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

by Tim Rowan, Editor

The most controversial provision in the home health payment system that becomes law on January 1, 2020 needs some unpacking. CMS has decided that lower revenue levels likely to come from PDGM will motivate you to cheat. One fear is that you will elevate a secondary diagnosis code to primary if it comes with a higher payment. The other is the old "case mix creep" argument that your nurses will upcode their OASIS assessments in order to get into a higher pay category.

This brings to mind two questions. Is this how you operate? And, are the CMS assumptions valid? Let's take the second question first.

CMS starts with assumptions about how agency owners think, how they train their nurses, and how closely the clinical and financial thought processes are tied together within a home health agency. On top of these assumptions, they layered historical data – not real-world patient condition data, but claims and OASIS data – and came up with the number 6.42%. This is the deduction they will take from every provider, based on the assumption that all nurses will pad OASIS and each will pad it precisely the same percentage.

Assumptions introduce problems

First, when the punishment precedes the crime, all sorts of American principles are violated. One begins to get images of Tom Cruise arresting people from his "Future Crimes Division" of the police department. Secondly, with profit margins shrinking year after year due to previous annual rate reductions, the additional 6.42% cut creates another motivation to find additional revenue.

There is a larger problem and it is both philosophical and data-driven. Home health patients really are coming out of the hospital older and sicker and closer to death than they were even a few years ago. The suspicion that nurses are cheating is based on rising average acuity over the years. CMS cites this as evidence of upcoding but the data show OASIS assessments merely reflect a larger reality, one out of the control of home health nurses. Given the choice between blaming the rise on actual patient condition or condition that only exists on paper, CMS chooses to assume the latter. And nobody knows why.

Here is why this is more a revelation of CMS staffers' opinions of our healthcare sector than of any objective research and analysis. CMS knows that patients are discharged from hospitals in dramatically worse conditions than they were before the introduction of Home Health PPS, certainly before hospital DRGs. In 2007, they commissioned an Abt Associates study that clearly demonstrated that reality. They also know they have saved billions of dollars by demanding hospital stays that used to be 14 days should now be limited to three. Would these early discharges be possible without the availability of in-home care to pick up where hospital care abruptly left off? Of course not. Absent home health, Medicare outlays would soar to cover more hospital days and longer nursing home stays.

Peering into 2020

Back to our first question. Are poor documentation and inaccurate OASIS assessments a problem? Well, yes, unfortunately, they are the number one problem in Medicare Home Health, according to the attorneys and operational consultants we have heard from. CMS data and outside analysts have determined that more than 80% of payment denials result from insufficient, inaccurate, or incomplete clinical documentation – frequently all three. Clinician training across the country, with few exceptions, is either inadequate, ignored, or both. It would be more accurate to describe it as a crisis than a problem.

PDGM may not make the crisis worse but it will certainly make it more visible. Believable assessments, thorough visit notes, and justifiable consecutive episodes will be, starting next year, the characteristics of survivors. An owner who permits the continued employment of a nurse who cannot – or will not – upgrade the quality of his or her documentation is inviting potentially fatal scrutiny. In an agency, one nurse has the power to cause a fraud and abuse accusation that could bring the entire company to its knees. With the current four year or longer wait to bring an appeal to an Administrative Law Judge, one accusation is all it will take to tie up enough cash flow to put an agency out of business, even if it eventually wins the appeal.

Nevertheless, CMS is in error thinking that pre-punishment will solve this crisis. This is the reason NAHC president Bill Dombi is currently focusing his meetings with CMS staffers on the so-called "behavioral modification" payment reduction. The rest of PDGM, with its flaws, is better than its proposed predecessor, known as HHGM. Dombi and company were able to reason with CMS about the dangers inherent in that earlier payment proposal. He told us he thinks he has gotten all the improvements he can into the overall plan, but the 6.42% hit based on shaky assumptions has to go.

If, after a year of PDGM, CMS sees that assessments are characterizing patients as sicker than they actually are, then go ahead and put the behavior modification in place, but do it agency by agency. To ignore the reality of the impact early hospital discharges are having on patient condition at the point of home health admission and assume – in spite of evidence to the contrary – that all episodic payment increases are caused by sinister intent is demonstrative of bureaucrat-think, not of concern for the Medicare Trust Fund. Doing the hard work of investigating into the real reason why OASIS assessments show patients are worse at home health admission today than they used to be would have produced a better policy. CMS chose the easier solution.


©2019 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.