Accounting for State Wrap Around Payments and Other Issues

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1 Accounting for State Wrap Around Payments and Other Issues Glenn Grigsby, CPA October 15, 2012 Today s Agenda History of Wrap Around Methodology Reconciliation Potential Problem Areas Best Practices Other Reimbursement Issues Q & A 2 1

2 Payment History Contracts began November 1, Counties not including Region 3 CoventryCares of Kentucky Kentucky Spirit Health Plan WellCare of Kentucky Open enrollment August 20 October 19 Does not apply to Region 3 3 Payment History Region 3 Effective January 1, month contract with four, one-year renewal options CoventryCares of Kentucky Passport WellCare of Kentucky Humana Medicaid recipients currently being matched to a MCO Receive notice of their MCO by early November Recipients will have 30 days to switch before 1/1/13 or 90 days after 1/1/13 2

3 Medicaid Supplemental Payment (Wrap around) Under the state plan, RHCs, FQHCs and PPS must be paid at least the PPS amount MCOs pay based on Physician Fee Schedule (PFS) Eliminates the ability to direct beneficiaries toward lower cost providers DMS responsible for the difference between PPS rate and PFS amount paid by MCO (wrap around) By law, these payments must be made at least quarterly Payments are currently made monthly 5 Medicaid Supplemental Payment (Wrap around) Supplemental payments are estimates based on average of paid claims reported by providers and MCO Total encounters based on historical paid claims Monthly MCO payments based on data supplied by MCOs Supplemental payment = (Average number of patient encounters X current PPS rate) estimated MCO payments 6 3

4 Medicaid Supplemental Payment (Wrap around) Potential Variances 7 Services provided by midlevel providers only paid at 75% of PFS Could cause underpayments Provider paid full wrap for Medicaid secondary Only entitled to unpaid coinsurance and deductibles Could cause overpayments Provider-based clinic issues Clinic billing under same NPI as hospital, etc. Non-clinic services billed under clinic number Providers files loaded incorrectly by MCOs Wrap arounds could be getting paid on the wrong claims Medicaid Supplemental Payment (Wrap around) Potential Variances Dental Services Pre MCO 1 visit per month limit Post MCO No monthly limits How will DMS settle? Practice Management vs. GL 8 4

5 Medicaid Supplemental Payment (Wrap around) Reconciliation DMS plans to distribute EOBs to providers Hopes to roll this out soon? Providers will have the ability to reconcile PFS payment from MCO EOB and wrap from DMS EOB DMS will provide detail back to 11/1/11 9 Best Practices Know your current PPS Rate Is the rate final? Scope changes Internally track all Medicaid patient encounters by MCO Estimate amount due to/from DMS Are wrap around payments making you whole? 10 5

6 Best Practices Communicate with DMS Provide internal logs to support entitled reimbursement Request increases/decreases in wrap payments As of 10/1, only 17 providers have contacted DMS 11 Example #1 Actual Payment Date of Service MA P / S Expected Payment Pt Resp HP Ky Spirit Coventry Wellcare Difference 11/1/2011 S $ $ $ - 11/1/2011 S $ $ - $ (15.00) 11/1/2011 P $ $ 2.00 $ $ (53.34) 11/3/2011 P $ $ 2.00 $ $ (64.00) 11/4/2011 P $ $ 2.00 $ $ (64.00) 11/7/2011 S $ $ - $ (21.00) 11/7/2011 P $ $ $ (64.00) 11/7/2011 P $ $ $ (56.22) 11/7/2011 P $ $ $ (64.00) 11/7/2011 P $ $ $ (64.00) 11/7/2011 P $ $ $ (64.00) 11/7/2011 P $ $ 2.00 $ $ (64.00) 11/7/2011 S $ $ - $ (15.00) 11/9/2011 P $ $ $ (53.34) 11/9/2011 P $ $ $ (64.00) 11/10/2011 S $ $ - $ (19.00) 11/10/2011 P $ $ $ (16.93) 11/10/2011 S $ $ - $ (15.00) 11/10/2011 P $ $ $ (53.34) 11/11/2011 P $ $ $ (64.00) 11/11/2011 P $ $ $ (36.69) 12 6

7 Example #1 continued FROM MCOs EXPECTED REIMBURSEMENT $ 39, ACTUAL REIMBURSEMENT $ 17, DIFFERENCE $ 21, (+ LOSS / - GAIN) AS OF PAYMENTS REC'D Payments from DMS NOVEMBER $ (1,428.95) - DECEMBER $ (2,032.44) $ 1, JANUARY $ (2,250.86) $ 2, FEBRUARY $ (2,248.96) $ 2, MARCH $ (2,818.12) $ APRIL $ (1,862.23) $ 1, MAY $ (2,586.43) $ 5, JUNE $ (1,629.84) $ 4, JULY $ (2,372.34) $ 5, AUGUST $ (1,932.83) $ 4, SEPTEMBER $ (799.37) $ 3, EXPECTED VS REIMBURSED $ (21,962.37) $ 32, $10, over 13 Example # 2 Service Date Claim Number Wrap-Around MCO MCO Paid MEDICAID $ 70, /1/ $ Wellcare $ $ 70, /1/ $ Coventry $ $ 69, /1/ $ Coventry $ $ 69, /1/ $ Coventry $ $ 69, /1/ $ Wellcare $ $ 69, /1/ $ KYSpirit $ $ 69, /1/ $ Coventry $ $ 69, /1/ $ Coventry $ $ 69, /1/ $ KYSpirit $ $ 69, /1/ $ Coventry $ $ 69, /1/ $ KYSpirit $ $ 69, /1/ $ Wellcare $ $ 69, /1/ $ KYSpirit $ $ 69, /1/ $ KYSpirit $ $ 69, /1/ $ KYSpirit $ $ 68, /1/ $ Wellcare $ $ 68, /1/ $ Wellcare $ $ 68, /1/ $ Coventry $ $ 68, /1/ $ Wellcare $ $ 68, /1/ $ Wellcare $ $ 68, /1/ $ Wellcare $

8 Example #2 continued Service Date Claim Number Wrap-Around MCO MCO Paid MEDICAID $ (12,370.91) 11/30/ $ KYSpirit $ $ (12,455.97) 11/30/ $ Wellcare $ $ (12,536.38) 11/30/ $ KYSpirit $ $ (12,594.97) 11/30/ $ KYSpirit $ $ (12,678.03) 11/30/ $ KYSpirit $ $ (12,761.09) 11/30/ $ Coventry $ $ (12,844.15) 11/30/ $ KYSpirit $ $ (12,929.21) 11/30/ $ Coventry $ $ (12,973.32) 11/30/ $ KYSpirit $ $ (13,031.91) 11/30/ $ KYSpirit $ $ (13,090.50) 11/30/ $ Wellcare $ $ (13,172.71) 11/30/ $ KYSpirit $ $ (13,255.77) 11/30/ $ KYSpirit $ $ (13,349.49) 11/30/ $ KYSpirit $ $ (13,432.55) 11/30/ $ Wellcare $ $ (13,514.76) 11/30/ $ KYSpirit $ $ (13,597.82) 11/30/ $ KYSpirit $ $ (13,693.54) 11/30/ $ KYSpirit $ $ (13,788.15) 11/30/ $ Coventry $ $ (13,868.21) 11/30/ $ Coventry $ $ (13,951.27) 11/30/ $ Wellcare $ $ (14,033.48) 11/30/ $ KYSpirit $ $ (14,134.62) 11/30/ $ KYSpirit $ Other Reimbursement Issues Do you know the current cost per encounter for your facility? PCCs do not file any annual cost reports after ratesetting Medicaid RHCs/FQHCs file Medicare cost report Cost per visit can be deceiving due to productivity limits Have you added or terminated services? Are these scope changes included in your current PPS rate? 16 8

9 Other Reimbursement Issues Medicaid rate-setting and scope change cost reports are audited closely Provider compensation Non-clinical duties Medical director Administrative duties Productivity limits Related party transactions When establishing GL, providers should consider cost reporting requirements 17 Other Reimbursement Issues HPSA Designations 18 HRSA required updates of HPSAs last reviewed in 2008 Several counties were recommended to have HPSA designation removed Caldwell Muhlenberg Hart Green Madison Wolfe 9

10 Final Thoughts Clinics must maintain claim level documentation Know current PPR rates Eligibility Payments received Capability of practice management system? Burden of proof lies on the clinics Communicate with DMS and MCOs All 3 must work together 19 Final Thoughts Track cost per encounter at a minimum annually Understand fluctuations Scope Changes? Medicare cost report may not tell the entire picture Stay informed of federal/state regulations that affect your practice 20 HPSA Medicare PPS (2014) Grants Payment reform 10

11 Questions? Glenn Grigsby Senior Managing Consultant BKD, LLP 220 W Main Street. Suite 1700 Louisville, KY ggrigsby@bkd.com 21 11