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Getting Started with Home Health Billing

A Home Health Agency’s Guide to Getting Started with Medicare Billing

Congratulations! You’re ready to start billing Medicare. Now what? For new Home Health Agencies (HHAs), making heads or tails out of where to put your focus and resources might feel overwhelming. This guide explores how to jump into Medicare billing with confidence.

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Medicare is Different.

Billing Medicare is one of the most complicated, important tasks an HHA will undertake. The process is distinctly different from billing commercial payers, with Medicare-specific rules and requirements. Since a majority of home health patients are Medicare beneficiaries, mastering Medicare billing is essential.

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Get Ready to Submit Claims

In order to submit Medicare claims, your organization and your individual billing team members must have the appropriate IDs established. Individuals who bill or work Medicare claims need a DDE/FISS ID, which is always tied to that individual, no matter where he or she works. Additionally, each facility (or facilities if you have multiple locations) needs a Medicare Submitter ID.

This is where your Medicare Network Service Vendor comes in. You’ll use a certified Medicare Network Service Vendor to set up and manage multiple IDs and ensure smooth access to DDE/FISS. HHAs may submit claims manually or use Electronic Data Interchange (EDI). Submitting claims electronically requires an EDI agreement with Medicare.

Some HHAs choose an RCM partner who has direct access to DDE/FISS and can securely transfer claim files to Medicare. RCM partners may also possess technology that analyzes claims before submission to ensure they’re complete and error-free, whether it’s a batch file or single claim. This technology is highly advantageous to busy billing departments, as it identifies claims Medicare didn’t accept and highlights errors you can resolve quickly.

Lifecycle of a Medicare claim timeline

The Lifecycle of a Medicare Claim

Like other types of claims, a Medicare claim has a specific cycle it follows from time of service to adjudication.

A Medicare claim starts with you, the provider. HHAs may use a variety of technology solutions to streamline operations, verify eligibility and generate claim files. Once you submit Medicare claims, you’ll want to keep an eye on their reimbursement cycle status. When a claim is in “Suspense”, it usually means no action is needed. However, if Medicare finds something wrong with a claim, it may take a number of paths while in Suspense.

Medicare assigns a status and location code to each claim that indicates exactly what’s happening. These codes tell you if and when a claim is going to be paid or denied, or alert you to fix an issue.

Here are a few common claim statuses:

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Suspense

Medicare is processing the claim normally through the system and should pay without intervention.

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Rejected

Rejected claims contain errors Medicare refuses to process. Patient eligibility issues are the primary cause of rejected claims.

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Additional Development Request (ADR)

Medicare would like additional medical documentation to ensure payment is appropriate. ADRs are also known as Medicare Records Requests, Prepay ADRs, or SB6001.

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Denied

Medicare has adjudicated the claim and refuses to pay. Providers may appeal a denied claim through the formal appeals process. Failure to respond in a timely fashion to an ADR is the most common reason for claim denials.

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Return to Provider (RTP)

Medicare has returned the claim to a provider because there’s some level of error. RTP claims aren’t physically returned to you. These claims are placed in the “T” file and will remain there until you correct them.

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Paid

Indicates a claim was fully paid or partially paid. A partially paid claim contains denied line items. These line items don’t require appeal, but they do require you to file a replacement claim within Medicare filing parameters.

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The Complexities of Home Health Billing

HHAs face the most complicated, tedious requirements to bill Medicare than arguably any other provider type. Why? It’s not that home health patients are receiving different care than they’d get in a traditional healthcare setting, its where they’re receiving care.

Naturally, providing care outside of a healthcare facility means provider organizations have less control over various factors like direct care supervision, access to medical devices, onsite medication, etc. This is partly why Medicare reimburses HHAs differently than other providers. Additionally, HHAs must comply with strict regulatory requirements that help prevent Medicare fraud and abuse.

Proper reimbursement begins before care starts.

Mistakes and errors during intake are costly. HHAs must check several items off the list before starting patient care:

Eligibility

Verifying patient eligibility for a home health episode lays the foundation for the entire reimbursement cycle.
You should verify:

Personal Information

  • Name
  • Birth Date
  • Medicare Beneficiary Identifier
  • Gender

Coverage Information

  • Home Health PPS Episodes
  • Medicare Advantage (HMO)
  • Type of Medicare Coverage (Part A or B)
  • Medicare Secondary Payer Insurance
  • Hospice Period Benefit
  • Home Health/Hospice Provider Detail
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Overlapping Episodes

Verifying patient eligibility for a home health episode lays the foundation for the entire reimbursement cycle.

A patient episode of care cannot overlap with a previous episode, either with the same provider or a different provider. If a patient was hospitalized, they must be discharged from the hospital to begin a home health episode of care. Overlapping episodes are a common cause of claim denials.

Avoid overlapping episodes by thoroughly checking patient eligibility information. If you receive a rejection due to an overlapping episode, you must correct the claim either by using DDE or a technology solution with a claims correction tool.

Prior Authorization

Medicare doesn’t require prior authorization for a home health admission, but be aware that Medicare Advantage, Medicaid and other commercial payers may require prior authorization. Failure to receive prior authorization will result in a claim denial and lost revenue.

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Home Health Claim Basics

OASIS

CMS requires HHAs submit an OASIS assessment file in the QIES for each home health patient before billing can begin. The purpose of OASIS assessments is to ensure agencies are operating as effectively as possible. Correctly completing, submitting and updating each patient’s OASIS assessment sets the table for an accurate treatment plan, rate of reimbursement, correct care giver assignment, and later, proof of quality care.

An agency stands to lose money and opportunity to improve its quality care reputation if it fails to submit accurate OASIS data. If OASIS data is submitted with inaccuracies or isn’t submitted at all, CMS applies a penalty of a 2 percent payment reduction.

CMS enforces a condition for Medicare payment that automatically checks whether the corresponding OASIS assessment is present in the QIES. If the OASIS assessment is missing and the claim’s receipt date is more than 40 days after the assessment completion date reported on the claim, Medicare will deny the claim.

The CMS OASIS data tool is cumbersome and time consuming. It’s easy to make entry and submission errors, leading to denials. Rather than take a chance on errors and failed submission, look for a technology partner that offers OASIS tools that help you complete, submit and track your OASIS assessments.

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Request for Anticipated Payment

The path of a home health claim through Medicare is established in the CMS Home Health Prospective Payment System (PPS), which CMS issues guidelines for yearly. Medicare-certified billing is handled in 60 day episodes of care, allowing for HHAs to receive two payments of 60 percent and 40 percent, respectively, per each episode. This two-part payment process repeats with every new cycle, following the patient’s initial 60 days of home care. Episodes may be less than 60 days.

HHAs can submit the Request for Anticipated Payment (RAP) early in the episode of care, after four conditions are met:

  • Outcome and Assessment Information Set (OASIS) Assessment is completed and locked
  • Physician has verbally given and documented orders for home care
  • A plan of care has been established and sent to the physician
  • The first visit under the plan of care has been conducted

It’s recommended HHAs submit the RAP by the tenth day of the episode. Medicare pays RAPs at 60 percent of total anticipated payment. Submitting RAPs and receiving payment is imperative for healthy cash flow within an HHA.

Final Claim

Once the episode of care is complete, HHAs can bill the final claim to Medicare. Upon adjudication, Medicare will pay the remaining amount of 40 percent. Ensure a successful final bill reimbursement by checking these items off your list:

  • Plan of care/re-certification is signed and dated

  • Physicians orders signed and dated that aren’t included in the plan of care

  • Appropriate, legible signatures

  • Initial episode of care certification is in the QIES and plan of care regardless of billed dates of service

  • Subsequent episodes

  • OASIS assessment has been submitted, locked and accepted

  • A copy of the OASIS assessment is included in the documents submitted to support the HIPPS billed

  • Verify the RAP has been paid and not canceled, and re-verify eligibility if necessary

  • Complete documentation includes:

    • Accurate patient status

    • Medical necessity related information

    • Verified matched diagnosis

    • Individual visit support for each billed visit

    • Therapy assessments - verify accurate therapy codes

    • Necessary supplemental orders

    • Advanced Beneficiary Notice (ABN) - if necessary

    • If a patient’s sole need is for skilled oversight of unskilled services, include physician’s brief for clinical justification

  • Face-to-Face encounter
    Medicare requires a Face-to-Face encounter with an approved practitioner no more than 90 days prior to the home health initial episode of care or within 30 days after the first episode

    • Include documentation of clinical findings with legible signatures and dates

    • Skilled services are supported through clinical findings

    • Homebound status documentation

    • Face-to-Face document for dates of service under review

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Turning Medicare Data into Action

Medicare is an incredibly complicated system that generates vast amounts of data. This data generally does not receive the in-depth analysis it should, and without proper insight into this data, you can’t improve billing procedures. If you’re willing to crunch the numbers, the benefits to your revenue cycle can be transformative.

Patient accounting software and Electronic Health Record (EHR) systems offer reporting that’s vital to your organization. But these systems typically cannot handle Medicare payment data analysis and accurate reporting that directs you toward action. This is why an investment in the right RCM technology provides a high return for HHAs.

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Track Actionable Data for a Healthy Business

Tracking as much claim data as possible is beneficial for any HHA. However, there are certain metrics you should monitor.

Key Metric 1: Days in Accounts Receivable

HHAs should track metrics that directly impact cash flow, especially the number of days in accounts receivable (A/R). HHAs and other Medicare providers sometimes believe they’re getting paid within the 14-day Medicare payment window. It’s important for your organization to track the time between date of service and actual submission of the final claim. Any billing delays or inefficiencies during this time-frame can substantially impact full aging of your cash flow.

GOAL: HHAs should strive to bill the RAP within 10 days of the start of the episode of care and must bill the final claim within 120 days after the start date of the episode or 60 days after the paid date of the RAP (whichever is greater).
Use the following guidelines to gauge A/R performance:
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If you have outstanding claims more than 40 or 50 days out, it may be time to consider changing your process and looking for areas of improvement . An RCM technology partner can offer reporting on days in A/R and alert you to cash flow trends that you probably hadn’t noticed.

The number of claims paid 60 days or more after discharge is a true indicator of your business health. If this number is high, it creates a detrimental lag in cash flow. Working to decrease claims that fall into this category will dramatically improve reimbursement rates and decrease days in A/R.

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Key Metric 2: Top 10 Reason Codes

Detecting claim trends in the DDE is impossible when you can view only one claim at a time. A successful claims resolution strategy provides insight into why claims are rejected, denied or returned.

Identifying the top 10 reason codes for rejections, denials and RTPs will maximize timely recovery and reimbursement levels, allowing you to take steps to protect revenue. According to MGMA, the cost to rework a claim is $25. If your team reworks 100 claims a month, that’s $2,500 plus wasted staff time. That’s expensive business!

A viable RCM solution helps you identify recurring problems using reason code reporting. You can then work with your team to create an action plan and make workflow changes that remove road blocks and improve cash flow.

Other Critical HHA RCM Metrics

Due to the particular nature of home health Medicare claims, follow these other key metrics to keep on top of your revenue cycle.

  • Timely filing for RAPs and Final Claims
  • RTP Reason Codes
    • No RAP on file
    • Duplicate claims
    • Overlapping episodes
  • Denial and Rejection Reasons
    • Common causes of denials based on medical review:

      • Requested records not submitted

        Avoid by checking the status of your claims daily and responding quickly to ADRs.

      • Face-to-Face encounter requirements not met.

        The certification must include required information and must occur no more than 90 days prior to the start of episode of care or within 30 days of the start of episode of care.

      • Medical Review HIPPS code change due to partial denial of therapy.

        Avoid by submitting the most accurate and complete documentation as possible for skilled therapy services.

      • No plan of care or certification

        Make sure the plan of care and certification or recertification are signed and dated by the physician and that the certification statement includes all required components.

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RAP Pitfalls

RAPs can get tricky. Failure to establish proper billing protocol, smart work flows and procedures around RAPs can create crippling cash flow issues:

RAP Takebacks
If Medicare doesn’t receive the final claim within 60 days, it will auto-cancel the RAP, take back the RAP payment, and also won’t pay the final claim. Medicare will alert you two weeks before a RAP is auto-canceled.

Z-RAPs
If there is a Medicare Secondary Payer or the patient is enrolled in a Medicare Advantage Plan, it will result in a zero payment, or “Z-RAP”. Also, if your agency has what Medicare deems are too many takebacks, all RAPs will be set to pay at zero percent instead of 60.

Many HHAs, especially ones that are still billing manually through the Medicare system, have serious obstacles to finding and analyzing RAP data. Avoid RAP pitfalls and improve cash flow by choosing an RCM partner that closely tracks RAPs at risk and canceled RAPs.

PDGM Is Coming - What Will Change?

The Patient-Driven Grouping Model (PDGM) starts January 1, 2020, and it is poised to change the way HHAs currently operate.

CMS said PDGM is its attempt to modernize Medicare Home Health. [The] “rule overhauls how Medicare pays for home health, refocusing on the needs of patients, promoting innovation, and reducing burdens for physicians and home health providers,” said CMS Administrator Seema Verma. When the PDGM rules go into effect, here’s what will change:

  • New payment episode timings
  • Payment groupings
  • Elimination of therapy thresholds
  • OASIS assessments
  • Increased claims
  • Low Utilization Payment Adjustments (LUPAs)
  • Diagnoses

    For more details on how each of these can affect your agency, follow this link to our blog.
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Medicare Secondary Payer Claims

Medicare Secondary Payer (MSP) claims are those claims where the beneficiary is covered by group insurance, Workers’ Compensation, or other third-party providers. Medicare doesn’t accept primary payer responsibility for patients who have other payer benefits. Claims that include MSP information must be submitted either directly or electronically to Medicare.

Why do MSP claims create so many headaches for HHAs? If an HHA failed to determine correct coverage and billed Medicare for a claim that should have been billed as an MSP claim, the claim will go into RTP status or may be rejected altogether.

Second, when a primary payer pays the MSP claim, it may not cover all the charges. This means providers must bill Medicare for the remaining charges. The only way to bill these charges is through manual entry into the DDE or via paper, which are both costly for agencies. This is a burdensome process, leading many agencies to simply write off what’s left on these claims.

HHAs can effectively handle MSP claim challenges using a technology solution that will track and rebill these claims without the hassle of manual DDE entry.

Hospital Readmissions within 30 Days

For many years, Medicare has required hospitals to reduce their 30-day readmission rates or face potential penalties. HHAs and other post-acute care providers are now required to make concerted efforts to reduce readmissions, just like hospitals. This means agencies must focus on keeping patients as healthy as possible to avoid hospital readmission and any potential financial penalties CMS may decide to enforce in the future.

CMS publicizes HHA quality data, including 30-day hospital readmission rates, and this information is included in the public Five-Star Ratings information. Additionally, post-acute providers face several consequences for high readmission rates and failure to report quality measures, all of which have financial implications. This includes the loss of coveted referrals and patients who may use readmission data to make decisions about where to receive home care.

HHAs must rely more on key data and metrics to reduce readmission rates. It’s never been more important to invest in platforms that continuously measure and report on quality levels, and technology that delivers live updates on patient progress. This includes tools that offer advanced reporting on Medicare claims throughout the entire reimbursement cycle coupled with reports that monitor readmission dates.

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Next Steps

HHAs new to Medicare billing will face challenges related to the complexity of Medicare. Take these next steps when navigating new waters:

  • Learn about the Home Health Prospective Payment System
  • Build an intake process that lays the foundation for reimbursement
  • Develop a system for tracking and analyzing claim statuses
  • Teach your team the importance of working suspense claims to completion
  • Understand what triggers Medicare reviews and audits, then develop a plan to handle them
  • Consider working with a partner who has the tools to help you automate the complex home health reimbursement cycle
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