Medicaid Limit on Medicare Coinsurance

Effective July 1, 2005, Medicaid will dramatically reduce their reimbursement of Medicare A coinsurance for dual eligible recipients as found in rule 5101:3-3-64, Nursing Facility Payment of Medicare A Cost Sharing . ODJFS will be calculating the "Medicaid Maximum Allowable Amount," which is 109 percent of the facilit y’s Medicaid rate on the date the service was provided. Medicaid will reimburse the lesser of the Medicare A coinsurance amount or the calculated Medicaid maximum allowable.

Medicaid’s non-payment amount can be considered a Medicare bad debt and may be reimbursed on Exhibit 5 of the Medicare cost report. Please remember to follow Medicare’s bad debt rules.

AdminaStar Federal is proposing to issue a Periodic Interim Payment (PIP) for providers with over $15,000 of FY04 Medicaid co-insurance. The PIP amount will be be 80 percent of the FY04 Medicaid coinsurance amount. Facilities should have received a letter from CMS notifying them of their PIP amount which will be paid in 26 installments starting the end of July. If you believe the PIP amount is not ref lective of your facilit y’s current situation, possibly due to increased Medicare utilization or change in beds, you may submit a request with supporting documentation to Kathy Guran at AdminaStar Federal. If you did not receive a letter from CMS, you can contact Kathy Guran at AdminaStar Federal; please remember that facilities with less than $15,000 of FY04 Medicaid co-insurance would not have received a letter.

Medicare Cost Report General Bad Debt Guidelines:

• Facility must have a written collection policy.
• Maintain evidence that you are uniformly following your collection policy by keeping copies of collection letters and legal correspondence, such as small claims court, legal notices, etc., for both non-Medicare beneficiaries and Medicare beneficiaries.
• Collection fees or expenses are not reimbursed as part of the bad debt.
• Generally, the bad debt should be 120 days old unless otherwise known to be uncollectible.

Medicaid Non-allowable for Medicare Bad Debt:

• Keep in mind for the Medicaid non-allowable that you intend to claim on the Medicare cost report, that you can not claim a bad debt until you have received the denial via the Medicaid remittance. The bad debt date should be the date listed on the Medicaid remittance advice. And the bad debt claimed on the cost report must be in the cost reporting period.
• The time period of the bad debt must correspond to the facilit y’s A/R subsidiary ledger. They may request detail to support the timing of the bad debt both via a Medicaid remittance and a copy of the A/R ledger.