Clinton’s latest news cause for celebration?
No new competition for six months; possible higher prices for agencies
If there’s such a thing as the opposite of the Midas Touch, many would argue that the Health Care Financing Administration (HCFA) and the federal government have it, particularly when it comes to home care. Recent federal mandates have rarely been kind to home care and home infusion agencies in particular. However, the most recent move by President Clinton and HCFA may give your agency reason to rejoice.
When Clinton declared an immediate six-month moratorium on the admission of new home health agencies to Medicare, in addition to requiring all home health agencies to re-enroll every three years and a doubling of audits of home health agencies, initial reaction was anything but warm.
However, for agencies already certified and providing Medicare-reimbursed home infusion services, the news is good for several reasons.
"It’s a good, conservative measure because you haven’t affected any of the agencies that are out there today," explains Tim Redmon, the director of regulatory affairs for the National Home Infusion Association in Alexandria, VA. "Utilization was getting a little high, and the rate of growth was zooming so much. Were the 100 new agencies coming in each month really qualified or not?"
Redmon adds that the unprecedented move provides Medicare- certified home infusion agencies with a favorable operating environment over the next several months.
"This is something we’ve never seen before," he says. "The government is stopping your competitors from doing certain things, and that should help you if you’re on the ball, are doing a good job, and have a good patient base. It’s kind of like the government said, I’m holding back your competitors for six months.’"
Redmon also adds that if HCFA feels more work is needed to "clean up" the home health industry, don’t be surprised if the moratorium is extended.
Kevin O’Donnell, president of Healthcare Resources of America in Lewisville, TX, says many agencies are already affected by such a moratorium at the state level.
"This is the equivalent of a nationwide Certificate of Need [CON] law," notes O’Donnell.
CONs allow new Medicare-certified home care agencies only when there is a true "need" for additional agencies, computed through a complex formula. New York has a CON moratorium in effect due to perceived market saturation.
But Redmon says it’s important to remember those caught on the other side of the fence.
"We have to mention that if there was an honest person ready to set up a home health agency, is this really fair to that person or not?" he asks. "Supposedly we are a free marketplace, yet that person can’t enter the free marketplace."
Robert Hagerman, RN, MS, president and CEO of New Age Home Care in Staten Island, NY, knows first-hand how difficult it is for a home infusion agency to be shut out of the Medicare program.
"We’re not Medicare certified, but I wish we were," he says. His agency has been unable to acquire a CON because of New York’s moratorium.
"It would increase our serviceability and open up a whole new market of patients as it relates to home infusion," he says. "If we get a Medicare patient or a patient whose insurance only accepts a certified agency, we have to give the case to a certified agency, and then they farm it back to us for the infusion care."
Because of its inability to acquire a CON, New Age Home Care no longer pursues or accepts Medicare patients.
"Medicare only pays for a limited amount of chemotherapy, pain management, and parenteral feedings, but we still turn away about 100 patients a year," says Hagerman. "It has had a big impact."
However, for those who already own a Medicare-certified home health/infusion agency, O’Donnell notes the federal government may have inadvertently driven up the prices such agencies can fetch from acquisition-hungry regional and national providers.
"In a CON state you can’t bill Medicare without a CON, but you can buy an agency that already has a CON," he says. "Now that we’ve imposed that on a national level, for a lot of people the only way they’re going to get in the business now is to buy one."
As the rules of supply and demand go, it seems that during the moratorium, demand will increase, while supply will stay the same.
In this respect, HCFA has informed Home Infusion Therapy Management that recertification is not needed when an agency is sold, provided the new owner(s) accepts the old provider number, provider agreement, and any liabilities associated with the provider number and provider agreement.
While the moratorium is obviously all good or all bad for home infusion agencies depending on whether you’re already Medicare-certified the remainder of HCFA’s plans are fairly neutral.
"The only difference regarding the audits will be the [increased] frequency," O’Donnell explains. (See related story, p. 151.) "And I don’t have a problem with the recertification, and most agencies shouldn’t either. That is probably one of HCFA’s more rational moves."
Redmon agrees. "If an agency has its records together on everything they have done, I don’t see this re-enrollment or these audits as a problem. It’s just more of the same, and once you have your paperwork together, you’re set."
Although he has no major problem with the substance of HCFA’s latest fraud-fighting efforts, O’Donnell is concerned with the message the government is sending to the public regarding it’s constant hunt for fraudulent agencies.
"I’m more concerned with the perception than I am with the reality of all this," he says. "Anything that enhances overall quality is a good thing, but the process is creating a perception, particularly when it comes from the presidential level, that this is a corrupt industry."
A prime example, says O’Donnell, is the media’s tendency to take the Columbia/HCA investigation and use it as a blanket example of what is wrong with home care. Unfortunately, he doesn’t expect the spotlight to shine elsewhere any time soon, although he says he hopes it will be with a more appropriate approach.
"I’m sure we haven’t seen the end of this scrutiny, and it’s very much focused on one industry," he says. "I don’t believe that HCFA is trying to put people out of business, but instead, they are trying to respond to claims that this is an industry that has been unregulated and has gotten out of control."
O’Donnell says providers would be best served by pressuring HCFA into releasing its findings once the latest fraud-fighting measures are complete, as the results will likely show there are a few bad apples but not an entire fraudulent industry.
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