As we wrap up this year’s National Home Care and Hospice Month celebration, we’re looking ahead to 2019 and the industry changes the new year will bring. In this blog post, we’ll dive into those changes and regulations that will undoubtedly impact your organization.
2019 Medicare Home Health Prospective Payment System (PPS) and Wage Index
Centers for Medicare and Medicaid Services (CMS) issued the Home Health 2019 PPS and Wage Index on November 1. The highlights include:
- Payments to HHAs will increase by 2.2 percent ($420 million) in 2019
- Changes to certifying and recertifying patient eligibility for home health services and remote patient monitoring
- CMS has removed seven measures for the Home Health Quality Reporting Program
- Refinements to the Value-Based Purchasing model
- Finalized changes to the Patient-Driven Groupings Model (PDGM)
2020 Patient-Driven Groupings Model
Your team should spend time next year preparing your revenue cycle and operations for the 2020 PDGM. Under the PDGM, the 60-day episode of care will continue for certification, but there will be two 30-day periods for payment, and patients are placed into 216 payment groups. HHAs will still submit Requests for Anticipated Payment (RAPs).
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PDGM will use new case-mix methodology. Each 30-day period is grouped into one of 12 clinical categories based on the patient’s main diagnosis.
The good news for Medicare is that improper payments to home health providers decreased nearly $7 billion from 2015 to 2018, according to CMS. Because of its success in reducing improper home health payments, CMS will continue to scrutinize home health claims.
For the best example of continued CMS efforts to head off improper payments, look no further than the updated Pre-Claim Review Demonstration originally launched in 2016, now called Review Choice Demonstration (RCD).
RCD is scheduled to begin in Illinois on Dec. 10, 2018, with expected future roll-outs in Ohio, North Carolina, Florida and Texas. RCD is a five-year program that offers providers more review flexibility with three participation choices:
- Pre-Claim Review
- Post-Payment Review
- Opt Out
While offering choices does add more flexibility for HHAs, each choice brings extra manual work and costs. To learn more about reducing these burdens and proactively preparing for RCD, check out our brand new eBook, Getting Ready for Review Choice Demonstration.
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PDGM makes assumptions about provider behavior that may lead to negative rate adjustments. Providers must code diligently and take measures to carefully document clinical and billing activity. Additionally, coding will be even more important under the new PDGM clinical groups because it could put a patient into a different classification, meaning you may get more or less reimbursement based on the codes you use. You may also increase your audit risk if you fall outside what CMS considers normal averages for coding and reimbursement rates.
PDGM bottom line: Prepare and train, train, train.
As CMS grows more open to reimbursement for telehealth services and remote patient monitoring, 2019 should find agencies developing telehealth service programs. In October, CMS proposed a rule that would give Medicare Advantage plans more flexibility to offer telehealth benefits to all enrollees, regardless of whether the patient resides in an urban or rural area. If implemented, the proposed changes would go into effect in 2020.
2019 Medicare Hospice Wage Index and Payment Rate
CMS released the 2019 Hospice Payment Rate and Wage Index, which went into effect October 1 for 2019. The highlights include:
- Payments to hospices will increase by 1.8 percent ($340 million) in 2019.
- Physician assistants will be recognized as designated hospice attending physicians.
- Changes to Hospice Compare to enable more efficient use of data and more public transparency. This includes changes to how the data is displayed publicly to eliminate confusion.
Home Health and Hospice Agency Mergers and Acquisitions
The industry became a hotbed for mergers and acquisitions in 2018. With aging Baby Boomers, the need for home health and hospice services continues to grow, making agencies an attractive buy for investors and smaller agencies attractive to larger organizations. Heavy M&A activity is expected to continue into 2019.
Whether your agency wants to be bought or is in acquisition mode, it’s critical to be operationally efficient. Also consider what sets you apart in the market and use that to position yourself as an attractive buyer or as attractive to buyers.
Succeeding in 2019 and Beyond
Marginal increases in Medicare payments to HHAs and hospices don’t match inflation rates. This fact, coupled with the reality that agencies are paying higher wages to attract and retain high-quality employees in a low unemployment job market, means your margins may be tight. It’s more important than ever for HHAs and hospices to be efficient and effective to maintain profits.
In a competitive, low-margin environment, knowledge is power. You must understand your operations at a detailed level. Medicare billing is complex, and not only do you need to accurately bill claims, you also need to take steps to protect yourself from an audit and extra Medicare scrutiny, which are costly to your business.
Thankfully, there are powerful, affordable tools that can help you understand the ins and outs of your billing procedures and operational performance. If you outsource your billing, it’s imperative to have total transparency into your claims and revenue cycle with tools to help you oversee your billing company’s activities. Is your outsourcing partner meeting industry standard benchmarks on your behalf?
While providers continue to face new regulations, tighter margins and more Medicare scrutiny, it’s also an exciting time for the industry. New opportunities and technologies are emerging to provide better patient care while improving operations. As we head into the new year, eSolutions is your partner in revenue cycle and compliance. We’ll help you speed up cash flow, improve margins, stay compliant and simplify your business.
Thank you to all the home health agencies, hospices and eSolutions' customers and staff team who helped make this year’s National Home Care and Hospice Month a huge success!