On the Reimbursement Front Round three and the Government is looking for a K.O. Who’s going down? The beneficiary, our elder client, is the loser. In the zeal to “save the system” Congress and HCFA have dealt some devastating blows to the Rehabilitation Care of the Medicare beneficiary. First, by revisiting Salary Equivalency and ... Viewpoint
Viewpoint  |   October 01, 1997
On the Reimbursement Front
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Older Adults & Aging / Viewpoint
Viewpoint   |   October 01, 1997
On the Reimbursement Front
SIG 15 Perspectives on Gerontology, October 1997, Vol. 2, 18. doi:10.1044/gero2.2.18
SIG 15 Perspectives on Gerontology, October 1997, Vol. 2, 18. doi:10.1044/gero2.2.18
Round three and the Government is looking for a K.O.
Who’s going down? The beneficiary, our elder client, is the loser. In the zeal to “save the system” Congress and HCFA have dealt some devastating blows to the Rehabilitation Care of the Medicare beneficiary. First, by revisiting Salary Equivalency and attempting to force reimbursement rates on Speech Pathology and Occupational Therapy that are so artificially low using inaccurate and outdated data. HCFa stated in the proposed regulations that the salary equivalency limits would be implemented not less than 60 days from the publication date of the final regulations. We are still waiting for the final rule. The comment period closed the end of May. Don’t hold your breath. When and if Salary Equivalency rates are published, what will be the effects? One must understand the nature of SE. SE is the average rate of allowable hourly salary that a provider can be reimbursed for providing contracted therapy to Medicare beneficiaries. The rate is based upon an arbitrarily set hourly salary cost for a therapist, an arbitrarily set percentage for benefits and a token allowance for administrative items like office space, support staff, and expenses related to having a small office. These costs are then blended together, reduced to a 75th percentile average and used to set a maximum allowable reimbursement rate or cap of expense. The hourly rate is then paid on a time on premise basis not on a patient related time basis. With this brief explanation, hopefully one can see the effects. The patient is now being charged for time on premise, including staff meeting time, break time if spent on premise, gossip at the water fountain, oh by the way therapy time. Just put in the time on premise. The provider (therapist or therapy group) does not get paid for true cost now it is based on a reduced average of adjusted salary information. The provider must cut costs some place to keep the doors open. Eventually with lack of cost shifting options, salaries will be reduced, benefits will be reduced or eliminated and careers in the allied health professions will dwindle down to almost nonexistence. Now for the GOOD NEWS. HCFA may or may not issue the final rule on salary equivalency due in part to the newly enacted Balanced Budget bill just signed into law by President Clinton. The Budget Act places caps on ancillary services in all settings except hospital outpatient clinics for Part B eligible effective January 1, 1999. This is the $1500 per year per therapy per beneficiary rule. This arbitrary cap was enacted without thought to the beneficiary’s needs, only to save money. The latest twist in this circus is that HCFA has interpreted the $1,500 cap to mean that it is shared jointly between physical therapy and speech-language pathology services, while occupational therapy retains its own $1,500. ASHA reports that this dilemma might require enactment of an amending law to remove an ambiguity in the existing Medicare statute. The Budget Act also requires SNF’s (skilled nursing facilities) to be paid under a Prospective Payment System (PPS) effective July 1, 1998. The SNF’s will be required to bundle all services, Parts A and B, and will no longer be able to allow other providers to bill for the ancillary services. The PPS will pay the SNF on a per diem basis to provide all the care necessary for the patient. The per diem will be based on “1995 cost data averaged nationally trended forward to 1998”. Don’t you just love the “GOVERNMENT-ESE” or perhaps it should be called “govonics.” By 1999, all providers of rehabilitation and home health agencies will be under a PPS. The fee schedule to be worked out later. What does this mean to the patient? Less therapy, or no therapy depending on the $1500 cap or the PPS payment for the SNF. What does this mean to speech-language pathologists, physical therapists and occupational therapists? My guess is lower wages, fewer jobs in Geriatric Rehab and fewer opportunities for providing rehab to those that really need and benefit from it causing increases in ethical issues related to caregiving. Is Rehab dead for the geriatric population? Not yet, but the PATIENT is in critical condition. Stay tuned for the final round.
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