The Hidden Dangers of Predictability in Home Health

Part 1 of 2

      Much of the current home health educational focus addresses the predictability of programming derived from the Start of Care. We will examine some of the fiscal and clinical effects of seeking accuracy of visit totals after a SOC or initial evaluation visit. 

     The introduction of the Prospective Payment System (PPS) for Medicare home health signified a quantum shift in the basic programming mandate for this form of healthcare delivery.  Replacing the Interim Payment System (IPS) that served as a reimbursement mechanism to transition the industry from the previous fee-for-service era, the capitated PPS structure retained the partial payment mechanism historically utilized in various Medicare programs.  The homecare version of this billing procedure, the Request for Anticipated Payment (RAP), pays home health agencies approximately 60% of the total payment for the 60 day episode as determined by the HIPPS code and wage variance.  This is known as the split-payment approach.  The RAP is submitted when the first Medicare billable visit has occurred and the agency has documented verbal service orders from the physician.  When the RAP is processed by the fiscal intermediary, the episode is posted on the patient eligibility information system; the Common Working File (CWF). This informs other providers that the agency is caring for the patient during this open episode.  This is the reason why it is crucial to submit RAPs in a timely manner.

     The facts and procedures recounted above represent standard operating procedure in homecare billing departments nationwide.  This authors’ concern is not with the application of this billing mechanism, but rather the effects of the predictability this system often prompts.  Prior to the implementation of the 2008 New Rule reform, the practical application of the RAP billing was further clouded by the procedural pressures of High therapy thresholds, SCIC’s, downcodes, and LUPAs.  The residual legacy of the IPS (& other subsequent Home Health reforms), is the pervasive attitude that an accurate level of predictability is not only required, but essential, for the financial health of any particular agency.

     The concern with predictability lies not in the attempts for accuracy.  On the contrary, accuracy of programming on the Start of Care RAP can indicate a well educated and conscientious clinician that has been appropriately oriented to the Medicare PPS model and supported in their quest to craft a successful program with desired clinical results. The desire to improve accurate predictable levels as an accounting function is where the home health clinical delivery system goes off-rail.  The trend referenced here is best described by the pre-New Rule process of tracking downcodes.  When the Start of Care visit identified the patient episode as one requiring High therapy utilization (pre-New Rule level of 10 or more combined therapy visits), the RAP was submitted and the agency’s initial payment was based on the escalated level of payment for High therapy cases (approximately $2300 more than same program without 10+ therapy visits).  If, for any reason, the episode concluded with less than 10 therapy visits made, the final claim would be submitted and processed with Medicare recouping the overpaid High therapy payments from the home health agency.  Agencies who experienced these losses of expected income certainly found themselves wondering how to minimize such occurrences.  The practice of tracking downcodes as a mechanism of fiscal management became commonplace in home health agencies.  This basic scenario has evolved into the current level of desire for predictability as a means of establishing financial stability.

     Before examining the effects of predictability on the clinical aspects of homecare delivery, we must review certain facts about this topic as it applies to other areas of health care.  First, it is important to note that the issue of predictability is a non-factor in ALL other areas of Medicare Part A coverage. Acute care hospital admissions are programmed to fit DRG coverage levels; no attempts are made to further predict or tailor care plans in any other manner.  After admission, hospitals proceed to treat the patient in a manner most likely to efficiently elicit desired clinical outcomes and ultimately, discharge back to the community.  Skilled Nursing Facilities (SNFs) have up to 100 days of PPS based coverage for Part A patients, yet they make no attempts at determining or valuing any level of admission derived predictability.  They also proceed with the goal of a rapid return to function and community discharge.  Only the homecare industry seems to value predictability as a necessary component of a healthy agency.

     In the next column, we will examine the emphasis on predictability in the areas of nursing and rehab to determine the effects on Start of Care programming, staff efficiency, and fiscal and clinical outcomes.

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.