Serving the home health, home care and hospice industry since 1999.

Medicare reimbursement rates are dropping. The Home Health payment system is nearing a complete overhaul. CMS under the Trump administration seems to be continuing the goal it has had through this President's two predecessors, reduce the total number of providers, even if it means increasing rehospitalization rates and overall Medicare costs.

How do today's providers prepare to be counted among the survivors? The answer has not changed in the 20 years that have passed since the IPS disaster: if you cannot increase revenue, cut costs. Experts today are asking agency leadership to focus on utilization. As one consultant put it, "If you can get a patient better in seven visits, why are you still doing 17?"

To learn more about controlling clinical utilization, we turned to longtime Medicare reimbursement expert John Reisinger. When John realized he was giving his clients the same advice over and over, he decided to automate his expertise and form a company, "Innovative Financial Solutions for Home Health." The result is a software system that has turned dozens of agencies from the verge of closure to profitability in a matter of months.

Reisinger's "Home Health Resource Planner" is a tool that can be run on an agency's data at the beginning, middle, or end of a PPS episode. At the beginning, this web-based app enables the case manager to strengthen the correlation of the targeted care plan with the OASIS, thereby ensuring that a proper amount of resources are planned to be provided for the episode. This helps agencies improve profitability while still maintaining high quality care.

Running the Resource Planner at other times, even at the end of an episode, turns it into a tool to perform several Business Intelligence functions:

  • Budget-to-Actual comparisons
  • compare projected resource utilization with financial projections (a mini episode budget)
  • enables a comparison of outcomes between caregivers, helping an agency develop best practices, down to the ICD-10 code, and identify training opportunities
  • develop benchmarks by HIPPS group, comparing your projected average to actual, group by group
  • gathering data for use in clinician training

"For years," Reisinger told us, "there has been lots of talk about 'best practices' in home health but precious little done from an analytical perspective to identify exactly what those practices should be." The Resource Planner provides objective data from which an agency can start to develop its own internal best practices, based on specific patient conditions.

Most administrators, especially Directors of Nursing, have a feel for which staff is better suited to which type of patient. "With the Resource Planner," Reisinger asserts, "you can do a better job with data and do not need to rely on a feeling. Allocating skills for the best outcome is how you begin to develop internal best practices. And keep in mind, best practices that result in better patient outcomes also lead to cost effectiveness, a critical step as we move toward value based purchasing." He added that this is true even though the regulations did not spell it out that way.

"Budgeting, whether for an organization or for an episode/patient-encounter is an underutilized business fundamental in home health," Reisinger continued. "If more agencies incorporated this fundamental, they would find that their financial outcomes (i.e., profit margins) would increase. An agency is provided a limited amount of resources for each episode of care. The more cost-effective they can become whilst still providing high-quality care -- which can be done together -- the more profitable they can and will be!"

Data-based training

The Resource Planner was built around the concept that teaching the basics of how to complete an OASIS assessment is only one part of what a clinician must know. "Almost all clinicians have precious little understanding of the financial implications of their resource usage decisions," he bemoaned. "'If you have an issue, throw more visits or supplies at it' is a relic from the '90's that, sadly, still exists throughout the industry. I've seen it so often when I first engage a client, I am no longer surprised to see that this relic is still there."

Reisinger went on to explain that using his tool in a classroom setting helps the staff to understand, visually, that home care is not just about throwing loads of resources at any given episode. It makes clinicians face the realities of financial limitations, teaching them how to provide the proper amount of resources to care for each individual in the most cost-effective manner possible.

"The Resource Planner was not developed to make clinicians and therapists financial managers of care," he emphasized. "It was developed to make them aware of the financial ramifications of the resource usage choices they make. The idea is to encourage clinicians to leverage the knowledge, experience and expertise they have developed and support it with data to help them plan what is really necessary for each and every episode, as opposed to just doing what was (and still is!) always done."

Credit Balance Reporting

Another business intelligence function the Resource Planner makes possible is the ability to know what episode revenue should have been during the episode. "Most of the time," Reisinger explained, "credit balances are identified a year or two after the end of an episode. This way, you can compare what you were paid to what history says you should have been paid. That difference is your credit balance."

With the recent CMS release of a proposed rule to re-imagine home health payments, Reisinger is already researching the changes he will have to make to the Resource Planner. "It may have to go through a complete re-design," he told us. "Making changes for 30-day payment episodes and adding a factor for admission source will actually give management more information. They will be able to look at the difference in reimbursement between the two sources."

Asked if he had any predictions about the impact of the proposed payment plan, Reisinger shook his head. "My conjecture is that if the difference in Case-Mix Weights of institutional vs community admissions is as great as it was when first proposed last year under HHGM, there are going to be a lot more re-hospitalizations come 2020."


©2018 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Tim Rowan's Home Care Technology Report. One copy may be printed for personal use; further reproduction by permission only.