AAHCP PPS MD Letter

Date:

Agency information (address, logo, phone):

Dear Physician:

We are grateful for your referrals to this home health agency and we look forward to providing your patient with high-quality home health care that is focused on optimizing patient outcomes. We are providing you with the following notice that was drafted by physician experts at the American Academy of Home Care Physicians.

As of October 1, 2000, Medicare has dramatically changed its method of payment to home health agencies for skilled care. Prospective payment is now in place. This means that agencies are provided with a standard, fixed payment for every 60 days of care for a given patient. The payments are adjusted for case complexity. There are 80 case-mix categories (HHRGs) with approximately a 5-fold difference between the top and bottom payment. The determination of the payment group assignment (HHRG) will rely on a clinical assessment done by the agency staff using the OASIS instrument which is also the basis for a broad quality improvement initiative. PPS provides reduced payments for cases that involve 4 or fewer visits and there is partial relief from excessive costs in some costly outlier cases. Special regulations apply to situations in which patients' status changes mid-way through 60-day episodes, in which patients move in and out of hospitals or nursing homes during an episode, and in which patients change agencies during an episode. Changes in HHRG assignment may occur when patients are re-certified (every 60 days), or mid-way through a 60-day episode if the agency requests a change in HHRG and completes a new OASIS assessment. Home health care is excited about this new payment model which has been extensively tested and will serve as a more rational and predictable means of payment than the interim process that has been in place for the past 3 years.

Here is what this means to you and your patients. First, there is no change in patient eligibility for Medicare home health services under PPS. Patients must still meet the Medicare homebound definition and need intermittent skilled care that is "reasonable and necessary" and has been ordered by a physician. Patients are still excluded if drawing blood is the only "skilled" service.

Physician requirements, including paperwork, are also largely unchanged by PPS. Physicians must still review and sign the initial care plan, orders to change the care, and renewal of orders every 60 days. As before, physicians should be available to home health agency staff members when there are unexpected clinical problems. Under PPS there is one noteworthy difference. With the initial orders and 60-day renewals, physicians will be certifying patient need for therapy services, and the amount of therapy will alter the HHRG assignment. A higher level HHRG will be assigned when patients require 8 or more visits or 10 or more therapy hours during a 60-day interval. It is important that physicians look carefully at the therapy orders.

The new home care PPS payment system will not affect the home (durable) medical equipment referral and certification process that is familiar to physicians who sign orders for oxygen, wheelchairs, hospital beds, and other similar devices in the home. It will not affect hospice care, and it will not affect Medicaid programs like personal care.

There is no increased physician liability risk under the PPS payment system. As is now true, the physician signature on the plan of care carries potential penalties if the patient is subsequently found not to meet Medicare coverage rules for services. However, unless the physician is involved in a regular pattern of frequent inappropriate referrals to an agency that is itself under investigation for bad practices, the risk to the physician approaches zero.

The PPS changes are very important to home care agencies. Under previous reimbursement models, agencies had an incentive to provide more visits. Now, incentives favor efficiency. The goal is still to provide the care that patients need and to achieve the desired outcomes, but the fiscal context must be understood. For example, agencies may adopt new approaches in cases that previously involved large numbers of visits for conditions like diabetes, or for frequent wound treatments that can be replaced by alternative treatments that achieve the same goals with fewer visits.

The new case-mix adjustment and performance improvement methods offer us a chance to work together toward defined goals that are case-specific and have measurable outcomes. OASIS requires the agency to gather a lot of data, but for the first time it will provide a systematic means of validating the work that is being done in home care. Our agency has implemented a sophisticated information management system that will enable our staff to give your patients the care that they need, to document that care and the related outcomes, and to make sure that the new Medicare PPS is a success. We are looking forward to PPS as a more rational and better method of payment than the one we have been using the past 3 years and to an open dialogue with you regarding the care of your patients. We remain committed to continuing with high quality, patient-centered care. Please contact me at 222-333-4444 if you have any questions.

Sincerely,

Joan Smith, RN
Director of Clinical Services