VA Issues its Final Rule on Payment Regulation for Non-VA Providers
The Department of Veterans Affairs (VA) has issued a final rule that amends its payment regulation for non-VA providers to include providers of home health and hospice services. Because the newly applicable methodology cannot supersede rates for which VA has specifically contracted, the rule will only affect home health and hospice care providers who do not have existing negotiated contracts with VA. The rule also rescinds internal guidance documents that could be interpreted as conflicting.
On February 18, 2010, the VA issued a proposed rule to implement certain payment methodologies for all non-VA inpatient and outpatient health care professionals and providers, which included paying according to Medicare fee schedules and prospective payment systems, as applicable. However, when the final rule was published on December 17, 2010, the regulation included an exception for implementing the payment methodologies for home health and hospice services.
The VA cited administrative and systems problems that prevented their ability to implement the Medicare payment system for home health and hospice services on such short notice. As a result, home health and hospice providers have been paid according to a payment rate structure outlined in the 2004 VA Handbook, which for home health providers, pays for services on the Medicare low utilization payment adjustment (LUPA) rates. For hospice services, the VA uses locally calculated Medicare hospice payment rates as the maximum reimbursement rates to purchase a comprehensive package of bundled home hospice services.
In the December 2010 final rule, the VA indicated that their intention is to promulgate another proposed and final rule once they are able to apply the payment methodologies to home health and hospice services. A proposed rule was published in the Federal Register on November 21, 2011, and the final rule was published in the Federal Register on May 6, 2013. Additionally, the rule rescinds the alternative pricing methods the VA has applied to home health and hospice providers.
Effective November 15, 2013, non-VA home health and hospice providers that do not have a negotiated contract with the VA for services will be paid the lowest of the following amounts:
- The applicable Medicare fee schedule or prospective payment system amount (“Medicare rate”) for the period in which the service was provided;
- The amount negotiated by a repricing agent if the provider is participating within the repricing agent's network and VA has a contract with that repricing agent. For the purposes of this section, repricing agent means a contractor that seeks to connect VA with discounted rates from non-VA providers as a result of existing contracts that the non-VA provider may have within the commercial health care industry;
- The amount that the provider bills the general public for the same service. Home health providers will need to complete an OASIS assessment on any VA patient for which the Medicare rates will be applied in order to generate a home health resource group (HHRG). To view the final rule click here.