Agenda. LeadingAge NY Financial Managers Annual Conference

Transcription

1 LeadingAge NY Financial Managers Annual Conference Managing Cash flow in a Managed Care World Benchmark Rates, Capital Rates, Outsourcing & Other Operational Issues Christopher J. McCarthy, MBA, CPA Partner Health Care Leader cmccarthy@pkfod.com Dorothea A. Russo, CPA Partner Health Care drusso@pkfod.com September 1, 2016 Agenda What are we seeing? Quick update on industry metrics Medicaid MLTC benchmark rates Quick update Statewide Pricing rates Capital rates Cash flow in a managed care world Outsourcing considerations 2 1

2 What Are We Seeing? SNF sales continue (locally and nationwide) Traditional Medicare vs. Medicare managed care Medicaid managed care Medicaid Benchmark rates Value based reimbursement/bundled payments The Top 50 post acute care providers how are they responding Other changes 3 Selected Industry Metrics Days in accounts receivable Net patient revenue divided by A/R = A/R Turnover Number of days in calendar year divided by A/R Turnover Current ratio Current assets divided by current liabilities Operating margin Net operating income divided by total operating revenue 4 2

3 Sample of Same SNFs - 4 Years 5 The Benchmark Rates Are currently posted on DOH website at: ent/nhr/ Included in Benchmark Rates: 1/1/2016 rate with July, 2015 CMI 2016 Transition Adjustment Case mix Cap, if applicable Cash Receipts Assessment per diem (using 2014 rate) 2014 Quality Measures 6 3

4 Statewide Pricing Direct Component 2 Peer groups (<300 beds; => 300 beds or HB) Mean price computed using 2007 base year costs <300 beds => 300 beds or HB 2016 $ $ $ $ Peer group mean price adjusted by WEF ( Utica vs. Brooklyn ) WEF computed using 2009 salaries (primarily nursing) After WEF, the mean price is adjusted by the facility specific case mix Every 6 months CMI Changes the Direct Component 7 Statewide Pricing Indirect Component 2 Peer groups (<300 beds; => 300 beds or HB) Mean price computed using 2007 base year costs <300 beds => 300 beds or HB 2016 $56.92 $ $57.18 $64.52 Peer group mean price adjusted by WEF ( Utica vs. Brooklyn ) WEF computed using 2009 salaries (primarily nursing) WEF is 50% regional & 50% facility specific Higher 2009 nursing wages, greater impact on WEF Higher the WEF, higher the indirect component 8 4

5 Statewide Peer Group Prices: Non-Comp & Capital Components Non-comparable component Based on facility specific 2007 non-comp costs No peer group, no need to apply WEF No change to non-comp unless new base year Transportation issue Capital component Generally, NFP s receive allowable mortgage interest & depreciation; Proprietary s receive mortgage interest & principal amortization Rate year for allowable mortgage expenses (Sch 17) 2 year lag for other capital items 10 5

6 Medicaid Rate Changes - Timing Case mix updates twice annually (1/1 & 7/1); with 5% case mix cap adjustments OMIG audit adjustments annually; will release and reset 5% cap adjustments Cash receipts assessment (CRA) per diem reconciliations - annually Quality measures annually stuck at Medicaid Rate Changes Case Mix Rate Changes Effective Date Check Date Cycle # Reason for Rate Change 1/1/2013 2/24/ /2012 CMI w/5% cap 7/1/2013 3/10/ /2013 CMI w/5% cap 7/1 12/31/2012 & 1/1 6/30/2013 7/1 12/31/2013 & 1/1 6/30/2014 7/1 12/31/2012 & 1/1 6/30/2013 7/1 12/31/2013 & 1/1 6/30/ /14/ Result of OMIG audits of 1/2012 & 7/2012 MDS s 2/8/ Result of OMIG audits of 1/2013 & 7/2013 MDS s 4/2016 Unwind results of OMIG audits of 1/12 & 7/12 4/2016 Unwind results of OMIG audits of 1/13 & 7/

7 Medicaid Rate Changes (cont.) Case Mix Rate Changes Effective Date Check Date Cycle # Reason for Rate Change 1/1/2014 7/23/ /2013 CMI w/5% cap 7/1/ /10/ /2014 CMI w/5% cap 1/1/2015 3/09/ /2014 CMI w/5% cap 1/1/2015 9/09/ /2014 CMI w/5% cap 7/1/2015 3/07/ /2015 CMI w/5% cap 1/1/2016 2/22/ /2015 CMI w/5% cap 13 Medicaid Rate Changes (cont.) Effective Date Check Date Cycle # Cash Receipts Assessment Rate Changes 1/1-12/31/2011 7/30/ /1-12/31/2012 (rolled rate into /9/ in error for some facilities) 1/1/2013 current (correction of error 4/13/ from cycle #1959) 1/1-12/31/2013 8/26/ /1-12/31/2014 2/22/ /1-12/31/2016 updated w/ 2014 rate 7/25/ Quality Measure Rate Changes 1/1-12/31/2013 On Hold On Hold 1/1-12/31/2014 On Hold On Hold 14 7

8 Planning Ahead vs No Change to Non Comp Component Direct Component increase = $0.51 before WEF and Case Mix Adjustment Indirect Component increase = $0.26 before WEF Capital Component will change based on 2015 RHCF Loss of transition adjustment effective 1/1/ Top SNFs Losing $10+/day in Transition 16 8

9 Capital Per Diem Important RHCF schedules: Schedule Q Facility Reported Capital (new in 2012) Part II and Part III (if applicable), Schedule 9 Part II and Part III (if applicable), Schedule 10 & 11 Part II and Part III (if applicable), Schedule 15 Part II and Part III (if applicable), Schedule 17 Part II, Schedule 8, 8A & 8D Part IV, Exhibit A & B Part IV, Exhibit E Part IV, Exhibit I Part I 3 17 Capital Per Diem (con t) Part II and Part III (if applicable), Schedule 9 Depreciation and Amortization on Bldg & Mov Equip Must be supported by Schedules 10 & 11 Mortgage related costs Details must be on Schedule 17 for current debt If refinanced after 2015 provide details in Notepad Movable Equipment Rentals Details must be on Schedule 15 Capital leases Details must be on Schedule 9A 18 9

10 Capital Per Diem (con t) Basis for the 2017 Schedule VI is 2015 RHCF 2015 RHCF, Schedule Q Facility Reported Capital Should reflect actual reimbursable capital» Issue regarding traceback percentages» Apply allowable mortgage percentages» Apply threshold for WCI, etc. 19 Capital Rate Streamlining Facility involvement before rates are promulgated DOH involvement will be reduced with reliance upon a facility s attestations OMIG will be more involved resulting in quicker and more numerous capital audits Significant reduction in the number of capital appeals Should result in more accurate and timely capital reimbursement 20 10

11 Capital Rate Streamlining (con t) Estimated timeline Mid-September - Initial 2017 capital rate using automated system and adjusted for known issues Mid-October Attestations for Corrections due NO Hotline period Q Initial 2017 rate including capital with operatorcertified changes 21 Cash Flow in a Managed Care World Bill electronically Use a Clearinghouse Use Electronic Funds Transfer (EFT) Know billing requirements/read and understand billing manuals/identify and follow time lines/submit clean claims/follow up Ensure identifier information is accurate for all payers (NPI, SS#, Fed ID#, etc.) Verify patient eligibility often 22 11

12 Cash Flow in a Managed Care World (con t) Clearinghouse rejections identify trends Managed care denials identify trends Billers want to bill not all want to follow up on unpaid claims Respond to requests from MCO s for information/medical records, etc. in a coherent manner Organize/standardize processes Seriously consider outsourcing billing and related functions If you decide to keep billing in house, reconsider 23 Cash Flow in a Managed Care World (con t) Authorizations/prior approvals NAMI Cash receipts assessment, case mix, retroactive rate changes Expect drop in census Day care/home care program billing issues Fundraising and grant writing Investment income 24 12

13 Outsourcing Considerations Does vendor have NYS Medicaid and MLTC billing experience Cost (usually, but not always, priced based on bed size, complexities, etc.) Outsourcing cost may(often) exceeds current in house cost Does vendor use a Clearinghouse # of vendor FTEs assigned to SNF 25 Outsourcing Considerations (con t) Does vendor FTE participate in periodic (weekly) resident status change calls with SNF Frequency of meetings with Administrator and/or business office staff to review open AR (quarterly) Who maintains/updates charge master Who determines G/L coding Monthly recap of activity for posting to G/L timing, etc

14 Outsourcing Considerations (con t) Access, frequency of AR aging reports Who handles resident funds, posting of interest, mailing of statements, disbursement of cash, etc. Who posts cash/makes deposits Who maintains census Which software package is used Does vendor mail NAMI/private bills (address on return envelope/ 800 # to call for questions about bill) 27 Outsourcing Considerations (con t) Who handles ADRs for Medicare denials & appeals Who manages credit balances Who handles Medicare credit balance reporting Who handles OMIG (HMS) credit balance audits Who handles/approves write-offs Cases referred to collection/legal who decides (conflict of interest consideration) 28 14

15 Outsourcing Considerations (con t) Who handles Medicaid applications Who handles Medicare recertifications Who prepares the CMS Form 855 Who reviews managed care contracts for inclusions/exclusions If agreement terminated access to tickler notes, voids, adjustments, billing records, etc. 29 Outsourcing Considerations (con t) Who manages initial and all subsequent authorizations for MLTC members Denial tracking Liability if vendor misses timely billing requirement Transition old AR Corporate compliance (HIPAA and BA) SSARS 16 report (old SAS 70 report) 30 15

16 Contact Information Christopher J. McCarthy, Partner New York 500 Mamaroneck Avenue Harrison, NY New Jersey 15 Essex Road Paramus, NJ Connecticut 3001 Summer Street, 5 th Fl. East Stamford, CT Dorothea A. Russo, Partner drusso@odpkf.com Fifth Avenue New York, NY Commerce Drive Cranford, NJ Great Meadow Rd Wethersfield, CT Keith Solomon, Partner ksolomon@odpkf.com Hudson Valley Avenue New Windsor, NY Eisenhower Parkway Livingston, NJ Maryland 7272 Wisconsin Avenue, Suite 340 Bethesda, MD