Sunday, October 19, 2008
Home Health: Part A vs. Part B


As the administrator of a home health agency in a large metropolitan area, I have recently confronted a form of competition that had not been encountered previously in our market.  With a census of 600+, it is common that we receive referrals consisting of a wide variety of patients from a great many sources; hospitals, SNF’s, assisted living facilities (ALFs), and physician offices.  Lately, however, many potential rehab patients (in assisted living facilities) we traditionally received are referred instead to Part B providers that have offices located in the residential ALF.  These Part B providers have had a department in the ALFs for 2-3 years but recently have marketed to local physicians and SNFs for referrals.  We are losing rehab (particularly ortho) patients previously referred to us for Part A services.  Our homecare consultant recommends we obtain Part B certification in order to compete.  Have you had any experience with this type of situation?


     The appearance of Part B providers in the homecare arena has been steadily increasing over the past 10 years.  The main impetus for this phenomenon may have been the installation of PPS with its capitated reimbursement prompting limited visit totals in the area of rehab.  As a contractor for multiple Medicare Certified Part A providers since the onset of PPS, this author has encountered the scenario you describe multiple times.  Many aspects of this use of the Part B benefit seem troubling, so we will examine some of the realities of Part A vs. Part B. 

     First, we must examine the difference between Parts A and B of the Medicare benefit. As we know, the Medicare benefit provides health care coverage primarily for citizens 65 and older (special needs coverage exists without age requirement).  Part A is a premium-free plan funded by FICA payroll deductions during the person’s working years.  Part A covers in-patient hospital or post discharge geriatric care (SNF or Home Health) and coverage provides payment for most of the costs associated with this care.  The Part A Home Health benefit covers 100% of the costs for the enrollee as long as qualifying requirements are met.  In contrast, Part B is a form of supplementary medical insurance that requires the payment of a monthly premium; individuals who do not want coverage may refuse enrollment.  It covers a portion of the costs of physician services, DME, diagnostic testing, outpatient rehab, and home health.  Co-payment is required in all cases and there is a yearly monetary cap on billable services.  Therapy clinics certified as Part B outpatient providers often enter into arrangements with ALFs to provide therapy services on site to the homebound client.  This is the situation you are encountering here. 

     Part B outpatient providers have been present in geriatric rehab for over 25 years. Many SNFs utilized Part B providers to staff, manage, and bill for rehab services prior to the introduction of PPS.  This arrangement became un-workable under the consolidated billing required by PPS reform.  Currently, many Part B providers market services to provide the in-home therapy services discussed here.  In my view, your agency, with its Part A status, would only compromise your primary mission by adding a Part B option. 

     Medicare Part A Home Health provides a multi-disciplinary array of services to include nursing, PT, OT, Speech, MSW, Dietary, and home health aides.  All of these services are covered 100% without co-pay required.  The OASIS requires the Start of Care clinician to identify concerns that may contribute to compromised function and add the disciplines needed to address these deficits; all with 100% coverage.  In contrast, the Part B rehab provider can only provide the disciplines available in the outpatient array of services. This excludes the nursing component.  If an ALF patient is referred to a Part B provider with PT only orders, the patient is unable to access nursing care if such a need arises.  If the same patient is referred to a Part A homecare agency with PT only orders, the OASIS should serve to identify nursing needs and the nurse can be added to the plan with 100% coverage under the Part A benefit. 

     Your ability to successfully market the Part A Home Health benefit with its full coverage and array of services seems obvious.  Patient and physician education and patient choice are relevant issues here.  The focused, individualized nature of the Medicare Part A, PPS based Home Health program is almost always the preferred delivery choice for homebound clients.  Part B delivery becomes relevant when, for any reason, the patient does not meet Part A requirements.


Arnie Cisneros is a physical therapist with nearly 25 years of home care experience.  He is the owner of Home Health Strategic Management in East Lansing, MI,  providers of clinical service management and home care consulting expertise. He is a nationally renowned speaker regarding the PPS refinements of 2008 and therapy utilization under the New Rule.