Face to Face Is Changing for the Better - CMS Publishes Home Health PPS 2014 Proposed Rule

On July 1, 2014, the Centers for Medicare and Medicaid Services (“CMS”) published the home health prospective payment rule (the “Proposed Regulations”) for calendar year 2015. Importantly, the Proposed Regulations contain the biggest change to the “face-to-face” requirement to date. This article will explain proposed changes to this requirement, as well as discuss other highlights of the Proposed Regulations, including clarification on start of care, rebasing status and home health payment updates.

Changes to the Face-to-Face Requirement

The Affordable Care Act requires, as a condition of payment for home health services, that a physician document that he or she, or an allowed nonphysician practitioner, had a face-to-face encounter with the patient (known as the “Face-to-Face” Requirement”). The regulations created by CMS to implement the Face-to-Face Requirement went above and beyond simply documenting the encounter and required that the physician include a narrative explaining how his or her findings supported the conclusion that the patient was homebound and the services were reasonable and necessary. Home health agencies (“HHAs”) have struggled to meet the unpredictable demands of auditors related to the Face-to-Face Requirement narrative.

CMS notes that non-compliance with the Face-to-Face regulations has proven very costly to the HHA industry. In its discussion of proposed changes, CMS states that the FY 2013 Comprehensive Error Rate Testing (“CERT”) report identified an improper payment rate for home health services of 17.3% or approximately $3 billion dollars due to insufficient documentation. CMS acknowledges that “[m]ost ‘insufficient documentation’ errors for home health occurred when the narrative portion of the face-to-face encounter documentation did not sufficiently describe how the clinical findings from the encounter supported the beneficiary’s homebound status and need for skilled services…”. In other words, allegedly “insufficient” physician narratives on the face-to-face documentation cost the industry approximately $3 billion dollars in reimbursement. The CERT report provides concrete evidence that the Face-to-Face regulations are costing HHAs billions, even if the care is being provided appropriately.

Fortunately for those in the home health industry, CMS intends to modify its implementation of the Face-to-Face Requirement. Having acknowledged that that the narrative requirement is having a significant negative impact on HHAs, CMS proposes to eliminate the face-to-face narrative requirement.

CMS proposes that instead of a narrative, a patient’s eligibility for home health will be determined by reviewing the “medical record for the patient from the certifying physician or the acute/post-acute care facility…used to support the physician’s certification of eligibility.” This means that they will simply look to the medical record of the certifying provider. CMS acknowledges that this record should support the patient’s need for skilled care and homebound status.

To be clear, even though the narrative requirement will be gone, the Proposed Regulations would still require the patient to have had a face-to-face encounter, for the reason for which the patient is in need of home health, no more than 90 days prior to the start of care or 30 days after the start of care. The face-to-face encounter would have to be with a physician or an allowed non-physician practitioner. The physician or allowed non-physician practitioner would need to document the face-to-face encounter, including the date of the encounter. This appears to be a significantly simpler documentation requirement.

CMS’s Proposed Regulations remove language requiring the face-to-face documentation be separate and distinct, as well as the title and date requirement and the need for communication between the acute care and community physician in the case of discharge. These changes appear to open the door to making the face-to-face encounter documentation simply part of the current certification.

In response to home health industry concerns that physicians have no stake in face-to-face requirements, CMS is proposing that if a home health claim is determined to be ineligible for reimbursement because of face-to-face deficiencies, the physician would not be eligible to receive reimbursement for certification, recertification or care plan oversight. This should provide some incentive for physicians to properly complete face-to-face documentation.

Clarification: Certification Required Anytime a New Start of Care OASIS is Completed

CMS notes that there has been confusion whether the Face-to-Face Requirement applies in situations where the beneficiary is discharged from home health with goals met/no expectation of return to home health care but is readmitted to home health less than 60 days later. Although this scenario requires a start of care OASIS, it is not an initial episode, because it is within the 61-day window. This conflict of a certification during a non-initial episode has caused confusion. Providers did not know if they needed to meet the Face-to-Face Requirement because the admission required a start of care OASIS or if they were safe to proceed without a face to face because it was not an initial episode, and CMS had clearly stated the Face-to-Face Requirement only applies to initial episodes.

CMS proposes to clarify this issue. The Proposed Regulations state that the Face-to-Face Requirement applies to certifications (not recertifications), rather than initial episodes. A certification (versus recertification) is considered to be any time that a new start of care OASIS is completed to initiate care.

Rebasing Continues and Home Health Payment Update for 2015

We are in the midst of a rebasing period whereby CMS is reducing the case mix weight by 14% over a four-year period, beginning in 2014.

As indicated in last year’s prospective payment system (“PPS”), CMS cannot reduce the home health episodic payment by more than 3.5% of the 2010 rates, or $80.95. CMS proposed to apply that $80.95 reduction to this year’s 2.2% payment adjustment, which results in an episodic payment amount of $2,922.76, an increase of $53.49 over last year. Also, continuing with the rebasing adjustment to the LUPA payments, CMS proposes to increase the national per-visit payment amounts by 3.5% of the national per-visit payment amounts in calendar year 2010 with the increases ranging from $6.34 for medical social services to $1.79 for home health aide services and reduce the NRS conversion factor by 2.82%. All told, CMS will update the HH PPS by the home health payment update percentage of 2.2%.

Practical Takeaway

During a July 9, 2014 Open Door Forum for Home Health, Hospice and DME, CMS staff discussed the Proposed Regulations. Of particular note, participants asked CMS staff how the elimination of the narrative requirement would be implemented in 2015, should the Proposed Regulations be adopted. In particular, how would the change affect current claims? CMS staff acknowledged the concern and indicated it was looking into how to timely implement the change, but the staff was unable to provide any additional detail. It is unclear (and perhaps unlikely) that CMS would eliminate the narrative requirement retroactively.

Along similar lines, Medicare fiscal intermediaries (“FIs”) asked CMS staff if it would provide direction to the FIs between now and the proposed implementation date to prepare for the new, less stringent, Face-to-Face Requirement. CMS staff again acknowledged the need for proper direction but were unable to commit to providing any information before the proposed implementation date.

It is likely that industry stakeholders will continue to provide comments on the Proposed Regulations up until the September 2, 2014 deadline. It will be interesting to see how CMS responds to the comments that are undoubtedly making their way to the federal government during this comment period. Should the final version of the regulations stay the same or similar, they will hold promise for significant reform to one of the most problematic requirements of home health regulations to date. Implementing the final version of the regulations will be no small feat, requiring all stakeholders to come to the table – including the agencies, industry providers and consumers, FIs and government staff. Check back for updates.

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