Bundling

Do We Pay, or Do They Pay?

House Bill 1 (H.B. 1) includes provisions for the "bundling" of certain ancillary Medicaid services (listed below) into the skilled nursing facility (SNF) per diem rate through a $3.91 "consolidated services payment" rate add-on. Effective for dates of service on or after August 1, 2009, ODJFS will no longer process claims for the bundled items. This is a significant change for providers and there continues to be much confusion in this area. Previously, these consolidated services were billed directly to Ohio Department of Job Family Services (ODJFS) and either reimbursed directly to the SNFs or the outside vendors. Nursing facilities will now be responsible for providing these services to Medicaid residents and will need to monitor and manage the related expenses. The $3.91 add-on to SNF per diem rate is intended to cover the cost of these services. The following items are included in consolidated Medicaid services:
  • Custom Wheelchairs
  • Over the counter (OTC) medications
  • Oxygen (Concentrators and Tanks)*
  • Therapy Services (Occupational, Physical, and Speech)*
  • Transportation Services (Ambulance and Ambulette)*

*Please note this is not just for Medicaid only residents but also includes 20% Medicare Part B co-insurance.

Click the links below to access the ODJFS information:

  1. Wheelchair-Oxygen
  2. OTC Drugs in Consolidated Services
  3. Therapy
  4. Transportation

ODJFS has provided the current fee schedules for 4 of the 5 categories which may be helpful in contract negotiations with vendors. However, they do not solely form the basis for the $3.91 add-on which were determined as follows:

  • Oxygen is based on $50 per month for concentrators and assumes a Medicaid utilization of 20% of the SNF patients.
  • Therapy is the total of Medicaid therapies and the Medicare Part B coinsurance claims PAID divided by 18,500,000 Medicaid days less two cents per day.
  • Over the counter medications is based on the total PAID for the included OTC drugs less the $3.00 dispensing fee.
  • Custom wheelchairs are based on the amount BILLED to ODJFS for the custom chairs, parts, and repairs divided by the 18,500,000 days less 9 cents per day.
  • Transportation services are based on the fiscal year 2008 ODFJS SPENDING for SNF patients divided by the 18,500,000 Medicaid days.

ODJFS has provided the current fee schedules for 4 of the 5 categories which may be helpful in contract negotiations with vendors. However, they do not solely form the basis for the $3.91 add-on which were determined.

In a change from prior years, the new SNF rates, to be effective 7/1/09, will not be calculated until September or October. Until that time, providers will continue to receive their 6/30/09 rate. In October, providers will receive a retroactive lump sum adjustment, which will include the $3.91 add on. Since the consolidated billing services will be paid as part of the SNF per diem, it will not require any special billing mechanism to be paid. Costs associated with the 5 consolidated billing services will be included on the cost report in either the direct care (oxygen, OTC drugs and therapy) or ancillary/support (transportation and wheelchair) cost center.

Claims with a date of service on or after August 1, 2009, that electronically cross over from Medicare Part B will not be paid. However, ODJFS cannot tell us what to expect to see on the remittance advices and or if we will see the claims at all. All claims with dates of service prior to and including July 31, 2009 should be billed as normal to Medicaid for reimbursement (i.e. Medicaid therapy only and Medicare Part B coinsurance). Medicaid recipients cannot be billed for any deductibles and or coinsurance amounts.

H.B. 1 does not provide detail as to how much or when SNFs must pay for bundled services nor defines which services must be provided. Providers need to continue to provide services needed by residents and remain in compliance with state and federal survey guidelines. You may need to enter into or renegotiate contracts with vendors for these services and provide safeguards to ensure unnecessary services are not provided. It may be necessary to consult with legal counsel especially if contracts have provisions regarding waiving deductible and coinsurance which may violate safe harbor rules. In addition, you should analyze how these services are currently provided and determine if there is a more cost effective method while remaining aware of potential case mix impacts that could negatively impact your Medicaid per diem rate. Reviewing your operations in these areas and monitoring and controlling these costs will be critical.

ODJFS has published a Frequently Asked Questions tool for clarification on Nursing Facility Billing Transition in regard to bundling. In addition, Governor Strickland signed an Executive Order on July 31, 2009, for Immediate Amendment of Rules Regarding Medicaid Reimbursement to Nursing Facilities.

At press time, a lawsuit has just been filed by the Ohio Ambulance and Medical Transportation Association. The bundling of transportation could be temporarily delayed.

Stay tuned as more information and clarification becomes available...