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Departments: Payment Strategies

Home Health Wound Services Under Medicare PPS

Schaum, Kathleen D. MS

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The Balanced Budget Act of 1997 mandated that home health agencies shift from a cost-based reimbursement system to a capitated episode of care payment system. With the cost-based system, agencies tended to provide as many home health visits as possible; they did not generally empower patients to manage their own wound care. Some agencies purchased whatever wound care dressings the physicians ordered from wherever they could obtain them, including local retail pharmacies. Cost was not an issue. Other agencies ignored patients' Medicare Part A benefit and asked physicians to write wound care dressing orders that could be filled by durable medical equipment (DME) suppliers. The DME suppliers then billed the Medicare Part B program and collected 80% of the durable medical equipment regional carrier (DMERC) fee schedule. The other 20% of the DMERC fee schedule was collected from the patients.

On October 1, 2000, the new home health prospective payment system (PPS) was implemented. The main goal of this new payment system is to control runaway costs. A second goal is to consolidate the payment for all Medicare Part A home health benefits into a single payment that the agency receives for each 60-day episode of home health care. The beneficiary does not pay any co-payment for these home health services.

This new payment system requires home health agencies to operate under a very different wound care philosophy-an enormous task for agencies that have not trained their staff and physicians to provide state-of-the-art wound care and have not tracked their clinical and economic wound management outcomes. The following table is intended to provide home health wound care specialists with an overview of the work they must accomplish to implement the new PPS in their respective agencies. The left-hand column of the table describes the major components of the Medicare Home Health Agency Prospective Payment System that affects wound care for homebound patients. The right-hand column suggests practical strategies that wound care specialists should employ to ensure the financial success of their wound management services. TABLE



Q: You often mention the Medicare Surgical Dressing Policy. Which providers need to learn about this policy?

A: Any provider who writes a wound care dressing order for a patient who has Medicare Part B coverage must know the wound qualifications, physician order guidelines, and utilization guidelines of the Surgical Dressing Policy. Here are some instances when the provider must know this Medicare Part B policy:

• Hospital staff must know it to discharge wound care patients to their homes.

• Staff of hospital-owned wound care clinics must know it to write orders for wound dressings needed by patients between wound care clinic visits.

• Physicians must know it to write orders for wound dressings needed by patients between physician visits.

• Staff at skilled nursing facilities must know it to obtain correct orders for patients who have completed their Medicare Part A stay and are now eligible for Medicare Part B surgical dressing payments or who are not eligible for Medicare Part A coverage on admission.

• Staff at home health agencies must know it to obtain agency discharge orders and to empower patients and/or caregivers to manage their own wounds.

© 2001 Lippincott Williams & Wilkins, Inc.