December 4, 2000

Medi-872-00

TO: ALL MEDICARE PROVIDERS

SUBJECT: IMPACT OF HOME HEALTH PROSPECTIVE PAYMENT

PRIMARY INTERESTS: BUSINESS OFFICE MANAGERS

EFFECTIVE DATE: OCTOBER 1, 2000

The Health Care Financing Administration has requested all Medicare contractors to publish the attached information.

THIS BULLETIN SHOULD BE SHARED WITH ALL HEALTH CARE PRACTITIONERS AND MANAGERIAL MEMBERS OF THE PROVIDER STAFF. NO COST COPIES ARE ALSO AVAILABLE FROM OUR WEB SITE AT riverbendgba.com

Please refer any questions to our office toll-free at 877- 296- 6189.

The Balanced Budget Act of 1997 required consolidated billing of all home health services while a beneficiary is under a home health plan of care authorized by a physician. Consequently, billing for all such items and services will be made by the single home health agency (HHA) overseeing that plan.

Program Memoranda (PMs) AB-00-65, dated June 2000, and B-00-50, dated October 2000 provided instructions for the initial implementation of consolidated billing for HH PPS for both intermediaries and carriers. This initial implementation created Common Working File (CWF) editing to deny claims for non-routine medical supplies or therapy services that were provided while CWF indicated that a beneficiary was in a HHPPS episode for the dates of service indicated on the supply or therapy claim.

Cases may occur when non-routine medical suppy claims may have been processed by a Durable Medical Equipment Regional Carrier (DMERC), or therapy service claims may have been processed by a local carrier or an intermediary prior to the receipt of the HHA Request for Anticipated Payment, or claim that establishes a HHPPS episode in CWF. On or after the effective date of this PM, these claims which are subject to consolidated billing must be cancelled and the payment already made must be recouped. The mechanism is described below for intermediaries and for carriers. CWF will read history for the dates within the 60-day episode period. CWF will apply this process to claims received on or after 4/1/2001 effective for dates of service l0/1/2000 and after.

Additional enforcement of the consolidated billing of these supplies and therapies is necessary at both intermediary and carrier sites. Additional edits are necessary to prevent duplicate payments.

Upon receipt of a HHPPS claim, CWF will search paid claims history to determine whether any therapy service claims (revenue codes 42x, 43x, 44x) for the beneficiary were paid within the HHPPS episode period to any other institutional provider type. This includes but is not limited to other HHAs, hospital outpatient departments and freestanding outpatient therapy providers. If such a claim is identified, the claim will be automatically cancelled within CWF.

When the CWF claim is automatically cancelled, CWF will generate an unsolicited response, including a trailer 20 with the identifying information regarding the cancelled claim. CWF will electronically transmit this unsolicited response to the intermediary that originally processed the claim that CWF cancelled. Upon receipt of the unsolicited response, the intermediary Standard System software will use exisiting logic that cancels the claim in the intermediary’s system and initiates recoupment procedures of any payment made. Currently electronic processing of unsolicited responses occurs at Regional Home Health Intermediaries (RHHIs) only, while other intermediaries receive unsolicited responses in paper format. Intermediaries that are not RHHIs must make any procedural changes necessary to accommodate electronic processing of unsolicited responses.

Upon receipt of a HHPPS claim, CWF will search paid claims history to determine whether any therapy service claims (claims reporting any of the therapy HCPCS codes identified in PM B-00-50) for the beneficiary were paid within the HHPPS episode period to any other Part B provider. If such a claim is identified, the claim will be automatically cancelled within CWF.

When the CWF claim is automatically cancelled, CWF will generate an unsolicited response, including a trailer 20 with the identifying information regarding the cancelled claim. CWF will electronically transmit this unsolicited response to the carrier that originally processed the claim that CWF cancelled. The carrier Standard System software must recognize the electronic unsolicited response, and create new logic triggered by the unsolicited response. This logic must cancel the claim in the carrier’s system and initiate recoupment procedures for any payment made. All carriers must make any procedural changes necessary to accommodate electronic processing of the unsolicited responses.

Upon receipt of a HHPPS claim, CWF will search paid claims history to determine whether any non-routine supply item claims (claims reporting any of the non-routine supply HCPCS codes identified in PM B-00-50) for the beneficiary were paid within the HHPPS episode period to any other Part B provider. If such a claim is identified, the claim will be automatically cancelled within CWF.

When the CWF claim is automatically cancelled, CWF will generate an unsolicited response, including a trailer 20 with the identifying information regarding the cancelled claim. CWF will electronically transmit this unsolicited response to the DMERC that originally processed the claim that CWF cancelled. The DMERC Standard System software must recognize the electronic unsolicited response, and create new logic triggered by the unsolicited response. This logic must cancel the claim in the carrier’s system and initiate recoupment procedures for any payment made. All carriers must make any procedural changes necessary to accommodate electronic processing of the unsolicited responses.

This process will not apply to any other DME fee schedule items. The CWF edit to prevent duplicate billing of DME across RHHIs and DMERCs was implemented effective l0/1/2000.

For all unsoliciated responses mentioned above, CWF will return a trailer 20 to show the claim is cancelled. Unsolicited responses will be in a separate file and all unsolicited responses will be cancelled claims. The unsolicited responses will have all identifying information – DCN, HIC, bene name, date of birth, sex. When CWF cancels the claim the deductible will be updated on the beneficiary’s file and the corrected deductible information will be returned to the contractor in the 11 trailer.