2011 Fee Schedules & Industry Updates
With the new year upon us, all of us at HW&Co. would like to wish you a happy, healthy and prosperous new year. As always, the new year brings many changes to the long-term care industry. We are pleased to provide you with some updates on some of these changes.
Medicare Updates
- 2011 Part B Fee Schedules - Drastic Cuts Avoided
- Part B Therapy Payments to be Reduced in Some Situations
- Don't Forget Your Part A Coinsurance Bad Debts!
- Take Time to Evaluate Your MDS 3.0 and RUG-IV Transition
- MDS Assessment Noncompliance Issues
- 2011 Medicare Part A Coinsurance and Medicare Part B Premium and Deductible
- PS&R System - Are You Registered?
- Transition from National Government Services to CIGNA Government Services
Ohio Medicaid Updates
MEDICARE UPDATES
2011 Part B Fee Schedules - Drastic Cuts Avoided
After weeks of intense lobbying, Congress passed the Medicare and Medicaid Extenders Act of 2010, which granted a one-year reversal of the expected 25% cut to payments for Medicare Part B services. While many news releases have said that there will be a "zero percent update" to the fee schedule payments, this does not mean that the fee schedules will not change on January 1, 2011. There have been various adjustments to the factors that are used to calculate the payments.
It is important to forward the fee schedules to your business office personnel to use for January bills. The schedules are available in PDF format in the links below.
Our Revenue Cycle Consultants are available to assist with any billing questions you may have. In addition, if you use PointClickCare, we can electronically upload the fee schedules for you.
Many of the fee schedules change or are updated on a quarterly basis. Please review the appropriate schedule based on the Centers for Medicare & Medicaid Services (CMS) updates. Check the CMS website on a regular basis for updates to these schedules. Please note that these schedules are not all inclusive. We have attempted to limit this information to the most commonly used Healthcare Common Procedure Coding System (HCPCS) codes for long-term care facilities.
Many providers use only the therapy fee schedules. We have provided the lab, radiology, PEN and DMEPOS schedules in order to help you identify potential cost savings for your Medicare Part A and Managed Care residents. The fee schedules may be useful in negotiating and verifying the rates being paid to ancillary services providers and will provide guidance to ensure you are paying a cost effective rate.
Ohio Medicare Part B Fee Schedules:
- Medicare Part B Therapy
- Radiology
- Clinical Diagnostic Laboratory
- Parenteral & Enternal Nutrition Items & Services (PEN) - National
- Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Items:
Also, as a reminder, the Extenders Act of 2010 also extended the therapy caps exception process through December 31, 2011. The separate caps for physical and speech therapy (combined) and occupational therapy will be $1,870 for 2011.
If you have any questions on these or other issues facing your facility, please feel free to contact your Howard, Wershbale & Co. health care professional or visit our Health Care section for more information.
Part B Therapy Payments to be Reduced In Some Situations
The one month “doc fix” in December was paid for by a multiple procedure payment reduction (MPPR) policy. The new policy will cut the practice component of the fee by 25% when more than one kind of therapy is provided to a resident in a single day. Congress enacted the policy in the Physician Payment and Therapy Relief Act of 2010. CMS has initially proposed a 50% cut, which was then reduced to 25% and finally to 20% by Congress.
However, CMS is currently taking the stance that the act recently passed by Congress only applied to office settings and not to institutional settings. Therefore, CMS is planning to cut the practice component by 20% for office settings and 25% for institutional settings, including SNFs. Various long-term care organizations are currently working with CMS to apply a consistent policy across all settings. Regardless of what CMS ultimately decides, the MPPR policy is effective January 1, 2011.
Part B rates are comprised of three components: work, practice and malpractice. The work component covers the clinical services actually provided. The practice component covers expenses related to the administration of the practice (e.g., office, rent, wages). The malpractice component covers the cost of malpractice insurance. The MPPR policy only affects the practice component of the payment.
CMS proposed the MPPR for therapy services because they believe certain activities are being paid for twice even though they are only performed once for a given patient. These activities include cleaning the therapy room and equipment, greeting the patient and providing post-treatment patient assistance. The MPPR covers therapy services billed under 44 different HCPCS codes (click here for a list of affected codes).
The MPPR presents some interesting and difficult operational issues. The most pressing of these issues is determining which codes will be paid in full and which will be reduced for days on which a resident receives therapy billed under two or more of the covered codes. CMS has indicated that full payment will be made for the HCPCS code for the unit or procedure with the highest practice expense payment. Any additional services after the service paid in full will be reduced by 25% of the practice expense component.
The last column of the therapy fee schedules above show the payment that would be made under the MPPR for the affected therapy codes. As more information becomes available, we will provide you with more detail on how to best implement the MPPR policy.
Don’t Forget Your Part A Coinsurance Bad Debts!
It is important to continually monitor your Part A coinsurance bad debts to ensure maximum reimbursement. Some facilities are leaving money on the table and reducing profit unnecessarily by not following National Government Services (NGS) requirements.
To receive the maximum amount your facility is entitled to, it is essential that proper procedures be followed. As a reminder, Medicare will not reimburse bad debts unless a proper Medicaid denial has been received. This denial must have a Q code (not a K code) on the Medicaid remittance advice and must be obtained before the cost report year end. Bad debt amounts also must be written off of your accounts receivable aging in the cost report year.
Other common mistakes include not reducing coinsurance amounts claimed by partial payments received from ODJFS, improperly applying patient liability, and improper use of income statement accounts for recording Medicaid coinsurance bad debts on the general ledger (i.e., there is no impact on income for coinsurance amounts related to dual eligible residents since Medicare will reimburse 100% of the coinsurance that has not been paid by Medicaid).
As you may remember, some preliminary adjustment reports providers began receiving in August from NGS for the 12/31/09 cost reports were showing providers owing an additional three days of pass-through payments. This change in pass-through payments was due to the new TRMS Web report NGS was using with the Fiscal Intermediary Standard System (FISS).
Providers are currently receiving NPR’s for the 12/31/09 cost reports. In most cases, the fix was made for the three day issue; however, we have seen some NPR’s that are NOT showing the three day fix. Technically, once an NPR has been filed, it requires a reopening to have adjustments made, and considering the small amount of money owed (plus the fact that providers will have to pay it anyway with the next year cost report), it is likely not worth fighting. If a provider decides to accept the NPR and pay the three extra days, they must make sure that it is properly documented so that those three days do not get paid again with the 12/31/10 cost report.
If you have any questions on reimbursement for coinsurance bad debts or pass-through payments, please contact your HW Healthcare Advisor.
Take Time to Evaluate Your MDS 3.0 and RUG-IV Transition
With three full months of MDS 3.0 experience and RUG-IV payments in the books, you should now begin evaluating how the transition has affected your Medicare rate, as well as your staff’s ability to properly complete the MDS 3.0 assessment. RUG-IV was forecasted to be budget neutral. However, contrary to expectations, many providers have seen very significant increases in their Medicare rates. It is important to ensure your facility is properly completing the MDS 3.0. Two areas in particular were expected to have a financial impact, and can also be used to identify potential issues with completion of the MDS 3.0 assessment form.
Decrease in Rehab Plus Extensive Services Days
To qualify for Rehab Plus Extensive Services, a patient must qualify for both a Rehabilitation RUG group and an Extensive Services RUG group. Under RUG-IV, CMS estimated only 3.8% of total days of service would qualify for this group (compared to 36.5% under RUG-III), because the extensive services qualifier is now more difficult to obtain. This is unfortunate given that Rehab Plus Extensive Services continues to be among the highest paid RUG groups.
Under RUG-III, intravenous medications and fluids received during a hospital stay prior to admission to the skilled nursing facility qualified as an extensive service. SNFs were able to “look back” into the hospital stay to obtain this qualifier, even though the IVs may not have continued at the nursing home. Under RUG-IV, IVs received during a hospital stay were removed from the definition of extensive services. In other words, the look back period was eliminated for Medicare.
In order to qualify for Extensive Services under RUG-IV, tracheostomy, ventilator/respirator, or isolation for active infections disease is required during the patient’s stay at the nursing home. These services are provided in few nursing homes so the likelihood of obtaining an Extensive Services or Rehab Plus Extended Services RUG grouping is greatly reduced for most providers.
If you have not seen a decrease in these RUG groups days since October and your facility rarely or does not provide the extensive services described above, consult with your MDS nurses to confirm that assessments are being completed correctly and proper billing is occurring.
Concurrent Therapy Billing Changes
RUG-IV also introduced changes to billing for concurrent therapy, which is when two residents are performing different activities but are supervised by one therapist (or assistant). In the past, concurrent therapy minutes were billed as though each patient were receiving one on one time with the therapist; under RUG-IV, although total minutes of concurrent therapy are still recorded, the grouper software divides the minutes by two. For facilities that did not take preventative measures with their therapy departments prior to the MDS 3.0 transition, this billing change is expected to shift patients to a lower rehabilitation group, particularly for patients qualifying for the Rehab Ultra High group, which requires a minimum of 720 therapy minutes a week.
If you expected a downward shift in your rehabilitation groupings due to high amounts of concurrent therapy provided at your facility but are not seeing it, consult with your therapy and billing departments to ensure proper documentation is occurring. At the other end of the spectrum, a drastic downward trend could indicate that concurrent minutes of therapy provided are being divided in two before being entered on the assessment and then being halved a second time by the grouper software, which would underreport the minutes and significantly impact your reimbursement.
MDS 3.0 and RUG-IV consulting is available from an HW Healthcare Advisor.
MDS Assessment Noncompliance Issues
The change to MDS 3.0 has also created confusion regarding missed assessments and the rates that will be paid for those days. Under MDS 2.0, a provider with an improperly dated or missed assessment would be paid at the default rate (i.e., the lowest rate in the RUG grouper). Section 6.8 of the RAI manual has been updated to reflect the new payment rules for early, late and missed assessments under MDS 3.0.
If a required assessment is submitted with a reference date earlier than the ARD schedule permits, the provider will be paid at the default rate for the number of days the assessment was early. For example, if a 14-day assessment is completed with an ARD of day 10 (1 day early), the provider would be paid at the default rate for the first day of the payment period that begins on day 15.
If a required assessment is submitted with a reference date after the ARD window (including grace days), the provider will bill at the default rate for all covered days up to the late ARD and at the RUG rate established by the late assessment for all days including and after the ARD. For example, a 30-day assessment with an ARD of day 41 would be paid at the default rate for days 31 through 40 and at the proper RUG rate beginning on day 41.
If a provider fails to submit an assessment, the provider generally will not be able to bill for the days covered by the assessment and will not be paid for those days. For residents that are still covered under a Part A stay at the time the omission is discovered, a late assessment can be submitted. However, if the resident was already discharged from the Part A stay, an assessment may not be completed and Medicare cannot be billed.
There are certain situations when payment can be made at the default rate even if an assessment is missed. Please contact an HW Healthcare Advisor if you have missed an assessment and need assistance.
2011 Medicare Part A Coinsurance and Medicare Part B Premium and Deductible
Effective January 1, 2011, the Medicare Part A coinsurance rate for SNFs will increase to $141.50 per day for days 21 through 100. The Part B deductible will increase to $162.00 per year. The Medicare Part B monthly premium for most beneficiaries will continue to be $96.40 since beneficiaries who currently have the Social Security Administration (SSA) withhold their Part B premium and have incomes of $85,000 or less (or $170,000 or less for joint filers) will not have an increase in their Part B premium in 2011. New Part B beneficiaries and those that do not currently have the Part B premium withheld from their Social Security benefit will pay $115.40, which is a 4.4% increase over the 2010 premium. If income exceeds $85,000 (single) or $170,000 (married filing jointly), the Medicare Part B premium may be higher than $115.40 per month.
PS&R System – Are You Registered?
The new PS&R system introduced at the end of 2009 has now been in effect for a year and providers will once again be required to obtain PS&R reports online, as NGS is not required to mail the reports. NGS was accommodating in emailing PS&R reports to the many providers who encountered difficulty in registering for and using the system last year. We cannot guarantee that NGS will do so a second year, so we advise you to confirm with your billing department that not only have they registered for IACS, but that they have successfully printed a PS&R report using the system. Should you require any assistance, contact your HW Healthcare Advisor.
Transition from National Government Services to CIGNA Government Services
CMS recently awarded the Ohio Part A and Part B contract to CIGNA. CIGNA’s role will be as Medicare Administrative Contractor, and is expected to replace Ohio’s current Financial Intermediary, National Government Services (NGS), by October 2011. CIGNA does not currently have any Part A contracts; therefore they have subcontracted Part A functions to Riverbend Government Benefits Administrator.
The transition impacts providers as Riverbend and CIGNA will review NGS existing cost reporting procedures to determine if there will be changes to low utilization requirements, interim rate reviews, pass through payment tolerances and bad debt documentation, among other processes.
To minimize the chance of disruption in payments, review all mail from NGS and CIGNA relating to the transition, and contact a HW Healthcare Advisor with any concerns.
OHIO MEDICAID UPDATES
January 1, 2011 Medicaid Rates
Effective January 1, 2011, ODJFS will recalculate the prices and rates for all nursing facilities in Ohio. The prices will be recalculated based on the average Medicaid-only case mix scores for the quarters ended June 30, 2010 and September 30, 2010 and the rates will be subject to the phase-in percentages that were in effect at July 1, 2010 (i.e., stop gain of 102.5% and stop loss of 99%). ODJFS will not send a letter to providers notifying them of their new rate.
Facilities that are in price are reminded that as of July 1, 2009, House Bill 1 mandated that once a facility is in price, the phase-in percentages will no longer apply; therefore, any change in your Medicaid-only case mix score will result in a change in your Medicaid rate as of January 1, 2011.
With significant deficit issues looming over the upcoming budget process, a variety of proposals have come about, many including taking all nursing facilities to their price. As of January 1, 2011, going to price would not affect the approximately 47% of facilities that are already in price. However, the proposals could have a major impact on the rest of the facilities, 22% of which are at stop gain and 31% at stop loss.
We will keep you updated as the budget battle develops.
No Mass Changes to Patient Liability
With the announcement that Social Security recipients will not receive a cost of living adjustment (COLA) in 2011, ODJFS recently announced that there will be no mass change in 2011 for nursing facility patient liability amounts. As a result, county departments of JFS will not be sending 9401s or COLA reports to document the patient liability amount as of January 1, 2011, unless the liability changes for another reason (e.g., a change in a third-party insurance premium).
The community spouse minimum ($21,912) and maximum ($109,560) resource allowances will also remain the same in 2011. These are the amounts used by the county when completing the resource assessment and determining how much of a couple’s resource must be spent, reduced or transferred to become eligible for Medicaid.
The only increase announced was in an increase in the maximum amount of home equity an individual can have in a home. The amount increased to $506,000 in 2011 from $500,000 in 2010.
Questions?
Contact:
Paula Z. Reape, CPA, LNHA
Principal
HW Healthcare Advisors
(216) 831-1200
preape@hwco.com
