 19 7 to 9 18 to 19
Service Utilization (number of therapy visits) S4 10 10
Service Utilization (number of therapy visits) S5 11 to 13 11 to 13
15
Clinical Scoring Domain ImpactCMS Table 4
Equation 1 (1st 2nd Episodes) 0 13 Therapy 1,322.92 BaseC1 Equation 2 (1st 2nd Episodes) 14 19 Therapy 3,659.31 BaseC1 Equation 3 (3rd or more Episodes) 0 13 Therapy 1,485.47 BaseC1 Equation 4 (3rd or more Episodes) 14 19 Therapy 3,979.88 BaseC1 Episodes (All Episodes) 20 Therapy 5,788.19 BaseC1
Base C2 342.36 C3 722.64 Base C2 569.40 C3 1,227.33 Base C2 131.91 C3 648.40 Base C2 623.43 C3 1,350.61 Base C2 485.17 C3 1,212,35
Ex C2 1,665.28 Ex C3 4,886.64 Ex C2 1,617.38 Ex C3 5,330.49 Ex C2 6,273.36
16
Functional Scoring Domain Impact
Equation 1 (1st 2nd Episodes) 0 13 Therapy 1,322.92 Base C1FI Equation 2 (1st 2nd Episodes) 14 19 Therapy 3,659.31 Base C1FI Equation 3 (3rd or more Episodes) 0 13 Therapy 1,485.47 Base C1FI Equation 4 (3rd or more Episodes) 14 19 Therapy 3,979.88 Base C1FI Episodes (All Episodes) 20 Therapy 5,788.19 Base C1FI
Base F2 201.15 F3 391.18 Base F2 264.04 F3 429.54 Base F2 304.00 F3 592.10 Base F2 297.18 F3 681.32 Base F2 430.23 F3 916.53
Ex C1F2 1,524.07 Ex C1F3 4,088.85 Ex C1F2 1,789.47 Ex C1F3 4,661.20 Ex C1F2 6,218.42
17
Service Domain Scoring Impact
Equation 1 (1st 2nd Episodes) 0 13 Therapy 1,322.92 Base C1F1S1 Equation 2 (1st 2nd Episodes) 14 19 Therapy 3,659.31 Base C1F1S1 Equation 3 (3rd or more Episodes) 0 13 Therapy 1,485.47 Base C1F1S1 Equation 4 (3rd or more Episodes) 14 19 Therapy 3,979.88 Base C1F1S1 Episodes (All Episodes) 20 Therapy 5,788.19 Base C1F1S1
Base S2 608.45 S31083.40 S41,570.38 S5 1,970.41 Base S2 353.49 S3 644.75 Base S2 794.16 S3 1,253.67 S4 1,755.87 S5 2,152.49 Base S2 263.13 S3 617.98 Base C(2 or 3) F (2 or 3)
18
EXAMPLES SERVICE DOMAIN IMPACT
Equation 1 (1st 2nd Episodes) 0 13 Therapy Equation 2 (1st 2nd Episodes) 14 19 Therapy Equation 3 (3rd or more Episodes) 0 13 Therapy Equation 4 (3rd or more Episodes) 14 19 Therapy Episodes (All Episodes) 20 Therapy
C2F2S1 1,866.43 C3F3S2 5,669.67 C2F2S3 3,175.05 C1F3S2 4,924.33 C3F3S1 7,917.07
C1F3S5 3,684.51 C2F2S3 5,137.50 C3F3S4 4,481.84 C1F1S3 4,597.86 C1F2S1 6,218.42
19
Table 9 Relative Weights for Non-routine Medical
Supplies Six-group Approach

  Percentage      
Severity of Points Relative Payment
Level Episodes (Scoring) Weight Amount
1 63.7   0.2698 14.12
2 20.6 1 to 14 0.9742 51.00
3 6.7 15 to 27 2.6712 139.84
4 5.4 28 to 48 3.9686 207.76
5 3.2 49 to 98 6.1198 320.37
6 30.0 99 10.5254 551.00
20
Other Changes

• SCIC (significant change in condition)
• Gone to the Wind

21
Other Changes

• The Outlier ratio has changed
• Will result in fewer episodes that will qualify
  as an outlier

22
Other Changes

• LUPA Add On
• Very 1st Episode or 1st in a series of adjacent
  episodes
• 87.93 additional for the episode
• Supposed to cover the additional cost of an
  initial assessment

23
Whats Next?
24
Calculate Agency Impact

• Understand and measure the financial impact to
  your prior episodes
• List every episode
• Attempt to get the following
• DX
• Visit totals by discipline
• Episode dates
• Episode payment
• Patient name

25
Calculate Agency Impact

• Measuring
• Sort by client
• Summarize between early and late episodes
• Summarize early and late episodes by therapy
  utilization group
• Apply industry estimates by category

26
Sample Real World Analysis
Home Health Agency Home Health Agency Home Health Agency Home Health Agency Home Health Agency Home Health Agency Home Health Agency Home Health Agency Home Health Agency
Episode Analysis Episode Analysis Episode Analysis Episode Analysis Episode Analysis Episode Analysis Episode Analysis Episode Analysis Episode Analysis

Ave episode revenue 2099
Expected change Expected change Revised Revenue
    Total Late Early Revenue Late Early  
Episodes lt 6 visits 14 73 1 72 151,128 -8.40 -8.80 139,751
Episodes 6-9 visits 13 67 0 67 140,633 34.10 18.60 166,791
Episodes 10-13 visits 20 108 3 105 220,395 1.60 -20.00 182,714
Episodes 14-19 visits 30 159 6 153 321,147 31.90 6.30 357,991
Episodes 20 visits 23 124 4 120 251,880 96.00 48.80 391,254
531 1,085,183 1,238,500


27
Analyze current case load

• Review episodes
• Sort episodes by DX codes
• Sort by HHRG
• Look for positive cases
• Lower visits
• Excellent outcomes
• Reduced Hospitalizations
• What can we learn from these

28
Analyze your operations

• Review your current operations and look for
  process changes that result in additional cost
  savings
• Use Telehealth
• Use the telephone
• Look for disease management pathways or programs

29
Analyze your operations

• Staff training on OASIS for accuracy
• Office or persons checking CWF to answer M0110
  and re-check in 2-3 week timeframe
• Coding for diagnosis very important, do any on
  line or audio courses available. Do not over use
  V codes

30
Analyze your operations

• Diagnosis sequencing extremely important. Refer
  to ICD-9 books for guidance
• Consider making 1 person a coding expert
• Use real time benchmarking systems to stay on top
  of outcomes and performance
• Consider having an OASIS QA person to make sure
  all questions are answered consistently and
  accurately

31
Analyze your operations

• OASIS QA person to be sure intent is accurate for
  all SOC, Recerts and D/C.
• Consider using HHAs for rehab that do not
  require therapies
• Check supplies to be sure you are using the most
  cost effective supply and not the most expensive

32
Analyze your operations

• Include all supplies on the bills and 485, even
  if they are supplies that are not being
  reimbursed. Be sure you know supply costs, Look
  at best practice for wound care

33
Analyze your operations

• Billable Medical Supply List Exhibit A
• Get your medical supply billing process in place
  (Payment rates in CMS Table 9)

34
Plan for Cash Flow Interruptions

• Will the Intermediaries be ready??
• Will your vendors be ready?
• Will your staff be trained?

35
Back Office Changes

• New methodology requires tracking new things
• Which episode is it
• Accurately project therapy visits
• Identify supplies or why no supplies

36
Back Office Changes

• New methodology requires clinical reporting
  changes
• New Oasis
• During transition will file both forms for
  episodes under old rules and episodes under new
  rules

37
Back Office Changes

• New methodology requires billing changes
• Results in IT interface changes

38
Technical Process Changes

• CR 5746 (Exhibit B) contains revisions to a
  number of sections for case mix policy changes
• Revises field by field billing instructions
• Describes the new coding required
• Contains detailed description of new HH pricer
  Logic
• Contains IT requirements for Medicare ET

39
Data Submission Changes

• Elimination of SCIC
• Effective episodes starting on or after 1/1/08
• Claims must NOT contain more than 1 revenue code
  0023 line
• Claims will be rejected and returned

40
Data Submission Changes

• New HIPPS coding structure requires additional
  information to determine payment
• Many new HIPPS codes

41
Data Submission Changes

• Need episode sequence and grouping step
• New HIPPS codes will begin with a number to
  represent the episode sequence and therapy visit
  grouping
• 1 early episodes and 0 13 therapy visits
• 2 early episodes and 14 19 therapy visits
• 3 later episodes and 0 13 therapy visits
• 4 later episodes and 14 19 therapy visits
• 5 all episodes and 20 therapy visits

42
Data Submission Changes

• Positions 2, 3 4 continue to report severity
  levels C F S Domains
• Clinical domain reported with letters A, B or C
• Functional domain letters reported with F, G or H
• Service domain reported with letters K,L, M, N P

43
Data Submission Changes

• Need non-routine supply severity level
• Position 5 of the code will represent NRS
• S Level 1 NRS provided
• T Level 2 NRS provided
• U Level 3 NRS provided
• V Level 4 NRS provided
• W Level 5 NRS provided
• X Level 6 NRS provided

44
Data Submission Changes

• Need non-routine supply severity level
• Position 5 of the code will represent NRS
• 1 Level 1 NRS NOT provided
• 2 Level 2 NRS NOT provided
• 3 Level 3 NRS NOT provided
• 4 Level 4 NRS NOT provided
• 5 Level 5 NRS NOT provided
• 6 Level 6 NRS NOT provided

45
Data Submission Changes

• New format for treatment authorization code
• The Claims Oasis Matching Key contains
  information needed
• The last 9 positions will carry recoding info
• 1 number to show the episode sequence (1 early,
  2 late)

46
Data Submission Changes

• 4 pairs of letters that encode the scores in the
  clinical and functional domains as calculated
  under each of the 4 equations of the refined case
  mix model
• Again, possible new format matches CR 5746
• Format will be validated by Medicare systems

47
Intermediaries Re-code Claims

• Medicare systems will validate your final claim
• Did the original episode get reported with the
  correct sequence (early or late)
• Are the therapy levels reported supported by
  actual covered therapy visits

48
Intermediaries Re-code Claims

• Errors found in sequence and therapy reporting
  will automatically adjust the codes and pay
  accordingly
• Values in the treatment authorization code will
  be used to make the determination

49
Supply Reporting

• CMS is creating a validation process
• Ensure that the 5th position of the HIPPS code is
  a letter indicating supplies were reported
• At least 1 revenue code 27x or 623 line must be
  present on the claim

50
Supply Reporting

• A Grace period will initially allow for absent
  supply lines
• Claim will be paid
• Message on the Remittance advice will alert HHA
  to the inconsistent data
• After the Grace Period claims will be rejected

51
Supply Reporting

• You will be required to report why there are no
  supplies
• For example, patient is VA and gets them through
  VA
• Supplies are not required and why

52
Supply Reporting

• Final changes will be described by CMS in a
  separate CR and implemented in April 2008
• Grace period will begin in April 2008 and extend
  for a period to be announced in the future
• Not sure what happens January through March

53
GOOD LUCK

• Overall the impact should be 50 lose and 50
  win.
• Analysis has shown the expected reimbursement
  change will hit the Midwest less than anywhere
  else
• Analysis has also shown we will lose more on
  early episodes with less than 14 visits

54
GOOD LUCK

• Analysis has shown Urban agencies will gain more
  and rural agencies will lose more
• Analysis has shown non profit agencies will gain
  more and for profit agencies will lose more

55
Get Ready

• Educate
• Analyze
• Improve quality while implementing cost saving
  processes
• Prepare for cash flow interruptions
• Implement new management tools to monitor as you
  move forward and adjust accordingly

56
PPS Home Health Reform

• Revised CMS regulations
• By
• Renee Korb, President
• Korb Consulting, Inc.