HCFA: Loose ties not enough for classification
HCFA: Loose ties not enough for classification
News of the Baltimore-based Health Care Financing Administration’s recently released program memorandum on criteria for provider-based home care agencies sent a wave of confusion through the industry.
The memorandum, released to HCFA fiscal intermediaries who handle Part A of Medicare, provides guidance to regional offices and intermediaries on how to determine if an entity is provider-based, which would allow the entity to get reimbursed on a cost-reimbursement basis.
Many are left bewildered by the memorandum.
"Unfortunately, the government sometimes comes out with requirements that are in advance of your capacity to meet them overnight," says Cathy Frasca, RN, BSN, FACHCA, executive director, South Hills Health System Home Health Agency, Homestead, PA.
That’s not to say she’s entirely against HCFA’s intentions.
"The more you work with HCFA, the more you realize they are struggling to do the right thing for the industry," she says. "I think HCFA is well-meaning and trying to meet the needs of the providers, but they don’t have all the information at their fingertips, so we have a responsibility to get this information to them and say This idea is great, but we need time to get our ducks in order.’"
While hospital-based agencies are left scratching their heads, HCFA says the memorandum contains nothing new.
"We took everything that has been said on the subject for the past 30 years and collected it all in one place," says Tony Lovecchio, senior advisor in the office of hospital policy, HCFA.
One of the criteria set forth in the program memorandum that should be of concern to agencies is the one requiring integrated billing.
"In many cases we find that because the hospital’s billing system is simply not designed to handle home health billing, the hospital often buys that service from an outside vendor," says J.D. Epstein, JD, partner, Vinson & Elkins, LLP, Houston. "The actual criteria says that the administrative functions of the entity records, billing, laundry housekeeping, purchasing are integrated with those of the provider where the entity is based."
"I think that the consolidation of medical records in concept is a good one but in reality is going to be very difficult to achieve," says Frasca. "We re moving toward automated systems nationwide, but to say all this can be in place overnight is completely unrealistic."
She adds that the government itself is not as integrated as it should be. Her agency, for example, is under the jurisdiction of two HCFA fiscal intermediaries, one for billing and a second for the remainder of its functions.
"The government wants you to consolidate your own functions when they haven’t even consolidated theirs," Frasca says.
Some agencies are also particularly worried about the proximity to the provider criteria. While there is no bright-line test, it seems this criteria is not a top priority to HCFA.
"We have said since 1980 that co-location is not imperative, but there has to be a reasonable distance between the parent provider and the agency," says Lovecchio. "The reason is that you must demonstrate that you meet all these other factors that show you’re an integral part of a provider and that you operate as a department of a hospital. How could you possibly be doing that if you’re located in another state? If you can demonstrate that there is a symbiotic relationship, that the two entities are operating as one, it doesn’t really matter that you’re around the block or 10 miles away."
With the numerous acquisitions and mergers taking place, Lovecchio notes that the problem usually occurs when an agency is acquired and the parent makes a declaration that the home care agency is provider-based.
"A simple declaration doesn’t get it," he says.
"I think this is true," notes Frasca. "National chains are buying up hospital-based agencies, but you can’t really buy the department of a hospital, and that is what a hospital-based agency is."
Other criteria listed in the program memorandum include:
• common licensure;
• common accreditation;
• same ownership and control;
• agency director reporting directly to the CEO;
• integration of clinical services.
Agencies not meeting the above criteria would still be able to operate but as a freestanding unit rather than provider-based.
"What you’ve done is lost the ability to allocate some of the hospital’s overhead to the agency, which is the bottom line and what HCFA’s trying to stop," according to Epstein.
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