HCFA has clarified guidelines on payment of some Medicare-covered rehabilitation services after providers complained that intermediaries were threatening to cut their reimbursement.
In April HCFA issued a letter providing state-by-state hourly rates, based on hospital data, that Medicare intermediaries could use in determining reasonable payment rates for occupational and speech therapy services in skilled-nursing facilities, home health agencies and other providers.
That letter triggered protests from nursing homes and therapy providers, who said the hospital payment information was out of date and inappropriate for a long-term-care setting. They said they were worried that intermediaries would begin auditing them.
HCFA's latest letter to regional administrators, dated June 21, says the hourly payment rates provided in the April letter "should not be used as the exclusive tool in making reasonable cost determinations" for paying salaried and contract therapists.
It says intermediaries should not use the April letter to initiate special audits to find providers that are receiving high payments.
Rather, they are to continue normal auditing procedures and use the state-by-state rates published in the April letter as a factor in determining whether providers' payment rates are reasonable.
Before the second document was issued, one attorney said, intermediaries were beginning to request explanations from some providers whose payment rates exceeded the rates published in the April letter.
"Exactly what the industry feared would happen started to happen," said Donna Thiel, an attorney with Gardner, Carton & Douglas in Washington. "The clear implication was if you can't explain it, we will make an adjustment."
By the end of July, HCFA is expected to issue "salary equivalency" guidelines that would allow nursing homes or other long-term-care providers to limit what they pay an outside speech and occupational therapy contractor to what it would cost for a salaried therapist to provide a given service.