MEDICARE CROSSOVER BAD DEBTS CHANGE IN SOC METHODOLOGY PLUS UPDATED SSI RATIO

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1 MEDICARE CROSSOVER BAD DEBTS PLUS UPDATED SSI RATIO 1 Presented by Kevin Pascoe, Partner, GNP Scott Ujita, Director Client Services, Toyon Associates

2 What is share of cost (SOC)? History of the SOC audit adjustment SOC for audits after 1/27/12. What do we do now? Things to keep in mind. 2

3 What is the share of cost (SOC)? Some Medi-Cal subscribers (recipients) must pay, or agree to pay, a monthly dollar amount toward their medical expenses before they qualify for Medi-Cal benefits. This dollar amount is called Share of Cost (SOC). A Medi-Cal subscriber s SOC is similar to a private insurance plan s out-of-pocket deductible. Since subscribers are not eligible to receive Medi-Cal benefits until their monthly SOC has been certified online, it is the provider s responsibility to collect or expect to collect this amount from the patient. 3

4 How to find out if a subscriber must pay a SOC Providers access the Medi-Cal eligibility verification system to determine if a subscriber must pay an SOC. The message returned by the eligibility verification system includes the SOC dollar amount the subscriber must pay. The eligibility verification system is accessed through the Point of Service (POS) device, Automated Eligibility Verification System (AEVS), state-approved vendor software and the Medi-Cal Web site on the Internet at 4

5 SAMPLE POS WITH $50 SHARE OF COST REMAINING 5

6 SAMPLE ON-LINE RESPONSE TOTAL SOC = $733; REMAINING SOC = $

7 SAMPLE ON-LINE RESPONSE TOTAL SOC = $733; REMAINING SOC = $0 7

8 Providers may collect SOC payments from a subscriber on the date that services are rendered or providers may allow a subscriber to obligate payment for rendered services. Obligating payment means the provider allows the subscriber to pay for the services at a later date or through an installment plan. Obligated payments must be used by the provider to clear Share of Cost. SOC obligation agreements are between the subscriber and the provider and should be in writing, signed by both parties for protection. Medi-Cal will not reimburse the provider for SOC payments obligated, but not paid by the subscriber 8

9 PROBLEM: For most crossover claims, the SOC is not calculated by Medi-Cal During a crossover bad debt hearing, it was discovered that once Medi-Cal has identified that there is no payment for a claim, they do not verify any SOC. Medi-Cal Claims Processing Steps: 1. Medi-Cal Eligibility Confirmed 2. Medi-Cal Calculates Total Reimbursement 3. If less than Medicare s payment, Approve claim at $0 and process for payment ; SOC prints as $0 on RA, but is meaningless 4. If greater than Medicare s payment, next check for SOC, and pay the amount in excess of Medicare amount, less SOC (SOC is shown on RA) 9

10 INTERMEDIARY SOLUTION (implemented 2003?): A sample of a couple of hospitals were analyzed The estimated SOC was rounded up to 2% Allowed but Zero Paid Crossover bad debts were reduced by 2%, unless the hospital could provide alternative proof of the actual SOC Allowed Partially Paid Crossover bad debts, no reduction (since SOC if any, will be on the RA) The State s DSH Eligibility system could NOT be used, as once a SOC was met, the eligibility code changes from a 2 to a 1 10

11 The Letter dated 1/27/12 The good news Not going to apply the 2% SOC adjustment anymore. The bad news Bad debt lists will need to be net of any SOC. You must explain what process was done to eliminate any SOC from the bad debt list. The ugly news If you can not prove that the SOC was eliminated from your bad debt list, the bad debt will be disallowed 11

12 Who will this affect? Every California hospital claiming Crossover Bad Debt Over 1000 Cost Reports (350+ hospitals x 3 open reports) Further clarification What reports are affected? If audit is already completed (Adjustments and Exit Conference) NOT required to resubmit the bad debt listing. Providers will need to submit revised logs for any FY under audit. Resubmit the log with the actual SOC verified to the hospital records Must document how the analysis was done 12

13 We have a request for a revised bad debt list. Now what? You will need to analyze each claim for a SOC You can do this manually, looking up each claim to a POS. PROBLEM: 13 Month limit You can use aid code for each claim and compare it to the aid code master chart. Where do you get aid code information? You can buy a report from the Medi-Cal claims processor. Identified claims need to be reviewed for actual SOC information using POS information. 13

14 Share of Cost AID Codes Most Common on a Crossover BD List 17 - Aid to the Aged - Medically Needy, SOC 27 - Blind - Medically Needy, SOC 67 - Disabled - Medically Needy SOC LTC SOC Aid Codes (LTC care only) 13, 23, 63 Other SOC Aid Codes 1Y 37 5R 6R 6W 6Y V C2 C4 C6 C8 D1 D3 D5 D7 D9 4V 7V Possible SOC - marked "Y/N" in Master Chart F M 7P 81 8F 7R 14

15 The Audit Once the claims have been identified and the list is submitted the audit will select a sample The audit will request support for the SOC whether or not the claim was determined to have a SOC. What support should I give them? The POS is the best support The aid code may be sufficient but you will have to disallow the entire claim. Fortunately, this is only 1 5% of the total claims Average SOC is $800 - $1000, so accounts with small deductible/coinsurance may not be worth pursuing (if paid with a SOC Aid Code) 15

16 What to do now Hospitals should print and keep POS information for all Medi-Cal patients Can go back 13 months to get any missing POS Keep notes in the patient file whether there is SOC or not Possible future sources of AID Code State DSH Eligibility??? 16

17 SSI UPDATE Released 3/16/2012 Federal 2006, 2007, 2008, 2009 Implements CMS-1498 R Incorporates Medicare Part C Data 17

18 SSI UPDATE Impact Original Revised Change Percent -13.4% -16.2% (aggregated California Acute Data) 18

19 SSI UPDATE Impact 15% Drop in SSI = 7 8% Drop in DSH $250K - $1M DSH loss per hospital per year Aggregate California impact per year: 250 Hospitals x $350K = $87.5M 19

20 SSI UPDATE What Next NPR s will be processed soon SSI issues from Baystate solved (??) Review Reserves on Books Once NPR is issued, Consider Appeal for Part C Days 20

21 Questions? 21

22 Contact information: Kevin Pascoe Partner Gong Nashed Pascoe, Inc Scott Ujita Director Client Services Toyon Associates, Inc