Unit 7: Homecare Reimbursment Issues

Lone Star college systems: Kingwood:

RSPT 1241: Unit 6: Homecare Reimbursement Issues

Lecture notesElizabeth Kelley Buzbee RRT-NPS, RCP

Read: “Respiratory Home Care” by P. Dunne ET allChapter 6 page 131-145

There are three basic sources of health care financing in the USA

Federal & state governmental programs
Medicare: elderly
Medicaid: under-privileged

Private insurance programs
Private pay

Because of the short falls of current reimbursement for health services, restructuring of health care is needed. Solutions are not seen in the near future.

Medicare

In 1965 President Johnson signed the Medicare bill into law. It provided for federal health insurance for those 65 years or older and in 1972 was expanded to selected younger persons with medical disabilities.

Persons are eligible for Medicare if they are eligible for SS Administration retirement, as well as some other retirement plans.

There are two benefits for Medicare:

Plan A:
Automatic for everyone.
While it has deductibles there is no cost to the patient
It covers hospitalization and skilled nursing facilities
It has some home health coverage, but not much
Patients can supplement with co-insurance

Plan B:
Voluntary with payment of premiums
Covers services such as doctor’s care and outpatient medical and surgical services and tests
Covers durable medical equipment

The Medicare card will have the patient’s name claim number [ss#] sex and effective date It will show if the patient is entitled to hospitalization and medical insurance.

As of 1997, many Medicare patients have enrolled in some form of managed health care organization in addition to Medicare.

Medicare will pay the HME Company directly for services but at the rate of pay determined by the Medicare Company. The HME Company accepts the price ‘accepts assignment’ then bills Medicare.

Medicare will send the HME Company 80% of the cost of the device and the patient must cover the next 20%.

If the company doesn’t ‘accept assignment’, the patient is billed for the entire amount, then, the company may bill Medicare as a favor to the patient. If Medicare pays, again, it will only send 80% of the amount that it wants to pay. The patient must make up the difference.

Medicaid [page 147-138]

In 1965, Medicaid a joint federal and state medical assistance program was started for the economically disadvantaged. It is funded by matched state and federal funds and for the most part is regulated by the state.

Medicaid serves three groups:

Low-income mothers and children
Non-elderly disabled persons
Low-income elderly, who supplements Medicare with Medicaid

Children account for half of the beneficiaries but most money is spent on the elder and disabled. Medicaid pays up to 53% of all nursing home care. It covers:

Doctor’s services
Inpatient and out patient hospital services
Skill, intermediate and custodial nursing facility care
Home health care
Family planning
Rural health clinic services

The doctor must certify the patient status every 6 months as to his level of care

Medicare Waiver programs

States may use Medicaid funds to help fund the care of ventilator dependent adults and children at home.

Many states contract with a single HME provider for respiratory services so the HME Company RCP needs to be sure of the patient’s status before bring equipment out to the house because once he learns the patient is on Medicaid it is illegal to bill them.

Private commercial insurance

Insurance works by collecting monthly payments [premiums] from inlistees then paying out claims as they occur. Because there is such a wide variance in the services provided by different insurance carriers, the RCP is well advised to make sure there is coverage for his services before he starts.

There are two types of insurance:

Group plans

Frequently as employee benefit
The individual and his company share the costs of insurance

Individual plans

Higher cost to the customer

Must provide proof of insurability
May be declined for health risk activity

Insurance companies may have a list of preferred providers with whom they have made arrangements and set costs. The RCP needs to verify not only coverage but also the status of his DME Company in the preferred list.

Payment by third party payers [page 139-140]

There are two types of payment

Prospective payment[plan A of Medicare]
Pays a specific amount for a specific diagnosis
Example is the DRG [diagnosis related groups] in which Medicare pays a flat fee for a specific disease. If the hospital can treat the patient under that fee, they keep the difference. If they spend more than that to treat the patient they must eat the difference
Fee-for-service[usually plan B of Medicare]
Again, the government determines how much they will pay for a service
Many private insurance companies follow the Medicare model of payment and some even use the same figures as the bases for their charges

Managed care [page 140-142]

Controls expenditures but control of resources.
May provide the services themselves or enters into contracts with clinics that will provide these services for the amounts they will pay.

HMO: health maintenance organizations
Combine insurers & providers into one entity
Pay for work with capilization or salary. The doctor gets paid per head, even if the patient doesn’t require services. The doctor will not get extra pay for extra services
Disadvantage: both the provider [doctor] and the HMO make money only when they don’t provide services.
PPO preferred provider organizations
Contract with various clinics, hospitals to provide service at cut rates.
Managed fee-for-service with case management/utilization review oversight
Very similar to traditional payment methods except that the third party payer can refuse to pay for services
Disadvantage: provider gets money when there are services so there is no incentive to keep the patient healthy

Payment for home respiratory care equipment [page 142-143]

Is based on purchase or monthly rental of the equipment. Payment of the equipment is based on the doctor’s medical necessity documentation.

Supplemental 02

For instance, Medicare may pay for home supplementary 02 if the doctor includes the fact that the patient’s Pa02 was at or below 55 [Sp02 88% or less] on room air at rest. If the patient level of hypoxemia is not there, they must arrange for payment outside of Medicare.

There are exceptions made for documented pulmonary edema and pulmonary HTN and polycythemia secondary to chronic hypoxemia, and for documented nocturnal drops in Pa02 and Sp02 while asleep with other s/s of sleep apnea.

CPAP

Medicare will not pay for CPAP devices without a sleep study documenting at least 30 episodes of 10-second apnea/ over 6-7 hours of recorded sleep.