There have been a number of recent changes in 2013 to home health, impacting agencies bottom lines either due to reductions or increased complexities in billing and claims processing. Unfortunately, there does not appear to be much reprieve in sight looking into 2014, and the chief question on your mind should be whether your agency is ready?

April 1, 2013 saw an outright 2% reduction in all claims due to Sequestration, with no relief in sight due to a divided Congress[i].  July 1, 2013 served as the threshold for new billing Q codes for indicating the location of patient services. The only reprieve appears to be the PECOS verification of physicians which was temporarily put on hold due to technical difficulties, but we all know this will not last for long and likely to surface again in 2014.  Looking ahead to next year’s changes, ICD-10 diagnoses codes and OASIS C-1 will simultaneously become effective October 1, 2014.

Sequestration took effect on April 1, 2013 and will remain in effect for 9 years through 2021 unless legislation is enacted to change it. The 2% payment reduction is applied to episodes with end dates of April 1, 2013 and later for Home Health providers[i]. The short period of time from announcement to enactment caught a number of agencies either poorly or completely unprepared and affected by the reductions.  There are additional proposed changes for 2014 which will be announced in the last quarter of this year.

The Q codes (Q5001, Q5002, and Q5009) introduced with Change Request 8136 (CR8136) added new HCPCS codes to the Home Health PPS claims[ii]. The code changes already in use with Hospice claims since 2007, indicate the location patient services are provided, standardizing them with Hospice and providing new data for CMS reporting purposes. They have just included Home Health Care in the definition as seen below:

These code changes are predicted to cause 10% rejection of all claims submitted across the United States, as many providers were unaware of the changes or did not make the necessary code changes on their claims. In the case of agencies utilizing Home Health software, the software vendors should have made the adjustments so the claims would generate correctly, ensure you verify with your software vendor this update has been made; while those not using software should ensure they educate themselves and their billing staff are compliant.

In previewing upcoming 2014 changes, CMS is proposing reduction in payment of 1.5% which is claimed to reflect a 2.4% home health payment update[iii]. Also ICD-10 CM is currently slated to begin October 1, 2014 after having been delayed for a number of years, with training required to become proficient in the new system[iv]. CMS has already predicted the cost of training just one experienced full time ICD-9 coder on ICD-10 to be around $644.00,  with an expected training time frame estimated at 24 hours. This estimate will definitely increase with part time or inexperienced coders. The implementation of OASIS C-1 is simultaneously occurring October 1, 2014 and will require review and training as well[v]. The expected productivity for all aspects of the agencies will be greatly reduced with the knowledge deficit of both ICD-10 coding and OASIS C1 changes. Medicare has already predicted 10% of all claims will be rejected due to the regulation changes of coding and OASIS assessments.

Although all this sounds like doom and gloom and not much to look forward to, if you start the planning process now the changes can be handled smoothly. Below are some recommendations to systematically address the issues identified:

1. Software – Do you have the right home health software and are they keeping up with the regulatory changes by embedding them in their systems, making it easier to capture and document the patient condition, billing and maximize reimbursement? Will they be ready for the upcoming changes and continue to stay current? Get a time line from them as you become informed.

2. OASIS C1 – review changes and begin planned training sessions with clinical staff.

3. Billing team – review current changes with the Q codes and plan for billing changes that will occur with the new diagnosis coding system starting October 1, 2014.

4. Financial impact- plan ahead for your agency to be financially ready for the changes not only in payments of episode but also reduction in productivity and training expenses that it will require your agency to bridge the knowledge deficits of coding and OASIS C1.

These are just a few suggestions to assist your agency to begin processing the changes. You can weather the storm if you plan ahead and start now to get your agency positioned to handle changes. There are many tools and workshops that are becoming available to assist the industry to get through the changes. Our industry is undergoing changes, as part of the wider healthcare system, and with it many opportunities for those who plan and best manage the change.

[i] www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2739CP.pdf

[ii] https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM8136.pdf

[iii] https://www.gpo.gov/fdsys/pkg/FR-2013-07-03/pdf/2013-15766.pdf

[iv] https://www.cms.gov/Medicare/Coding/ICD10?redirect=/icd10

[v] https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/OASIS