Part A Information

MLN Matters Number: MM6027 Revised
Related Change Request (CR) #: 6027
Related CR Release Date: May 16, 2008
Effective Date: HHPPS Episodes beginning
on or after Jan. 1, 2008
Related CR Transmittal #: R1505CP
Implementation Date: October 6, 2008

Correction to Determinations of Early Episodes versus Later Episodes under the Home Health Prospective Payment System (HH PPS)

Provider Types Affected
Home Health Agencies (HHA) submitting claims to Medicare contractors (Regional Home Health Intermediaries (RHHI)) for services provided to Medicare beneficiaries

Provider Action Needed
Impact to You
This article is based on Change Request (CR) 6027 which corrects Medicare system determinations of “early” versus “later” episodes under the Home Health Prospective Payment System (HH PPS).

What You Need to Know
If a HH PPS episode has been fully denied by medical review because it does not meet Medicare coverage requirements for the Home Health (HH) benefit, the episode should not be counted in determining whether an episode is early or later. Currently, Medicare’s common working file (CWF) system does not make this distinction, and CR 6027 corrects this problem.

What You Need to Do
See the Background and Additional Information sections of this article for further details regarding these changes.

Background
Under the refined HH Prospective Payment System (PPS) case-mix system which was implemented in January 1, 2008, HH episodes are paid differently based on whether the episode is classified as “early” or “later” which are defined as follows:

• The first two episodes of a sequence of adjacent episodes are considered “early;” while
• The third episode of that sequence and any subsequent episodes are considered “later.”

Providers submit claims for HH PPS episodes and indicate whether the episode is early or later using the first position of the Health Insurance Prospective Payment System (HIPPS) code:

• HIPPS Codes beginning with 1 or 2 represent early episodes; and
• HIPPS Codes beginning with 3 or 4 represent later episodes.

These HIPPS codes are validated in Medicare’s Common Working File (CWF) system by comparing the code to the number of episodes on file for the beneficiary. If the code submitted by the provider disagrees with Medicare’s episode history, the CWF rejects the claim, and the Fiscal Intermediary Shared System (FISS) recodes the claim as appropriate.

Currently, these CWF validation process checks episodes based on their start and end dates alone, without regard to whether the episodes were covered by Medicare. The current HH PPS episode record does not contain an indicator that shows that the episode is noncovered.

If a HH PPS episode has been fully denied by medical review because it does not meet Medicare coverage requirements for the HH benefit, the episode should not be counted in determining whether an episode is early or later. These episodes should be treated the same as periods without any home health services.

HH PPS episodes may be fully denied for a number of reasons, including lack of physician orders, lack of qualifying skilled service need, the patient not being homebound, or the services were not reasonable and necessary.

CR 6027 provides instructions that:

• The CWF exclude episodes that were fully denied by medical review from determinations of whether an episode should be paid as “early” or “later.”
• Medicare systems make changes to correct for cases where a HH PPS episode has been fully denied by medical review because it does not meet Medicare coverage requirements for the HH benefit, and are not count the episode in determining whether the episode is “early” or “later.”

Corrections and clarifications to HH billing instructions are also made in the Medicare Claims Processing Manual (Chapter 10 (Home Health Agency Billing)) which is included as an attachment to CR 6027.HHAs may want to pay particular note to the revised Section 70.4 of Chapter 10. This section deals with the decision logic used by the HH Pricer software on HHA claims.

Additional Information
The official instruction, CR 6027, issued to your RHHI regarding this change may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R1505CP.pdf on the Centers for Medicare & Medicaid Services (CMS) Web site.

If you have any questions, please contact your RHHI at their toll-free number, which may be found at http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.zip on the CMS Web site.

Disclaimer This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.