How to prepare now for the pending decision
How to prepare now for the pending decision
It’s not clear how hospital-based home care agencies would need to modify their referral sources should HCFA uphold its most recent letter interpretation; however, even though it appears everyone is in the dark, there are steps you can take to act now and stay ahead of the game.
Sally A. Rosenberg, JD, partner, McDermott, Will & Emory, Washington, DC, notes that agencies should now inventory exactly what their financial relationships are with physicians to find out which, if any, can be considered to have a "significant ownership" or "significant contractual relationship" with a hospital. These are defined as employment that totals more than $25,000, or 5% of the total operating expenses of the home health agency, whichever is less. Chances are, you ll find such relationships.
"I would bet that most of hospital-based agencies on some level have financial relationships where doctors are getting more than $25,000 a year," says Rosenberg.
Where there are problems, Rosenberg notes that it appears agencies will have one of two possible solutions between which they’ll be forced to choose:
1. Not accepting referrals from hospital physicians.
Is this really an option, though? It appears that, in some cases, many hospitals would then be forced to send their own patients to competing freestanding home health agencies.
2. Divest the home health agency.
According to Rosenberg, HCFA has indicated that, if it sticks with the new interpretation, hospitals can separately incorporate their home health agencies. But that’s not nearly as easy as it sounds.
"That means getting a separate license, which in some states can take weeks and weeks," notes Rosenberg. Because divesting can be a long and drawn out process, she notes that the real losers are likely to be those whom home care agencies should be thinking of first.
"It might mean interrupted care, which could have a very negative impact on patients," she says. "That’s why this issue is so serious."
The issue goes beyond what to do in the future. Retroactive penalties could result in sizable monetary penalties for some agencies.
According to Tom Hoyer, director, Office of Chronic Care Policy, Home Care Financing Administration, there won’t be any grandfathering in, and while he looks for a prospective enforcement, he adds that there may be retroactive penalties if somebody has been out of compliance for a long time and somebody finds out. That wouldn’t be enforcing it retroactively because the provider would have been continually in violation. That could mean huge fines for home care agencies that don’t stay current on HCFA’s actions.
While the muddy waters surrounding the issue settle, one thing is obvious: Hospital-based home care agencies stand to take a hit. But don’t wait to find out where you stand.
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