CMS’s July, 2010 Proposed Rule Most Likely Changes Mergers and Acquisitions Landscape

Good Morning MFS Bloggers, The following text was taken directly from the CMS Proposed Rule and changes the landscape (if published in final form) for all mergers and acquisitions in the HHA industry:

“In last year’s home health prospective payment system final rule titled, "Medicare Program: Home Health Prospective Payment System Rate Update for Calendar Year 2010," we finalized several home health program integrity provisions. Specifically, we finalized a provision in 42 CFR 424.550(b) (1) stating that if an owner of an HHA sells (including asset sales or stock transfers), transfers or relinquishes ownership of the HHA within 36 months after the effective date of the HHA's enrollment in Medicare, the provider agreement and Medicare billing privileges do not convey to the new owner. The prospective provider/owner of the HHA must instead: (i) Enroll in the Medicare program as a new HHA under the provisions of §424.510, and (ii) Obtain a State survey or an accreditation from an approved accreditation organization.

In particular, we are proposing to revise 42 CFR §424.550(b) by adding subparagraph (2) as exemptions to 42 CFR §424.550(b)(1):
- A publicly traded company is acquiring another HHA and both entities have submitted cost reports to Medicare for the previous five (5) years.
- An HHA parent company is undergoing an internal corporate restructuring, such as a merger or consolidation, and the HHA has submitted a cost to report to Medicare for the previous five (5) years.
- The owners of an existing HHA decide to change the existing business structure (e.g., partnership to a limited liability corporation or sole proprietorship to subchapter S corporation), the individual owners remain the same, and there is no change in majority ownership (i.e., 50 percent or more ownership in the HHA.)
- The death of an owner who owns 49 percent or less (where several individuals and/or organizations are co-owners of an HHA and one of the owners dies) interest in an HHA.
Change in Majority Ownership within 36 months of Initial Enrollment or Change in Ownership. HHA’s and other provider organizations must report a change of ownership of 5 percent or more of the equity in the company.

Accordingly, in §424.550(a)(1) we are proposing that any change in majority control and/or ownership during the first 36 months of when the HHA is initially conveyed Medicare billing privileges or the last change of ownership (including assets sale, stock transfer, merger or consolidation) would trigger the provisions of §424.550(b)(1). We believe that this approach would allow individuals or organizations to purchase or sell an ownership interest in an HHA as long as it did not change majority ownership or control within the first 36 months of ownership.
Consequently, we are proposing a definition of “Change in Majority Ownership” to mean an individual or organization acquires more than 50 percent interest in an HHA during the 36 months following the initial enrollment into the Medicare program or a change of ownership (including asset sale, stock transfer, merger, or consolidation). This includes an individual or organization that acquires majority ownership in an HHA through the cumulative effect of asset sales, stock transfers, consolidations, and/or mergers during a 36 month period.“

(See Pages 123-128 of the Rule for More Detail)


Have a great day! Chris

PGBA/ZPIC'S Assessing Overpayments for HHA-PT Services

Good Afternoon To All, Based upon a recent wave of overpayment assessments for PT-HHA servicves by PGBA-ZPIC'S, I thought it important that you each renew your familiarity with PGBA'S PT-HHA general guidelines and then review the LCD in more detail regarding the modalities your Agencies are providing.

LCD No. 99HH-021-L - Physical Therapy for Home Health

General Physical Therapy Guidelines:
1. Physical therapy services are covered services provided the services are of a level of complexity and sophistication, or the patient’s condition is such that the services can be safely and effectively performed only by a licensed physical therapist or under his/her supervision. Services normally considered to be a routine part of nursing care are not covered as physical therapy (i.e., turning a patient to prevent pressure injuries or walking a patient in the hallway postoperatively).

2. Covered physical therapy services must relate directly and specifically to an active written treatment regimen established by the physician, with input from the qualified physical therapist, and must be reasonable and necessary to the treatment of the individual's illness or injury.

3. Additionally, in order for the plan of care to be covered, it must address a condition for which physical therapy is an accepted method of treatment as defined by standards of medical practice, and must be for a condition that is expected to improve materially within a reasonable and generally predictable period of time or establishes a safe and effective maintenance program.

4. Therefore, physical therapy is only covered when it is rendered under a written treatment plan developed and approved by the individual’s physician to address specific therapeutic goals for which modalities and procedures are planned out specifically in terms of type, frequency and duration.

5. The therapist must document the patient’s functional limitations in terms that are objective and measurable.

Have a great day! CP

PGBA Home Health Top Denial Codes: Part 12

5F031/5A031 - Skilled Observation Not Needed from Start of Care
Reason for Denial

The claim was fully or partially denied because the clinical documentation submitted for review did not support the medical necessity of the skilled services from start of care.

How to Avoid a Denial

PGBA recommends the following in avaoiding this type of denial:

• Submit all documentation related to the services rendered and billed to Medicare which supports the medical necessity of the services. The documentation should support a reasonable potential of a complication or further acute episode in the patient's condition. The key to Medicare coverage is for the documentation to "paint a picture" of the beneficiary's overall medical condition indicating the need for skilled services.

• Ensure a legible signature is present on all documentation necessary to support orders and medical necessity.

• Submit all documentation that would support medical necessity for services. Some examples for services may include, but are not limited to, the following:

1. New and/or changed prescription medications.
2. "New" medications are those that the patient has not taken recently, i.e. within the last 30 days.
3. "Changed" medications are those that have a change in dosage, frequency or route of administration within the last 60 days.
4. New onset or acute exacerbation of diagnosis.
5. Hospitalizations (include the date and reason.)
6. Acute change in condition.
7. Changes in treatment plan as a result of changes in condition (i.e. physician's contact, medication changes.)
8. Changes in caregiver status.
9. Complicating factors (i.e. simple wound care on lower extremity for a patient with diabetes.)
10. Inherent complexity of services that causes them to be safely and effectively provided only by skilled professionals

For more information, PGBA recommends you refer to:
• Code of Federal Regulations, Sections 409.32, 409.33 and 409.44
• CMS Internet-only Manuals (lOMs), Pub 100-02, Medicare Benefit Policy Manual, Chapter 7, Section 40.1.2.1
• CMS Internet-only Manuals (lOMs), Pub 100-08, Medicare Program Integrity Manual, Chapter 3, Section 3.4.1.1.