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Carol

Anderson & Tuttle, LLC have been busy defending ADR denials for instance and legal nurse consulting for agencies facing criminal charges that could have all been avoided with a 10 minute check-and-balance process: The Pre-Billing Record audit.

For instance, we have seen agencies that have been submiting claims to Medicare for up to 7 years without ever having to justify the claims they were sending. This lead to a sense of complacency; Medicare wouldn’t let them screw up that much for that long, right? WRONG!

One agency had a wonderful program providing therapy services for instance. Good growth, good referral base. Only to discover that the services they were providing were not covered by physicians orders. (Eval and treat only pays for the eval, therapy orders MUST include frequency, duration, modalities, and intervention) To make matters worse, even if the physician had signed the orders, they didn’t follow their own plan. The final nail in the coffin was the particular therapy they were offering was not considered reasonable and necessary by their RHHI because it did not result from a new onset or exacerbation of disease.

They got a few ADRs, didn’t know what they were (most agencies don’t deal with them routinely) so they did not appeal which resulted in denials, the percentage of denials racked up until they were on total medical review. All the remittance advices for current services were $0.00 because it was being recouped from current claims.

More commonly, claims are denied because the physician signature is dated after the date the claim was created. That signature can be back on the chart in 3 days, but if the claim is created in 2, the claim is denied.

485′s without COMPLETE orders (frequency, duration, interventions) do not cover services an agency is being paid for, which for all intents and purposes looks incredibly similar to billing fraud. (Note: The REAL frauds usually drive better cars than those who just skip the billing audit process)

So make sure you have a tool, a process, that indicates that for the episode being billed the physician has signed and dated the orders (and all supplemental orders that indicate a change to 485). Make sure that all disciplines have specific orders. Make sure that you have provided the visits that are noted on the claim (some sort of calendar worksheet is necessary for this step) no more, and no less.

Caveat with software solutions: They are terrific at auditing schedulted, versus ordered frequency. However, signed orders can too easily be entered in error. Worse, some agencies will actually mark an order signed just to free up the bill knowing that the order has not been returned to the agency.
Software solutions can certainly make the apre-billing audit go faster, but does not take the place of a hands-on prebilling audit.

Pre-billing audits are not always done by a clinical person. Preliminary visit to order comparison can be done by support staff as well as signature confirmation. Utilize this resource when you can, but limit how many hands the pre-billing process has to touch.

Any quality management model will demonstrate that too many steps and too many hands lead to higher error rates.

Lastly, and most importantly, when you get that first ADR (or 5th or 50th) CALL SOMEONE who deals with support and appeals processes regularly. Smaller agencies in particular will have a difficult time reaching that paid vs denial threshold simply due to sample size and a few ADR’s can turn into a cash flow nightmare quickly.

Get info on and download our new billing tool here.

Now, for those of you who don’t know, that’s a big deal. They require 100 hours of continuing education relevant to the industry and offered by approved sources.

I have been a certified hospice and palliative nurse since 2000. I took and passed that exam then, then again in 2005, and I did NOT want to sit for another exam, so I dug out all my documentation and came up with 103 hours, whew!!!

So I’m still CHPN until December 31, 2014. I better start working on getting those credits, I’m already dreading the test!

Here is how the Medicare Conditions of Participation define
Administrator, home health agency as: A person who:

(a) Is a licensed physician; or

(b) Is a registered nurse; or

(c) Has training and experience in health service administration and at least 1 year of supervisory or administrative experience in home health care or related health programs.

This is your administrator, not necessarily your owner. So if you don’t meet the criteria, hire someone who does. Note that it is a OR b OR c. The Administrator doesn’t have to be nurse, but must have supervisory or administrative experience in home health or “related health program”.
To be honest, that related home health program is kind of at the discretion of the surveyor reviewing the resume’. Some surveyor’s will consider nursing home supervision acceptable, others do not on the grounds that it is not related to home health in the sense that it is not a Medicare Part A funded program.

Be aware that running a home health agency requires precision management and tons of experience. Very little of your clinical nursing experience will prepare you for the challenge of running an agency at a profit. You must negotiate contracts with service providers (like therapists) know how to get the most reimbursement from every episode (Coding and OASIS certification training) know how to utilize resources (staff and supplies) to bring good clinical outcomes without spending more than you are being reimbursed.

If you’re not the administrator and you need to hire, consider recruiters, get references. You will be hard-pressed to oversee the performance of a position that you do not understand. (and they know that).

If you want to start a home health agency and you don’t have this experience, hire someone who does and then retain a consultant who can evaluate if your agency is running lean and mean or can use a little help in either improving reimbursement, managing resources, streamlining processes, selecting software solutions, developing marketing strategies, etc.

Often the difference between making it and breaking it is just a few hundred dollars per episode. Managing those episodes (your staff) is no place to cut your budget.

The first question I will ask you if you call me is about capitalization. Medicare requires 3 months of operating expenses on deposit at the bank in the name of the agency and less than 50% of that can be borrowed.

Most folks that call don’t really know what that number is and calculating it can be a little tricky. Some areas cost more to operate in than others. Rents can be high, salaries can be high, contracted services can be high. These factors are calculated in your operating budget.

For the most part, in a state that does not require certificate of public need a monthly operating budget can be as low as $5000 (in Texas, where you can work out of your dining room for instance) to $30,000 per month. That would mean a letter from your bank stating you have $90000 on deposit and less than half of it is borrowed.

An average monthly budget for our clients is around $15,000.
Great! You have 40-60 thousand dollars to start an agency.
No, you have 40-60 thousand dollars to demonstrate required capital. There are other expenses to consider.
1. You will need application fees for your state license (varies).

2. You will need application and accreditation fees for an accrediting body to do your Medicare certification survey ($500 application fee for CHAP, followed by around $8000 for a 3-year accreditation).

3. You will need a policy and procedure manual appropriate for your business ( a private duty manual does not translate to a skilled home health manual) manuals range from $270.00 Decision Health to around $900.00 The Corridor Group and even higher.

4. You will need that policy and procedure manual customized for your state regulations. Most folks hire us (or someone like us) to do that. We can do it in a matter of hours, where it might take you a number of weeks. The reason for this step is your state licensure survey (the very first survey) is going to scour your manual to ensure that your state’s regs are represented. And they are ALL different. Some states require additional policies than what is in your manual.

5. You may need consulting services to help you set up employee records, employee handbooks, patient records, patient handbooks, infection control program, quality assessment/performance improvement programs, facilitiate your mandatory meetings (Governing Body, Professional Advisory Committee, Clinical Record Review Committee) to ensure that the minutes reflect the required tasks and representation required of those committees, and many other services that can smooth the way to a quicker billing date–and that is the goal. Consulting fees vary widely (from $5000 to $50000) depending on what you can do yourself.
Let’s say technically you can do it all yourself. Many people can. The question then is how long will it take you? Calcualte those carrying expenses and compare to a consultant and you will probably find that the consultant is much cheaper.

And if you are waiting for the state to do your survey instead of paying the $8000 or so to get accreditation, you are losing money. Most states take up to a year or more to do initial surveys (CMS put it on the lowest priority) multiply your monthly budget by 9 to 12 months and you’ll find CHAP much cheaper.

6. You are going to have to pay for care of at least 10 patients while you wait for survey. You will never be compensated for that care. It’s charity. So select patients that don’t require alot of resources (monthly foley change, B12 shot?)

When you figure you have the money to start a home health agency check out the next blog post on the experience you will need to pass a survey and be successful!

Here are some DO’s and DON’T's
DON’T
1. DON’T freak out! You need to inspire confidence for your staff and that will come across to the surveyors as well.
2. DON’T be defensive. Some things you just can’t defend and you look like a jerk when you try to defend bad hand hygiene or lazy charting. You expect more from your staff and you can say so. Just hope that whatever you can’t defend doesn’t happen repeatedly.
3. DON’T take too long getting records to the surveyors. They have a limited amount of time to review thousands of elements. This is NOT the time to start that QA process you’ve been talking about.
4. DON’T wait until you get a written report to develop your plan of corrections!
DO
1. DO provide a comfortable place for them to work, to plug in their computers, to spread out and have some privacy. Nothing irritates a surveyor more than having to balance on the corner of your desk.
2. DO have your policy and procedure manual ready as well as your last meeting minutes of your governing body and PAC. This will get them something to look at while you figure out how many patients you have.
3. DO Know how many patients you have. There are some basic numbers that every manager needs to know. Your census and unduplicated admissions is what you will need for survey. (You should also know your average visits per episode, your average reimbursement per episode, etc just to be able to manage your resources)
4. DO write down every G tag or L tag or deficiency. You will need to start on your plan of corrections immediately. Some may require policy revision that must be approved by PAC and Governing Body and education provided to the staff.
5. DO ask for help if you need it. Anderson & Tuttle, LLC and our associates write plans of correction way more often than you ever will and that can translate into improved processes and outcomes for your staff and patients.

First of all, they are IMPORTANT! Do NOT file them in a drawer and think they will go away. They won’t. They will reproduce in there.

Second, don’t have your billing person pull a record and send it in. It requires a clinical record review.

Third, if an ADR has been denied, do the research to discover the reason. There are denial codes that disclose this information. For example, you can send long cover letters about how your patient was eligible for services, but if the denial reason is because the POC wasn’t signed before the claim was submitted, it will not help. However, a notarized statement from your physician may (or may not) help.

Less obvious; keep a log of which claim (patient and dates) are being requested, note the outcome of the appeal (paid or appealed to the next level). This is very important as the ADR’s will continue and possibly increase as claims are denied, which could bring your cash flow to an abrupt standstill.

Always exhaust the appeals process, more often than not, the ALJ (Administrative Law Judge) will overturn previous denials. It’s worth a shot.

Home Health and Hospice ADRs affect sequential billing meaning that Medicare will not consider subsequent claims until the claim in question has been resolved. (hence, the cash flow issue).

Since ADR support and appeals is not part of the every day skillset of a Clinical Manager or Administrator, and since and ADR attack can literally ruin an agency financially it is money well spent to outsouce your ADR support to a company that understands what the intermediary is looking for and can either point it out in your documentation or request additional documentation from you to support your claim.

Anderson & Tuttle, LLC review and write letters of support that are submitted with documentation to the intermediary. It is a third party perspective which includes references to the record for key information.

This work does not require an on-site consultation and can be completed off-site via mail or fax, or access to electronic record systems. However, sending an exact copy of what you are sending to the fiscal intermediary is recommended.

If you are under ADR Attack please feel free to contact us at (804) 274-0556.

Alabama
Alaska,
Arkansas
Georgia
Hawaii
Kentucky
Maryland
Mississippi
Montana
New Jersey
New York
North Carolina
South Carolina
Tennessee
Vermont

Washington
West Virginia
District of Columbia

This process can be a little different from state-to-state. The long and short of it is that you have to demonstrate that the area that you want to open an agency is underserved by existing home health providers.

The CON process usually requires a feasability study of the area and completion of an application (state specific) The process can consume a lot of resources and take up to two years to get approved (or rejected).

An alternative for some potential providers is to purchase an existing home health provider number from an existing organization. If this is the direction you choose, a due diligence survey would be prudent.  Unfortunately, it is not uncommon that an agency is purchased and is already under a record review by the fiscal intermediary. Meaning that some of the claims that have already been paid are subject to being returned to CMS. Other unfortunate buying decisions include buying an agency with an existing census only to discover that a large percentage of the census is not eligible for Medicare payment.

The only way to reduce your exposure to risk is to analyze not only the financial health of the organization, but the level of compliance as well.

Contact Anderson & Tuttle for assistance with either the CON process, including a feasibility study or for a due diligence assessment of an agency you are interested in acquiring.

There’s a letter from Senator Wyden going around asking for protection for hospice from rate cuts. Use this link to contact your senator to sign the letter!! Just put in your zip code and the letter is written!