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Posts tagged ‘PPS’

THE Formula

The formula for making money in home health is simple.  Take the number of patients you have and multiply it by the average payment and you can get a pretty good idea of what your revenue will be.  I don’t think you need a degree in higher mathematics to figure that out.  What I have trouble conveying to certain people is how the census influences the average revenue.  The significant decrease in later episodes is enough to make a sane person think twice about holding onto patients who have met their goals but sanity doesn’t seem to be our strong point at times. 

Luckily for me, Palmetto GBA has simplified the explanation for me.  Here are some numbers that PGBA sent to one provider as an explanation for why they were undergoing a probe audit.

Length of Stay in Days


It would seem that this particular provider has an average length of stay close to a thousand days but Louisiana in general is closer to 400 (that is not a typo) and all PGBA states are just over the 200 mark.  More than half of the agency’s patient are on service longer than 975 days. 

Based upon these numbers, one would think that the provider who received this letter was paid a whole lot more than they should have been, right?  After all, their patients were on service for twice as long as most Louisiana patients and three times as long as the average of all patients in the states that PGBA serves as a MAC.  But, you would be wrong.  Otherwise, I would not be writing this post.  Here is the reality in dollars and cents.

Disbursement per Beneficiary


Suddenly the tops of the bars are a little closer together.  The blue provider is only making slightly more per patient than agencies with a shorter length of stay and about 2K greater than all PGBA states.

So, if your strategy for increasing your census is to hold onto patients until they die, or quite possibly you die, you may want to re-visit that strategy.  Everything else aside, the agency in blue is now burdened with the extra expense and stress of getting records ready for review by Palmetto GBA.  In agencies with a large number of later episodes, the average HHRG will come up simply by discharging patients who are on service for longer than they need to be.

Keep one other thing in mind as you look at these numbers.  The PPS system results in higher reimbursement for some occurrences in the later episodes offsetting this natural decline in payment.  Patients who have surgical incisions in later episodes or a need for therapy actually pay much higher than the average.  What this means is that patients who truly do require extra services because of a new diagnosis or event will generate the revenue required to take care of them. 

The original formula still works but in order to succeed agencies need to understand how the numbers affect each other and aggressively pursue new admissions as the only way to build census.  Holding onto patients apparently costs the agencies more than it does the payor source but it won’t stop them from coming after you if your numbers produce a graph such as this.

If you have received a copy of a similar letter from PGBA, I would very much like to see a copy of it.  You can delete your agency information or you can be assured that I would never disclose your identity. 

Don’t forget to register for the Food, Football and Fun event.  Your nurses will come away with the tools your agency needs to survive the scrutiny that is apparently our fate this year.

Note: The blue numbers have altered insignificantly so that a provider’s actual data was not posted in a blog.

Patient Abandonment and Face to Face Encounters

Today I have the opportunity to share with you some wise thoughts regarding a potential risk associated with Physician Face to Face encounters that hadn’t occurred to me before. Thanks to Elizabeth Hogue, we can take pre-emptive steps to avoid liability related to patient abandonment.

Face-to-Face Encounters: Avoiding Liability for Abandonment

Elizabeth E. Hogue, Esq.
Office: 877-871-4062
Fax: 877-871-9739


Providers are at risk for legal liability when they terminate services to patients.  Termination of services has historically been warranted by the following circumstances, among others: violence or threatened violence, noncompliance by patients and/or primary caregivers, inability to provide adequate assistance, or inappropriateness for services.  Providers are understandably concerned about the possibility of legal liability associated with the termination of beneficial services.

Specifically, they frequently express concern about the possibility of liability for abandonment of patients.  The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services (DHHS), the primary enforcer of fraud and abuse prohibitions, has indicated that abandonment of patients may also constitute fraudulent conduct.

Providers now have new concerns regarding liability for abandonment in light of requirements for face-to-face encounters.  Specifically, providers may not be paid for services rendered if patients have not had appropriate face-to-face encounters with physicians during required time periods.  It is important, therefore, for providers to understand how to terminate services without liability for abandonment.

Practitioners often speak of abandonment as though it is equivalent to termination of services.  On the contrary, patients who want to hold providers liable for abandonment must show that:

  1. Providers unilaterally terminated the provider/patient relationship;
  2. Without reasonable notice;
  3. When further action was needed.

Patients who fail to prove any one of these requirements are likely to lose their lawsuits against providers.

The second requirement of abandonment provides a key basis for avoiding liability for abandonment.  Providers will not be liable for abandonment as long as they give patients reasonable notice prior to termination of services.  The key question is: what is “reasonable” notice, especially in view of new face to face encounters?

Many providers historically viewed thirty days as the minimum number of days required for reasonable notice.  This period of time is too long for most patients, including patients who have not had required face-to-face encounters.  A more reasonable period of time for most patients, unless a specified period of notice is mandated by state statute or regulation, is probably one to three days.

After staff members agree upon a reasonable notice period, patients and attending physicians should receive verbal and written notice.  Written notices should be hand-delivered to patients’ homes.  Although it is desirable, it is unnecessary to obtain a signature verifying receipt.  Written notices to physicians should be faxed to them.

When the date for termination of services arrives, providers must terminate care as planned.  Practitioners are sometimes tempted to continue in the face of pleas from patients, physicians, and/or family members.  Providers must bear in mind, however, that their organizations, whether for-profit or not-for-profit, simply cannot afford to render unlimited amounts of uncompensated care.  The consequence of lack of attention to fiscal limitations may be the disruption or unavailability of care to many patients.

Finally, providers can defeat claims of abandonment if patients for whom services are discontinued need no further attention.  How do providers know whether further attention is needed?  Is this requirement as subjective as it appears?  On the contrary, judges are likely to make retrospective determinations about whether further attention was needed.  The basis for such determinations will probably be whether patients were injured as a result of termination.

In other words, the law is likely to conclude that no further attention was needed, so long as patients are not injured as a result of termination of services.  What kind of injury must patients prove?  Can patients who attempt to prove emotional damage only as a result of termination of services by case managers win lawsuits?

The “good news” for providers is that courts generally require proof of physical injury or damage before they will find providers liable for abandonment.  Providers must, therefore, take appropriate steps to make certain that patients are not physically injured as a result of termination of services.  In rare instances, appropriate action may include sending an ambulance to take the patient to the nearest hospital.  If the patient refuses transport by ambulance, the patient will have been contributorily negligent or will have assumed the risk, so providers are likely to avoid liability.

Now is the time for providers to educate themselves about the possibility of liability for abandonment.  Positive steps must be taken in order to prevent this type of legal liability in view of the uncertainty of the impact of requirements for face-to-face encounters.

(To obtain a complete set of policies and procedures to use in order to prevent liability for abandonment, send a check for $105.00 that includes shipping and handling made out to Elizabeth E. Hogue, Esq. to Fulfillment, 107 Guilford, Summerville, SC  29483.)

© 2011.
Elizabeth E. Hogue, Esq.  All rights reserved.
No portion of this material may be reproduced in any form without the advance written permission of the author.

How to Minimize Income

I have never been inside an agency that has too much cash on hand but if you happen to be one who would like to earn a little less money, I can help. Follow the steps outlined below to minimize your income and prevent the problem of not knowing what to do with all your extra money.

  1. Do not invest in ICD-9 or OASIS training for your staff. They can read the internet just like everyone else.
  2. Make sure that every patient in your agency is scheduled to be seen by a nurse once a week for nine weeks. It doesn’t matter how many or how few visits are needed to provide good care. What’s important is that it is easy to follow a 1w9 pattern.
  3. Do not waste your time putting in processes to manage therapy. You only stand to make money if therapy is tightly managed and missed visits are made up as quickly as possible.
  4. Make frequent use of the hospital. Not only will you lose money by providing extra care to patients discharged from the hospital but your patients might just be safer there if you are planning on implementing any of these measures.
  5. Do not provide any management training for your nurses. Simply expect that because they are ideal clinicians that they will know how to manage a business and staff.
  6. Finally, hire your staff indiscriminately. Anyone with an R and an N behind their name can do OASIS. If you are bound and determined to keep extra cash to a minimum, treat the nurses as though they are disposable and easily replaceable. Certainly that is the case if you are not looking for loyal, qualified employees.

Anyone who tries any of these strategies, please post a comment so we can evaluate their effectiveness.

Bundled Services and Outcomes

Bundling of Services

One legislative policy option for controlling postacute care costs is for Medicare to make a “bundled” payment to hospitals to cover episode costs.

This policy is being suggested by an economist Pete Welch in the Health and Human Services Division of the Congressional Budget Office. In short, bundled services would include all post acute care services for a period of thirty days to be included in the hospital DRG payment.  If post acute care services were ineffective, the financial risk to the hospital would be considerable.

It is only a ‘suggestion’ at this time but there is a very real possibility that Congress will take this suggestion seriously as a means to reduce post acute costs to Medicare. Whether this is good or bad depends on where you are sitting. But, as a consultant, my job isn’t to determine the suitability of such a proposal but rather to get clients ready for the possibility of bundled services.

It stands to reason that if hospitals are going to be paying for the first thirty days of care following a hospitalization they will have serious motivation to choose the best post acute care option with the best potential to meet the needs of the patient thereby reducing costs. Furthermore, the hospitals would have to justify their decisions.

Therefore, if I owned any type of facility that rendered care to patients following an inpatient stay, I would start now to ensure that my reported outcomes were as pristine as possible. And the outcome I would focus the most attention on is Acute Care Hospitalizations. If and when this comes to pass, I cannot see a hospital deliberately choosing an agency or facility that had a high rate of hospitalizations.

And if this doesn’t come to pass, there are millions of other reasons why preventing hospitalizations is a good thing. Ask any patient or family member of a patient who has been hospitalized lately how their lives were disrupted by an inpatient stay.


MO620, is one of the most frequently misunderstood OASIS questions in our experience. It asks for the frequency of behavior problems and then goes on to give the examples of wandering episodes, self abuse, verbal disruption, physical aggression, etc.).

Reading further in Chapter 8 of the OASIS Manual in the definition section, it states:

MO620 identifies frequency of behavior problems which may reflect an alteration in a patient’s cognitive or neuro/emotional status. “Behavioral problems” are not limited to only those identified in MO610. For example, “wandering” is included as an additional behavioral problem. Any behavior of concern for the patient’s safety or social environment can be regarded as a problem behavior.

Therefore, if MO610 has any response other than ‘none of the above’, MO620 would be expected to reflect the frequency of the problem behavior. It would be an inconsistency in data to any problem noted in MO610 and have any response less than ‘several times each month’ noted in MO620.

Keep in mind that MO620 can also refer to problems that are not noted elsewhere in the OASIS assessment. Memory impairment may be such that it does not require 24 hour supervision but may be of concern in the patient’s social environment.

The key to consistently answering MO620 correctly is to understand that the question refers to all problem behaviors, not just the four examples stated.

As always we are open to comments and questions in the comments section below or by email at   Making PPS Work for You, an online educational offering about OASIS is now available from Haydel Consulting Services LLC.

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