NAHC reacts to bundled supplies: What counts?

Under the new regulations handed down from the Health Care Financing Administration (HCFA), home health agencies will be responsible for all medical supplies (excluding durable medical equipment), which are not case-mix adjusted in the final prospective payment system (PPS) rule.

That means a home health care agency could find itself paying for diabetic supplies for a patient, even though those supplies are not directly related to the patient’s home health care. Unless clarified, home health agencies may find themselves spending millions of dollars on medical supplies.

According to William Dombi, vice president for law at the National Association for Home Care (NAHC) in Washington, DC, "HCFA seems to have the opinion that whatever supplies the patient uses, whether they have anything to do with home health care, will be the responsibility of the home health agency. For some people, that sounds like a really minor issue, but it’s hundreds of millions of dollars."

The home health services included in consolidated billing are:

• part-time or intermittent skilled nursing care;

• part-time or intermittent home health aide services;

• physical therapy;

• speech-language pathology;

• occupational therapy, medical social services;

• routine and nonroutine medical supplies;

• a covered osteoporosis drug [as defined in section 1861(kk) of the Act — not paid under PPS rate, see 1833(a)(2)(A) — but excluding other drugs and biologicals];

• medical services provided by an intern or resident in training of the hospital, under an approved teaching program of the hospital in the case of a home health agency that is affiliated or under common control with a hospital;

• services at hospitals, skilled nursing facilities, or rehabilitation centers when they involve equipment too cumbersome to bring to the home.

Partial payment episodes

According to Dombi, if a patient is discharged and then readmitted or transferred to another agency, payment would be prorated based on the number of days of care. This would in effect penalize the agency that provides the initial care, which typically is the most expensive.

Adjustments for caregiving resources

Regardless of whether a caregiver is living in the home of a patient, the home health agency providing service will be paid the same.

Rural vs. urban agencies

The different needs of rural and urban agencies were not addressed by HCFA in the final regulations. This is an especially contentious point considering the higher costs involved with visiting rural patients, a large part of which is due to transportation-related costs. NAHC is proposing an increase in payment rates to rural agencies.