The Centers for Medicare & Medicaid Services (CMS), a federal agency, was established in 1977 to administer the Medicare program and the federal portion of the Medicaid program. Its purpose is to ensure quality health care for beneficiaries receiving services through these federally funded health insurance programs. Any health care provider must meet the established standards to receive reimbursement for Medicare and Medicaid customers. Hospitals not reporting quality data receive a reduced percentage in their annual payments.

CMS has established quality measures that will provide a greater awareness of the quality of care provided by a facility. These data will allow patients to make more informed decisions related to their health care. CMS is continually looking at standards and guidelines developed by other quality groups and organizations, such as the National Quality Forum, to update their program for quality improvement.

Patients receiving health care services under the Medicare/Medicaid umbrella have the opportunity to provide feedback and concerns to the agency. All concerns are followed up by CMS personnel, and the validity of the concern is determined. If a complaint is valid, the health care facility must provide documentation related to how standards will be met in the future. Failure to comply with established standards in the established time frame could result in elimination of reimbursement for care rendered to CMS beneficiaries, leading to a large financial impact to the health care facility.

Health insurance was developed to help offset services for individuals requiring health care. In 1847 the first “sickness” clause was added to an insurance document. Health insurance became fully established in 1929 when an insurance company covered school teachers in Texas. After World War II, the health insurance industry became a widespread means of reimbursement for health care services (Castro and Layman, 2006).

The majority of health insurance plans are directly related to employment. These plans may require partial payment for the cost of the plan as well as partial reimbursement for services received. Insurance companies may establish individual contracts with a given health care facility. These contracts may require the health care facility to meet certain quality measures to receive payment.

The two major types of unit of payment include fee-for-service reimbursement and episode-of-care reimbursement.

Currently, reimbursement is based on a system that reflects the work performed and the resources consumed in the delivery of the service. Resources include the supplies used and the time required to perform the procedure. Each procedure is identified by a code that is listed in a schedule that is identified by various payers. In the schedule, each procedure is assigned a charge, commonly called “relative value units (RVUs), for the time worked, supply expense, and a mark-up percentage that incorporates overhead costs including liability and operational costs such as utilities. Table 9-1 lists infusion therapy procedures and the average nursing time to perform the procedure.

It is important for any new procedure or service to undergo the code development process. Billing compliance personnel will also conduct a valuation of the expenses involved by determining the geographic difference in labor, supply, and liability costs. Each of these elements is adjusted by a “geographic practice cost index” for each Medicare locality (Thorwarth, 2004).

The next step after a charge or relative value has been determined for a procedure is to assign a CPT (current procedure terminology) code. The CPT coding system contains more than 8000 codes and is the building block for medical care reimbursement and record-keeping (Thorwarth, 2004). Each procedure performed is assigned a CPT code or a series of HCPCS (healthcare common procedural coding system) codes within the CPT. The CPT code is used to file reimbursement claims, as well as to track procedures for research, utilization review, and other purposes. A variety of reimbursement codes are available for different payers of patients in various health care settings. Uniform bill, or UB-92, codes are used by hospitals for inpatient and outpatient billing to major third-party payers.

Medicare uses diagnostic-related groups (DRGs) to reimburse inpatient stays. The DRG reimbursement system was instituted so that health care organizations would receive a fixed payment based on diagnosis and not on the facility’s charges. The prospective payment system (PPS) produces a list of prices that Medicare pays for services delivered for each DRG. With the advent of changes in Medicare payment, the health care facility is reimbursed at a prospectively determined rate for treating a specific case, irrespective of the charges accumulated during the patient’s stay. This places the burden of reducing health care costs on facilities and requires them to be more efficient in their delivery of care (Niedzwiecki, 2006). With the advent of the PPS, hospitals have implemented other measures to generate revenue, such as inserting peripherally inserted central catheters (PICCs) not only in the inpatient setting but also in an outpatient ambulatory clinic or an alternative care setting.

Revenue codes are used by payers to categorize the items used and charges incurred during a patient’s stay with a health care provider. All items on a patient’s bill must be assigned a revenue code for payers to process the bill. All health care charges must be accurate and follow standard guidelines. To facilitate this, health care organizations set up charges on a chargemaster. The chargemaster is a large computer file that contains all patient charges. Table 9-2 is an example of a chargemaster account for infusion therapy charges.

Because of the frequent changes in rules and regulations, procedure codes and charges are frequently reviewed by billing compliance personnel. It is important for the infusion nurse to perform an annual review with billing compliance personnel to evaluate current procedures and charges. In the annual review process, consideration should be given to adding any new infusion procedures that are being performed as well as adjusting supply costs for any changes in contractual agreements. It is important for the infusion nurse to stay informed and knowledgeable regarding the constantly changing rules and regulations that govern reimbursement.

Reimbursement for home infusion therapy is complex because of the different models of home infusion delivery as well as the varying sources of, and gaps in, insurance reimbursement. Depending on patient needs, geographic differences in the model of care, availability of resources, and reimbursement requirements, there may be differences in how home infusion services are provided. The following are two examples of home infusion services:

While a detailed presentation of the intricacies of home care reimbursement is beyond the scope of this chapter, an overview of key concepts is provided.

Most private health insurance plans consider home infusion therapy as a medical service, and reimburse clinical services (e.g., nursing visits), medications, and needed supplies under the medical benefit rather than the prescription drug benefit. Payments are generally separate for the drugs and nursing visits. Many, if not most, health insurance plans require preauthorization for home care and/or co-payments; therefore patients must be informed of any charges they may incur. If home infusion services are not covered by insurance, the patient may choose to pay for the home infusion therapy, receive the therapy in the hospital or physician’s office, or obtain funding through charitable organizations.

Organizations are often required to make one home visit to assess the patient’s needs in the home environment and then establish a plan of treatment that includes the type and frequency of service necessary to return the patient to his or her optimal level of functioning. This information is then communicated to the insurance case manager, who authorizes a finite number of visits that must occur within a specified amount of time. For example, three daily visits are authorized to teach the patient home IV antibiotic therapy. After the third visit, if goals are not met, the agency must obtain additional authorization to continue services.

In making the decision to authorize additional visits and ongoing services, the case manager is dependent upon the nurse’s assessment of patient progress and clinical documentation. The home health nurse must clearly communicate any barriers limiting the patient from achieving goals and hindering return to independence. For example, the home health nurse might find that the patient is very anxious about learning to perform his IV infusion, slowing down progress. The home health nurse asks for two more visits, anticipating that these visits will provide the opportunity for this patient to learn to safely perform his infusion independently. The home health care nurse becomes the “eyes and ears” of the insurance company, and many patient-related decisions involve collaboration with the case manager. Any unauthorized visits may not be reimbursed; therefore the home health organization must meticulously track both visits and authorizations to assure reimbursement for services rendered to the patient.

Government health plans such as Medicaid, TRICARE, and the Federal Employees Health Benefits Program reimburse for home infusion therapy (NHIA, 2008). Because Medicaid coverage is administered by the state, there are differences in the extent of coverage and there are often gaps. Coverage under Medicare is complex and limited. Medicare’s fee-for-service program (Parts A, B, and D) is the only major health plan in the country that has not recognized the clear benefits of adequately covering provision of infusion therapies in a patient’s home. Because most Medicare beneficiaries are enrolled in the fee-for-service program, when seniors and the disabled find they may need infusion therapy they often find it unaffordable to receive this care in the comfort of their homes (NHIA, 2008).

When home nursing visits are needed for beneficiaries receiving infusion therapy, there may be Medicare Part A coverage under Medicare’s home health benefit when the following conditions are met: the patient is serviced by a Medicare-certified home health agency, the patient meets homebound criteria, and the patient requires intermittent (not 24 hour) home nursing. Agencies that are Medicare certified must complete an OASIS (Outcome and Assessment Information Set) assessment in addition to the routine home care assessment (CMS, 2007). The OASIS assessment is a data collection tool used to quantify demographic, clinical, and functional information about the patient’s health status. This information is submitted to the state and to CMS and becomes part of an outcome assessment database that is used to measure and assess the quality of patient care and delivery of services. Medicare provides a payment in a lump sum to the home health agency to provide all the beneficiary’s home care services required for a 60-day period, or “episode of care,” under the prospective payment system (PPS). The Medicare PPS, originally implemented in 2000, was revised for the first time effective January 2008 (CMS, 2008b). Accurate coding of the patient’s diagnoses along with accurate completion of certain OASIS items is essential as OASIS scores determine the PPS payment. PPS reimbursement to the agency is based on averages. With some patients, the agency may achieve a profitable episode, and with others the agency may experience a financial loss. The mechanism by which this balance of profit and loss is achieved is called case mix adjusting or case mix management.

Under Medicare Part B, there is some coverage for a few infusion therapies administered using durable medical equipment such as mechanical or electronic external infusion pumps. Infusion therapies covered under Part B include a few anti-infective drugs, certain chemotherapy infusion drugs, inotropic drugs including dobutamine and milrinone, and infusion analgesics. Parenteral and enteral nutrition infusion therapies may be covered under Medicare Part B, but only if the need for the therapy is documented to be for at least 90 days and other coverage criteria are met. Coverage for intravenous immune globulin (IVIG) for primary immune deficiency patients exists but supplies and equipment are not reimbursed. More specific information can be obtained by contacting the Medicare entities called Durable Medical Equipment Medicare Administrative Contractors through the website http://www.cms.hhs.gov/center/dme.asp (CMS, 2008a). While most infusion drugs may be covered by the Medicare Part D prescription drug benefit, the Centers for Medicare & Medicaid Services (CMS) has determined that it does not have the authority to cover the infusion-related services, equipment, and supplies under Part D. As a result, many Medicare beneficiaries are effectively denied access to home infusion therapy and are compelled to receive infusion therapy in hospitals and skilled nursing facilities at a significantly higher cost to Medicare and at great inconvenience to the patients (NHIA, 2008). Increasingly, more participants in the Medicare program are enrolling in the Medicare Advantage (Part C) program. Similar to most commercial health plans, many Medicare Advantage health plans will cover home infusion because they recognize it will reduce their overall health care costs and achieve high levels of patient satisfaction. NHIA is working on legislation to address the gaps and limitations in coverage by Medicare and is an excellent resource for seeking the most up-to-date information about reimbursement for home infusion therapy (www.nhianet.org).