HHS Loosens Provider Relief Fund Restrictions, Allows Agencies to Cover Lost Revenue

In response to ongoing opposition from both lawmakers and providers, the Department of Health and Human Services (HHS) recently announced it has made changes to its rules surrounding COVID-19 relief funding.

The department’s amended rules now allow providers to use Provider Relief Fund (PRF) money toward lost revenue that’s potentially unrelated to COVID-19.

“After reimbursing health care-related expenses attributable to coronavirus that were unreimbursed by other sources, providers may use remaining PRF funds to cover any lost revenue, measured as a negative change in year-over-year actual revenue from patient care related sources,” HHS said in a recent statement.

Before the recent update, HHS placed a stricter stipulation on what would eventually amount to $175 billion of funds provided through the CARES Act stimulus package. This was to prevent providers from becoming more profitable in 2020 than 2019 by improperly using federal funds for financial gain instead of an operational lifeline.

While the PRF program was “well-intentioned,” it has been mired with challenges associated with conflicting and unclear guidance along the way, Matt Wolfe, a partner at law firm Parker Poe, told Home Health Care News.

“In September, when HHS put out guidance that seemed to limit or restrict these provider relief funds, there was understandably a significant amount of pushback by providers and members of Congress,” Wolfe said. “When [HHS] created this program under the CARES Act, they were really trying to make sure that health care providers of all stripes were able to respond to the public health emergency and keep their doors open.”

Since its formation, the PRF has accomplished its goal of keeping home health agencies and other afloat, Wolfe believes. Still, over the past couple of months, there had been growing concern that HHS was becoming more restrictive than what Congress originally intended.

“You’re putting providers in this difficult situation of saying, ‘Well, I needed this money because it’s what allowed me to make it through this unprecedented challenge,’” he said. “At the same time, they’re wondering, ‘If I retain the funds and don’t pay them back, am I going to have some potentially large obligation down the road?’”

HHS’s amendment to the reporting requirements is key because it clarifies whether providers should hang on to the funds.

While certainly an improvement for home health agencies, and “a step in the right direction,” there’s still work that needs to be done to accomplish the Congressional intent of the program, according to Wolfe.

“For example, it allows a provider to be able to show lost revenue attributable to the coronavirus, essentially by looking at 2019 patient-related revenue compared to 2020 patient-related revenue,” he said. “Depending on your operations in 2019, you may have had an acquisition or some other type of growth at the beginning part of 2020. You may have actually still lost revenue that isn’t dissipated revenue in 2020, but that simplistic comparison of 2019 to 2020 may not actually show that.”

As more providers retain funds, the industry will likely also see an increase in federal oversight.

Since providers are dealing with federal dollars, there’s the possibility of False Claims Act liability, according to Wolfe.

Moving forward, it will be critical for providers to receive clarity in order to continue to make informed business decisions.

“There’s a lot still to be determined in terms of how you’re going to comply with these reporting requirements,” Wolfe said. “Some of the decisions about how to report are going to influence how you spend the money. It’s really critical that HHS provides that clarity so that providers can make decisions about how to utilize these funds if they haven’t already.”

The HHS to loosen the Provider Relief Fund rules marks the second significant relaxation of rules around federal support for health care providers in recent weeks.

The Centers for Medicare & Medicaid Services (CMS) also extended repayment terms for its Medicare Accelerated and Advance Payment Program earlier this month.

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Senator Kirsten Gillibrand Pushes for Increased PPE, Telehealth Payment for In-Home Care Providers

U.S. Senator Kirsten Gillibrand (D-NY) is asking the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) to ensure that in-home care providers have access to essential resources amid the coronavirus.

Throughout the public health emergency, home health and home care providers have been vocal about the challenges they’ve faced acquiring personal protective equipment (PPE), as well as the need for federal payment barriers to be lifted.

Gillibrand — alongside Senators Bob Casey (D.Pa), Tina Smith (D.Mn), Elizabeth Warren (D.Ma), and Richard Blumenthal (D.Ct) — penned a letter to HHS and CMS asking them to address those ongoing concerns and others.

Overall, the letter has drawn support from the industry, with Visiting Nurse Service of New York (VNSNY), American Network of Community Options and Resources (ANCOR) and Home Care Association of New York State (HCA-NYS) giving the authors praise.

“To keep our frontline staff safe and our homebound patients healthy, we must have appropriate policies and financial support,” VNSNY President and CEO Marki Flannery said in a statement. “That means reimbursing home health providers for vital services delivered through telehealth, sufficient Medicare and Medicaid funding for care in the home, and priority access to personal protective equipment.”

In the letter, Gillibrand details the struggles that providers continue to face when it comes to securing and maintaining adequate supplies of PPE. She urges HHS and CMS to grant in-home care providers priority access to PPE.

“In some jurisdictions, home care and hospice were not even recognized by emergency management and public health authorities as essential care settings where PPE was vital for care access, health safety and protection,” Gillibrand wrote in the letter. “HHS and CMS must establish home care and hospice essential personnel status for PPE and other prioritization in emergency response, and direct state and local public health jurisdictions to follow.”

The letter also addresses the need for additional flexibilities in telehealth waivers for Medicare home health providers, namely ones that allow home health providers to be paid for providing virtual visits. While CMS has been active when it comes to granting telehealth payment waivers to many Medicare providers, home health has been left out.

“Efforts have fallen short in regards to home health,” Gillibrand wrote. “Under current law, CMS allows [home health agencies] to provide telehealth to those under their care, but they will not reimburse HHAs for those services as ‘virtual visits.’”

Reimbursement for telehealth would allow home health providers to increase telehealth services while lowering the risk of spreading of COVID-19. An increased use of telehealth services would also help them preserve PPE.

Gillibrand acknowledged that the current payment model for home health may complicate telehealth reimbursement and that some services, such as wound or catheter care, should always be provided in person. Still, she argued it’s “imperative” for CMS and HHS to come up with some sort of payment solution to help home health agencies get home health reimbursement.

Additionally, the letter calls for support of Medicaid long-term care providers delivering services in home and community settings, which have become crucial when it comes to reducing the spread of infection and caring for vulnerable populations, according to Gillibrand.

“Some states have asked for and received waivers that enable states to stabilize [home- and community- based services (HCBS)] providers,” She wrote. “However, state Medicaid budgets are stretched thin, and the waivers only allow retainer payments to [home health agencies]/HCBS providers and employees for thirty days. The federal government must provide adequate resources for these service providers and the workers they employ.”

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OIG: Medicare Overpaid $267M for Hospital In-Patient Claims with Post-Acute Transfers to Home Health Services

Hospitals improperly coding for post-discharge services contribute to hundreds of millions of dollars in Medicare overpayments. And the majority of incorrect payments are often related to home health services.

That’s according to a new audit report from the Department of Health and Human Services (HHS) Office of Inspector General (OIG).

The purpose of the OIG audit was to determine if payments met the standards of Medicare’s post-acute care transfer policy. As part of the audit, OIG examined almost 90,000 in-patient claims filed in fiscal years 2016 and 2017, totaling $948 million.

Auditors took a sample of 150 claims and found that Medicare only paid three correctly. Meanwhile, 147 incorrectly paid claims received $722,288 in overpayments.

Overall, that means Medicare may have incorrectly paid $267 million for hospital services over a two-year period, according to OIG. About $218 million of that amount was related to the improper coding of a discharge directly to home, audit found.

“Medicare improperly paid most in-patient claims subject to the transfer policy when beneficiaries resumed home health services within three days of discharge but the hospitals failed to code the in-patient claim as a discharge to home with home health services or when the hospitals applied condition codes 42 (home health not related to in-patient stay) or 43 (home health not within three days of discharge),” OIG auditors noted.

In order to address Medicare overpayments, OIG recommends that the Centers for Medicare & Medicaid Services (CMS) reprocess the claims to recover some of the funds from hospitals that were disbursed within the past four years.

Among other things, OIG also recommended that CMS “correct its related system edits, improve its provider education related to the Medicare transfer policy and use data analytics to identify hospitals disproportionally using condition code 42.”

Additionally, OIG recommends that CMS should reduce the need for “clinical judgment” with claims under the post-acute-care transfer policy.

One way to achieve this would be to consider all home health services within three days of discharge to be related to in-patient hospital services, according to the report. Doing so would have saved an estimated $46.6 million during the review period.

In response to OIG recommendations, CMS stated it will require its Medicare contractors to recover the identified overpayments, reprocess the remaining in-patient claims and review a sample of the remaining in-patient claims.

In addition, CMS has modified its Common Working File (CWF) system for verification, validation and payment authorization.

CMS has also made efforts to educate health care providers on proper billing.

“CMS educates health care providers on appropriate Medicare billing through various channels, including the Medicare Learning Network, weekly electronic newsletters and quarterly compliance newsletters,” CMS Administrator Seema Verma said in a statement to OIG. “For example, CMS published an informational booklet in February 2019 regarding the acute care hospital in-patient prospective payment system, which included information on the transfer policy and related payment adjustments.”

CMS disagreed with OIG’s suggestion related to reducing the need for clinical judgment.

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Home Health Agencies with Recent Acquisitions Likely Still Waiting on CARES Act Funds

In response to the COVID-19 emergency, the federal government distributed billions of dollars in CARES Act relief funding to health care providers, including Medicare-certified home health agencies.

In some cases, though, the funds are being held up due to the distribution process. That’s a costly hold-up for providers, many of which are using the relief funding as a financial lifeline to help mitigate COVID-19 costs and disruption.

Specifically, buyers that purchased health care companies in January found themselves placed on the backburner. In other words, a home health agency that acquired a competitor in late 2019 may not have gotten CARES Act relief money tied to that business.

“I have several clients who did not receive those general fund payments,” Randy Glenn, an attorney at Austin, Texas-based law firm Glenn Rogers, told Home Health Care News. “They amount to about a half-million dollars on average, from what I’ve seen.”

In April, the Department of Health and Human Services (HHS) sent a first tranche of CARES Act funds to providers directly based on 2019 Medicare reimbursements. The money was wired to the bank accounts associated with the taxpayer identification number (TIN) on record.

This meant that owners that took over Medicare licenses in late 2019, or early 2020, did not receive relief money. Instead, the funds automatically went to previous owners who no longer operated these companies.

Further complicating the issue, former owners are not permitted to send the money directly to new owners. HHS requirements stipulate that the funds must be returned to the federal government.

The funds are to be reallocated in the next round of distribution, which could take months or longer, according to Glenn.

“There’s no guarantee that these funds are ever going to find their way to these providers who assumed these Medicare contracts in late 2019, or early 2020,” he said.

While being placed in “Medicare purgatory” is largely a phenomenon that is taking place in the skilled-nursing space, home health providers and other Medicare contractors are not immune, according to Glenn.

“I believe that this does impact all Medicare contractors,” he said. “This can happen to anyone who has a Medicare contract and is providing care under that contract.”

For home health providers dealing with the financial fallout of the public health emergency, waiting for the next round of relief fund distribution may prove difficult.

And providers that have not received funds are operating at a competitive disadvantage, according to Glenn.

Many providers have seen cost increases since the start of the COVID-19 emergency. The most obvious cost of doing business is the rising price tag on personal protective equipment (PPE).

Amedisys Inc. (Nasdaq: AMED), for example, reported $1 million in increased costs due to the public health emergency in the first quarter of 2020. The costs were associated with increased training expenses, quarantine pay and PPE.

Meanwhile, Chicago-based in-home care franchises company BrightStar Care acquired $2 million in PPE alone.

In April, Moorestown, New Jersey-based Bayada Home Health Care told HHCN that the company used a year’s worth of supplies in just one week. This led the company to launch a fundraising campaign for, among other things, supplies.

Additionally, several providers saw their bottom lines take a hit due to a decline in home health admissions.

Moving forward, Glenn believes that there is a clear path forward for HHS when it comes to solving the issue of misdirected funds.

“I believe this can be pretty quickly and easily solved,” Glenn said. “Someone at HHS who has the authority to take this on and see it through to the end [should] just dig into this and get the funds to the right place. HHS is under pressure because of COVID-19 and their resources are stretched, but there’s no doubt that this a pretty simple fix.”

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