The nation's 8,500 home health agencies may still be up a creek as far as Medicare reimbursement goes. But two recent regulatory changes may give them back their paddles.
Last year the industry struggled with lower Medicare reimbursement payments mandated by the Balanced Budget Act of 1997. Now new HCFA rules that may ease data reporting requirements and simplify billing procedures could reduce the financial pressure.
On April 26, agencies were supposed to start sending the government medical information on each of their patients. HCFA wants the program, called the Outcome and Assessment Information Set, or OASIS, to monitor quality of care and help the agency design an acuity-adjusted prospective payment system to replace the current interim system by October 2000.
But the home health industry, which supports the development of a new PPS, had been railing for months about the technical and financial burden of collecting and electronically submitting patient data. As a result, HCFA is reviewing the reporting requirement. In letters to the agency and industry publications, home health agencies contended that HCFA did not adequately reimburse them for the costs of OASIS reporting. When regulations issued in January made it clear that agencies would have to collect and report data for all patients, even those who were not Medicare or Medicaid beneficiaries, the outcry over uncompensated costs grew.
Soon, however, the industry took up an issue with wider appeal than agencies' sagging bottom lines. In its March 12 letter to HCFA protesting the regulations, the National Association for Home Care noted that concern for privacy had prompted some private-pay patients to refuse to provide data. Pressure mounted as more groups took up the call for patients' rights.
In March, HCFA said it would review OASIS protocol, and early this month it postponed the effective OASIS reporting date indefinitely.
The review, undertaken at the behest of Vice President Al Gore, focuses on whether the requirement to collect and report data about the mental, physical and financial status of home-care patients violates patients' privacy.
Peter Appelbaum, M.D., a professor of psychiatry at the University of Massachusetts Medical School, Worcester, and secretary of the American Psychiatric Association, is among those who have lobbied HCFA to reconsider its OASIS policy.
"Much of the information is extremely personal and highly sensitive," he says.
The OASIS assessment includes questions about drug and alcohol dependency, mental confusion, behavioral patterns and financial status. Collecting such data would help home health nurses to create care plans, Appelbaum says.
But once the agencies report that data to HCFA, he says, "the federal government is going to know that you are sometimes incontinent or have feelings of self-reproach. That's none of the government's business."
Robert Berenson, M.D., director of HCFA's center for health plans and providers, defended data collection as an important tool for ensuring quality of patient care in an industry that, unlike the hospital industry, lacks "established professional standards about what information should be collected (on patients)."
Hospitals are not required to supply the government with similar data routinely, because they already maintain medical records covering the same indicators that OASIS tracks, he says.
Nevertheless, he calls the concerns about privacy a "legitimate public policy issue" and says that "modest changes" might be made within a few weeks.
It has been widely reported that HCFA will drop OASIS requirements for private-pay patients, but Berenson would confirm only that the matter was under review. HCFA was also considering whether to collect information that identifies patients, such as Social Security numbers, and how to enhance privacy protection through data encryption, he says.
Some home health agencies could save money if HCFA decided not to require them to collect data about patients who are not Medicare or Medicaid beneficiaries. But the change would come too late for Joan Stephens, director of Naperville, Ill.-based Delnor Home Care.
Stephens has been preparing for OASIS since 1997, when she converted the agency's information systems to improve data collection and reporting. When she learned earlier this year that HCFA would require her agency to collect OASIS data not only on Medicare patients but also on private-pay patients, she calculated the extra data collection would cost about $75,000 a year.
So, like many agency directors, she decided to duck the OASIS reporting requirements by forming a separate corporation that would serve only private-pay patients. Her license application for the new agency is pending with the Illinois health department.
Now she's wondering if the $10,000 she spent on creating the new corporation was worth it.
Another recent regulatory change, however, will benefit almost all home health agencies. After months of intensive lobbying, the industry persuaded HCFA to drop a billing requirement mandated after the passage of the balanced-budget law. The requirement delayed payments for some agencies for months.
Under the requirement, called sequential billing, agencies were barred from submitting new bills on patients until any previous bills had been paid or rejected. Between 3% and 5% of all claims go into medical review, which can take up to 60 days to be resolved.
One Illinois agency reports sequential billing bumped up the time it took to receive bill payments to 80 days from 40.
HCFA had imposed the requirement to help it keep its accounting of the two Medicare trust funds straight, because home health agencies bill to both. But agencies argued that since fiscal intermediaries decide whether bills will be paid, HCFA could wait to determine the fund from which to deduct payments. Sequential billing for home health agencies will be dropped by July 1.