Define IPS, other terms for staff understanding
July 1, 1998
Define IPS, other terms for staff understanding
Lehigh Valley Home Care in Allentown, PA, has created these handy definitions to help staff understand the interim payment system (IPS) and related changes to home health care. The brochure's definitions include the following:
o IPS: Interim Payment System. Beginning July 1, 1998, a new Medicare reimbursement system is being introduced to Lehigh Valley Home Care, which will dramatically reshape and reduce reimbursement to home health nationwide. Lehigh is moving from cost reimbursement to IPS with final transition to a prospective payment system by Oct. 1, 1999. IPS will pay lesser of either reduced per-visit cost limit, or per-beneficiary limit. A prospective payment system will reimburse a fixed rate per episode of illness. You may have heard of hospital DRGs; they are an example of a prospective payment system.
o MSA: The Metropolitan Statistical Area code. The code is a four- or five-digit number representing an urban area. Areas without MSA codes are considered rural. These codes now will be used in the billing process and will result in less reimbursement for visits in rural areas.
o Per-Beneficiary Cap: Each agency will have a per beneficiary annual limit applied to the agency's unduplicated count of Medicare patients. That calculation is based on the agency's 1994 costs and a regional average. Agencies no longer will get paid for unlimited visits. Instead, they will have a yearly aggregate cap of about 40 visits per Medicare patient. The cap does not restrict visits to individual patients; rather, it is applied in aggregate, requiring lower-cost patients (few visits) to balance higher-cost patients (multiple visits). LeHigh Valley's previous approach of maximizing visits (more visits, more money) is outdated and will jeopardize the "balance."
o Unduplicated Census: This is the total number of patients on service. A patient is counted once, even if he or she is admitted several times. Under IPS, a per-beneficiary cap is calculated by the total unduplicated census, not the total number of admissions.
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