In reviewing denied claims referred to our office, it is my experience that hospitals must be aware of Medicare’s Consolidated Billing rules when providing services to home health beneficiaries. When a provider other than the primary Home Health Agency furnishes healthcare services, reimbursement falls under Medicare’s Consolidated Billing rules, even if the provider does not participate in Medicare’s Prospective Payment System.
Home Health Agency Consolidated Billing is similar to situations where SNF patients are temporarily transferred to hospitals, and those hospitals then each bill the SNF facilities. The Balanced Budget Act of 1997 established Medicare’s Prospective Payment System (PPS) for Home Health beneficiaries who receive covered services, including physical therapy, occupational therapy, and speech-language pathology. As stated above, Medicare’s Consolidated Billing rules are applicable even where the provider does not participate in PPS. Under Consolidated Billing, Medicare makes all payments to the beneficiary’s designated Home Health Agency (HHA), including for those services not rendered by the HHA. The HHA in turn then reimburses the facility directly.
An example of this occurrence is when a home health beneficiary receives outpatient physical therapy within a hospital setting. The system allows that the HHA be reimbursed by Medicare for the services that the hospital rendered at a predetermined base payment.
And, as with SNF patients, if a hospital fails to abide by Consolidated Billing rules for HHA beneficiaries, then it runs the risk of not being reimbursed by the HHA. In these cases, the hospital is left with the unpalatable choice of either pursuing the patient for payment, or else of having to write off the charges.
To avoid these risks, hospitals must answer three questions prior to treating Medicare home health beneficiaries:
- Are these services subject to Consolidated Billing provisions? Stay up-to-date.
There are common groups of services falling within this provision, such as physical therapy, occupational therapy, and speech-language pathology. However, because Consolidated Billing for HHA beneficiaries is not limited to these services, hospitals should stay up-to-date with Medicare’s annually-released list of supply codes and therapy codes. Medicare updates this list in conjunction with annual changes to HCPCS codes to ensure that all parties are aware of those services subject to HHA Consolidated Billing. If a service is not subject to these provisions, then it should be billed directly to Medicare.
- Is the patient currently a home health beneficiary? Be proactive, and document everything.
The hospital should first ask the patient and verify whether she is receiving HHA benefits. Additionally, Medicare systems track certification (and recertification) of beneficiaries when they are covered by a HHA. Medicare contractors may also be queried and the Common Working File (CWF) should always be checked. If the CWF reflects that a patient is a home health beneficiary, the data should be printed so that there is documentation of the CWF search. Remember: documentation is key, in anticipation of any potential denials.
- Has the HHA been contacted prior to performing services? Prior authorizations are crucial to recovery.
If the hospital determines that the patient is a home health beneficiary, then the HHA should be contacted prior to the services being rendered. This communication is important to ensure liability on the part of the HHA. If contact is not made and approval obtained, the HHA may deny payment. One main reason for denial of payment is that the HHA may determine that it had the clinical capabilities to render the same services – and in a less costly manner.
Ultimately, a hospital must take steps to ensure its services rendered to HHA beneficiaries are paid. But if the work is not done on the front-end, and prior to the services being rendered, there is little recourse the hospital has once the HHA has denied payment.
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