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Know Your Numbers Part 1

Management of a Medicare Certified agency has never been a job that allowed for a wide margin of error. In the near future, with payment cuts looming, managing an agency without sufficient information will be a fast trip to failure.

Since the implementation of PPS, we have known that the clinical and business operations can no longer be separate in an agency. My successful clients work within a combined operations model while clients who struggle continue to try to separate these two intertwined components of a home health care agency.

Can you answer the following questions about your agency?

  • What is your average case mix weight for Medicare Patients?
  • What percentage of that case mix weight comes from ICD-9 coding?
  • Is your functional scoring representing the acuity of your patient mix?
  • What do your outcomes look like compared to your competitors?
  • How would you fair during a RAC audit?

If you know the answer to all of the above questions, my hat is off to you. If you know the answers and don’t like one or more of them, relax – you are still ahead of the game because at least you know where to focus your efforts. If you don’t know the answers to one or more of these questions, it is time to find out.

Most software systems should be able to report to you the average case mix weight for your patients. Although you will invariably ask, no one but you can determine what the correct case mix weight for your patients should be. If you have a lot of therapy and very few later episodes, I would expect it to be close to two. Lower therapy and later episodes may bring it down to around 1. The important thing is that you are not leaving legitimate money on the table which a surprising number of agencies do.

ICD-9 coding seems to get more and more complicated each passing year. How do you know that your coding is accurate? What checks and balances do you have in place? Is there a coding expert – certified or otherwise available to your staff?

Functional scoring is often overlooked in the OASIS assessment data. The full impact of the functional domain is not nearly as great as the clinical domain or but if your agency is losing an average of $50.00 per episode on functional scoring, it doesn’t take many episodes for that number to really add up to a real hit. Additionally, it is difficult to support therapy services when the functional domain is artificially low.

If you don’t know your outcomes as well as your competitors’ outcomes, you are operating blind. Your referral sources know them. The state knows them. Your patients have the ability to look at them. Agencies should be prepared to explain any poor outcomes and should be proudly displaying any good outcomes.

Finally, we are holding our breath here at Haydel Consulting Services. RAC audits have begun and CMS has a plan for expanding RAC audits. Keep in mind that Recovery Audit Contractors are paid on a contingency basis. They are financially motivated to find issues with your charts. Only a thorough pre-billing audit and sound billing policies will save you once your agency is selected for review.

In the coming weeks, we will be discussing each of these issues and how to use the information in managing your agency. If you have any questions or comments, please feel free to contact me below in the comments box or by email at

One Comment Post a comment

    I would like to receive information on the subjects raised on know your numbers Part 1

    July 22, 2009

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