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«DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 409, 424, and 484 [CMS-1560-F] RIN 0938-AP55 Medicare ...»

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the patient is unable to learn to self-manage, including selfadminister medication, the home health agency would be expected to provide the teaching and training to a care-giver or family member. There will always be a subgroup of patients who cannot learn self-management, do not have a willing and able caregiver, and/or have no community support. However, as discussed in the proposed rule, our analysis shows us that after excluding HHAs in certain areas of the country where fraudulent billing practices are suspected, we expect that less than 2 percent of all Medicare HHAs would be affected by a 10 percent cap on outlier payments, and that of that less than 2 percent of HHAs, almost all are located in urban areas where beneficiaries have other choices. We also expect that the ability of agencies to receive 10 percent of their total payment in outliers would partially compensate agencies for the care associated with this subgroup. The outlier policy in the HH PPS was never intended to fully compensate HHAs for episodes that incur unusually high costs due to patient home health care needs. Rather, the intent of the outlier policy is to mitigate the negative financial impact that unusually high cost patients have on HHAs. We believe that our final outlier policy for this rule, that

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consistent with that intent. Our analysis shows us that approximately 70 percent of HHAs receive between 0 percent and 1 percent in outlier payments. Therefore, we believe our final outlier policy (which includes a 10 percent cap on outlier payments at the agency level) is reasonable and responsible.

We also encourage home health agencies to take advantage of the help and support available from organizations such as the American Diabetes Association, the Indian Health Service, and the American Association of Diabetic Educators regarding innovative techniques associated with diabetes self management training (DSMT). Collaborating with these organizations may allow agencies to achieve greater success in enabling IDDM patients and/or their caregivers to better achieve selfmanagement, and may provide the agencies with innovative care suggestions regarding their IDDM patients. CMS will closely monitor utilization trends of IDDM home health patients to assess the impact this policy may have on their access to care.

Specifically, we plan to look at pre-2010 data to analyze trends of home health usage by IDDM patients, looking also at patterns of their Medicare utilization prior to the home health episode, and will compare those patterns with current usage.

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reported that beneficiaries have access to an adequate number of HHAs, the reality is that many HHAs limit acceptance of highutilization patients due to lack of resources or to protect their bottom line. The commenter also stated that they accept referrals for patients that other agencies will not admit.

Another commenter stated that they would not be able to accept these types of patients if the proposed outlier policy were implemented, stating that they already take a 20 percent loss on these patients, which they offset with the few low-utilization short episodes they receive. The commenter stated that their agency will be restricted in the number of high utilization, sicker patients that they will accept. The commenter stated that many HHAs will not gamble with reimbursement calculations, timing, and cash flow issues that would be associated with a 10 percent cap. Consequently, the commenter believed that there would be no agency for many of the patients to turn to, and therefore this would likely result in an access to care issue.

Response: While experience varies from year to year, on average, the increased cost of sicker patients should generally be offset by the decreased cost for other patients. As stated in an earlier response to comments, based on our analysis (which

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potentially fraudulent billing practices), we expect that less than 2 percent of all Medicare HHAs may be affected by a 10 percent cap on outlier payments, and of this group of HHAs who may be affected by the 10 percent outlier cap, a vast majority are located in urban areas where beneficiaries have other choices. That being stated, an overwhelming majority of HHAs will not be affected by the 10 percent outlier cap, and thus will be in a position to accept patients who legitimately need home health services, and meet the eligibility requirements for the Medicare home health benefit.

Comment: A few commenters generally supported the proposed outlier policy, but recommended modifications to the policy.

Generally speaking, some commenters requested that an appeals process be created for HHAs that CMS initially determined to have exceeded the 10 percent cap. The concern here was that such a cap could potentially affect legitimate outlier cases.

As such, a commenter stated that situations could evolve in which high needs patients receiving care at one HHA are forced to change agencies during a potentially critical time. This commenter also found it concerning that we would have a cap policy that could potentially not allow for reimbursement for a

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areas where the data indicate the overutilization of outliers, rather than applying the policy to all HHAs in the country. We also received the following recommended modifications: 1) The cap should be put in place no earlier than 2011 (different versions of a delay included that of a delay until it is clear that Congress has addressed the issue, while another version suggested phasing-in the 10 percent cap by starting with a higher cap of 15 or 20 percent); 2) CoPs should be amended to allow agencies to discharge outlier patients when it can be estimated that a HHA will exceed the cap; similarly, CoPs should be amended to permit a HHA to deny admission to an outlier patient when its estimated cap will be exceeded. CoP amendments should also address patient notice rights; 3) During pendency of cap discharges, allow an exception to the cap if a HHA can show that it took all reasonable measures to secure alternative care for qualified patients; 4) Establish an exemption if the provider exceeding cap can show that patients served are qualified and that no other HHA is available to admit them; 5) Establish a registry of HHAs that report availability to accept outlier patients; 6) Issue “best-practice” guidelines for dealing with outlier patients; 7) The Secretary of HHS should

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that would modify outlier standards. Not doing so could result in piecemeal enactment which could put HHAs at higher risk; 8) Clarify that the application of the cap calculation is based solely on outlier adjustments.

Response: An appeals process would be cumbersome and difficult to implement for such a small percentage of situations. HHAs should be able to predict whether they will be affected by a 10 percent outlier cap policy based on past utilization and, in legitimate situations, be able to point the beneficiaries to alternatives. CMS is moving forward with implementation of the 10 percent outlier cap for CY 2010, effective January 1, 2010. With suspect fraudulent outlier billing practices continuing to increase, we believe it crucial to implement this policy now (CY 2010) rather than delay.

Additionally, a delay, while maintaining the current FDL ratio of 0.89, would not be possible. In such a scenario (that is, a delay), CMs would have to either eliminate the outlier pool altogether, or raise the FDL ratio significantly (see CY 2009 HH PPS Update Notice at 73 FR 65357), so as to maintain a 5 percent outlier pool, if the 10 percent outlier cap were not implemented this year. However, CMS does not believe that eliminating the

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policy at this time. Revisions to existing CoPs do not need to take place in order to implement this outlier policy. CoPs do not, and are not intended to, address or restrict the ability of HHAs to discharge patients. The HHA is required to accept patients with a reasonable expectation that the patient’s medical, nursing, and social needs can be adequately met by the agency at the patient’s place of residence (42 CFR 484.18). The CoPs already address patients’ rights at 42 CFR 484.10. Given the availability of HHAs, and the estimated infrequency of circumstances where legitimate cases might exist, we do not believe that exemptions are necessary. As noted in a previous response to comments, as stated in the proposed rule (at 74 FR

40957) and finalized in this rule for CY 2010 only, the outlier policy will include a 10 percent cap on outlier payments at the agency level. That is to say, an agency’s outlier payments are to be capped at 10 percent of its total HH PPS payments (of which outlier payments are a component). For any claim with an outlier payment, if it is determined that paying the outlier portion of the total HH PPS payment for that claim would result in the HHA exceeding the 10 percent cap in outlier payments, the outlier portion of the claim would not be paid at that time.

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applied to that claim) would not be subject to that 10 percent outlier cap, and thus would be paid. Any HH PPS payment adjustment (that is, PEP, recoding for therapy visits, etc) other than the outlier payment, would also continue to apply to the claim.

Comment: A commenter agreed with the approach, but stated that the overarching problem is that beneficiary needs have increased and that the flaw is not in the outlier policy but in low reimbursement. The commenter suggested that CMS develop more accurate methods to deal with HHAs that “gamed” the outlier policy, versus putting forward the proposed policy. The commenter asked CMS to consider something akin to the hospice cap, but with a modifier to allow for HHAs with sicker patients.

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reimbursement rates. The newly refined 153-HHRG case-mix model now reflects different resource costs for early home health episodes versus later home health episodes and expanded the case-mix variables included in the payment model. The newly refined model also replaced the previous single 10-therapy threshold with three therapy thresholds (6, 14, and 20 therapy visits), with gradual payment increases between the first and

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six severity levels at which it pays for non routine medical supplies (NRS). We believe that the new model has addressed the areas identified by the industry as “not being accounted for” in the previous 80-HHRG case-mix model. Sicker patients are accounted for in the more detailed 153-HHRG case-mix model.

Home health margins, even by industry standards, have been generous.

Comment: Several commenters whose parents are Medicare HHA patients were opposed to the proposed outlier policy, stating that their parents are diabetic and unable to administer insulin; that the children’s work schedules are not flexible, and consequently the adult children are not consistently available to assist their parents. These commenters stated that they rely on the HHA to administer the insulin to their parents.

These commenters emphasized that their parents have paid into the Medicare program and that it should be available to them in their time of need. The commenters also stated that changing this would be a horrible burden on them, as they would have to have their parents move into their homes, which would be a difficult situation. Commenters stated that their parent's independence would be lost forever and that their overall health

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change jobs, which was not an option at this time; otherwise their parents would not get their insulin regularly. The commenters stated that if their parents would not move in with them, their parents would go into a nursing home. Commenters believed this was an attempt by CMS to save money while risking the lives of patients. These commenters urged CMS to reconsider the outlier policy. One commenter, an insulin patient, stated that he/she was unable to give himself/herself shots and did not have family to do so on a regular basis. The commenter went on to say that if nurses cannot come to their home, he/she would end up in the hospital or nursing facility. The commenter stated that the cost to be in a nursing facility would be more than the cost of a home health nurse who comes to his/her home.

The commenter requested that CMS not change how it pays the home health nurse.

Response: CMS is sympathetic to the fact that some beneficiaries who need help administering insulin. The new outlier policy is intended to address the inappropriate, potentially fraudulent billing practices that we are seeing. In our view, there is no reason to expect a large number of insulin patients unable to treat themselves would all be utilizing a

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areas of the country except those with severe program integrity issues. We believe that by implementing such a policy, in conjunction with the continued program integrity efforts, including possible payment suspensions for HHAs with questionable outlier billing activities, Medicare beneficiaries will continue to receive the services they need, while providers receive appropriate payment for the services they provide. We are committed to addressing potentially fraudulent activities, especially those in areas where we see suspicious outlier payments, and will monitor and aggressively pursue actions towards agencies where inappropriate billing of outlier payments is identified.

Comment: One commenter urged CMS to re-examine the outlier policy in its entirety, as some HHRGs have more underlying cost variation than others. Another commenter recommended that CMS modify use of HHRG scores and related payment in PPS for diabetic episode and outlier payments, rather than limit the number of diabetic patients that an HHA can care for and be paid for. A commenter suggested we re-examine the outlier payment policy in its entirety. This commenter wrote that some HHRGs have significantly more underlying variation in costs than

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