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either disabled or aged 65 or older. It is administered by the
Healthcare Financing Administration (HCFA), a division of the
U.S. Department of Health and Human Services, with whom private
insurance companies in different regions of the country have
contracted to serve as fiscal intermediaries.
In 1995, Medicare reimbursed home health care providers at
an amount that equaled the lesser of the actual reasonable cost
or customary charges, up to the maximum “cost cap”; i.e., the
aggregate per-visit costs limitation under the law applicable to
Medicare. During 1995, Medicare paid home health care agencies
for the necessary services they provided to covered beneficiaries
on a retrospective cost system under which Medicare sent a
“periodic interim payment” (PIP) every 2 weeks to home health
care agencies to cover claims activity. The Sta-Home tax-exempt
entities used the PIP payments to fund their payroll, which was
paid biweekly. Home health care agencies also submitted
quarterly reports and filed annual cost reports with the fiscal
intermediary. If PIP payments differed from the payments
allowable as ascertained from the cost report, the fiscal
intermediary made the appropriate adjustment by reimbursing the
home health care agency for an underpayment or requiring the
agency to remit an overpayment. The Aetna Insurance Co., which
was the fiscal intermediary for the Sta-Home tax-exempt entities,
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Last modified: May 25, 2011