Medicare Update Rural Hospi Rural Hospi al Fi al nance
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1 Medicare Update Rural Hospital Finance Workshop- August 24, 2012 PS&R Redesign Update PS&R Redesign Issue-Negative Charges A problem has occurred in the claims processing system where non covered charges have been duplicated in certain situations. In these situations the duplicated non covered charges are reported in the covered charge field as a negative amounts on the paid claim. The paid claims with the negative covered charge amounts were subsequently sent to the PS&R. The issue affects outpatient claims processed and paid after April 1, 2010 with a 51MUE denial code. As a result, some outpatient charges may be understated or shown as negative amounts on PS&R reports. The problem primarily affects hospital outpatient reports. Initial reprocessing of these claims did not fix the issue. 1
2 PS&R Redesign Issue-Negative Charges Impacting cost report settlements. Progress has been made between FISS and CMS on a correction. Testing is currently taking place with several test contractors. Claim adjustments will be required once the fix is in place. New MAC Jurisdictions Implementing the MAC Jurisdictions and the procurement schedule for the new contractors were announced by CMS on 2/22/05 CMS plans to award a total of 19 MACs through competitive bidding 15 Pi Primary A/B MACs servicing ii the majority of all provider types (both Part A and Part B) 4 Specialty MACs (durable medical equipment suppliers) 2
3 Jurisdictions for A/B MACs 7 Implementing the MAC (cont.) MAC J6 which includes the states of Wisconsin, Illinois, and Minnesota was originally awarded to Noridian Administrative Services. After initial protest it was then awarded to NGS. Additional protests have been made and it is now in the corrective action stage. Once a final decision on MAC J6 is made there will be a transition schedule. The transition schedule will be around 6 months. Super MAC Concept has been proposed by CMS. Under this proposal J5 and J6 would be combined. Connex Provider Portal 3
4 What is Connex? Secure web portal providers may use to deliver information and documentation to NGS. Currently in use by other NGS functions. Claim status Beneficiary eligibility Financial data Provider demographics Ability to order remittances 10 Provider Access to Connex Provider contact must register. Each provider designates a Local Security Officer (LSO). LSO grants, denies, or revokes access for all provider employees. Also controls level of access. Must have PTAN, NPI, and TIN. Need Internet access E mail address Provider Submissions Provider completes cover sheet. PTAN & FYE Type of Data (ex. Wage Index) E mail address of intended recipient Purpose of submission (ex. NGS data request) May attach documentation (ex. Excel, Word, Adobe files) Encryption not necessary for PHI/PII Web portal is secure! 4
5 Advantages No need to encrypt PHI/PII. Submission is instantaneous. Connex maintains record of all submissions. Save shipping time and cost. More secure than shipping. Medicare Password6 5
6 Provider Assessment Generally an allowable cost. Based on each hospital s gross revenues Any revenue received as a result of the tax/assessment must be offset against the tax expense per 42 CFR Generally, the net allowable expense is $0, as revenues will exceed the expense. As the purpose for the tax is to generate additional federal matching funds, which are distributed to the hospitals. HITECH 6
7 American Recovery & Reinvestment Act of 2009 (ARRA, or Recovery Act) Includes the Health Information Technology for Economic and Clinical Health Act (HITECH ACT) Requires that CMS provide incentive payments under Medicare and Medicaid to Meaningful Users of Electronic Health Records (EHRs) If Hospital is deemed a Meaningful User during a Reporting Period, they are eligible to receive an incentive payment. First year for hospital payments is FY 2011 Payments may be made for multiple years (100% for the first and then decreasing amounts) Applies only to Inpatient reimbursement. If hospital doesn t become a Meaningful User they will eventually be penalized. Hospitals will receive a preliminary (interim or initial) payment, and it will be reconciled on the cost report. Incentive Payment is different as CAHs are paid on reasonable cost. Incentive CAHs will be able to expense the EHR costs in the year incurred EHR costs = costs incurred for the purchase of depreciable assets, such as computers and associated hardware and software. 7
8 HITECH Incentive Payment Only Depreciable Assets Qualify Computers and associated hardware & software. Net Un depreciated Cost allowed for assets purchased prior to becoming a meaningful user. (Use un depreciated cost at beginning of CRP that CAH becomes meaningful user.) Rental or lease arrangements do not qualify. Staff Training Costs do not Qualify for Incentive Payment. HITECH Incentive Payment (cont.) Costs expensed entirely in single period. CAH must remove depreciation and interest related to assets in subsequent periods. Cost Reporting Period must begin no earlier than FFY 11, or later than FFY 15. Payments limited to 4 consecutive years. Hospital must be meaningful user. What Constitutes Necessary Documentation? 8
9 Certified EHR Technology Assets Detailed Description. Certification Number from CMS Website Cost Date placed in Service Prior Accumulated Depreciation Asset Life Allowable Net Book Value Assets Necessary to Administer All information for Certified EHR Technology Assets except Certification Number. Explanation of why necessary to Administer. Allocation to EHR Technology vs. Other uses. Shared Hardware Shared between EHR and other systems. CAH must allocate costs. Must have documentation to support split of costs. 9
10 Group Purchases EHR Technology cost split between CAH and other providers. CAH may only include actual costs it incurred. Limited to certified EHR technology to which purchase depreciation would apply. Documentation to support cost allocation, and that it has ownership interest in assets, and is not renting or leasing. Home Office Purchases EHR Technology Cost must be directly attributable, and separately identifiable. Cannot be included in pooled allocations. Documentation must support direct or functional allocation. Ensure that subsequent depreciation not included in allocations to CAH. Subsection (d) Hospital Prompt Interim Payment required after provider submits an allowable attestation Subject to Reconciliation on Cost Report Critical Access Hospital Prompt Interim Payment required after CAH submits necessary documentation. Subject to Reconciliation on Cost Report. Calculated once CAH submits documentation supporting cost incurred for certified EHR technology 10
11 Calculation of Payments Subsection (d) Hospitals HITECH Payment = Initial Amount * Medicare Share * Transition Factor Initial Amount Includes two components Base Amount $2,000,000 Discharge Related Amount First through 1,149 th discharge $0 per discharge 1,150 th through 23,000 th discharge $200 per discharge 23,001 st discharge and beyond $0 per discharge Medicare Share Numerator = Inpatient Part A Days + Inpatient Part C Days Denominator = Total Inpatient Days * ((Total Eligible Charges Charges Attributable to Charity Care) / Total Eligible Charges) Transition Factor First HITECH Year Year Year Year Year Beyond
12 Subsection (d) Hospital Example - Information From Most Recently Accepted Cost Report Inpatient Part A Days = 4,541 Inpatient Part C Days = 0 Total Inpatient Days = 7,504 Total Discharges = 2,216 Total Charges = $97,656,113 Charity Care Charges = $3,975,477 Other Information Attested in February, 2012 Payment Year 1 Subsection (d) Hospital Example Initial Amount Base Amount = $2,000,000 Discharge Related Amount 2,216 discharges per cost report First 1,149 discharges are not included 1, th 23,000 th discharges are included at $200 per discharge Discharge Related Amount = (2,216 discharges 1,149 discharges) * $200 = $213,400 Initial Amount = $2,000,000 + $213,400 = $2,213,400 Subsection (d) Hospital Example Medicare Share Numerator Inpatient Part A Days + Inpatient Part C Days 4, = 4,541 Denominator Total Inpatient Days * (Total Charges Charity Care Charges)/Total Charges 7,504 * ($97,656,113 $3,975,477) / $97,656,113 7, Medicare Share 4,541 / 7, =
13 Subsection (d) Hospital Example HITECH Calculation Transition Factor Since this is payment year 1 and they attested in 2012, the transition factor is 1.00 Payment Calculation Initial Amount * Medicare Share * Transition Factor $2,213,400 * * 1.00 $1,396,212 Calculation of Payments - CAH HITECH Payment = Allowable Cost * Medicare Share Allowable Cost Based on documentation submitted by hospital Medicare Share Based on the most recently submitted and accepted 12 month cost report Medicare Share Numerator = Inpatient Part A Days + Inpatient Part C Days Denominator = Total Inpatient Days * ((Total Eligible Charges Charges Attributable to Charity Care) / Total Eligible Charges) 20% is added to this amount Cannot exceed 100% 13
14 Example: Information From Auditor (Audited Documentation) Allowable CAH Cost: $592,447 From Most Recently Accepted Cost Report Inpatient Part A Days: 2,835 Inpatient Part C Days: 0 Total Inpatient Days: 3,650 Total Charges: $45,594,375 Charity Care Charges: $0 Other Information Attested in May, 2012 Payment Year #1 Example: Medicare Share Numerator Inpatient Part A Days + Inpatient Part C Days 2, = 2,835 Denominator Total Inpatient Days * (Total Charges Charity Care Charges)/Total Charges 3,650 * ($45,594,375 $0) / $45,594,375 3,650 Medicare Share 2,835 / 3, = Example: HITECH Calculation Payment Calculation Allowable Cost * Medicare Share $592,447 * = $578,642 14
15 Overview of Payment Process Subsection (d) Hospital When an as filed cost report is accepted, the appropriate information is entered into the system within 5 days of acceptance. Hospital registers Hospital attests Monthly trigger file sent to obtain FISS info for those who attested that month Payment info sent to Payment Contractor Payment Contractor prepares the file Overview of Payment Process Subsection (d) Hospital Payments are distributed to providers (EFT, check) Payment is made approximately one month after the trigger file obtains the necessary information. Adjustments t t at final settlement, t and others as needed CAH registers CAH attests as a Meaningful User CAH supplies documentation to their FI/MAC FI/MAC audits documentation and requests additional information as necessary FI/MAC enters allowable amount and Medicare Share into FISS 15
16 Overview of Payment Process - CAH Monthly trigger file sent to obtain FISS info for those who attested that month Payment field in FISS will lock up after three trigger files are sent. If the payment field is locked up, FI/MAC contacts t CMS to unlock field. Payment info sent to Payment Contractor Payment Contractor prepares the file Overview of Payment Process - CAH Payments are distributed to providers (EFT, check) Payment is made approximately one month after the trigger file obtains the necessary information. Adjustments t t at final settlement, t and others as needed FAQ Document on CMS website: 16
17 Questions? 17
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