The first article of this two-part series, we reviewed the history of the split payment approach and the RAP mechanism that is standard operating procedure for Medicare certified agencies nationwide. We examined how pre-New Rule downcode concerns evolved into the current desire for predictability as a means of establishing financial stability. Today, we will examine how the emphasis on predictability in both nursing and rehab affects Start of Care programming, staff efficiency, and clinical outcomes.
     The introduction of M0 826 in the PPS New Rule refinement of 2008 marked a significant change in Home Health reimbursement. For the first time since the introduction of the Prospective Payment System, CMS proposed the concept of “up-coding” as a mechanism of final payment adjustment. Previously, M0 825 required a “yes” or “no” answer to the question of whether this episode proposed a combined total of rehab (PT, OT, and Speech) visits that would reach a pre-determined high threshold: 10 visits or more. The New Rule replacement of M0 825 with M0 826 served to identify estimated RAP level payments based on the SOC proposed visit total without the concept of a high threshold. However, with the introduction of M0 826, CMS installed a discharge billing adjustment that could move in either direction to determine final payment. So, it is important to note for our discussion: M0 826 does not determine what the agency will be paid for a particular episode, only the pace of payment. Therefore, under this latest New Rule refinement, a Home Health program completed with 9 rehab visits will receive a payment commensurate with that total, regardless of what the SOC M0 826 number states. If M0 826 is answered with the number 12, and the episode ends with only 9 rehab visits made, the agency will be paid for a 9 visit program. Likewise, if M0 826 is answered with the number 6 and the episode ends with 9 visits made (with required Drs orders), the agency will be paid for a 9 visit program. This New Rule reality casts predictability in an entirely new light. 
     The problems that result from an over-emphasis on predictability are many and affect agencies negatively in a multitude of ways. Because most agencies and clinicians are not mindful of the up-coding/down-coding realities of MO 826, variations in visit totals are viewed from a high threshold, down-coding frame of reference. Financial stewards of homecare agencies, concerned with the over-all trend of decreasing reimbursement funds, proposed freezes until 2009, and New Rule fiscal predictions, seek to stabilize budgets by focusing on the M0 826 answer and levels of adjustments to that number at discharge. As a result, a pervasive attitude towards variation from the SOC MO 826 number in ANY direction spreads throughout agencies and clinicians alike. This scenario provides an example of the lingering fee-for-service effect on contemporary programming: Home Health educators instruct agencies not to assume that “More Visits = More Margin”. Consultants urge agencies to remain mindful that if they have higher per visit costs, more visits could result in a financial loss for the episode. 
     This is precisely where this author takes issue with the contemporary thinking. Instead of seeking to determine and/or improve the quality or composition of the individual clinician and their visits, we (as an industry) seem comfortable to scratch the analytical surface with a cursory financial analysis. Our lineage as caregivers would hopefully guide us towards more clinical and outcome based delivery thoughts. The prevalence of technology based solutions to these problems serves to further isolate agencies from potential clinical solutions to these scenarios.   
     The specific effects on nursing and rehab are commonplace today and are noticeable throughout the country in almost all agencies. As nurses propose programming in terms of visits (via frequency and duration orders) at the SOC or eval, the primary focus is often to complete the program without unnecessarily increasing visit numbers. Little, if any, emphasis is placed on focusing of care to complete the episode as efficiently as possible with acceptable outcomes.
     In contrast, rehab has a more direct link to reimbursement due to the visit based Service(S) score of the HHRG and its direct relationship to payment. Unless on-going clinical management is employed as a means of controlling therapy visit content and quality, rehab clinicians often complete the initially proposed visit total rather than face discussions regarding the variation from MO 826. Somehow, the management posture of the industry takes the rehab visit at face value, despite obvious differences in levels of patient success, experience, and educational backgrounds. As a result, the message heard by clinicians often emphasizes the view of episodes as visit tallies, rather than the clinical voyages that they are.
     In closing, those of us interested in delivering our services to as many of our needy clientele as possible may want to visualize our patients in terms of care delivery excursions rather than numerical visit requirements. As we focus care by adapting best practices (HEPs with full compliance, caregiver participation, assertive use of PPS principles), we may find improved outcomes that are supported by appropriate levels of reimbursement.

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. 

The Hidden Dangers of Predictability in Home Health