Health Care Financing Administration targets side-by-side’ certification
Freestanding agencies with low Medicare utilization off the hook
If your Medicare-certified private duty agency is freestanding but has a low Medicare utilization rate, breathe a deep sigh of relief. If your agency has a 0% utilization rate and shares resources with another agency that has a 100% utilization rate, a representative from the Health Care Financing Administration (HCFA) may be visiting you soon.
So says a spokesman for HCFAs Region IX office. An August 1996 state survey letter said the region wanted to eliminate two practices: Medicare-certified home health agencies with "restrictive admission practices," primarily limited to private pay or managed care patients; and the co-location of two Medicare-certified home health agencies in one general location. However, the concern is not with freestanding agencies with low Medicare utilization rates, says the spokesman who asks to remain unnamed.
"We’re not after the [agencies] that aren’t sharing services with an agency that’s 100% Medicare," he says.
The key to the focus in the region, which covers Arizona; California; Hawaii; and Nevada, is "sharing services." The agencies under examination have zero to very low Medicare utilization rates, he says, and share staff, space, or other administration functions with a nearby agency that has a 100% utilization rate.
The result often is that Medicare gets a disproportionate charge of the expenses, he says. A review of such a case last year resulted in an adjustment to a cost report of about $100,000 in favor of Medicare, the spokesman explains.
"We’re working on this from a compliance point of view," he continues. "We can’t do a survey of a place that doesn’t take care of Medicare patients. We can’t apply standards."
The spokesman says he knows agencies go to the trouble of becoming certified for several reasons. Many managed care organizations (MCOs), for example, require their providers to be Medicare-certified. (For more information on what MCOs may accept instead of Medicare certification, see story on right.)
Still, he says, certifying agencies that don’t serve Medicare patients doesn’t make sense. "It raises all the issues about whether they meet the terms of the provider agreement."
The 80% figure was just an average
One cause for concern for some providers in the August letter was the statement, "Typically, an HHA patient mix is well over 80%."
This figure was included in the letter as an average, not as a threshold for termination, the spokesman says. "Typically you should see a fairly large [Medicare] utilization. When you see 0, then we have really big problems."
The region is not saying everyone has to be 80%, he explains. "If you are seeing 15% Medicare patients and a lot of managed care, but you’re all by yourself you’re not sharing services with another agency then we’re not concerned about [the low utilization].
Medicare certified private duty home health agencies that share resources with other Medicare certified agencies, therefore may find themselves under scrutiny by the HCFA Region IX office.
The spokesman says the region believes it has grounds to terminate Medicare agreements when it finds one of two co-locating agencies with a 0% utilization rate. No agreements, however, have been terminated yet, although some agencies that share services have been discouraged from becoming certified, he says.
The region has identified a listing of 150 potential co-locating situations in California, he says. Surveyors will visit the agencies and check on their relation to each other and their utilization rates. Cost reports may be examined at some point in time, as well.
(Editor’s note: HCFA Region IX can be reached at 75 Hawthorne St., 4th Floor, San Francisco, CA 94105-3903.)
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