11 Questions to Help You Prepare for FY11

August 4, 2011

1. Why haven't you received your 7/1/10 nursing facility Medicaid rate setting yet? 
2. Do you know what your 7/1/10 Quality Add-On is? 
3. Have you heard ODJFS released the FY 2011 ICF/MR rollback percentage? 
4. Have you seen the 10/1/10 RUG-IV Medicare PPS rates? 
5. Are you at risk for losing Medicare reimbursement due to timely filing limitations? 
6. Are you billing for flu vaccines? 
7. Are you submitting informational bills for Medicare managed care/HMO residents? 
8. Do you have the current therapy fee schedules? 
9. Is your software ready for MDS 3.0? 
10. When will your benchmarking reports be available? 
11. Do you know how to get easy access to all of our previous newsletters and articles? 

1. Why haven't I received my 7/1/10 nursing facility Medicaid rate setting?

The second year of Amended Substitute House Bill 1 (H.B. 1) commenced July 1, 2010. A summary of important H.B. 1 provisions, relevant to fiscal year (FY) 2011 (July 1, 2010 – June 30, 2011) is available below.

Fiscal year 2011 rates are not expected to be finalized until October, as the franchise permit fee (FPF) component of the rate is not yet determined. ODJFS is currently assessing the 2009 Medicaid cost report data to determine if the franchise fee can be further increased under federal guidelines to increase drawdown of federal funding. Any increase in the FPF will be used to increase prices. In FY 2010, a $0.06 increase in the FPF resulted in a 0.73% increase in price (an average of $1.20).

Consistent with the prior year, the July 1, 2010 Medicaid rates will not be paid until October. Until that time, each facility will continue to receive its current rate, and then a lump sum adjustment retroactive to 7/1/10 will be made. While the franchise permit fee component of the rate remains an estimate, variations in the franchise permit fee will only affect the rate received by facilities currently at or near price. For an estimate of your 7/1/10 rate, including the just released details of your facility’s 7/1/10 quality add-on calculation, contact an HW Healthcare Advisor.

The goal of ODJFS has been to move providers toward price. As you can see in the chart below, that goal is being accomplished as only 20% of providers were at price for FY 2010 while 40% are estimated to be at price for FY 2011.

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2. Do you know what your 7/1/10 Quality Add-On is?

ODJFS recently released the 7/1/10 NF quality add-on calculation and benchmarks. The price per point for FY 2011 will be $0.77 (FY 2010 price per point was $0.80). Facilities can earn up to 8 quality add-on points. Benchmarks for determining points are as follows:

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3. Have you heard ODJFS released the FY 2011 ICF/MR rollback percentage? 

Late last week, the Ohio Department of Job and Family Services released the long awaited FY 2011 ICF/MR rollback percentage. The rollback came in at 4.19%, which is significantly higher than the FY 2010 rollback of 1.62%, but close to the percentages we estimated in the spring with your estimated rate settings. The Department has indicated the final FY 2011 rate settings should be mailed out by the end of next week (8/13/10). Below is a summary of the final FY 2011 ceilings and inflation factors.

ICF/MR Ceilings and Inflation Factors

• The rollback of 4.19% will be applied to the full rate calculated using your 2009 cost report data.
• The FY 2011 rate is effective 7/1/2010 and will commence payment on the August vendor.
• For FY 2011, ICF/MR franchise permit fee (FPF) decreases by $1.20 to $13.55 per day with an effective date of 7/1/2010.
• The June 2011 vendor payment remains deferred into FY 2012. There was no language in H.B. 1 addressing the payment delay or when the payment will be paid however, it was the intent of all stakeholders that the payment would only be delayed for a short period. Providers need to closely monitor cash flow and plan for any cash flow difficulties that may arise.

In summary, as in previous years, ODJFS determined a rate for each provider using the 2009 cost report data. Once all costs were processed, ODJFS calculated a mean total per diem for all ICFs/MR facilities in the state, weighted by the May 2010 Medicaid days. This per diem was compared to the $278.15 targeted State Wide Average to arrive at the roll-back percentage. The SWA per diem for FY 2010 resulted in a fiscal year 2011 rollback of 4.19%.

All of our clients should have received HWCO revised 7/1/10 rate settings (using final ceilings and inflation factors), via email earlier this week. Please do not hesitate to give your healthcare consultant a call if you have any questions regarding your rate or if you did not receive this email. Please be aware once you receive your facility’s FY 2011 rate setting you will only have 30 days to review and notify the department of any errors. It is important that the rate setting be reviewed for accuracy and that any errors are communicated to the Department in a timely manner.

Should you have any question after receiving your rate setting, please contact your HW Healthcare Advisor or submit your questions here: Contact Us

4. Have you seen the 10/1/10 RUG-IV Medicare PPS rates?

If not, you may have missed our eblast!  Click here for a link to our email from 7/22/10.

5. Are you at risk for losing Medicare reimbursement due to timely filing limitations?

The Medicare billing claims for the period of October 1, 2008 through December 31, 2009, are set to expire on December 31, 2010. All claims must meet what is known as “clean claim definition” in order to be processed. If the claim does not meet the “clean claim definition”, the claim will be returned to the provider with no right to appeal. Be sure to review claims from these time periods to ensure you get properly reimbursed.

Effective January 1, 2010, timely filing limitations were changed in the Health Care Reform Bill and you now only have one year from the date of service to submit your claims. It is more important than ever to have the proper Medicare billing procedures in place to ensure you do not miss out on reimbursement for services delivered.

6. Are you billing for flu vaccines?

It might be the furthest thing from our minds right now, but one day winter will return and bring the flu season with it. Your staff is likely providing flu vaccines to residents, however while  preparing 2009 Medicare cost reports we noted that many providers are not taking advantage of this cost based reimbursement opportunity. Click here for a brief Quick Reference Guide published by CMS, summarizing the billing codes, allowed frequency of administration, and other frequently asked questions. 

Some points to keep in mind to help you maximize reimbursement:

1. Shots can be purchased in bulk (23 shots in one vial). If you expect to administer the shots in high volume, take advantage of bulk pricing.
2. Instruct billers to use both vaccine codes when billing (one for the actual vaccine and the other for the nursing administration portion).
    
3. The maximum allowable amount is your friend! Log into your Medicare online system to find the percentage (determined by locality – zip code) to calculate your maximum allowable amount. You want to ensure you are charging this amount.  
    
4. Don’t wait until flu season to educate your billers. Upon admission, each resident is asked when he or she last received a flu shot, and the vaccine and subsequent billing may be appropriate at that time.  
    
5. When a resident receives both the flu and pneumonia vaccines, both administration codes should be reported (G0008 & G0009). Medicare will pay both administration fees if the resident receives both the flu and pneumonia shot on the same day.
    
6. If you provided flu and pneumonia vaccines in the past but didn’t bill you can still do so. Claims with dates of service October 1, 2008 through December 31, 2009 can be billed/processed through December 31, 2010. 
    
7. If the resident has an HMO or Medicare Advantage Plan rather than Medicare B, contact those companies individually to inquire about their policy for reimbursement of vaccinations.

Our Revenue Cycle Group can provide assistance with roster billing and other services you may require. Contact your HW Healthcare Advisor if you have any questions or require any assistance.

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7. Are you submitting informational bills for Medicare managed care/HMO residents?

If the answer is no, then like many other providers you are not in compliance. Even though submission of these bills will not result in payment, skilled nursing facilities (SNFs) are required to submit informational bills to Medicare for all Medicare Advantage (MA) beneficiaries admitted to an SNF since 2007. Click here for Change Request (CR) 5840, which was implemented on March 17, 2008, and gives specifics to billing codes and requirements for reporting these claims. Medicare has reported that many facilities have not complied with this requirement and has agreed to override the timely filing edits on claims for 2007 and 2008 if the submission is completed by August 31, 2010. We recommend submitting these claims before the deadline to take advantage of the timely filing edits override and to continue with future billings on an ongoing basis.

Similarly, all non-teaching, inpatient prospective payment services (IPPS) hospitals, inpatient rehabilitation facilities (IRFs) and long-term care hospitals (LTCHs) are required to submit their claims for FY 2007 and 2008, and in addition they are required to complete an attestation form stating that they have complied with the requirement by September 15, 2010. Click here for details or to obtain the attestation form.

8. Do you have the current Therapy fee schedules?

If not, then click here for a copy of our eblast with the retroactive changes for 1/1/10 to 5/31/10, and the revised schedules for 6/1/10 to 11/30/10 reflecting a 2.2% update. 

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9. Is your software ready for MDS 3.0?

If not, you could be at risk of not meeting the 14-day submission and electronic signature requirements that will be put in place on October 1, 2010, whether we like it or not!  These new requirements are here to stay.

For software solutions or demonstrations on MDS 3.0, please contact your HW Healthcare Advisor for assistance.

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10. When will your benchmarking reports be available?

The 2009 Medicaid cost report databases for NFs and ICFs/MR have not yet been released. ODJFS has indicated that they will be released at the end of August. We will need some time to format the data and anticipate being able to produce reports in October. Please contact us if you would like to place a preorder for this valuable report that can assist with budgeting and enhancing operations.

11. Do you know how to get easy access to all of our previous newsletters and articles?

All of our previous newsletters and e-blast are available on our website. Browse through our e-news and newsletter archives.

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SUMMARY OF KEY PROVISIONS FROM AMENDED SUBSTITUTE HOUSE BILL 1
RELEVANT TO FY 2011

Governor Strickland signed Amended Substitute House Bill 1 (H.B. 1) into law on Friday, July 17, 2009. The provisions of the bill relating to Medicaid reimbursement for skilled nursing facilities remained relatively unchanged from the “framework” version adopted by the Conference Committee. Unfortunately, most of the increases suggested by the House and/or Senate were eliminated due to an additional state budget shortfall of $3.2 billion.

A summary of important H.B. 1 provisions are as follows: 

• Phase In: The stop gain/stop loss methodology will be used to calculate rates, with a 2.25% stop gain and 1% stop loss in FY 2011. A significant change is that once a provider is in “price”, they are no longer subject to the stop loss/gain calculation for interim or fiscal year end rate calculations. They will remain in price and any future case mix changes (positive or negative) will result in adjustments in the provider’s rate and will not be subject to further stop loss/gain provisions.
• Prices: No inflation to peer group prices but may increase based upon FPF - see below.
• Franchise Permit Fee (FPF): FPF increase of $5.70 (referred to as "Work Force Development Payment") is added to the rate after stop gain/loss calculations. Total FPF for certified beds up to 200 is $12.06 (6.36 + 5.70) per day. The FPF for certified beds in excess of 200 is $9.99. The franchise permit fee amount is subject to change once ODJFS uses the 2009 Medicaid cost report data to determine if the franchise fee can be increased further under federal guidelines. Any increase will be used to increase prices. Therefore, final skilled nursing facility rates will not be known until October, 2010 at which time there will be a retroactive adjustment to 7/1/10.
• Capital:   No capital provisions (hold harmless or capital compensation add-on) are included in the price; however, 6/30/10 rate used for stop gain/loss calculation does include the H.B. 562 capital compensation add-on for previously qualified facilities. Price does not include the capital hold harmless to the 6/30/05 rate as called for in earlier budget versions.
• Bundling: Consolidated Service Payment (the "bundling" of certain ancillary Medicaid services into the SNF rate) of $3.91 will be added to the rate after stop gain/loss calculation as certain ancillary Medicaid services are no longer be separately billed to Medicaid by the supplier, effective 8/1/09. These ancillaries include Oxygen ($.33), Therapies ($1.75), Transportation ($1.14), certain OTC Pharmacy ($.03) and Wheelchairs ($.66). The related cost incurred by the SNF is now reported on the annual cost report as the facility now incurs additional expenses related to these items. The actual amount paid will be increased by the final FPF increase ($0.06 in FY10).