Fall Brings New Laws to Home Health: A Roundup of Legislation and Rules Affecting Your Agency

Monday, October 31, 2016



Now that the summer days are over, the kids are back in school, and pumpkin spice is once again taking over the world, it’s time for a number of new laws and regulations to go into effect. There are a number of new rules that can potentially impact your agency taking effect between October 1 and the end of the year. If you haven’t reviewed these rules yet or made the necessary changes to ensure compliance, the time to do so is now.


New ICD-10 Codes Launching October 1

It’s hard to believe that it’s already been a year since ICD-10 took effect. So far, the transition has been relatively smooth, but agencies need to brace for additional changes taking effect in October. For the last year, there has been a freeze on code changes and additions, but beginning October 1, the typical annual schedule of changes and updates will resume. Among the changes include 3,651 new hospital inpatient procedure codes and 1,900 new diagnosis codes, as well as 487 revisions to existing codes. One of the new codes being introduced is related to the Zika virus. ICD-10 updates also include changes to the tabular instructions.


All of the addenda can be found on the CMS website, which includes all of the new and revised codes as well as a revised tabular, alphabetic index, table of drugs and chemicals, neoplasm table, and index of external causes.


Wage Changes Take Effect December 1

Last year, the Department of Labor passed a rule stating that home health workers were subject to minimum wage and overtime rules. This year, President Barack Obama signed additional legislation into effect extending overtime pay rules to all employees who earn under a specific threshold.


Beginning December 1, salaried employees who earn less than $47,476 per year ($913/week) will qualify for overtime pay for all hours worked over 40 hours. While it’s unlikely that the change will affect most home health care providers, there may be some employees in your agency who qualify. If so, you have three options: Pay overtime wages (time and a half) for hours worked over 40 hours; increase employee salaries above the threshold; or restrict employees from working more than 40 hours per week.


Home Health Prior Authorization Requirement Begins

In February 2016, CMS announced the Pre-Claim Review Demonstration for Home Health Services, a demonstration project designed to reduce Medicare fraud and abuse by requiring home health providers to seek prior authorization for services before submitting claims for reimbursement. Because a 2015 review found that nearly 60 percent of home health claims had some type of improper payment, CMS believes that the pre-authorization project will ensure that all claims are accurate and warranted.


The demonstration project began on August 1 in Illinois, and will expand to four other states throughout the fall; Florida is next to join the demonstration on October 1, followed by Texas on December 1, and then Massachusetts and Michigan on January 1. However, because the demonstration is expected to go nationwide by the end of 2017, despite some weaknesses that have already been identified in the process, it’s important for agencies to follow the developments to the demonstration and begin adjusting their processes and procedures now to ensure compliance in the future. This may include investing in new home health software, making changes to billing procedures, and providing more education to staff and clients about what’s on the horizon. 


Discharge Planning Rule Announcement

In October 2015, CMS announced a proposed rule requiring changes to the discharge planning process for patients transitioning into long-term care facilities, home health agencies, and rehabilitation facilities. The proposed rules changes are being developed with an eye toward creating consistency among providers while ensuring that patients transition from inpatient care with a comprehensive discharge plan that will reduce the likelihood of readmission or poor outcomes.


Under the proposed new rules, hospitals would be required to develop a process that begins the discharge planning early in a hospital stay. Ideally, from the beginning hospital staff should begin identifying the patients’ post-hospitalizations goals, preferences, and needs, and developing the right plan for the patient. The new rules are designed to take discharge planning beyond a simple documentation process, and transforming it into one that considers every patient’s unique circumstances, preferences, and goals to ensure a more positive outcome.


The initial comment period for the new discharge rules ended last January, and CMS has been deliberating over the rules for the last nine months. Expect to see an announcement of the new proposed rules to appear sometime in October or November.


The rules for home health care delivery are changing all the time. These are just some of the new regulations that are bound to affect your agency in some way. Stay tuned here to learn more about news that can impact your company, and stay ahead of the curve by learning more about Complia Health's family of products here.