December 2009 Health Care Update

2010 Fee Schedules Released - Drastic Cuts Expected if Action Not Taken by Congress

The Centers for Medicare & Medicaid Services (CMS) have released the Medicare Fee Schedules for Ohio effective January 1, 2010. The updated fee schedules institute a cut of approximately 21.5% to payments for Medicare Part B services, including therapy and radiology. The cut results from a “sustainable growth rate” factor included in the flawed payment formula and annual intervention by Congress to delay cuts in prior years. Since the initial formula called for a balanced budget, each year that the cuts are delayed increases the potential cut the following year.

It is possible that Congress will once again delay the massive payment cut with legislation in either late December or early January. If so, it will likely be achieved as part of any health care reform package that is passed. When that action is taken, we will provide you with the updated fee schedules to load into your system. We will also provide you with the fee schedules for laboratory, durable medical equipment and supplies at that time.

Since the fee schedules may change if Congress takes action, we have delayed posting them until more information is known. However, you may contact us if you would like a copy of the current therapy fee schedules that include the 21.5% payment cut. Be aware that if you choose to enter the current version, you may have to reenter them into your charge masters if they change. Finalized fee schedules will be posted as soon as it is clear they are final.

Action Required: Register Now for New PS&R System to Avoid Late Cost Report Filing and Payment Interruption

The requirement for each provider to register online for the new PS&R system was communicated to clients in our November Health Care Update. National Government Services (NGS) has recently advised providers that registration takes up to seven (7) weeks to process before access to the PS&R data is granted. Register immediately if you have not already done so in order to avoid delays in cost report filing. PS&R data is necessary for cost report preparation and not filing a timely cost report may cause your payments to be interrupted.

January 1, 2010 Medicaid Rates

Effective January 1, 2010, ODJFS will recalculate the prices and rates for all facilities in Ohio. The prices will be recalculated based on the average Medicaid-only case mix scores for the quarters ended June 30, 2009 and September 30, 2009, and the rates will be subject to the phase-in percentages that were in effect at July 1, 2009 (i.e., stop gain of 101.75% and stop loss of 99%). ODJFS will not send a letter to providers notifying them of their new rate.

Facilities that were 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, 2010.

We estimate that the rates for approximately 280 facilities will change as of January 1, 2010, including 180 facilities that were in price as of July 1, 2009. Please contact us if you would like us to calculate your January 1 rate for you.

Coinsurance Bad Debt Update

Loss of Bi-weekly Bad Debt Pass Through Payments for Certain Providers

National Government Services (NGS) has previously stated that providers reporting less than $50,000 of bad debts on their Cost Report Questionnaire 339 – Exhibit 5 will no longer receive bi-weekly pass through payments. NGS has recently started implementation of this new policy. The good news is that while future pass through payments were reduced to $0, NGS did not take back a lump sum for the pass through payments that were already paid to the provider to date. Keep in mind that the pass through payment amounts will be reconciled with the bad debts as of December 31, 2009 and the difference will be a settlement to be paid/received at cost report preparation time. 

Ensure Reimbursement for your Coinsurance Bad Debts

As we approach the end of the year, now is the time to review your coinsurance bad debts to ensure that you maximize your reimbursement. By not following specified procedures some facilities are leaving money on the table, reducing profit in an already difficult economic environment.

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” in the cost report year. Other common mistakes include not reducing coinsurance amount claimed by partial payments received from ODJFS and improper use of income statement accounts for recording Medicaid coinsurance bad debts on the general ledger.

If you have any questions or require assistance obtaining reimbursement for coinsurance bad debts, please contact us.  

Our November Health Care Update included an article on Credit Balance Reports. Although the CMS-838 Credit Balance Detail Report is filed online electronically, the signed certification page is still to be mailed to NGS quarterly. For many providers filing the detail report is a new procedure and CMS hasn’t updated the hard copy form to indicate that the detail report is required to be filed electronically. Based upon requests for more information, we have included instructions as follows:

To enter a CMS-838 Credit Balance Detail Report online, you will need:

1. HIC number
2. Credit Balance 838 Detail information (i.e., name of beneficiary, monies owed, credit balance reason, amount repaid)

Instructions for DDE system:

• After completion press F9 to update.

New Limits Set on RAC Medical Record Requests

According to their December 2nd, 2009 press release, the Centers for Medicare & Medicaid Services (CMS) have modified the additional documentation request limits for the RAC (Recovery Audit Contractor) program in FY10. These limits will be set by each RAC on an annual basis to establish a cap per campus on the maximum number of medical records that may be requested per 45-day period. A campus unit may consist of one or more separate facilities/practices under a single organizational umbrella; each limit will be based on that unit’s prior calendar year Medicare claims volume.

Limits will be based on the servicing provider/supplier’s Tax Identification Number (TIN) and the first three positions of the zip code where they are physically located. Using TINs will reduce the total number of limits that would have been imposed per organization under the previous draft policy, which was based on National Provider Identifiers, while zip codes are factored in to promote equitability for regional or national organizations.

Limits will be set at 1 percent of all claims submitted for the previous calendar year (2008), divided into eight periods (45 days). Although the RACs may go more than 45 days between record requests, in no case shall they make requests more frequently than every 45 days.

Read the full CMS notice.

For background information on RACs see “The RACs are coming to Ohio!”.