R48. ENSURE INDUSTRY PARTICIPATION IN DEFINING HOMEBOUND BASED ON PATIENT STATUS
R49. ENSURE PROVIDER RIGHTS
R50. ENSURE REASONABLE APPLICATION AND IMPLEMENTATION OF HOME HEALTH SURETY BOND REQUIREMENT
R51. REFINE CLAIMS REVIEW
R52. ESTABLISH REFERRAL STANDARDS AND DISCHARGE PLANNING REGULATIONS THAT ENSURE PATIENT CHOICE AND EQUAL ADVANTAGE TO ALL PROVIDERS
R53. CONTROL PAPERWORK BY REQUIRING HCFA TO FOLLOW THE PAPERWORK REDUCTION ACT
R54. MODIFY PAYMENT TO PHYSICIANS FOR CARE PLAN OVERSIGHT
R55. CLARIFY THE ROLE OF PHYSICIANS
R56. REFRAIN FROM IMPOSING MANDATORY MEDICAL DIRECTOR REQUIREMENTS UNTIL THE NEED AND IMPACT ARE STUDIED
R57. PROVIDE ACCURATE INFORMATION TO CONSUMERS AND PHYSICIANS
R58. CLASSIFY CLAIMS CURRENTLY SUBJECT TO TECHNICAL DENIALS AS "INCOMPLETE CLAIMS"
R59. STUDY THE FEASIBILITY OF TREATMENT CODES
R60. INCREASE INFORMATION AND REQUIREMENTS FOR NEW AGENCIES
R61. STRENGTHEN REQUIREMENTS FOR PUBLICATION OF POLICY CHANGES BY HCFA
R62. ENSURE APPROPRIATE ACCESS TO HOSPICE SERVICES FOR PATIENTS WITH "PALLIATIVE CARE" DRGs
R63. ENSURE TIMELY UPDATE OF LOCAL MEDICAL REVIEW POLICIES FOR HOSPICE
R64. ENSURE REASONABLE PARTICIPATION REQUIREMENTS FOR HOME HEALTH AGENCIES
R65. DEVELOP A MODEL HOSPICE COMPLIANCE PLAN IN COOPERATION WITH THE DEPARTMENT OF HEALTH AND HUMAN SERVICES OFFICE OF THE INSPECTOR GENERAL (OIG)
[TOP]ISSUE: The Balanced Budget Act of 1997 (PL105-33) contains a provision (Section 4613) requiring the Secretary of HHS to carry out a study and submit a report to Congress on "homebound" not later than October 1, 1998. This provision replaced an earlier legislative proposal to impose strict numerical limitations on how often a home health beneficiary could leave home for non-medical reasons (no more than approximately 5 times a month and no more than about 3 hours each time).
RECOMMENDATION: Delay establishment of new homebound policies until Congress has had the opportunity to review and act upon HCFA's report on homebound. Work with the industry to establish homebound definition and guidelines that:
- Ensure access to home health services as intended by the Social Security Act
- Are based on functional limitations and the clinical condition of the patient as documented in the patient record rather than arbitrary number and duration of absences.
- Do not impose burdensome documentation requirements such as detailed information about reasons, frequency, and duration of non-medical absences from the home.
- Do not limit a beneficiary's right to unlimited attendance at medical day care programs.
RATIONALE: Congress rejected the inflexible definition proposed by the Administration for homebound that prescribed limits to the frequency and duration of non-medical absences from the home. Counting frequency and hours of absences from the home will be burdensome and frequently inaccurate. Functional status and medical condition are appropriate criteria for determining whether a person can leave home, without undue hardship or negative health consequences. This information is already documented by home health agencies and therefore avoids the need for additional documentation of the frequency and duration of absences.
[TOP]ISSUE: The Health Care Financing Administration (HCFA) and the Office of Inspector General (OIG) have embarked on several projects to uncover fraud and abuse through medical review and Medicare survey activities. Operation Restore Trust (ORT) is the most recent effort to ensure integrity in Medicare, but it carries its own concerns about fairness to home health and hospice providers overall. Current ORT projects are designed to target a small number of providers with high home health utilization patterns or protracted hospice stays. These providers are subjected to sampling and overpayment projections. Some agencies have been required to pay back as much as $250,000 based on overpayment projections for a single claim denial. These overpayments must be repaid before agencies have had the opportunity to e rcise their appeal rights. In addition, high utilization agencies have been targeted for HCFA Regional Office survey. Agencies have been cited with deficiencies based on incorrect surveyor interpretation of regulations.
RECOMMENDATION: Providers should be allowed to exercise their appeal rights prior to repayment or decertification. HCFA and its contractors should adhere to rules and published manual instructions for all activities.
RATIONALE: Home health agencies and hospices may be unfairly and irreparably harmed by ORT activities that result in large financial repayment or agency decertification when based on incorrect determinations. Overpayment can be financially disastrous to cost reimbursed agencies when sampling is applied and repayment required prior to completion of appeals. HCFA's own data supports the need to allow providers to exhaust appeal rights prior to repayment. HCFA reported that 46% of coverage denials appealed at the intermediary level and 80% of the denials appealed to the Administrative Law Judge (ALJ) were reversed in fiscal year 1995 for home health and hospice providers. Furthermore, the sampling methodology used in ORT activities does not employ statistically valid sampling procedures. In light of the high percentage of coverage reversals on appeal, it is unfair to require home health and hospice providers to repay projected overpayments prior to completion of appeals.
In addition, incorrect survey findings resulting in decertification can be disastrous for home health and hospice providers and the patients they serve since the process requires providers to discontinue service to Medicare beneficiaries prior to completion of appeals. Providers have been irreparably harmed by this, even in cases where the ALJ later found in their favor and reinstated their Medicare certification.
[TOP]ISSUE: The Balanced Budget Act of 1997, P.L. 105-33, mandated that all home health agencies and certain other entities participating in Medicare and/or Medicaid secure a minimum surety bond of $50,000 in order to protect the programs from fraud. The provision was effective January 1, 1998.
The Health Care Financing Administration (HCFA) published implementing regulations for home health surety bonds on January 5, 1998, in the Federal Register that went far beyond the intent of Congress. While the legislation requires a minimum $50,000 bond and allows HCFA to waive the requirement in states where a similar requirement already exists, HCFA expanded on that authority in the regulations by requiring a bond which is the greater of $50,000 or 15% of previous year's Medicare and/or Medicaid revenues. HCFA placed no cap on the amount of the bond. Additionally, the regulations were crafted so that the length of time for which the surety company was liable could be as long as six years. As a result, many surety companies would not write surety bonds for home health; other companies required that agency administrators or owners provide personal guarantees or post collateral two or three times the full value of the bond. Most home health agencies were unable to secure bonds. In the regulations, HCFA waived the requirement for government-run agencies (even though the statute did not expressly allow this), but HCFA made no attempt to exempt providers with proven good track records.
In an effort to address concerns about the January 1998 regulations, HCFA published changes that responded to the criticisms of the surety industry, but that failed to address home health agencies' concerns. The Small Business Administration (SBA) petitioned HCFA to withdraw the rules, citing, among other concerns, the threat the regulations posed to agencies as small businesses.
Both the Senate Special Committee on Aging and the Senate Committee on Small Business held hearings on home health surety bonds. Witnesses from the SBA, home health and the surety industries all expressed concern over HCFA's regulations. Finally, in the wake of overwhelming Congressional objection and the threat of passage of resolutions introduced by Senator Kit Bond (R-MO) and Representative Jim Nussle (R-IA) formally disapproving the surety bond regulations, HCFA was forced to withdraw the compliance date for agencies to meet the bonding requirement. HCFA agreed to await the results of a Congressionally requested General Accounting Office study prior to developing new regulations. In no case are the new regulations to require compliance with the surety requirement before February 15, 1999.
RECOMMENDATION:HCFA should apply the surety bond requirements only to agencies with poor records of repayment to Medicare and/or Medicaid or to new agencies wishing to participate in the program(s);
HCFA should limit the surety bond amount to a maximum of $50,000;
HCFA should utilize the surety bond only as a screen to bar inappropriate providers from the programs to protect against fraud, not as insurance against any programmatic losses through unrecouped overpayments;
HCFA should require a single bond for participation in Medicare and Medicaid rather than two separate bonds;
HCFA should honor the notice and comment requirements in the Administrative Procedures Act in promulgating regulations to implement the surety bond requirement;
HCFA should comply with all procedural requirements of the Small Business Regulatory Enforcement Act in developing regulations for the surety bond requirement;
HCFA should establish objective criteria for agency eligibility for a repayment plan;
HCFA should explore more targeted approaches to resolving the root causes of problems related to recoupment of overpayments, including requiring that agency operators have sufficient knowledge of Medicare prior to opening an agency. Serious consideration should be given to alternatives that are better measures of an agency's competence and worthiness to participate in Medicare than imposing surety bond and similar requirements. Alternatives to a surety bond approach include requiring the demonstration of financial management ability and knowledge of Medicare coverage and participation requirements.
RATIONALE: Unrecouped Medicare home health overpayments amount to less than 0.2% of home health outlays. Given this fact, applying an across-the-board surety bond requirement that is onerous and difficult for many agencies to meet is counterproductive and will limit the availability of important home health services. Home health, for the most part, is not a capital-intensive industry. Rather, many agencies are small businesses that are established because of a commitment to providing vital services to needy beneficiaries. These agencies have limited financial reserves. Meeting any requirement that focuses primarily on capital does not necessarily demonstrate an agency's understanding of Medicare policies, nor does it gauge an agency's motivations for getting into the home health business. Unrealistic or excessive requirements could preclude all but the most highly-capitalized providers from entering the program, discouraging many highly-scrupulous and capable providers from participating in the program and threatening beneficiary access to care.
[TOP]ISSUE: Currently, less than 4% of all Medicare home health claims and even fewer hospice claims are reviewed. It is cost prohibitive to perform a claim-by-claim review. Claims denial must be based on the information contained in forms and records and based on the individual beneficiary's medical condition. Those claims that are reviewed require submission of extensive records that is costly and time-consuming for both providers and RHHIs. Payment is often delayed because intermediaries fail to review records in a timely manner.
HCFA has instructed RHHIs to direct medical review efforts towards claims where there is the greatest risk of inappropriate program payment. Intermediaries have responded by implementing processes to analyze utilization and billing data. After analysis of the data the intermediaries conduct test edits whereby they suspend claims for medical review for four to six weeks to determine if inappropriate billing has occurred. Individual providers that appear to have billed inappropriately are notified and remain on Focused Medical Review (FMR) for a minimum of three to four months.
Fiscal intermediaries have developed local medical review policies that deny coverage to home health as spelled out in HIM-11.
RECOMMENDATION:
- Identify 485 data elements that can be submitted electronically in response to a request for medical review (such as from the electronic 485).
- Direct focused medical review efforts at non-technical issues.
- Establish guidelines for provider-specific focused review to ensure cost-effective utilization of limited resources.
- Commit resources to educational activities to address issues noted in focused review.
- Establish minimum standards for RHHI medical review staff.
- Develop a procedure for providers to explain utilization variations prior to making decisions to place them on FMR.
- Instruct fiscal intermediaries to develop local medical review policies (LMRP) that clarify coverage rules rather than establish more restrictive policies and limit coverage.
Require RHHI to make coverage determinations within a reasonable time for claims under prepayment review.
Limit medical review to 4% of claims except in cases of demonstrated cause.
RATIONALE: Claims review must be refined in its targeting to become productive, rather than to remain a labor-intensive, cost-intensive activity. However, claims review must continue to act as both an ongoing educational device and a deterrent to abusive claims submission. LMRP should not limit coverage of care to which beneficiaries are entitled. Agencies are under severe financial hardships when payments are delayed weeks and, in some cases months, while under the intermediary review process.
[TOP]ISSUE: The home health and hospice industry has expressed concern about regulations and practices that may result in steering patients to certain providers. The root issue is patient's ability to freely choose a qualified home health provider and ensure a level playing field for providers of all types. The Balanced Budget Act of 1997 requires discharge planning to include provision of a list of all Medicare certified HHAs that request to be listed in the patient's geographic area. In addition, the discharge plan may not specify or limit qualified HHAs and must identify those entities to whom the patient is referred in which the hospital has a disclosable financial interest.
HCFA published proposed hospital CoP on December 19, 1997 that includes BBA provisions. The regulations require the list of agencies be included in the patient record as part of the "discharge planning evaluation."
RECOMMENDATION: Work with the industry to establish referral standards and/or discharge planning regulations for all Medicare participating providers and suppliers to ensure that patients have freedom of choice in selection of qualified home health and hospice providers.
- Available providers should include all that provide post-hospital services, including but not limited to HHAs, hospice and HME.
- Revise the documentation requirements to eliminate the list of providers in the patient's record and replace with documentation that the patient was notified of available providers and ensured freedom of choice.
RATIONALE: The Social Security Act, at 42 USCS ¤1395a, guarantees freedom of choice by requiring that: "any individual entitled to insurance benefits under this title (42 USCS ¤¤1395 et seq.) may obtain health services from any institution, agency, or person qualified to participate under this title "if such institution, agency, or person undertakes to provide him such services." Discharge planning regulations "Discharge planning regulations" and referral standards would ensure compliance with patient rights legislation. Hospital discharge planning regulations for ensuring patient choice that provide for the dissemination of information to consumers about home health services available in their communities will help guarantee that all providers will have an opportunity to compete in the market but similar regulations are needed for hospice. Similar regulations are needed to govern referrals made by all providers and suppliers.
[TOP]ISSUE: Excessive and duplicative paperwork both increases costs and can have a detrimental impact on quality as it takes more and more staff time away from patient care. HCFA plans to require collection and eventually submission of patient assessment data as a way to measure quality of care. The paperwork burden of this requirement has yet to be determined.
The Paperwork Reduction Act of 1980 requires that before a government agency begins or revises information collection, it must make sure the information is not collected elsewhere and reduce to the extent possible the burden on the persons required to provide the information. Approval must be obtained from the Office of Management and Budget (OMB).
RECOMMENDATION: Promote paperwork reduction by elimination of duplicative information and establishment of efficient procedures. New policies that may increase paperwork should not be instituted without a cost-benefit analysis that supports implementation and appropriate payment to compensate providers for the added paperwork.
RATIONALE: According to HCFA, the Home Health Initiative has been undertaken to improve the Medicare home health benefit and promote more efficient use of limited financial resources. Paperwork reduction and the development of efficient and effective documentation tools and procedures should be a vital part of HCFA changes. Any increased paperwork requirements should have benefits that outweigh the costs. The reimbursement system must be adjusted for any new requirements imposed on home health providers.
[TOP]ISSUE: HCFA published regulations effective January 1, 1995 allowing physicians to bill Medicare for time that they spend in care plan oversight activities for patients receiving Medicare covered home health services (42 CFR ¤414). In order to bill for these services, the physician must spend at least 30 minutes or more in a calendar month on oversight activities. Physicians "Physicians" may bill only one care plan oversight charge for a patient in a calendar month, regardless of how much time they spend in excess of the 30 minute minimum time requirement. Hospice medical directors have been excluded from payment for care plan oversight payment, even if the hospice medical director is a volunteer who is also the patient's attending physician.
RECOMMENDATION: Payment for care plan oversight should be enhanced as follows:
- Time spent by a physician in care plan oversight activities in excess of 60 minutes should be studied and guidelines established for additional compensation to the physician.
- Physician payment should be extended to qualifying care plan oversight services provided on behalf of patients receiving home care services outside of a Medicare covered home health plan (e.g., Medicaid services, Medicare beneficiaries receiving noncovered home care services).
- Volunteer hospice medical directors should be paid for care plan oversight activities for those patients for whom they also serve as the attending physician.
RATIONALE: The 1995 rule is a first step in the process of encouraging physician involvement in the delivery of home health and hospice services. But, in order to accomplish this end effectively, this compensation should be extended beyond beneficiaries receiving covered home health services and to those volunteer hospice medical directors who are not paid by the hospice for their services. Fair compensation is needed for the management of care of those complex, unstable patients requiring more than 60 minutes a month of the physician's time to ensure that these individuals receive appropriate care and remain at home.
[TOP]ISSUE: HCFA is exploring what the role of the physician in home care should be, from a quality of care and gatekeeper perspective. From a professional practice perspective, physicians must be involved in home care to prescribe medical treatment and provide input for total care management. The American Medical Association and the American Academy of Home Care Physicians "Physicians" are in agreement with the need for physician involvement in home care.
Medicare requires physician orders for medical treatments as well as all other care provided by the home health agency, including aide services. Other professionals are capable and competent to initiate their own independent practice orders and direct the care of home health aides. The current role of the physician is to prescribe medical treatments, certify the patient as eligible for home health benefits, and authorize the entire plan of care, serving as a "gatekeeper." In practice, the home health agency develops the plan of care and the physician reviews, modifies as appropriate, and signs it. This may signify true physician involvement or merely paper compliance. However, if the physician is not seen as a gatekeeper, HCFA may seek other external case managers.
Nurse practitioners and physician assistants have authority to prescribe medical treatments and medications in most states. However, according to HCFA, Medicare legislation requires a physician signature on a comprehensive plan of care for all home health patients. This requirement limits the practice of these professionals and may interfere with access to home health services, particularly in rural areas.
RECOMMENDATION:
- Continue with the physician role for gatekeeping functions of eligibility certification and authorization of Medicare covered services.
- Define and differentiate between "plan of care" requirements (physician orders for medical treatment and management) and care plans.
- Support the physician role for medical management: orders for medical treatments.
- Limit application of the physician authorized plan of care requirement to patients receiving skilled services for treatment of a medical condition.
- Allow nurse practitioners and physician's assistants to sign the Medicare plan of care on behalf of the physician where permitted by state law.
RATIONALE: Strictly from a quality of care perspective, physicians do not need to authorize the total plan of care, but they must provide direction for medical treatment. A physician's directed and signed plan of care should not be required for home health services not considered medical treatments subject to a physician order, unless required for payment.
Physicians should be considered an integral part of the team for managing medical care. Because HCFA and legislative bodies will always require some external oversight for Medicare service authorization, using the physician for this purpose is more cost effective than developing an external case management system. Since the HHA will need to continue working with physicians for medical management, adding an external case manager would increase costs through additional paperwork, phone calls, etc. The physician's authorization for services is presumed to be medically reasonable and necessary for medical treatments and also protects against arbitrary denials for Medicare covered services.
However, it is counterproductive to limit the scope of practice of nurse practitioners and physician assistants working for physicians. These professionals can prescribe home health services and fill the role of gatekeeper as effectively as the physician.
[TOP]ISSUE: Over the past several years the issue of mandatory medical direction of home health agencies was discussed by HCFA as a potential means of providing additional clinical oversight for home health agencies. The universal introduction of medical direction could help ensure quality of care, compliance with home health regulations and accountability for patient care. Medical directors could help bridge communication gaps between a home health agency and a physician's office. The use of a physician on staff at a home health agency could assist in the implementation of the most appropriate clinical services while working to clarify the status of homebound patients. Unfortunately, the additional costs of medical direction would place undue financial burdens on the home health agency.
RECOMMENDATION: Study the need and benefits of mandatory medical direction as well as the impact of such requirements on access to the home health benefit and cost to the Medicare program.
RATIONALE: Increased physician involvement could greatly enhance the home care delivery process. However, agencies in some areas of the country may not have access to qualified medical directors. In addition, under IPS, home health agencies are already struggling to survive financially. HCFA estimates that, under current policies, nearly all agencies will receive less than their actual costs of providing care. Many costs, including most costs associated with OASIS , are not reimbursed. Under the modest improvements offered by the 105th Congress, most agencies will continue to sustain considerable unreimbursed costs. Therefore, it would be impossible for all agencies to comply with a mandate to have a physician on staff unless full reimbursement is guaranteed.
[TOP]ISSUE: Physicians beneficiaries and their families do not have access to comprehensive information about home health agencies (HHAs), hospice agencies, and covered services to make informed decisions. Adequate information is essential for beneficiaries and physicians to make informed decisions about care options as well as to participate appropriately in the fraud and abuse activities HCFA and Congress have established. Beneficiary and provider groups have commented that communication improvements are needed to inform physicians and beneficiaries about services available to them. Beneficiary brochures have been developed by HCFA, but they do not contain information about patients' rights under the Medicare home health and hospice benefits. Information developed for physicians does not include adequate explanation of their role, coverage criteria, and clear definitions of the terms "homebound," "medically necessary," and "terminally ill." Also, it has been suggested that beneficiaries, upon admission to home health, may be signing more forms than are necessary and are not adequately informed about what they are signing or why.
RECOMMENDATION:
- Work with the home health and hospice industry to develop informational products.
- Develop a more comprehensive standard information brochure about Medicare covered home health and hospice services and agency requirements, including a patient rights statement, that all HHAs and hospices distribute to patients on admission.
- Permit agencies to continue to develop their own policies and procedures for consent for services.
- Develop brochures for patients and physicians which define "medically necessary," "homebound," and and correctly describe eligibility and coverage rules.
RATIONALE: Standardized information about the Medicare benefit will promote delivery of consistent and accurate information to patients. The current patient rights regulation and application in the survey process lead to long and complex rights statements that may not best inform patients, but are developed to pass the survey.
In order for physicians to take an active and responsible part in ordering and gatekeeping home health and hospice services, they must be fully informed of the breadth of the benefit and eligibility requirements. Physicians and beneficiaries cannot provide meaningful information about potential fraud and abuse unless informed.
Agencies need to be able to develop their own consent procedures for meeting legal and liability requirements which may vary from state to state. Therefore, it would not be practical for HCFA to develop standardized consent forms.
[TOP]ISSUE: The Health Care Financing Administration (HCFA) requires Regional Home Health Intermediaries (RHHI) to issue a Medicare denial when a claim is reviewed and fails to meet technical requirements. Examples of claims that result in issuance of technical denials include failure to: record the verbal order date on the plan of care, secure physicians' signatures on all verbal orders prior to billing (including minor treatment changes), and date the receipt of signed orders if the physician has not dated his or her signature. These denials are often appealed and overturned, a process that is time-consuming and costly for providers, RHHIs and ultimately, the Medicare program.
HCFA has a procedure in place for handling "incomplete claims" that is described in the Medicare Intermediary Manual, ¤3605.1. An incomplete claim is defined as "any claim missing required information." These claims may be returned to the provider as "unprocessable" and may be resubmitted once a correction is made.
RECOMMENDATION: Treat claims that are presently issued technical denials because they are missing information as "incomplete claims." Notify providers of the reason that their claims cannot be processed. In cases where the problem is discovered on post-payment review, require repayment. Allow providers to resubmit these claims for payment once the incorrect or incomplete information has been received.
RATIONALE: Handling claims with missing information as "incomplete claims" is more efficient than issuing a denial. The "incomplete claims" procedure should significantly reduce the number of costly appeals filed by providers in cases where services have been delivered according to Medicare program regulations but where paperwork requirements were missing.
[TOP]ISSUE: Home health billing is based on revenue codes for each discipline, but there is no mechanism to identify what was done on the visits. When the 486 was in use, treatment codes were documented, but were not correlated to the claim. HCFA is considering the use of CPT or HCPCS codes for home health services.
RECOMMENDATION: Initiate a task force to identify specific information needs that could be addressed by instituting treatment codes for home health. For example, would that information contribute to the medical review process or payment methodology? If it is determined that treatment codes would be useful, a demonstration study to show feasibility and cost-effectiveness should be conducted. Development of treatment codes should address the following issues:
- Simplicity and clinical relevance.
- Consistency among disciplines, e.g., both nursing and physical therapy perform management and evaluation.
- Use existing coding schemes (ANA, Georgetown, Omaha, Iowa), if possible.
- Capacity for multiple codes per discipline.
- Evaluation of impact, e.g., each visit coded separately.
- If treatment codes are mandated, aggregate data should be made available to providers on an annual basis.
RATIONALE: Before proceeding with development of a treatment code scheme for home health, there must be a thorough understanding of why they would be used. Treatment codes "Treatment codes" on the UB-92 may help with medical review and would also provide data that could be linked to payment methodologies and quality assurance. However, it is not known what level of detail would be required and the feasibility of such a system. For example, would each visit have to be coded separately? Before additional data is required, there should be demonstrated usefulness and cost-effectiveness.
[TOP]ISSUE: There has been a tremendous increase in the number of Medicare-certified home health agencies/hospices. Currently, there are over 10,000 certified HHAs and over 2,100 hospices. Federal funding to carry out survey activities has not increased commensurate with the growth in providers. Agencies can obtain a copy of the Conditions of Participation (CoP) from the state survey agency prior to their certification survey, but do not receive the coverage, billing, and cost reporting guidelines until they are already certified.
Certification of new agencies is based upon compliance with the CoP but there is no test for knowledge of Medicare coverage, billing procedures, or business acumen. There is concern that some of these new agencies are ill-prepared to operate a Medicare business, since, according to HCFA, many fail within the first three years of operation. The Balanced Budget Act of 1997 (PL105-33) requires HHAs to purchase a surety bond, thus protecting the Medicare program from financial losses due to failed agencies. HCFA published initial capitalization regulations for new providers requiring three months of operating capital at the time a provider number is issued. The proposed CoP contains provisions to strengthen administrator qualifications.
RECOMMENDATION:
- Make available training and materials on requirements for Medicare-certified HHAs and hospices, including CoP, coverage, billing, cost report and audit/reimbursement in advance of applying for certification.
- Charge a fee for precertification materials and training.
- Require prospective agencies to demonstrate compliance with the CoP, knowledge of coverage guidelines, and ability to implement billing and accounting procedures before certification is granted.
- Require administrators to have a bachelor's degree, education in administration or management, and education in finance as well as a minimum of two years of experience in health care management and experience in financial management.
RATIONALE: Surety bonds ensure repayment to the government but do little to prevent agency failure. Initial capitalization "Initial capitalization" ensures availability of operating funds during the home health agency start-up phase, but does not address the issue of provider knowledge of Medicare rules. Detailed information available to prospective providers on the complexity of Medicare requirements and procedures will act as a deterrent for those who are not prepared to meet the requirements. HCFA resources should be allocated to make sure new agencies can perform successfully to prevent significant and costly problems that develop if the agency is not proficient in the complex coverage, billing and cost-accounting procedures. Qualified administrators are essential to ensure quality HHAs.
[TOP]ISSUE: Over the past few years, the Health Care Financing Administration (HCFA) has issued numerous changes in policy through program memoranda, interpretive guidelines, and manual provisions which affect the day-to-day administration of the Medicare home health and hospice benefits. For example, HCFA has recently changed its policy standards for determination as to whether a home health agency is authorized to operate branch offices. However, this policy and many others of like kind are developed and issued outside the regulatory process, thereby placing affected parties at risk of noncompliance since there is no formal notification process. In addition, some of these changes exceed regulatory authority.
RECOMMENDATION: HCFA should conform to section 1871 of the Social Security Act, 42 USC ¤1395hh that requires that any statement of policy which establishes or changes the standards governing program operations, whether as a rule of law or an interpretive guideline, be promulgated only by way of a regulation with prospective effect.
RATIONALE: HCFA has ignored section 1871 in all but limited circumstances claiming that most policy changes do not represent a change in a substantive legal standard since administrative bodies have the authority to reject the standard. However, the day-to-day administration of the Medicare program is governed by these guidelines and providers of services should not be obligated to challenge policy changes that are implemented without their knowledge and with retroactive effect. At a minimum, all policy changes should be subject to publication in the Federal Register prior to effective date.
[TOP]ISSUE: The ICD-9-CM code, V66.7, a secondary code called "Encounter with Palliative Care," was created for health care providers across all settings to identify patients who are no longer seeking curative care. The Health Care Financing Administration (HCFA) is requiring physicians, hospitals, skilled nursing facilities/nursing facilities (SNF/NF), home health agencies, and hospices to use V66.7 in order to track the incidence of palliative care and study the need for a new hospital DRG rate for palliative care.
RECOMMENDATION: Require physicians and other health care providers to: 1) assess patients whose admissions have been coded with a palliative care DRG for hospice eligibility; 2) provide information about hospice services and the availability of hospice programs as appropriate; and 3) include referrals to Medicare-certified hospice agencies in the discharge planning process as appropriate.
RATIONALE: All patients are entitled to information about their rights concerning end-of-life decision-making. The Patient Self-Determination Act (1902 (a) (57) of the Social Security Act) requires that health care providers inform patients about their rights to make decisions concerning medical care, including the right to accept or refuse medical or surgical treatment, and the right to formulate advance directives. Major studies published in the past several years have shown that the last wishes and/or written advance directives of seriously ill patients are often misunderstood or not heeded by physicians and other health care professionals.
A palliative care DRG code that identifies patients who are no longer pursuing curative care should require physicians to discuss end-of-life options with their patients, document the patients' wishes, and provide information and referral to appropriate services, including hospice services.
Patients who have been identified by their physicians as receiving palliative care are entitled to comprehensive information about relevant services, including hospice care. The Social Security Amendment Act of 1995 requires hospitals, as part of the discharge planning process, to include information about hospice services to appropriate patients. A palliative care DRG code should trigger a discharge planning assessment for palliative services in the community to ensure continuity of care across all settings. If the patient has a prognosis of six months or less, discharge planning services should include adequate information for the patient and family to make an informed choice about receiving hospice services.
[TOP]ISSUE: In response to intense scrutiny of long-stay hospice patients by the Office of the Inspector General (OIG), the Health Care Financing Administration (HCFA), and Regional Home Health Intermediaries (RHHI), the hospice industry developed Medical Guidelines for Determining Prognoses in Selected Non-Cancer Diseases (Guidelines). HCFA converted these Guidelines into model hospice LMRP that are used to make local medical coverage decisions. HCFA has effectively created national policy for determining hospice eligibility without broad industry input through the circuitous route of LMRP.
The current hospice LMRP promulgated by HCFA (Guidelines) limit the policies to a set of medical variables and clinical signs and symptoms that are used to predict a prognosis of six months or less for terminally ill Medicare beneficiaries. Claims reviewers using the LMRP are given no instructions or guidance to take into account the physician's clinical judgement and the psychosocial dimensions of the illness for determination of coverage decisions.
In addition, there are no guidelines or timeframe for updating LMRP. The current hospice LMRP state that the medical criteria contained in the policies "form a reasonable approach to the determination of life expectancy based on available research, and may be revised as more research is available." However, there are no time parameters included in the policies, nor are there any "triggers" to require automatic review and revision.
RECOMMENDATION: Publish future hospice medical review policies in the Federal Register for public review and comment or allow broad dissemination of proposed policies through national and state associations representing the hospice industry so that comments can be compiled and recommendations returned to HCFA.
Add the following criteria to LMRP to provide additional guidance to medical reviewers in determining the appropriateness of hospice admissions or recertifications:
Create an additional LMRP similar to the "General Guidelines" section of the Guidelines, to allow for appropriate supplemental documentation;
Encourage the use of multiple LMRPs to document co-morbidities so that all conditions, and not just the primary diagnosis, are being reviewed;
Require review of documentation of the psychosocial dimensions of the terminal illness by medical reviewers; and
Require documentation by the reviewer of the date of patient's death, as appropriate, while enrolled in the hospice benefit or after discharge from the benefit.
Perform annual reviews of the LMRP and revise the policies based on available research and other pertinent findings relevant to the determination of a prognosis of six months or less.
Require that when making Medicare claims determinations, great weight be given to the opinion of the treating physician. If the physician believes in his/her best medical judgement that the patient is appropriate, a system of expedited review prior to benefit termination should be created to handle such claims.
Require review or additional documentation prior to issuing denials.
RATIONALE: It is inappropriate to establish national policy either in isolation or at the local level. Local medical review policies "Local medical review policies" should be limited to policies that can and should reflect local beliefs, values, and standards of practice. Criteria for determining a prognosis of six months or less (eligibility for hospice services) is not a matter to be decided at the local level but rather by a set of scientifically determined variables, signs, and symptoms for discrete diagnoses based on research and clinical judgement. With the broad dissemination of proposed policies, either in the Federal Register or through national or state associations, the resulting LMRP will better reflect the current state of the art of prognostication and best practices in determining a life expectancy of six months or less for Medicare beneficiaries.
Even though prognostication for terminal illness is a science in its infancy and the Guidelines reflect best scientific "guesses" rather than absolute fact, the Guidelines have provided structure and standards to hospice admissions, assessments, and recertifications. However, the Guidelines only address the medical aspects of the terminal prognosis, further limiting the scope and depth of the review process. Additional instructions regarding review of clinical judgement and psychosocial dimensions must be included in the "Description" section of the policies to ensure adequate access to the benefit.
There is concern that the LMRPs may have a chilling effect on referrals of terminally ill Medicare beneficiaries for hospice care because treating physicians will view the LMRPs as actually limiting hospice coverage. Assuring the physician that his/her clinical judgement will be taken into consideration will help to eliminate this perception.
Although the LMRP indicate that policies may be revised as more research is available, absent a timetable, the policies could quickly become outdated and inappropriate tools for medical review. Further, the LMRP identify covered and non-covered ICD-9-CM codes, which may also need to be changed with new information. Annual reviews of the policies are needed in order to keep them up-to-date and consistent across all regions.
[TOP]ISSUE: In September 1997, in response to allegations of fraud, waste, and abuse in federal home health program, President Clinton imposed a temporary moratorium on new certifications of home health agencies. The moratorium was to be kept in place until regulations governing initial capitalization for new home health agencies were published and implemented. The Administration also signaled its intention to impose additional requirements on new home health agencies, including that agencies have a client base of a specific size (for example, that an agency be serving at least 10 non-Medicare clients) prior to certification.
At the same time, it was announced that the Health Care Financing Administration (HCFA) would propose regulations requiring existing home health agencies to undergo a re-enrollment process every three years. This proposal included a full-fledged independent audit of agency records and practices and requires provision of information on ownership of related businesses.
HCFA published regulations governing new agency initial capitalization standards as an interim final regulation on January 5, 1998, in conjunction with its publication of home health surety bond requirements. Under the regulation, which was effective on January 1, 1998, all agencies newly seeking certification under Medicare or Medicaid must prove that they have three-months liquid operating capital, only 50% of which may be borrowed.
RECOMMENDATIONS:
- Address the cash-flow problems that may be created under the initial capitalization requirement by the lengthy waiting period between application and survey.
- With respect to the reapplication and audit requirements for existing home health agencies, ensure that the costs of the audit are reimbursable program expenses.
- Explore alternative requirements for participation in the Medicare and Medicaid programs, such as staff credentialling and/or certification in financial management and other areas of administration, that would more directly address concerns about agency compliance with program requirements.
RATIONALE: Imposing initial capitalization criteria on new home health agencies, provided the agencies may use that capital to maintain cash flow in the early months of operation, is a sound program requirement. However, the regulation requires that capital be available upon application for certification and also at the time of an agency's survey. Because the length of time that may transpire between application and survey can be as long as nine months, this requirement may place severe financial constraints on an agency.
Periodic audits for existing agencies are advisable to ensure that agencies are maintaining a high standard of operations. However, given the payment system for home health care (particularly under the Medicare interim payment system) most agencies are operating with lower reimbursement levels than their actual cost of providing care. Any audit requirement must be fully reimbursable under Medicare.
[TOP]ISSUE: In efforts to reduce fraud, abuse, and waste in the hospice the industry OIG has announced its intent to create a model compliance plan and invited the industry to participate in crafting a proposed rule. The Hospice Association of America (HAA) has drafted language for a compliance plan in conjunction with hospice providers, the Center for Health Care Law, and other national associations.
RECOMMENDATION: The hospice industry should continue to participate in the development of a model compliance plan in cooperation with OIG, ensuring that the proposed and final rules: reflect appropriate accountability of hospice providers in complying with state and federal laws, regulations, and guidelines; do not limit or hinder patient and family access to hospice services; and provide for adequate flexibility in development, implementation, and maintenance.
RATIONALE: HAA and its parent organization, the National Association for Home Care (NAHC), have a zero tolerance policy towards fraud, abuse, and waste. The recent intense scrutiny by OIG and other federal and state agencies of hospice programs nationwide has revealed that while there is almost no incidence of fraud, there appears to be some vulnerability with abuse and waste, particularly in the areas of "long-stay" patients, hospice nursing home programs, and physician certification of terminal illness. Compounding the confusion of what is the "right thing to do" hospices have experienced ambiguous and uneven interpretation of hospice conditions of participation by surveyors as well as inaccurate and capricious claims review and processing by fiscal intermediaries
HAA has already taken measures to educate hospice providers on these issues. HAA has also cautioned OIG on the need to more appropriately and accurately assess the perceived vulnerabilities because of limited scientific information in determining a prognosis of six months or less. Medical guidelines, developed by the industry and incorporated in hospice local medical review policies, are being used to assess admissions and recertifications. In addition hospice providers have access to ongoing national and regional educational programming focused on compliance issues.
All of these experience and activities will contribute to a more "user-ready, user-friendly" compliance plan. The compliance plan should be based on more than OIG's experience in hospice fraud, waste, and abuse investigations, HCFA's outdated and unevenly enforced rules and regulations, and fiscal intermediaries' capricious claims reviews and payment decisions. Leadership by HAA and other national associations is essential in crafting a plan that will result in a compliance plan that makes sense for patients, families, providers, payers, and enforcers.