Transcript Slide 1

Create. Navigate.SM Boston Healthcare.
Home Healthcare Reimbursement:
Getting Payment For New Living Room Technologies
Presented to:
Boston Healthcare Associates, Inc.
75 Federal Street, 9th Floor
Boston, MA 02110
617.482.4005
Fax 617.482.4005
www.bostonhealthcare.com
9 March 2006
© 2006 Boston Healthcare Associates, Inc.
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Discussion Topics
 What is Reimbursement?
 What is “home healthcare”?
 What healthcare items and services are paid for in
the home?
 Who pays for home healthcare?
 How is home healthcare reimbursed generally?
 How are items and devices used in the home
reimbursed?
 How do you create a reimbursement strategy?
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Defining Reimbursement: Coverage, Coding and
Payment
The term “reimbursement” has become an umbrella term used to describe:
COVERAGE
 Coverage is the first priority
 Coverage defines the range and extent of
services and products for which the insurer
will pay
CODING
 Coding is the language that characterizes
services, procedures and products rendered
to patients by physicians/institutions and
the rationale for providing them
PAYMENT
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 Payment represents the link between
coverage and the value proposition for a
product
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Home Health Care Services and Providers Defined
 Home health care services include:
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high tech pharmacy services,
skilled professional and paraprofessional services,
custodial care, and
medical equipment provided in or delivered to the home
 Providers of care delivered in the home
– Home Healthcare Agencies
– Durable Medical Equipment (DME) and Medical Supply
Distributors
Under the home healthcare reimbursement environment, new technologies face the
challenge of being integrated into an existing system of consolidated payment, with
little allowance for separately reimbursed items which may result in low payment for
novel technologies
A DME benefit may be more profitable for new technologies!
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Medicare’s Definition of a Home Health Agency
A home health agency (HHA) is a public agency or private
organization, or a subdivision of such an agency or organization, that
must:
1.
2.
3.
4.
5.
Be engaged in providing skilled nursing services and other therapeutic
services; such as physical therapy, speech-language pathology services,
or occupational therapy, medical social services, and home health aide
services
Have policies established by a professional group associated with the
agency or organization (including at least one physician and one
registered nurse) to govern the services and provides for supervision of
such services by a physician or a registered nurse
Maintain clinical records on all patients
Be licensed in accordance with State or local law or is approved by the
State or local licensing agency as meeting the licensing standards, where
applicable
Meet other conditions found by the Secretary of Health and Human
Services to be necessary for health and safety
Private payers follow the Medicare definition of an HHA as far as State licensing, regulations,
and the types of services the agency must provide
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A Prospective Payment System (PPS)
Consolidated billing system with an episodic payment rate
Services & Supplies Included
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The six home health disciplines: skilled nursing services, home health aide
services, physical therapy, speech-language pathology services, occupational
therapy services, and medical social services
Medical supplies; both routine and non-routine medical supplies are included in
the base rates for every Medicare home health patient regardless of whether or
not the patient requires medical supplies during the episode, i.e., catheters,
catheter supplies, ostomy bags and supplies related to ostomy care
Telehealth: the services are recorded in the plan of care along with the
Medicare covered home health services
Services and supplies are paid on a reasonable cost basis using a consolidated
billing system; HHA submits all Medicare claims for all home health services
provided white the eligible beneficiary is under a plan of care
Services & Supplies Excluded or Separately Payable
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DME including supplies covered as DME,
Osteoporosis drugs
The law governing the Medicare home health prospective payment system (PPS) requires that
all payments be made to the home health agency for any services and medical supplies (as
described in the Social Security Act (the Act except for durable medical equipment (DME)) that
are furnished to an individual during the time the individual is under a home health plan of care
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Medicare HHA Eligibility and Benefit
 4 Medicare Home Care Eligibility Conditions
– Part of physician care plan
– Patient needs intermittent (not full time) skilled nursing care or
physical, speech language, or occupational therapy
– Patient is homebound
– HHA must be Medicare approved
 Original Medicare HH benefit covers:
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Skilled nursing/therapy,
Some social services,
Certain medical supplies (BUT…NOT Rx Drugs)
Medical equipment (Covers 80% approved DME)
Reasonable and Necessary Services
The law requires that payment may be made only if a physician certifies the need for services and
establishes a plan of care. The Secretary is responsible for ensuring that the claimed services are covered
by Medicare, including determining whether they are "reasonable and necessary"
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Duration of Covered Home Health Services
Hospital insurance coverage then Part B coverage
Hospital Insurance Coverage –Part A
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Home health services are covered under the beneficiary’s
hospital insurance, Part A, up to 100 home health visit
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The first 100 visits must be paid under Part A if the beneficiary is
entitled under Part A, and the remainder of the visits may be
paid under Part B
Part B Coverage
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The unit of payment under home health PPS is a national 60 day
episode rate for coverage of the same home health services that
would have been paid by the Part A benefit
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Coverage under Part B occurs after Part A coverage has expired
The HHA may receive payment through the Part A or Part B benefit. The Part A
benefit covers for up to 100 home health visits, and once these visits expire,
the Part B benefit kicks in for a 60 day duration of care
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Key Reimbursement Issues to Consider in Home Healthcare
 Medical supplies and Durable Medical Equipment (DME) are reimbursed differently
in home healthcare; DME is separately payable, and thus not covered under an HHA
 The determining factor for coverage is the medical classification of the supply, not the
diagnosis of the patient
 The beneficiary is subject to a 20% co-insurance when using DME in the home
 Telehealth services may not replace home health visits but may be furnished in the
plan of care along with Medicare covered home health services: it is not separately
payable
 Home Healthcare Agencies are paid initially from the Part A (100 visits) Medicare
benefit, then paid by the Part B (60 day episode) benefit
 End Stage Renal Disease (ESRD) patients receive Medicare benefits as secondary to
benefits payable under an employer group health plan (EGHP), during a period of
up to 12 months
Under the home healthcare reimbursement environment, new technologies face the challenge of
being integrated into an existing system of consolidated payment, with little allowance for
separately reimbursed items which may result in low payment for novel technologies
A DME benefit may be more profitable for new technologies
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DME Coverage and Payment
Rental and Purchase of DME in the Home
A participating provider of service may be reimbursed under Part B on a reasonable cost basis
for durable medical equipment which it rents or sells to a beneficiary for use in his home if
the following three requirements are met:
1.
The equipment meets the definition of durable medical equipment:
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2.
The equipment is necessary and reasonable for the treatment of the patient's
illness or injury or to improve the functioning of his malformed body member:
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3.
(1) Can withstand repeated use, and
(2) Is primarily and customarily used to serve a medical purpose, and
(3) Generally is not useful to a person in the absence of illness or injury, and
(4) Is appropriate for use in the home
These considerations will bar payment for equipment which cannot reasonably be
expected to perform a therapeutic function in an individual case or will permit only
partial payment when the type of equipment furnished substantially exceeds that
required for the treatment of the illness or injury involved
The equipment is used in the patient's home
Payment may be made for repair, maintenance, and replacement of medically
required durable medical equipment which the beneficiary owns or is purchasing
Separately itemized charges for repair, maintenance, and replacement of rented
equipment are not covered
The beneficiary is subject to a 20% co-pay with DME
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End-Stage Renal Disease Program: Home Dialysis Is a
Unique Benefit
 Medicare entitlement begins in the fourth month after the start of
maintenance dialysis, except for patients who have undergone a
kidney transplant or who receive training to perform dialysis at
home
 During the first three months, also known as the waiting period,
the patient and other programs that the patient is eligible for
(such as state Medicaid programs) are responsible for payment
 If an employer group health plan (EGHP) covers a patient when
ESRD is diagnosed, then the EGHP is the primary payer for the first
33 months of care
 Medicare is the secondary payer during this period
 EGHPs include health plans that patients were enrolled in through
their own employment or through a spouse’s or parent’s
employment, before becoming eligible for Medicare due to ESRD
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Reimbursement Strategy Summary
 What reimbursement will mean to your product depends on a wide
range of internal and external factors
– First, understand the factors within your control (and put a plan in
place to control them)
 Characterize your product: type of service, site of service, expected
payer mix, amount of competition, availability of clinical and
economic data
– Then, define your approach to those factors beyond your control
 Assess the marketplace, policies and indicated patient audience(s)
 After creating a great product, creating a strategy to get that
product into the hands of the users is the most important step!
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Concluding Remarks
 Some creative reimbursement strategies could
include working legislatively to obtain coverage
under a demonstration project
 Try to obtain coverage through various payers –
understanding that Medicare is the elephant in
the corner
Many limitations on coverage exists for Medicare beneficiaries under the
Home Healthcare benefit.
Understanding the reimbursement of medical supplies versus DME products
early on may help to define the appropriate market for new technologies
and help manufacturers reach their utilization goals
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Thank You!
Erica Bisguier
(617) 912-5114
([email protected])
Boston Healthcare Associates, Inc.
75 Federal Street, 9th Floor
Boston, MA 02110
617.482.4005
Fax 617.482.4005
www.bostonhealthcare.com
© 2006 Boston Healthcare Associates, Inc.
| Create. Navigate.SM