Karen Vance: This is always one of my favorite topics to talk about because of the importance that OT can and should play in the home health setting. Today we are going to talk about what we as practitioners can do to help strengthen the role occupational therapy in the home health setting. We also want to frame this topic today in terms of how it looks this year in 2016, as well as where it is going with the new payment models and the new initiatives that Medicare is driving the whole health care system toward. This is why we are referring to this session as 2016 and beyond.
Home Health Payment Models
We want to think about our current practice in the context of the kind of influence home health payment models, in Figure 1, have had on our practice.
Figure 1. Payment models.
It might be a good idea to make the distinction between working with someone in their home versus working in the home health setting. We know at this point in the development of our profession that we have some great opportunities and a lot of occupational therapy practitioners working in home modifications or some related industry and obviously that is working with people in their home. I happen to think working with people in their own home is the very best place possible to work with people because they are in inextricably in the context of their own life and their own environment.
However, when we talk about home health and payment models, we are talking about a home health setting that is more of a medical model. This started in the mid '60s when Medicare started paying for home health. That is why when we talk about home health payment models in Figure 1, I have separated out Medicare Cost Based, which was up to the year 2000, October first, to be exact, and Medicare Prospective Payment System, or PPS, which was 2000 and beyond.
Those are the primary payers and always have been. Medicaid is a payer for home health, but whether or not occupational therapy is one of those covered services, depends entirely upon what state you are in and how they wrote the Medicaid law, or the program. There is managed care and other commercial insurers with individual coverage policies, but even though there are all of these different kinds of payment models, most of them have been driven by the model that was set out by Medicare. This is the reason I am driving home that point because that is or has been a primary influencer of occupational therapy practice.
Payment Methodologies
Payment methodologies can be seen as either visit payment or episodic payment as seen in Figure 2.
Figure 2. Visit vs. episodic payment.
Visit Payment
Visit payment of course is being paid for each visit made, and it is a predetermined amount by the insurer. In Medicare's case, which we will talk about in just a minute, the predetermined amount, up until 2000, had everything to do with each individual's agency's cost and what they reported on their cost report. Nonetheless, annually that amount is predetermined. Now to get payment for each one of those visits, the coverage criteria for that particular insurer must be met. There has to be documented proof for the number of visits needed, as well as proof that the visits actually were made and match what was on the claim. Then, the number of visits, typically under this type of system, is managed by the payer. For example, with a commercial insurer, who is doling out visits, you have to call and request more visits. This is what I mean by managed by the payer. They get to say how many visits you are or are not going to do.
Episodic Payment
An episodic payment on the other hand is payment for a time period, and for Medicare certified home health, that period is 60 days. The payment for that episode is determined by the client and service factors. It is not necessarily the actual number of visits total that says exactly what the payment is going to be, even though in Medicare episodic payments the therapy thresholds play into that, but primarily it is determined by the way the client looks, as assessed by the Outcome Assessment Information Set, or the OASIS. However, there still has to be documented proof that the coverage criteria are still being met. Even though we are not necessarily getting paid for each and every visit, we still have to make sure each visit meets coverage criteria. The amount of services is managed internally. In other words, you are not calling Medicare or another kind of insurance company asking for more visits because if they are paying you one set dollar amount for an episode, it needs to be managed internally by the agency to make sure that you are doing it as cost effectively as possible.
