CT Nursing Facilities 2017 Legislation: Reimbursement Presentation to the Membership of CAHCF. December 7, 2017

Transcription

1 CT Nursing Facilities 2017 Legislation: Reimbursement Presentation to the Membership of CAHCF Vincent Ruocco, CPA Partner December 7, 2017 Discussion CT Medicaid rates effective July 1, 2017 Perhaps a new trend is emerging Withholding tax on taxable pensions and annuities New rule could affect applied income CT Medicare Savings Program changes What they mean to NFs and how to mitigate their effect 2 1

2 CT MEDICAID RATES EFFECTIVE JULY 1, Does CT have a reimbursement system? Yes ---but... Since 1991 the legislature has ignored the system and imposed limits on annual reimbursement rate changes The legislative budget passed in October 2017 continues the pattern 4 2

3 The consequences of budget driven philosophy Over time the gap between costs and rates has grown For FY16 the average shortfall was approximately $27.00 ppd However, it is estimated that some forty (40) NFsin CT have a paid rate that exceedstheir cost based calculated rate 5 How can a paid rate exceed a calculated rate? While cost-based rates have always been calculated by DSS, the state has generally ignoredthe calculations (except for interim rate situations) Instead, rates were based upon the NF s prior rate Meanwhile, many NFs reduced their costs to reflect declining occupancy levels Most NFs, however, have NOT reduce their licensed bed capacity despite a declining census This has, in certain situations, caused paid rates to exceed calculated rates 6 3

4 There are other factors Interim rates Ownership changes 7 Rates effective July 1, 2017 (i) Base year 2016 Minimum occupancy 90% Stop gain zero (except for fair rent adjustments) Stop loss UP TO 2% rate cutif the NF s paid rate exceeds its calculated rate (i) Language indicates retroactive 8 4

5 How are calculated rates determined? Total historical allowable costs Total historical actual and imputed days Inflation applied to qualified costs Calculated prospective rate 9 Imputed days If an NF s occupancy is less than 90% -using licensed bed capacity as the base -DSS imputes (ADDs)enough days in the denominator to bring occupancy to 90% The patient day statistic is the denominator in the calculation of per diem costs As the denominator increases per diem costs go in the opposite direction -DOWN 10 5

6 State s short and long-term objectives Cut budgeted expenditures Reduce the number of facilities whose PAID rate exceeds their CALCULATED rate Encourage facilities to right-size 11 Predictions CT will continue to experience budget deficits and will look for more ways to cut expenditures Accordingly, the stop losspercentage will continue and may actually get worse Eventually the stop loss will be zero!!! 12 6

7 A hypothetical... You ve reduced your costs to reflect your occupancy But now your paid rate exceeds your calculated rate, so DSS reduced your rate Old paid rate -$ New calculated rate - $ New paid rate -$ Fix the problem: Imputed days Allowable expenses $ 9,000,000 $ 9,000,000 Beds Available days Actual days Occupancy percentage 80% 91% Imputed days Actual and imputed days Allowable costs ppd $ $

8 You ve solved the problem Old paid rate -$ New calculated rate - $ $ New paid rate - $ $ So, why not de-license beds??? 16 8

9 WITHHOLDING TAX ON TAXABLE PENSIONS AND ANNUITIES 17 New Income Tax Withholding Requirements Effective January 1, 2018, payers that maintain an office or transact business in Connecticut and make distributions of taxable pensions or annuities to a resident individual are required to deduct and withhold income tax from such distributions. DSS will assume the gross amount of the payment as applied income, NOTthe net amount after the tax 18 9

10 What is subject to withholding Employer pension Annuity Profit sharing plan Stock bonus Deferred compensation plan Individual retirement arrangement Endowment Life insurance contract 19 Withholding rate Highest marginal CT rate 6.99% 20 10

11 Withholding avoidance Recipient provides the payer a properly completed newform CT-W4P CT-W4P has been revised for Information from DRS ubssn/2017/sn pdf 22 11

12 CT MEDICARE SAVINGS PROGRAM 23 Disclaimer Changes to the CT Medicare Savings Program are new Affects eligibility, NOT REIMBURSEMENT RATES Guidance seems sparse Questions remain 24 12

13 What does the MSP do? The State of Connecticut offers financial assistanceto eligible Medicare enrollees through its Medicare Savings Programs. Three (3) different Programs with different limits and benefits. The programs may help pay Medicare premiums, deductibles and co-insurance. 25 Legislative changes Source: CT Dept on Aging Public Act 17-2, section 50, special session Changes the income-eligibility levels for the Medicare Savings Program, effective January 1, Only those who are income qualified may remain on MSP The federal government establishes minimum federal MSP income guidelines. CT will be at minimum federal income levels. Note: Federal Poverty Levels are announced in February. MSP income guidelines will likely change effective March 1,

14 State by state income limits (QMB - single) Source: NCOA; CMS; CT DSS Federal income limits 100% of FPL -- $1,025 (Alaskaand Hawaii slightly higher) Alabama Alaska Arizona Arkansas California Colorado Delaware Florida Georgia Hawaii Idaho Iowa Kansas Kentucky Louisiana Maryland Massachusetts Michigan Minnesota Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Federal District of Columbia $2,990 Illinois Indiana $1,105 Maine $1,461 Mississippi $1,040 Connecticut $2,120 $1, State by state assetlimits (QMB -single) Source: NCOA; CMS; Federal asset limit $7,280 Alaska Arkansas California Colorado Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maryland Massachusetts Michigan Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico North Carolina North Dakota Ohio Oklahoma Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Virginia Washington West Virginia Wisconsin Wyoming Maine Federal limit Minnesota $10,000 Alabama Arizona Connecticut Delaware District of Columbia Mississippi New York Oregon Vermont $58,000 Liquid assets only No limit 28 14

15 Eligibility notices Source: DoA November 19, 2017 notices to those who may lose benefits December 15, 2017 discontinuance notices to beneficiaries December 15, 2017 change in benefit notices beneficiaries 29 Impact estimates Source: DoA 82K will lose MSP coverage 27K may change from OMB to SLMB/ALMB (Specified Low Income Medicare Beneficiary / Additional Low Income Medicare Beneficiary) 90% losing MSP bill be OMBs All will experience reduction in SS income by $134 per month (Part B medical insurance premium) --- likely by February 30 15

16 Effect on Patient Liability Source: DSS Medicaid rules require individuals receiving Long- Term Services and Supports pay a portion of their income towards their cost of care. This portion is called the Patient Liability Amount (PLA). Individuals who are no longer eligible for a Medicare Savings Program will see a decrease in their Social Security award because the Medicare Part B premiumwillbe deducted. A reduction in the Social Security award will result in a reduction in the PLA owed to the nursing facility each month. 31 Additional information for CT... Care/Medicare-Savings-Program/Medicare-Savings- Program sp/mspchangespresentationforaginganddisabilityprof essionals.pdf 32 16

17 QMB Recipients with Medicaid Source: DoA Traditional Medicare & QMB & Medicaid Outcome if no action is taken: Medicaid pays Medicare Part A and B deductible & cost-sharing Part B premium will now be deducted from SSA check This group does not need to take action due to loss of QMB ~~~~~~~~~~~~~~~ 33 Uncertainties... How many and to what degree will NFs patients be affected? State Plan to deduct Part B premiums from social security checks? Stay tuned... CT Mirror headline... 12/5/2017 Legislators to rethink Medicare Savings Program cuts 34 17

18 What if the NF cannot collect? Provider Reimbursement Manual Part 1 Guidance/Guidance/Manuals/Paper-Based-Manuals.html Section 300 to 326 Principle... Bad debts, charity, and courtesy allowances are deductions from revenue and are NOT to be included in allowable costs; however, bad debts attributable to the deductibles and coinsurance amounts are reimbursable under the Program. 35 Criteria A debt must meet these criteria to be an allowable bad debt: The debt must be related to covered services and derived from deductible and coinsuranceamounts. (See 305 for exception.) The provider must be able to establish that reasonable collection efforts were made. The debt was actually uncollectible when claimed as worthless. Sound business judgment established that there was no likelihood of recovery at any time in the future

19 Reasonable collection (Section 310) To be considered a reasonable collection effort, a provider's effort to collect Medicare deductible and coinsurance amounts must be similarto the effort the provider puts forth to collect comparable amounts from non-medicare patients. It must involve the issuance of a bill on or shortly after discharge or death of the beneficiary to the party responsible for the patient's personal financial obligations. It also includes other actions such as subsequent billings, collection letters and telephone calls or personal contacts with this party which constitute a genuine, rather than a token, collection effort. The provider's collection effort may include using or threatening to use court actionto obtain payment. (See 312 for indigent or medically indigent patients.) 37 Documentation The provider's collection effort should be documented inthe patient's file by copies of the bill(s), follow-up letters, reports of telephone and personal contact, etc

20 Presumption of non-collectibility If after reasonable and customary attempts to collect a bill, the debt remains unpaid more than 120 daysfrom the date the first bill is mailed to the beneficiary, the debt may be deemed uncollectible 39 Indigent or medically indigent patients (Section 312) In some cases, the provider may have established before discharge, or within a reasonable time before the current admission, that the beneficiary is either indigent or medically indigent. Providers can deem Medicare beneficiaries indigent or medically indigent when such individuals have also been determined eligible for Medicaid as either categorically needy individuals or medically needy individuals, respectively. Otherwise, the provider should apply its customary methods for determining the indigence of patients to the case of the Medicare beneficiary under the following guidelines: 40 20

21 Guidelines to determine indigence 1. The patient's indigence must be determined by the provider, not by the patient; i.e., a patient's signed declaration of his inability to pay his medical bills cannot be considered proof of indigence; 41 Guidelines to determine indigence 2. The provider should take into account a patient's total resources which would include, but are not limited to, an analysis of assets(only those convertible to cash, and unnecessary for the patient's daily living), liabilities, and income and expenses. In making this analysis the provider should take into account any extenuating circumstances that would affect the determination of the patient's indigence; 42 21

22 Guidelines to determine indigence 3. The provider must determine that no source other than the patient would be legally responsiblefor the patient's medical bill; e.g., title XIX, local welfare agency and guardian; and 43 Guidelines to determine indigence 4. The patient's file should contain documentation of the methodby which indigence was determined in addition to all backup informationto substantiate the determination 44 22

23 Once determined indigent... Once indigence is determined and the provider concludes that there had been no improvement in the beneficiary's financial condition, the debt may be deemed uncollectible without applying the 310 procedures (Reasonable collection efforts). (See 322 for bad debts under State Welfare Programs.) 45 State welfare programs (Sec. 322) Effective with the 1967 Amendments, States no longer have the obligation to pay deductible and coinsurance amounts for services that are beyond the scope of the State title XIX plan for either categorically or medically needy persons

24 Sec. 322 (continued) For services that are within the scope of the title XIX plan, States continue to be obligated to pay the full deductible and coinsurance for categorically needy persons for most services, but can impose some cost sharing under the plan on medically needy persons as long as the amount paid is related to the individual's income or resources. 47 Sec. 322 (continued) Where the State is obligated either by statute or under the terms of its plan to pay all, or any part, of the Medicare deductible or coinsurance amounts, those amounts are not allowable as bad debts under Medicare. Any portion of such deductible or coinsurance amounts that the State is not obligated to pay can be included as a bad debt under Medicare, provided that the requirements of 312 (indigent or medically indigent) or, if applicable, 310 (reasonable collection effort) are met

25 How to claim allowable bad debts Report on the annual Medicare cost report 49 Regulation Section Subsection (h)(2) ---SNFs and swing bed hospitals... Reduced the allowable bad debt amount from 100% to 65%. However, that may change

26 Proposed federal changes (January 26,2017) Source: HHS; OMB...reduce bad debt payments to 25 percent over 3 years for all providers who receive bad debt payments. This proposal will more closely align Medicare policy with private payers, who do not typically reimburse for bad debt. [$32.9 billion in savings over 10 years] 51 The End 52 26