Breaking Medicare Benefits Manual down into bite-sized pieces.

My goal is for each of you to have a working understanding of the Medicare Benefits Manual. I plan on taking parts of the manual and breaking it down into segments. This will enable you have small portions of information to read, which I’ve found is MUCH easier than trying to read a 100-page document all at once. Each of these segments will be coming directly from the Benefits Manual, so if you have any questions, please let me know and I will delve deeper for additional answers.

First, let me start of with the ‘National 60-day episode rate.’ Laws require the 60-day episode include all covered home health services (HHS), including medical supplies, pain on a reasonable cost basis. This means that the 60-day episode rate includes costs for the six home health disciplines and the costs for all routine and non-routine medial supplies. So you will have a working knowledge, the 6 disciplines are: Skilled nursing services, home health aide services, physical therapy, speech-language pathology services, occupational therapy services, and medical social services.

There are some excluded services though, and you should be aware of them at all times. Durable Medical Equipment is specifically excluded from the 60-day episode rate, but is paid on the fee schedule outside of the PPS rate. The osteoporosis drug (injectable calcitonin), is excluded from the 60-day episode rate but must be billed by the home health agency while a patient is under a home health plan of care since the law requires consolidated billing of OP drugs. The osteoporosis drug continues to be paid on a reasonable cost basis.

CMS has adjustments in place for episodes of care. One of these is the case-mix adjustment, which adjusts payment rates based on characteristics of the patient and their corresponding resource needs (diagnosis, clinical factors, functional factors, service needs). The 60-day episode rates are adjusted by case-mix methodology based on data elements from the OASIS, which are organized into three dimensions: Clinical severity factors, functional severity factors, and service utilization factors. Each data set is assigned a score value and the “scores” are summed to determine the patient’s case-mix group.

The 60-day episode rate is adjusted to also reflect the wage index based on the site of service. Home health PPS rates are adjusted by the ‘pre-floor’ and ‘pre-reclassified’ hospital wage index. The hospital wage index is adjusted to account for the geographic reclassification of hospitals in accordance with sections 1886 (d)(8)(B) and 1886(d)(10) of the Social Security Act. Geographic reclassification only applies to hospitals, and the hospital wage index has specific floors that are also required by law. Because these reclassifications and floors do not apply to home health agencies, the home health rates are adjusted as stated above (“pre-floor and pre-reclassified” hospital wage index).

A note has been added that indicates the pre-floor and pre-reclassified hospital wage index varies slightly from the numbers published in the Medicare inpatient hospital PPS regulation that reflects the floor and reclassification adjustments. The wage indices published in the home health final rule and subsequent annual updates reflect the most recent available hospital wage index available at the time of publication.

Sections 10.1 – 10.2: Medicare Benefits Manual

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