The Balanced Budget Act of 1997 called for the implementation of a payment system (Medicare Reimbursement ) for Medicare Home Health Care Agency services. This section contains useful information for understanding and implementing the prospective payment system (Medicare Reimbursement ) for Home Health Care Agencies.
Medicare will pay Home Health Care Agencies a predetermined base payment or Medicare Reimbursement. The Medicare Reimbursement is adjusted for the health condition and care needs of the beneficiary. The Medicare Reimbursement is also adjusted for geographic differences in wages for Home Health Care Agencies across the United States. Medicare Reimbursement adjustment for the conditions or characteristics and services of the patient is known as the case mix adjustment. The Home Health PPS will provide Home Health Care Agencies with Medicare Reimbursement for each 60-day episode of care for each patient. If a patient is still eligible for home health care after the end of the first episode, a second episode can begin. There are no limits to the number of episodes a patient who remains eligible for Home Health Care Agecny benefits can receive nor the number of Medicare Reimbursments that correspond. While Medicare Reimbursement for each episode is adjusted to reflect the beneficiary’s health condition and needs, a special outlier provision exists to ensure appropriate Medicare Reimbursement for those patients that have the most costly health care needs. Adjusting Medicare Reimbursement to reflect the Home Health Care Agencies cost in caring for each beneficiary including the sickest, should ensure that all beneficiaries have access to Home Health Care Agency services for which they are eligible.
Medicare Reimbursement for the 60-day Episode
The unit of Medicare Reimbursement under HHA PPS will be for a 60-day episode of care. The Home Health Care Agency will receive half of the estimated base Medicare Reimbursement for the full 60 days as soon as the fiscal intermediary receives the initial claim. This estimate is based upon the beneficiaries condition and care needs. The Home Health Care Agency will receive the residual half of the Medicare Reimbursement at the close of the 60-day episode unless there is an applicable adjustment to that amount. The full payment is the sum of the initial and residual percentage Medciare Reimbursement unless there are Medicare Reimbursement adjustments. This approach provides balanced cash flow for Home Health Care Agency. Another 60-day episode can be initiated for longer-stay beneficiaries.
Case Mix Adjustment: Adjusting Medicare Reimbursement for a Patients Condition and Needs
After a physician prescribes a home health plan of care, the Home Health Care Agency assesses the beneficiaries condition and likely skilled nursing care, therapy, medical social services and home health aide service needs at the beginning of the episode. The assessment must be done for each subsequent episode of care a beneficiary receives. A nurse or therapist from the Home Health Care Agency uses the Outcome and Assessment Information Set instrument, also known as OASIS, to assess your patients condition. OASIS items describing the patient’s condition are used to determine the case mix adjustment to the Medicare Reimbursement rate. Eighty case mix groups are available for patient classification to determine Medicare Reimbursement to your Home Health Care Agency.
Outlier Payments/Medicare Reimbursement : Paying More for the Care of the Costliest Beneficiaries
Additional Medicare Reimbursments will be made in addition to the 60-day case-mix adjusted episode Medicare Reimbursments for patients who incur large costs. These Medicare Reimbursement payments will be made for episodes whose cost exceeds a threshold amount for each case mix group. The amount of the Medicare Reimbursement will be a proportion of the costs beyond the threshold. Outlier costs will be imputed for each episode by applying standard per visit amounts to the number of visits by discipline reported on the claim. Total national outlier payments/Medicare Reimbursement for Home Health Care Agency services annually, will be no more than 5% of estimated total Medicare Reimbursement payments under home health PPS.
Medicare Reimbursement Adjustments for Beneficiaries Who Require Only a Few Visits During the 60-day Episode
The proposed Home Health PPS has a low utilization Medicare Reimbursement adjustment for beneficiaries whose episodes consist of four or fewer visits. These episodes will be paid the standardized, service specific, per Home Health Care Agency visit amount multiplied by the number of Home Health Care Agency visits actually provided during the episode.