Veteran’s Administration (VA) updated fee schedule for 2021
The VA’s New Approach to Rate Calculation
Game-Changing Increase for Some, Others See Margins Erode.
The Veteran’s Administration (VA) recently rolled out its updated fee schedule for 2021. In the past, new fee schedules were celebrated as good news for home care agencies who would typically see rates increased. Unfortunately, this has not been the case for some agencies this year. Worse than no increase, for some agencies, fees have decreased significantly.
“Our margins just declined by 25%, the rates we are paid dropped 10%! This was a completely unexpected change that will impact our ability to stay open.” Explained one agency owner in the northeast operating just outside a major metro.
The reason agencies are finding themselves in this situation is the VA’s change in the way payment rates are calculated.
From VA.gov: “VA is updating its fee schedule calculations to align with industry best practices and will now calculate the payment rate based on the location where the care is provided (i.e. rendering locality). Previously, the VA fee schedule calculated the payment rates based on the location of the referring VA Medical Center.”
For the owners of agencies working with clients in suburban areas outside of New York, Boston, Philadelphia and other major metropolitan areas, in the past – for clients that travelled into the city to their closest VA facility for care – rates were based on the referring facility location. See Figure 1 below.
For example, in 2020, the rate for G0156 was $8.29 per 15-minute unit or $33.16 an hour for referring facilities in Boston. The 2021 rates take Boston to $8.63 per unit or $34.52, a 4% increase.
However, with the change in payment calculation now based on the rendering location, if the client’s home is located just outside of Boston (based on zip code), the rate paid for the same service will drop to $7.70 or $30.80 an hour. An over 10% decrease!
|Metro||2020 Per Unit / Per Hr||2021 Per Unit / Per Hr Zip in Metro||2021 Per Unit / Per Hr State Zip||Metro Zip Hr. Increase / %||State Zip Hr. Decrease or Increase / %|
However, the opposite situation is true on the other side of the country, depending on how far veterans travel to their referring facility.
For example, zip codes that lie outside of Dallas, payment on G0156 is almost $60.00 an hour, compared to the 2020 rate of $25.00 an hour for the Dallas facilities. That is a 139% increase!
One improvement the VA has rolled out is the overall accessibility to the fees in one central location online.
“The change was significant in that it shows the VA’s continued commitment to helping improve efficiencies across their systems and providers,” explains Durrand Ashford, Agency Owner with Acti-Kare in Orlando. “I would recommend that to ensure they receive timely updates on fees and all things VA, that agency owners and administrators sign up for the VA online newsletter.”
How do I determine the new 2021 VA fees?
Visit the VA website for a full description and resources to calculate the appropriate rates:
The calculation change has undoubtedly added a level of complexity to rate determination.
We will go through the process step-by-step for Community Care Home Care Providers below:
- Identify the rendering location’s (client/patient’s home) zip code.
- Download Zip Code to Carrier Locality ZIP file here.
- Unzip the file and download the spreadsheet using Google Sheets or Excel.
- Identify the ‘Medicare Carrier’ number and the ‘Medicare Locality’ number for the location where services were rendered (client/patient’s home).
- Next, download the 2021 Fee Schedule here.
- Open the spreadsheet using Google Sheets or Excel.
- Identify the service code, include the modifier (if applicable). Scroll or filter or find that code.
- Next, scroll to the ‘Medicare Locality’ number identified in step 4.
- Scroll to the ‘Medicare Carrier’ number identified in step 4.
- When delivering care in the home, the rate you need is the rate in the ‘No’ column, as care is not being provided in a facility.
It is essential for agencies that serve our Veterans through the Community Care Network to stay current on the VA rates and other developments and announcements.
Rates are subject to change at any time, according to the VA. As recommended by Durrand Ashford above, to keep up-to-date on rates, you can sign up for their ‘Provider Advisor’ newsletter here.
About SMARTcare Software
SMARTcare technology works to advance care while addressing one of the largest challenges facing home healthcare; a shortage of caregivers.
The SMARTcare team released the ‘COVID-19 Toolset‘ last March, which helped the home care industry respond quickly to the pandemic. The company is a leader in-home care innovation with a comprehensive enterprise solution that includes back-office automation, interoperability and point-of-care apps.