Re­im­burse­ment re­vise

GAO re­port may trig­ger change in home-care pay

Modern Healthcare - - THE WEEK IN HEALTHCARE - Paul Barr

The home health­care in­dus­try may be in store for changes in how Medi­care pays its providers fol­low­ing the re­lease of a re­port from the Govern­ment Ac­count­abil­ity Of­fice high­light­ing im­proper billing by three for-profit home health­care com­pa­nies.

“The re­im­burse­ment pol­icy en­cour­ages gam­ing, and gam­ing is what’s oc­curred,” Sen. Chuck Grass­ley (R-Iowa) said in a news re­lease. Grass­ley was one of two Se­nate Fi­nance Com­mit­tee mem­bers who re­quested the re­port. He and Sen. Max Bau­cus (D-Mont.), chair­man of the com­mit­tee, called for changes to Medi­care’s re­im­burse­ment ap­proach, as did the in­dus­try’s ma­jor as­so­ci­a­tion, the National As­so­ci­a­tion for Home Care & Hospice.

“The sys­tem is flawed,” said Joe Hafken­schiel, pres­i­dent of the Cal­i­for­nia As­so­ci­a­tion for Health Ser­vices at Home, which rep­re­sents home-care and hospice providers in the state. The method for re­im­burs­ing for home care—ther­apy in par­tic­u­lar—needs to be re­worked and the GAO re­port could spur such a change, he said.

Sim­i­larly, Val Hala­man­daris, pres­i­dent of the NAHC, said in a state­ment that “We have long been con­cerned that the cur­rent model dis­cour­ages home health agen­cies from pro­vid­ing the care that was ap­pro­pri­ate for the in­di­vid­ual pa­tient needs.” He said the group commends the Se­nate Fi­nance Com­mit­tee for draw­ing at­ten­tion to the mat­ter.

Of con­cern, though, is that the CMS will use a broad ap­proach to fix the prob­lem, po­ten­tially pun­ish­ing providers that haven’t been abus­ing the sys­tem, Hafken­schiel said. “The larger is­sue is, do you tar­get the peo­ple ma­nip­u­lat­ing the sys­tem or do you pun­ish ev­ery­one be­cause of the bad ac­tors?” he said in ref­er­ence to home health agen­cies that are ad­just­ing care to max­i­mize profit. “I think there’s a grow­ing feel­ing that we need to go af­ter the fraud and abuse in the in­dus­try,” he said.

The in­dus­try al­ready ab­sorbed a 4.89% pay cut in 2011 from Medi­care and is in line to see it cut again by 3.35% in 2012, as­sum­ing the CMS fol­lows through with its plan in a pro­posed rule is­sued in July. A cut of that size for 2012 would re­sult in a de­crease of about $640 mil­lion com­pared with Medi­care pay­ments to the na­tion’s home health agen­cies in cal­en­dar 2011. The fi­nal rule is ex­pected in Novem­ber or early De­cem­ber.

Many of the prob­lems cited in the GAO re­port, in­spired by a story in the Wall Street Jour­nal, con­cern billing for ther­apy, which can change re­im­burse­ment markedly when cer­tain amounts of care are achieved. Con­gres­sional in­ves­ti­ga­tors found in an ex­am­i­na­tion of records from pub­lic com­pa­nies that Amedisys, Ba­ton Rouge, La., Gen­tiva Health Ser­vices, At­lanta, and LHC Group, Lafayette, La., “en­cour­aged ther­a­pists to tar­get the most prof­itable num­ber of ther­apy vis­its, even when pa­tient need alone may not have jus­ti­fied such pat­terns.”

“Each com­pany showed con­cen­trated numbers of ther­apy vis­its at or just above the point at which a ‘bonus’ pay­ment was trig­gered in the prospec­tive pay­ment sys­tem,” ac­cord­ing to ex­am­ples cited in the re­port. The re­port also says that Amedisys en­cour­aged man­agers to meet a 10-visit thresh­old and that LHC Group man­agers, in­clud­ing CEO and chair­man Keith My­ers, “in­structed em­ploy­ees to in­crease the num­ber of ther­apy vis­its pro­vided in or­der to in­crease case mix, a mea­sure­ment of pa­tient acu­ity, and rev­enue.”

Two of the com­pa­nies in sep­a­rate state­ments de­nied they were billing in­ap­pro­pri­ately. Amedisys wrote: “We are dis­ap­pointed with the com­mit­tee’s con­clu­sions, and we stand by our com­pany’s in­tegrity, ethics and pa­tient-care prac­tices.”

Gen­tiva wrote that the com­pany “main­tains its be­lief that the com­pany is pro­vid­ing the high­est qual­ity of care and re­ceives pay­ment within the stan­dards set forth by the re­im­burse­ment sys­tem es­tab­lished by the (CMS).”

LHC pointed to a $65 mil­lion set­tle­ment the com­pany agreed to last month (Oct. 3, p. 4) that re­solves the mat­ter of home ther­apy vis­its among other al­le­ga­tions. “LHC Group is pleased to have put this mat­ter be­hind us, and we look for­ward to work­ing co­op­er­a­tively with (HHS’ in­spec­tor gen­eral’s of­fice) un­der the terms of the cor­po­rate in­tegrity agree­ment over the next five years.” LHC wrote in a state­ment.

The re­lease of the re­port Oct. 3 was fol­lowed by steep de­clines in share prices of the four ma­jor pub­licly traded home health com­pa­nies that day, with the com­pa­nies above and Al­most Fam­ily, which was ex­am­ined by the in­ves­ti­ga­tors but not sin­gled out for ma­jor billing is­sues by the GAO, clos­ing down 8% to 33% in one day.

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