Medicare Advantage Reimbursement Issues. Presented by: Jason Johnson John Garcia

Transcription

1 Medicare Advantage Reimbursement Issues Presented by: Jason Johnson John Garcia 1

2 DISCUSSION AGENDA Brief background on Medicare Advantage ( MA ) Enrollment Rates And Trends Regulatory Environment Introduction To Shadow Billing MA Reimbursement Issues IME/GME/NAH HITECH SSI/DSH DSH and Bad Debt Deeper Discussion of Shadow Billing Reasons For Slippage Best Practices 2

3 MA Enrollment Rates and Trends 3

4 TOTAL MA ENROLLMENT,

5 CURRENT MA ENROLLMENT BY STATE 5

6 MA ENROLLMENT - SOUTHERN CALIFORNIA Medicare Eligible Enrolled in Medicare MA Penetration County Name Population Advantage Rate Los Angeles 1,126, , % Orange 360, , % Riverside 260,907 91, % San Bernardino 205,716 63, % San Diego 380,760 95, % Ventura 104,619 15, % Note: Effective June 2009, Excluding Kaiser and Other Cost Based Plans Source: 6

7 TYPES OF MA PLANS HMO/PPO Plans must establish networks and sign contracts with providers Private Fee for Service (PFFS) Prior to 2011, no network required Patients can go to whichever hospital is most convenient Deeming Process Required to establish networks by 2011 Special Needs Plans (SNP s) Restricted to special needs beneficiaries 7

8 MA ENROLLMENT BY PLAN TYPE

9 MA ENROLLMENT BY PLAN TYPE

10 MA ENROLLMENT BY PLAN TYPE - CA 1,730,810 Enrollees in California in 2011 Source: Kaiser Family Foundation, Program on Medicare Policy, Data Spotlight, September 2011 * PPO Includes Local and Regional Plan Types. ** Other includes Cost and Special Needs Plan Types 10

11 MA ENROLLMENT BY COMPANY 11

12 COMBINED MA MARKET SHARE OF THE THREE LARGEST FIRMS 12

13 MA ENROLLMENT BY COMPANY - CA Total CA MA enrollment, 2011 = 1,730,810 13

14 Regulatory and Medicare Payments Overview For Medicare Advantage Beneficiaries 14

15 CMS SHADOW BILLING GUIDANCE Balanced Budget Act of 1997 CMS Change Request 5647 Change Request 6821 Feb, 2003 March, 2009 July, 1998 July, 2007 May, 2010 CMS Change Request 2476 CMS Transmittal

16 BALANCED BUDGET ACT OF 1997 SEC PAYMENT TO HOSPITALS OF INDIRECT MEDICAL EDUCATION COSTS FOR MEDICARE+CHOICE ENROLLEES. Section 1886(d) (42 U.S.C. 1395ww(d)) is amended by adding at the end the following: (11) Additional payments for managed care enrollees.-- (A) In general.--for portions of cost reporting periods occurring on or after January 1, 1998, the Secretary shall provide for an additional payment amount for each applicable discharge of any subsection (d) hospital that has an approved medical residency training program. (B) Applicable discharge.--for purposes of this paragraph, the term 'applicable discharge' means the discharge of any individual who is enrolled under a risk-sharing contract with an eligible organization under section 1876 and who is entitled to benefits under part A or any individual who is enrolled with a Medicare+Choice organization under part C. SEC PAYMENTS TO HOSPITALS FOR DIRECT COSTS OF GRADUATE MEDICAL EDUCATION OF MEDICARE+CHOICE ENROLLEES. Section 1886(h)(3) (42 U.S.C. 1395ww(h)(3)) is amended by adding after subparagraph (C) the following: (D) Payment for managed care enrollees.-- (i) In general.--for portions of cost reporting periods occurring on or after January 1, 1998, the Secretary shall provide for an additional payment amount under this subsection for services furnished to individuals who are enrolled under a risksharing contract with an eligible organization under section 1876 and who are entitled to part A or with a Medicare+Choice organization under part C. 16

17 IME AND GME Indirect Medical Education (IME) Additional payment for a Medicare discharge to reflect the higher patient care costs of teaching hospitals relative to non-teaching hospitals Direct Graduate Medical Education (GME) Additional payment made to teaching hospitals for the direct costs of approved graduate medical education programs 17

18 TIMING OF PAYMENTS FI/MAC will verify patient s Medicare Advantage eligibility in the Medicare Common Working file After Medicare Advantage verification, the operating IME payment will be made by Medicare Part A for teaching hospitals only GME interim payments will continue to be made in their normal fashion for teaching hospitals NAH payments are calculated on the cost report using the data from the PS&R report type

19 MA IME/GME SLIPPAGE EXAMPLES Example #1 Example #2 Example #3 Small Teaching Program Medium Teaching Program Large Teaching Program IME/GME Per Day ,000 Part A Days 37,622 23,909 46,459 Current MA Days 12,852 12,857 20,753 MA Enrollment % 25% 35% 31% Increase MA Days 5% ,038 Additional MA IME/GME $128,520 $385,710 $1,037,650 19

20 NAH REIMBURSEMENT Nursing and Allied Health Education (NAH) Additional payment made to teaching hospitals for the costs of approved nursing and allied health education programs NAH payments established in 1999 in the Balanced Budget Refinement Act NAH is funded by a reduction made to GME payments 20

21 SHADOW BILL BASICS A shadow bill (no-pay or informational only) is a claim submitted to Medicare Part A for Medicare Advantage beneficiaries The shadow bill triggers CMS to issue the IME payment for MA patients It also allows CMS to capture the MA days in the SSI ratio Condition Codes 04 (and 69 for teaching) must be present on bill 21

22 SHADOW BILL Source: NORIDIAN Administrative Services LLC 22

23 TIMELY FILING DEADLINE Part A timely filing rules currently apply to shadow bills Until recently, providers had months go bill Medicare (until following calendar year) Beginning January 1 st, 2010, Medicare changed to a 12 month deadline Failure to meet the 12 month deadline will result in claims being rejected 23

24 MMA

25 Source: CMS 25

26 Source: CMS 26

27 27

28 HITECH ACT OVERVIEW Health Information Technology For Economic and Clinical Health Act Medicare & Medicaid incentive payments for providers designated meaningful users of electronic health records (EHR) Payments beginning in 2011, made over a four year payout After 2014, penalties may be levied for failure to demonstrate meaningful use of EHR 28

29 TIMING AND BASIS OF HITECH PAYMENTS Paid 4 8 weeks after designation of meaningful use of electronic health records First initial payment based on the most recently as submitted and accepted cost report at the time deemed a meaningful user Final payment will be settled on the cost report period in which the provider was deemed a meaningful user 29

30 EXAMPLES OF DETERMINING CORRECT COST REPORT FOR FIRST HITECH PAYMENT 6/30 FY provider attesting in March cost report will have just been submitted by 1/31/2012 Initial HITECH payment based on 2011 cost report 6/30/2011 dates of service: 7/1/10 through 6/30/2011 Still opportunity to double check 11/17/2010 6/30/11 12/31 FY provider attesting in March cost report not filed until May 2013, after attesting for EHR So, initial HITECH payment based on the 2011 cost report 12/31/11 dates of service: 1/1/11 through 12/31/2011 First deadlines to start hitting 1/1/

31 HITECH MEDICARE CALCULATION Initial Amount Start with $2,000,000 base amount Add [(discharges 1,149) X $200)] Multiplied by Medicare Share Numerator IP Part A Days + IP Part C Days Denominator (Total Charges Total Charity Charges) / Total Charges Multiplied by Total Acute Days 31

32 COST REPORT DATA FOR HITECH PAYMENTS The CMS data elements are as follows: 1) Total Discharges - Worksheet S-3 Part 1, Column 15, Line 12 2) Inpatient Part A Days - Worksheet S-3 Part 1, Column 4, Line 1 + Lines 6 through 10 3) Inpatient Part C Days - Worksheet S-3 Part 1, Column 4, Line 2 4) Total Inpatient Days - Worksheet S-3 Part 1, Column 6, Line 1 + Lines 6 through 10 5) Total Charges - Worksheet C Part 1, Column 8, Line 103 6) Charity Care Charges - Worksheet S-10, Column 1, Line 30 The CMS data elements are as follows: 1) Total Discharges - Worksheet S-3 Part 1, Column 15, Line 14 2) Inpatient Part A Days - Worksheet S-3 Part 1, Column 6, Line 1 + Lines 8 through 12 3) Inpatient Part C Days - Worksheet S-3 Part 1, Column 6, Line 2 4) Total Inpatient Days - Worksheet S-3 Part 1, Column 8, Line 1 + Lines 8 through 12 5) Total Charges - Worksheet C Part 1, Column 8, Line 200 6) Charity Care Charges - Worksheet S-10, Column 3, Line 20

33 SAMPLE HOSPITAL HITECH ANALYSIS 5% INCREASE TO MA DAYS Estimated Payment Showing CR Reported Days INITIAL AMOUNT Estimated Payment Adding 5% MA Days INITIAL AMOUNT Base Amount $2,000,000 Base Amount $2,000,000 Total Discharges 20,580 Total Discharges 20,580 Total Initial Amount $5,886,200 Total Initial Amount $5,886,200 MEDICARE SHARE MEDICARE SHARE Part A Days 24,201 Part A Days 24,201 MA Days 7,502 MA Days 7,877 Total Acute Days 81,002 Total Acute Days 81,002 Total Charity Charges 53,767,139 Total Charity Charges 53,767,139 Total Charges 115,219,088 Total Charges 115,219,088 Non Charity Charge Ratio 53% Charity Charge Ratio 53% Medicare Share Calc 73.38% Medicare Share Calc 74.25% TRANSITION FACTOR TRANSITION FACTOR Year Factor Year Factor Calculated Payment Year 1 $4,319,450 Calculated Payment Year 1 $4,370,556 Calculated Payment Year 2 $3,239,587 Calculated Payment Year 2 $3,277,917 Calculated Payment Year 3 $2,159,725 Calculated Payment Year 3 $2,185,278 Calculated Payment Year 4 $1,079,862 Calculated Payment Year 4 $1,092,639 $10,798,624 $10,926,390 Recovery Year 1 $51,106 Year 2 $38,330 Year 3 $25,553 Year 4 $12,777 Total $127,766

34 SAMPLE HOSPITAL HITECH ANALYSIS 20% INCREASE TO MA DAYS Estimated Payment Showing CR Reported Days INITIAL AMOUNT Estimated Payment Adding 20% MA Days INITIAL AMOUNT Base Amount $2,000,000 Base Amount $2,000,000 Total Discharges 20,580 Total Discharges 20,580 Total Initial Amount $5,886,200 Total Initial Amount $5,886,200 MEDICARE SHARE MEDICARE SHARE Part A Days 24,201 Part A Days 24,201 MA Days 7,502 MA Days 9,002 Total Acute Days 81,002 Total Acute Days 81,002 Total Charity Charges 53,767,139 Total Charity Charges 53,767,139 Total Charges 115,219,088 Total Charges 115,,219,088 Non Charity Charge Ratio 53% Charity Charge Ratio 53% Medicare Share Calc 73.38% Medicare Share Calc 76.86% TRANSITION FACTOR TRANSITION FACTOR Year Factor Year Factor Calculated Payment Year 1 $4,319,450 Calculated Payment Year 1 $4,523,875 Calculated Payment Year 2 $3,239,587 Calculated Payment Year 2 $3,392,906 Calculated Payment Year 3 $2,159,725 Calculated Payment Year 3 $2,261,938 Calculated Payment Year 4 $1,079,862 Calculated Payment Year 4 $1,130,969 $10,789,624 $11,309,688 Recovery Year 1 $204,426 Year 2 $153,319 Year 3 $102,213 Year 4 $51,106 Total $511,064

35 Shadow Billing Challenges 35

36 REGISTRATION Incomplete and/or inaccurate information Medicare HICN is key SSN is not always enough Medicare Advantage Plans Who are they? ER admits Complex and confusing to patients Example Medicare v. Medicare Advantage Card Changing benefits mid-stream 36

37 MISSING MEDICARE HIC NUMBERS 37

38 MAC OPEN FORUM - MEDICARE HIC NUMBER QUESTION Provider s question to their FI/MAC during a teleconference: Question 15: MA plans tell their members not to use their Medicare cards but to use the MA plan identification card. This presents a problem when the provider has to submit an information claim to Medicare, but has no prior history on the patient and therefore no Medicare number to put on the MA information claim. The provider then has to expend its resources to try to get this Medicare Health Insurance Claim (HIC) number. This is a burden on providers. Answer 15: We will bring this to the attention of CMS to see if this message can be shared with the MA plans. 38

39 BILLING Medicare HICN required for billing Options for tracking down missing HICN Medicare Common Working File (CWF) Patient Medicare Advantage plans Proper Condition Codes required 04 & 69 for teaching; 04 only for non-teaching Tracking status of claim through payment Many accounting systems do not create an IME receivable Lack resources to follow up on 100% of rejected claims 39

40 REIMBURSEMENT HITECH, IME and GME Accuracy of PS&R Report Type 118 For non-teaching, discharges prior to 7/1/2010 not included Timing of claims submitted Are claims submitted soon enough to capture on cost report? One year timely filing window too broad to rely on 40

41 Best Practices For Shadow Billing 41

42 REGISTRATION Training, Training, Training Demonstrate financial impact of missing HICN Create hit list of active Medicare Advantage plans for guidance Require HICN before admission for any plans on hit list Create dialogue with billing department re: challenges Provide tools for HICN verification Master Patient Index reference CWF Build incentive plan for registration staff 42

43 BILLING Automate Configure system to generate and submit claims automatically Automatically add condition codes Track Create IME receivable in patient accounting system Frequently review RTP claims for timely adjustments Manual reconcile to Medicare Advantage remits Support Medicare Common Working File (CWF) Master Patient Index reference 43

44 REIMBURSEMENT Reconcile to PS&R Report Type 118 Request that MAC use an updated PS&R for NPR Encourage billing department to bill claims quickly Do not wait for primary plan to pay Utilization Part C DRG to Part A DRG ratio v. Part C GME to Part A GME (historical) Enrollment Medicare Advantage county penetration rates 44

45 Shadow Billing Implications on SSI and DSH 45

46 SSI DATA ANALYSIS Will the inclusion of MA days in the SSI calculation dilute the SSI percentages used for DSH calculation? SSI % Source: CMS Medpar data 46

47 THE SSI BATTLE STILL ON CMS still in the process of reviewing SSI % s for FFY 2006 onward Northeast Hospital Corp. v. Sebelius (No ) Challenged inclusion of Medicare Advantage days in SSI Court agreed for period prior to 2004 Post-2004, Court ruled in favor of CMS Continue to appeal the SSI calculations by filing protest DSH amounts on cost report 47

48 Medicare Advantage Bad Debt and DSH 48

49 MA BAD DEBT Medicare Advantage plans pay virtually nothing for Bad Debt but cover 23% of all Medicare beneficiaries Why not? Payment was not negotiated in contracts Hospitals are not asking to be paid for out of network and Medicare Advantage PFFS patients Will Medicare Advantage Plans Pay? CMS says they can if they want to but they don t have to 49

50 RESEARCH THE TERMS AND CONDITIONS FOR EACH MEDICARE ADVANTAGE PLAN This Plan Will Pay Pacificare/Secure Horizons This Plan Won t Pay This Plan pays according to, Original Medicare This Plan is another maybe Aetna Blue Medicare Humana T&C are almost identical to CMS polices on Bad Debt T&C specifically mentioned that Aetna will not yearend cost settle with providers, nor will they pay Bad Debt T&C reimburses deemed providers the amount they would have received under Original Medicare T&C says that settlement for certain payment methodologies is available upon request. 50

51 MEDICARE DSH SETTLEMENTS FOR MEDICARE ADVANTAGE PLANS There is no cost report settlement process for Medicare Advantage plans like there is for FFS Medicare Provider Specific file and Pricer are not updated retroactively Payment by Medicare Advantage plans is first and final based on what PSF data is in the Pricer CMS says it balances out in the end 51

52 MEDICARE ADVANTAGE DSH IMPACT Our internal study indicates that over a four year period DSH payments increased by $3 Billion for some providers and decreased by $1 Billion for others between the As Submitted and Settled cost reports Doesn t seem to even out Will Medicare Advantage plans pay for DSH settlements? Maybe 52

53 ACTION ITEM FOR PROVIDERS Research Terms and Conditions of Medicare Advantage plans to submit requests for cost settlement of Bad Debt and DSH for MA patients 53

54 Questions The material and information presented is for educational purposes only and should not be considered accounting, financial, operational, business planning, investment, tax or other professional advice. Before making any material changes or decisions that may impact your business, please consult with a qualified advisory firm. Furthermore, HPS shall not be responsible for any loss sustained by any individual or business that relies on the information contained in this presentation. Copyright 2011 Healthcare Payment Specialists, LLC All rights reserved. 54