Review of Physician Therapy Services Provided During Home Health Episodes in Calendar Year 2008

The Centers for Medicare & Medicaid Services (CMS) includes in the home health prospective payment system (HH PPS) base rate reimbursement to home health agencies for physician-provided therapy services that are not subject to the consolidated billing requirement and are billable by physicians. As a result, when a physician bills Medicare Part B for therapy provided to a beneficiary during a home health episode, Medicare pays twice for the same service: once to the physician under Part B and again to the home health agency under the HH PPS.

Prior to the implementation of the HH PPS on October 1, 2000, therapy services furnished to beneficiaries receiving home health care were separately billable to Part B by outside providers such as physicians, therapists, and outpatient facilities. In May 2003, CMS instructed Medicare contractors to allow Part B payments for therapy services furnished during home health episodes whenever those services were billed with a physician specialty code. Beginning in 2014, CMS must rebase home health payments to improve payment accuracy for home health agencies. Our review included an analysis of the development of the base rate and of updates through 2010.

We recommended that CMS eliminate any duplicate payments when rebasing home health payments by adjusting the HH PPS rate to exclude physician-provided therapy services or by making physician therapy services subject to the consolidated billing requirement again. CMS agreed with our recommendation and provided information on action that it planned to take to address the recommendation.