Let’s Make a Deal!
May 14, 2012
There has never been any shortage of factors that add or decrease value to a home health agency. I am asked all the time if a home health agency is still a good investment. Watching my 401 (through a microscope), it occurs to me that most home health agencies are a better investment than anything related to the markets. The tricky part in making a deal lies in the fact that the number of unknowns has increased considerably with health care reform and regulatory scrutiny.
Basics:
When any healthcare facility transfers ownership, there are three options.
- The buyer assumes the provider agreement of the seller. This transaction can be done without any interruption in billing. There is no change in the provider number or license and the new owner completes paperwork in order for the change in ownership to be recognized by Medicare.
- Stock (or any organization that issues units or shares) is transferred from one party to another. An LLC for instance may have only have one member. If the member sells his interest in the LLC to another person, there has been no change of ownership because the LLC still owns the agency.
- The buyer buys the operations of an agency (license only) and has to reapply to become certified by Medicare. Nothing is billable until the last day of a successful certification survey. After that day passes, it may be another 3 months until claims can be dropped.
Complications
This used to be simple and I always steered clients to option 1. Option 2 is much easier but the buyer assumes all of the liability of the LLC, not just the Medicare history. Option 3 has never been attractive because the certification process is long and complicated and very expensive.
Things have changed, folks. A couple of weeks ago I was asked to help out an agency who had 30 claims requested by the Zone Contractor in 2009. The dates of service went back as far as 2006. In 2012 they received a letter stating that they owed CMS 1.96M. Oops. If that agency had been sold during those three years, the new owner would be responsible for the overpayment. Of course it will be appealed but lawyers and consultants need to be paid, too. And there is no guarantee that the appeals will be successful.
While a prospective buyer can query Medicare to determine if there are any outstanding liabilities, they cannot be assured that the agency will not be subjected to scrutiny that hasn’t occurred yet for claims submitted prior to the purchase. That ups the risk factor for option 1 considerably. In Louisiana alone, there are 128 ZPIC investigations and they are not public information.
Indemnity clauses address potential liabilities that have not been revealed at the time of sale but I have never seen any agreements that held the buyer harmless for the amount even approaching some of the ZPIC overpayments we have seen over the last year.
Effective last year, both option 1 and option 2 have a restriction on selling the agency within 36 months after the agency was certified or last changed ownership or until after 2 cost reports are filed. Buying late in the year and filing cost reports early can reduce the amount of time to closer to 24 months. That means that if the agency begins to tank and the only sane course of action is to sell out, the option may not be available. This restriction applies to stock transfers only when a majority of the stock is moved.
The third option – the expensive one is undoubtedly the safest. The agency, because it is licensed must be fully functional. That means a lease, an administrator/DON, patients (2), and all the other expenses that go along with an agency. Upon purchase, the agency must apply for accreditation through an accrediting body such as JCAHO or CHAP. This takes time and is an additional significant expense. It is becoming more attractive every day because this option offers something that the other two options do not – a squeaky clean provider number.
So a lot of people are steering clear of health care in general these days. That should mean that the demand for agencies is lower in general. Consider the agencies who are under scrutiny from a Zone contractor and are not expected to do well. One option is to simply procure another provider number while awaiting results. When the results and extrapolations are complete, the agency negotiates a settlement, files bankruptcy and runs its operations out of the new agency. By the way, this doesn’t mean the agency escapes the Medicare debt – they merely get to prolong their agony.
What that means for potential sellers is that there is a lot of desperate buyers out there. So while people who have never been in the industry are staying away for now, there are others who are facing certain demise who will pay more than an agency is worth to ensure their future business. How do you calculate these factors into the price?
You ready to make a deal? Call us. We’ll make sure you understand the pros and cons of each option and recommend a physician who can medicate you throughout the process.
Skilled Charting
March 26, 2012
Our small little company probably sees more denials than anyone else other than say Palmetto or one of the Zone contractors. So we make a lot of fuss about documentation and getting paid but while we are very good about finding errors, we don’t offer as much as we should in teaching documentation with payment in mind. I’m not going to bother with that now as I have a lot to do so let me just show some examples of bad, better and really good documentation.
Skilled Teaching – Diet
Bad: taught low sodium diet. (worse if this is not the first time)
Better: Taught patient how to read food labels for sodium content. Used handout attached.
Best: Taught American Heart guidelines for low sodium diet according to handout pages 1 and 2. Copy attached and left in home folder.
Homebound Status
Bad: SOB on exertion (everyone gets short winded if they exert themselves enough)
Better: Patient is short of breath when walking 20 feet.
Best: Patient is unable to leave the home due to SOB r/t CHF, arthritic pain and impaired judgment due to narcotic medications. Requires cumbersome assist devices and at least one person to help leave the home.
Diabetes Foot Check
Bad: Taught patient to perform foot care.
Better: Inspected all surfaces of feet. No problems noted. Patient was able to demonstrate foot care with a mirror.
Best: Inspected all surfaces of feet while simultaneously instructing patient on foot care and (proper footwear), (risks of decreased sensitivity), (risks of going without shoes), (when to see podiatrist), (importance of annual eye exam). Take your pick and rotate through the list.
PT/INR
Bad: PT/INR drawn per orders and brought to lab.
Better: PT/INR drawn per orders. Called team leader to watch for results.
Best: 10:00 PT/INR drawn. Dosage of 5 mg/day Coumadin noted on lab slip. 4:00 pm MD confirmed receipt of lab. INR 2.8. No new orders.
Any0ne else care to add to the list? Yes, you’ll chart a little more but if you blow off the recap of what is on the flow sheet – assessed all body systems, patient awake alert and oriented times 3, denies pain, etc., etc., you may find that you write less and say more. Better yet, you will get paid for your hard work and your outcomes will improve as well.
Patients for Sale
March 13, 2012
I sound like a broken record reporting on fraudulent activity so often these days. It really is not what I want the focus of this blog to be. Normally I would not report on a fraud conviction related to a partial hospital program, sleep clinic, etc. but I think we all need to pay attention to why these people are going to jail. From the HHS press release:
According to court documents, ATC’s principals paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks.
What this means to you is that if you or your agency enter into any agreement where cash or goods are provided on a per referral basis, you may find yourself in jail. My recommendation is that any arrangement where someone is paid a bonus for referrals be reviewed by a healthcare attorney. If you choose to ignore my advice, please at least consider the following advice.
- When selling patients, charge a lot more than $50.00. There are hidden costs in this line of work including legal fees and bail money. Do NOT accept checks or credit card payments when selling patients.
- When buying patients, at least give them a token amount of health care. I am petitioning God for a special kind of hell for those that bill on our most vulnerable members of society and don’t even give them much needed health care.
- If your generosity to patients includes flat screen televisions, cash, WalMart cards or rides to the physician’s office, have the patients sign a confidentiality agreement first.
- If you pay an outrageous amount of money for rent to another facility so you have access to their patients, make all payments in unmarked bills.
- If you market directly to patients, wear a disguise, drive an grey sedan and use a fake name. Do your marketing before 8:00 am and after 5:00 pm. The feds keep a pretty predictable schedule and you will be less likely to draw attention.
Of course, the best way to market is to provide impeccable care and become known as the agency who keeps patients out of the hospital and goes further than other agencies to attend to patient needs. It has come to my attention that some agencies are unwilling to go that route. If you are one of them, heed my advice. You will still be caught but you may have a little bit of cash stashed away for legal fees.
Payment Suspended for 78 Agencies
February 29, 2012
By now, everyone has heard of the very busy Dr. Jacques Roy who had more home health care patients than anyone in the entire united states and is accused of causing greater than 345M in false claims to be billed to Medicare.
Have you read the actual indictment, though? It names at least two RN’s as well. That really doesn’t bother me because I don’t count nurses who pay homeless people money as colleagues. I do so hope they lose their licenses.
What was tucked in at the bottom of the most recent article that came across my desk is that 78 home health care providers have apparently had their payments suspended pending the results of a full investigation.
This sounds extreme and it is because of the number of agencies that have payment suspended. However, these are not the first agencies who have had payment suspended because of ties to known or suspected physicians.
One client was assessed an overpayment of greater than 3M. This is small time compared to the 345M that makes headlines. Nevertheless, payment was suspended. Another agency with the same medical director likewise had their payment suspended. The second agency was not in a position to hire me due to the profoundly impaired cash flow.
Check your docs, folks. After these agencies had funds suspended I began researching the docs for all ZPIC clients. It is amazing what was found. The problem is that the state board of medicine doesn’t actually report on issues while they are still under investigation. In fact, the medical director referenced above was in jail for 8 months before the OIG added her to the exclusion list. The state board of medicine still lists the license as active and having no disciplinary history. (Jail doesn’t count, I suppose.)
I got the good stuff the way I get all the good stuff. I googled the docs. The press love photos of physicians being escorted out of buildings by men in uniforms. If there are handcuffs involved, it makes the first page.
If a physician has a restricted license, be sure that you are fully aware of the restrictions. Some physicians in recovery are not allowed to prescribe scheduled meds. Often a nurse will write all meds a patient is taking including scheduled meds from another physician. When the restricted doc signs the 485, he has just violated his license. I had never come up against that before and frankly, I do not know how these will fare during review. I am not hopeful, however.
For what it is worth, the client who was assessed the greater than 3M overpayment arranged to borrow the money from the bank so that Medicare could be paid back and the agency would be able to function until the appeals level of the audit. Medicare said, ‘thanks but we are not restoring your payments until after the entire investigation is complete.
In other words, a year or longer. That means that there are effectively 78 fewer agencies in Dallas this week.
On the bright side, you may get a really good deal on a licensed only agency but you will not be able to bill until you establish a new provider agreement with Medicare. Remember, if you purchase a provider and assume their provider agreement, you have assumed their debt to Medicare. You would think that would be obvious but it’s worth stating again.
So, check your docs. If you find out any good stuff about docs in my area (Louisiana, TX, Fl, AL), send me a discreet email at julianne@haydelcs.com so I can ensure my clients are not unwittingly involved with someone who will get their cash suspended.
Foot Assessment Tutorial
February 17, 2012
It is not my style to knock the advice given by the American Diabetic Association, Podiatrists, the Lower Extremity Amputation Prevention Program or all of those other so-called experts who teach foot exams. I certainly buy into their position that assessing feet is important for so many reasons but I find that their instructions are incomplete. In response, Haydel Consulting Services, LLC has stepped up to the plate to provide you with the missing pieces for a complete foot exam. Pay close attention. The skills you learn could save a limb or a life.
- Start with a foot encased in a shoe and sock. Take a look at the shoe to make sure it is appropriate for the patient and fits well. High heels, flip flops and all the other really cool kinds of shoes are not appropriate for many of our elderly patients. No matter how ugly the shoe is, do not criticize the patient’s choice of footwear if the shoes meet the above criteria.
- Untie the shoe. This may add some time to your visit but it will definitely make it easier to complete the following steps.
- Gently ease the shoe off the foot. Do not pull, tug or otherwise force the shoe off to prevent the foot from coming off with the shoe.
- Inch the sock down from the top towards the toes until the entire foot is visible. DO NOT ATTEMPT STEP 4 UNTIL STEPS 1 – 3 ARE COMPLETE.
- Attentively assess the foot according to the incomplete guidelines published by above referenced agencies. Notice how the nurse in this photo (Susie Soskin, RN) is at eye level with the foot. If you cannot get down to eye level, find someone who can or get the patient to lay down in the bed. If your knees are too old to bend down then chances are your vision is not good enough to assess feet from a distance.
- These are perfect feet. I know this because they belong to my son. I have bought hundreds of shoes for these size elevens. At the cash register, I have often been a bit overwhelmed at the cost of keeping him in shoes. After taking care of a few amputees, I am honored to have had the privilege to buy full pairs of shoes for him. I hope when I am dead and gone, he still has to pay for a full pair.
A high resolution copy of the above tutorial is available by clicking here. Please feel free to print it, share it or ignore it. And yes, I know the vast majority of us do take shoes and socks off every visit and look at diabetic feet. This is good but diabetics are not the only patients who benefit from foot assessments. Patients with heart failure or take diuretics will show signs of fluid build up in their feet, compromised circulation from cardiovascular or other disease can result in discoloration or stasis ulcers and injuries to the feet can be overlooked by any patient with loss of sensation or callused skin.
So, if this helps you to remember, all is well. If you don’t need reminding, kudos to you. If you think that one of your nurses or coworkers is not taking the time to do a complete foot assessment, draw a happy face on the bottom of the foot and see what shows up in the documentation:)
As always, questions and comments are welcome below or via email. As so on…..
