Home Health and Hospice Medicare Reimbursement: Why You Need to Take Note of These Policy Changes
Positive cash flows are just as important as profits when it comes to evaluating an organization’s performance. In the healthcare setting, both home health agencies (HHAs) and hospices rely heavily on regular cash inflows to provide timely patient care delivery. The main source of these agencies’ cash inflows are reimbursements, with the higher percentage coming from Medicare than private insurances. Year after year, policy changes are rolled out by CMS which affect payment processes and ultimately, Medicare reimbursement amounts. To keep you updated on the latest changes on Home Health and Hospice reimbursements, here are some facts you should take note of.
PDGM Home Health Reimbursement
Effective January 1, 2020, CMS finalized the Patient-Driven Groupings Model (PDGM), a new payment system for HHAs designed using a case-mix adjustment methodology. CMS implemented the PDGM with the purpose of encouraging value over volume and removing incentives for HHAs to provide unnecessary therapy care, thus reducing home health care delivery costs.
Under the PDGM, CMS will categorize your 30-day care periods (from the initial 60-day periods) into different subgroups based on admission source, timing, clinical groupings, functional impairment, and lastly, comorbidity adjustment. This adds up to a total of 432 possible case-mix groups.
Due to the change in care episodes from 60 days to 30 days, your agency will need to process billings twice as often as before. This means that there will be a shorter time frame for your submission of the initial Request for Anticipated Payment (RAP) and the final claim as RAPs are submitted on or before the 5th day of each 30-day period. Failure to do so will result in a payment reduction for each day of delay. Given this, it is important that your physicians sign the certification and plan of care documents in a timely manner which are requirements for claims processing. However in 2022, the RAP will be replaced by a one-time Notice of Admission (NOA) which employs the same deadline and penalty enforcement for delays. To know more about RAPs and their impact to HHAs, read this article.
Hospice Medicare Reimbursement
CMS released the final FY2021 hospice payment rule on July 31, 2020. The rule spells out the new national hospice payments and hospice cap amount which have both increased by 2.4% this fiscal year. The rates will continue to be subject to geographical modifications except for the hospice cap which is now at $30,683.93 per patient.
Your hospice will also be required to submit upon request an “Election Statement Addendum” which will include information on your non-covered diagnoses, services, and treatments determined to be unrelated to the terminal or primary diagnosis. The signed statement is a prerequisite for payments together with other relevant documents. It must be submitted to the requesting entity within three (3) days from request if hospice care has already started or within five (5) days from request if the request was made on the effective date of hospice election.
Forecasting cash inflows for agencies via reimbursements are made more difficult by changing industry policies. Regardless of the payment systems in place however, if services are properly rationalized and recorded, adjustments to the billing and claims processes will be easier.
Data Soft Logic, with its innovative and customer-centric software solutions, Home Health Centre and Hospice Centre, can help you keep your billing and claims submission processes up to date with the latest policy changes. To know how we can be of help, schedule a demo with us now.
