As the end of 2016 draws near, we would like to offer a few reimbursement planning tips that will be helpful for year-end close, cost reporting, and proper recording of 2017 revenue.
Establish an accurate Medicare bad debt receivable or liability
Prior to year-end, we recommend that you review all of your Medicare bad debt claims and compare the total to any pass-through and lump sum payments received during the year. If the result is an overpayment by Medicare, a review at this time will help you to plan for the repayment that must be made with your Medicare cost report in May 2017. If your review indicates a receivable, you may consider filing your cost report sooner in an effort to facilitate the refund.
- Identify the Part A coinsurance claims that qualify for inclusion as a reimbursable bad debt on your Medicare cost report. Claims can be included only for residents with traditional Medicare Part A coverage (not for Medicare HMO’s or Part B), when the coinsurance payer is:
- MyCare Ohio Medicaid. This includes dual eligible residents who elected to keep traditional Medicare coverage instead of enrolling in the MyCare Ohio Medicare plan. They are dual eligible residents who are not dual participants.
- Traditional Ohio Medicaid.
- Private, for which all collection efforts have been exhausted (HIM 15-1, Section 308.)
- For claims identified, in “A,” confirm that you have the required documentation to support the bad debt:
- Evidence of the payment by Medicare. The Medicare remittance cannot be dated after the end of the cost report period.
- Evidence of a qualifying reason for non-payment from MyCare Ohio Medicaid or Traditional Medicaid in the form of a remittance advice, dated no later than the end of the cost report period and containing an acceptable denial code.
- For private pay, evidence that all collection efforts have been exhausted in accordance with Medicare regulations (HIM 15-1, Section 308) and in accordance with your facility bad debt policy. Also, at least 120 days must have elapsed between the date of the first bill to the beneficiary and the date of the actual write-off.
- Evidence of the actual bad debt write-off in A/R. The write-off date should represent the remittance date referenced in item 2 or the date determined in item 3.
- Update your Medicare bad debt log (Exhibit 5 for the Medicare cost report.) Remember that the write-off dates must be within the cost report period for reporting the bad debt, not the claims dates of service. Also, with traditional, MyCare Ohio opt-out, and private pay, you must list Medicare remittance advice dates.
- From the log, determine the total allowable Traditional Medicare Bad Debts for the cost report period. Multiply the total by the Medicare allowable reimbursement rate of 65%, and then by 98%, which will result in net reimbursement due after sequestration.
- Subtract the bi-weekly pass through payments, and all lump sums received or paid, to determine a receivable or payable. Bi-weekly pass through payments and lump sums should have been communicated to you through an interim rate letter issued by your fiscal intermediary. An example letter is available >>
If you are not in agreement with the payment information contained in the letter, differences should be resolved directly with your fiscal intermediary prior to completion of the Medicare cost report.
What is a qualifying reason for non-payment?
- General rules:
- Traditional Ohio Medicaid
Qualifying coinsurance bad debts will appear in a separate section of the Provider Remittance Advice, entitled “Institutional Medicare Crossover Inpatient Claims Paid.”
- MyCare Ohio Medicaid only
The most common reason codes for the various plans are listed below. The list is not all-inclusive. Generally, to qualify as a Medicare allowable bad debt, the claim must show a zero payment, with a reason for non-payment that is related to maximums already paid by the primary payer (Medicare), with either no additional benefits available, or in the case of a partial payment, less than full benefits available. Denials for any other reason, such as improper coding, or billing errors, will not qualify the claim for bad debt reimbursement.
- Traditional Ohio Medicaid
- MyCare Ohio plan specific information:
- MyCare Aetna
Qualifying reason codes may appear on the remittance as a zero pay or partial pay. The Code/Description may be 23 or 97.
- MyCare Buckeye
Qualifying reason codes may appear on the remittance as MX, EX76, MX02, or with any explanation indicating that the “maximum” allowable has been paid by primary insurance.
- MyCare CareSource
Qualifying reason codes may appear on the remittance as OA‐23, or OA‐45, or with any explanation indicating that the prior payer adjudicated the claim or the charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement.
- MyCare Molina
Qualifying reason codes may appear on the remittance with some indication that the COB payment exceeds the plan allowed.
- MyCare United Healthcare
Qualifying reason codes may appear on the remittance as 45 or 190, or with some explanation indicating that payment is included in the allowance for an SNF qualified stay.
- MyCare Aetna
Establish an accurate MyCare Ohio Medicare bad debt receivable or liability
Treatment of coinsurance bad debts for dual enrollees by the MyCare Ohio Plans is discussed below. For Buckeye and CareSource, maintaining a separate bad debt log for each carrier will facilitate the tracking of any settlement due.
If the facility has executed a contract amendment with Aetna for coinsurance bad debt coverage, Aetna will pay RUGS + 2%. The 2% allowance is intended to cover any coinsurance that might be assessed. There is no additional reimbursement for coinsurance.
Buckeye will pay a percentage of coinsurance back to the facility annually in a lump sum, depending on funds available for this purpose. The payment will not exceed the percentage allowable by Traditional Medicare for any given period (in 2016, 65%). The total of bad debts will be determined from Buckeye’ record of claims processed for the facility. The projected cut-off date for processing 2016 claims for inclusion in the lump sum payment is March 31, 2017. Watch for notifications from Buckeye for the actual claims cut-off dates.
CareSource will pay the same percentage of bad debt that is allowable by Medicare (65% for 2016) annually in a lump sum payment. The total of bad debts will be determined from CareSource’s record of claims processed for the facility. No additional billing is necessary. The projected cut-off date for processing 2016 claims for inclusion in the lump sum payment is February 28, 2017. Watch for notifications from CareSource for the actual claims cut-off date.
If your facility signed a contract amendment, Molina would add an allowance to both MyCare Medicaid and MyCare Medicare payment rates (in 2017, it is 0.992%). This allowance is intended to cover any Part A coinsurance bad debts for Molina participants. There is no additional settlement.
Coinsurance is not applied to United Healthcare claims. No coinsurance should be assessed for accounts receivable, and no tracking or settlements are necessary.
Compile census and related statistics for the cost reports
- The level of detail required to complete the census schedule of the Medicaid cost report appears below. Census must be reported on a monthly basis. Be sure to segregate the MyCare Ohio program days from the Medicaid and Medicare days for reporting purposes.
MyCare Medicaid leave days should be tracked separately so that they are easily identifiable for completion of the cost report. They are not reported with other leave days. The “Leave Days” columns (4 & 5) above represent traditional Medicaid leave days only.
Traditional Medicare days should be tracked by RUGS score, and by month. Also traditional and MyCare Ohio Medicaid Hospice days should be placed in Column 11.
- Total admissions and discharges must be reported on the Medicare cost report. They must be compiled into three categories by payer: traditional Medicare, traditional Medicaid, and all other. Only a year-to-date total is needed for each category. There may be tools and reports available within your accounts receivable software to facilitate gathering these statistics. Compiling this data on a regular basis throughout the year will simplify the annual cost reporting process.
Access your PS&R
Regular reconciliation of your Medicare revenue to the Provider Statistical and Reimbursement (PS&R) Report is recommended. It is a critical management tool for billing and to test revenue. It is also an important element for Medicare cost report preparation as well as a required element for Medicare settlement.
- Make sure you or your authorized representative can access the PS&R. If you require new authorizations for access, please allow ample time to obtain them. We are unable to retrieve these reports for you due to access restrictions. However, we have developed specialized instructions for retrieval that we can send to you upon request.
- After you are successful with your login, we recommend that you log in periodically to ensure that your user name and password remain active. Passwords must be changed every 60 days. Accounts are completely disabled after six months of inactivity.
- For cost reporting purposes, obtain the most recent PS&R report for the cost report filing period. The “pay date” parameters for the cost report period should be through the date you are requesting the report, which will most likely be in the months of March through May 2017.
Assign an “agent” role to the cost report preparer for submission of the Medicaid cost report through MITS
Effective January 1, 2017, providers will be required to submit their Medicaid cost reports electronically through the MITS portal. The cost report may be uploaded by an agent of the provider, such as Plante Moran. In order to accomplish this, the agent must be granted access to MITS by the provider. ODM training for this process is expected early in 2017. However, there is guidance for adding agents in the MITS Online Tutorials for Providers, Web Portal Fundamentals, called “Assign Agent Roles,” if you would like to familiarize yourself with the process. Although the cost report preparer may submit the report for the provider, the certification of accuracy must come from the facility. It is recommended that a key facility official is the “PIN” holder for this certification. We recommend the agent role be assigned as soon as possible to avoid any last-minute filing delays.
Determine if De-Licensing Beds by Year End is Beneficial
If you have considered de-licensing beds due to current and projected census levels, you have until December 31, 2016, to notify ODH in order to potentially increase your future reimbursement and save provider taxes. There are ways to de-license beds:
- Permanently surrendered beds to ODH.
Below is the reimbursement impact if providers are able to go from a Large (100+ licensed beds) facility to a Small (< 99 beds) facility:
The peer group prices above were effective July 1, 2016, and were the result of Medicaid re-basing prices on 2014 costs. ODM’s history shows that it rebases every 10 years. The differential shown in prices reflected above could change when ODM next rebases prices.
Other considerations: Please note if you permanently surrendered beds between 5/1 and 12/31, the franchise permit fee will be reduced for the 3rd and 4th quarter. Also, before making this change, providers need to consider that the bed reduction is permanent. A replacement of beds surrendered would require a new purchase of beds. Loan covenants, bond covenants, HUD agreements, and lease agreements must also be considered prior to making the decision to de-license beds. There may be prohibitions in these documents, or approvals of bed changes may be required.
- De-license beds to ODH due to pending sale or CON.
While you can potentially change your peer group and receive a rate increase on 7/1, the franchise permit fee will be no longer be reduced for temporary bed de-licensing. Thus the seller should consider passing this cost to buyer after CON is approved.
Please call us if you have specific questions regarding bed sizing. We can assist you with bed value and proper notifications.
Complete your PELI for all SNF in-house residents as of 12/31/16 and assess your position for earning quality points
The Quality Incentive Rate of $16.44 included in the FY 2016 rate setting continues to be included in the FY 2017 rate. In addition, there is a quality payment available in the amount of $.58 per quality point, to a maximum of 5 points, or $2.90 per day. These points must be earned by the provider. There is also a roll back of $1.79 per day that is being recovered from the rate for all Ohio providers. For FY 2017, quality points were based on a measurement period from July 1, 2015, through December 31, 2015. For FY 2018, the measurement period will be the calendar year 2016.
One quality point may be earned for each of the following five quality indicators:
- Preferences for everyday living inventory
A facility earns a quality point if a PELI tool was implemented and is indicated in Attachment 8 of the annual Medicaid cost report. Last year 902 out of 907 providers received a point.
- Employee retention
If the employee retention rate is at or above the seventy-fifth percentile of all Ohio facilities in the measurement period, a point will be earned. This is calculated from data submitted on Attachment 8 of the annual Medicaid cost report (below). Last year, 684 providers or 75.4% earned this point. As a guide, DOM calculated the minimum retention factor last year to be 70.14 percent. Please note this percentage may fluctuate more than normal this year as DOM will be using the full calendar year 2016 instead of using the last half of the year in CY 2015.
- Pressure ulcers
A quality point is earned if a nursing facility is at or below the 25th percentile for their pressure ulcer rate for both short-stay and long-stay residents. Rate are obtained from CMS. As a target, last year the 25th percentile for long-stay residents was 2.75%, and short-stay residents were 0.00%. Last year only 25.8% of providers received this point.
- Antipsychotic medications
A nursing facility must be at or below the 25th percentile for both short-stay and long-stay residents for their antipsychotic medication use rate. Rates are obtained from CMS. As a target, last year the 25th percentile for long-stay residents was 12.41%, and short-stay residents were 0.49%. Last year only 18.1% of providers received this point.
Avoidable inpatient hospital admissions
To earn this point, the facility must attain a rate of 1.0 or less for avoidable inpatient hospital admissions for residents who are in receipt of Medicaid, resided in the nursing facility during a minimum of two days preceding the hospital admission, and resided in the nursing facility for at least fourteen days during the measurement period. The facility’s actual hospital admission rate must be at or below the risk-adjusted Expected PPA (EPPA) Rate calculated for the facility. Please note last year all providers received this point since the third party contractor was not able to produce the results. We believe this year they will have actual results.
Make sure you have the correct reimbursement rates entered into your billing system
- Medicare Part A rates
The SNF PPS Rates that are currently in effect for October 1, 2016, through September 30, 2017, for Ohio are below.
- Medicare Part B rates
We were hopeful to attach the Medicare Physician Part B Rates as part of this article; however, we still have not confirmed the final Part B Fee Screens with CMS at this time. As soon as we have confirmation, we will send them out as a separate mailer.
- Medicare coinsurance, Part B premium, and deductibles
- Medicare Part A Coinsurance for 2017 is $164.50 per day for days 21 through 100, for each qualified benefit period.
- Medicare Part B Premium for 2017 for those “held harmless” from any increase in premiums is $109.00. Beneficiaries not subject to the “hold harmless” provision will pay $134.00.
- Medicare Part B Deductible for 2017 is $183.00.
- Medicare therapy caps
Physical Therapy (PT) and Speech Language Pathology (SLP) combined cap are $1,980; Occupational Therapy (OT) cap is $1,980. If your billing software tracks therapy caps, it may be necessary to reset the limits as of January 1, 2017.
- Exceptions for medically necessary services above the cap are continued through the use of the KX modifier. The MACRA required targeted manual medical review (MMR) process for certain services over an annual $3,700 threshold will continue through 2017.
- New Medicare Part B therapy CPT codes
Confirm that your charge masters have been modified for changes to therapy CPT codes:
- Effective January 1, 2017, the four common CPT codes used for Physical Therapy (PT) and Occupational Therapy (OT) evaluations and re-evaluations (97001-97004) will be replaced by three new evaluation codes based on patient complexity and one new re-evaluation code for each specialty.
- The new PT evaluation codes (97161, 97162, and 97163) and OT evaluation codes (97165, 97166, and 97167) are based on low, moderate, and high complexity, respectively.
- The new re-evaluation codes for PT and OT are changed to 97164 and 97168, respectively.
- The new codes will be classified as “always therapy” and therefore will require the appropriate GP or GO modifier.
- Medicaid rates
Remember to update your Medicaid, MyCare Ohio Medicaid, Hospice Medicaid, and other Medicaid HMO rates for the semi-annual case-mix rate adjustment that will be effective January 1, 2017. Leave day rates for all affected payers will also need to be updated. We have estimated all January 1, 2017, Medicaid rates. If you would like your facility(ies) rate, please email us.
- Medicaid leave days
Replenish leave days for all Medicaid and MyCare Medicaid residents effective January 1, 2017.
- Patient liabilities
Adjust patient liabilities for annual Social Security COLA and other benefit changes.
Identify updated patient liabilities that exceed the threshold for a qualified income trust
Effective January 1, 2017, the monthly income threshold for a QIT increases from $2,199 to $2,205. Since patient liability changes for cost of living and other adjustments will take place in January, the revised patient liabilities should be reviewed to determine if any new QITs are required.
Identify Medicare coverage changes pursuant to annual open enrollment
Perform an annual confirmation of the Medicare payer for all residents with Medicare coverage as of January 1, 2017. If any resident has converted from traditional Medicare to a Medicare HMO or has changed from one Medicare HMO to another:
- Obtain a pre-authorization for services with the new payer.
- Quantify the deductibles/out-of-pocket expenses for new carriers.
Confirm Medicaid payers
If your facility has not adopted a process to confirm Medicaid eligibility through MITS on a monthly basis, confirmation should be done as of January 1, 2017. If any resident has changed from traditional Medicaid to a Medicaid HMO, or from one Medicaid HMO to another, obtain pre-authorization for services with the new payer.
Address ODM post payment claims over-payment reviews
ODM has completed their “second-look” on the SFY 2011 claims. Facilities should remain diligent in their review of the claims despite the “second-look” process. It has been reported that inaccuracies remain. SFY 2012 reviews should also be forthcoming. Plan to allow time for staff to respond to these notices during the busy year-end season.
CMS payroll-based journal reporting
By now we believe all providers have successfully submitted their first required submission for the quarter ended September 30, 2016. Here are some best practices that we have gathered from several clients:
- Save your PBJ Final File Validation Reports.
- Compare CASPER Report 1700D to your internal reports.
- Save all source information so that you have auditable records in case CMS conducts an audit.
- Document methods used to collect non-payroll information (I.e. contract personnel and therapy)
- Analyze your results!
- Save your CASPER Reports 1702S and 1701D monthly and/or quarterly.
- Determine the facility’s reported hours per resident day for the quarter.
- Compare this to current CMS 671 results.
- Determine impact on 5 Star staffing.
- Use the results for other benchmarking.
We have designed a best practice and PBJ reporting analysis. Please call us if you would like us to prepare a PBJ Operational Review to enhance future success.