CMS releases payment updates for FY 2013: A slight breather for SNFs

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1 October 2012 Vol. 14, No. 10 CMS releases payment updates for FY 2013: A slight breather for SNFs In late July, CMS officially released an update notice on the SNF PPS for fiscal year (FY) It appears SNFs will get a bit of a break compared with recent years, as the agency decided to grant a slight increase to Medicare reimbursements while forgoing the proposal of any major changes or regulations. After the last few years with significant procedural, operational, and payment changes, SNFs finally get a reprieve from major changes with this notice. CMS opted to skip the proposed and final rule process and simply issue a notice of rate change, says Janet Potter, CPA, IN THIS ISSUE p. 3 Mind your Ps, Qs, and ADLs Don t let improper ADL coding negatively impact cash flow. Find out how much money your facility could be leaving on the table. p. 5 Supreme Court decision means SNFs need a proactive approach The Supreme Court s decision to uphold the ACA will force SNFs into an era of greater accountability, with a focus on cost cutting, quality care, and collaborative care don t get left behind. p. 8 MedPAC report moves reform agenda ahead MedPAC urges Congress to focus particular attention on the role of Medicare beneficiaries in its June report. Learn more about its recommendations. p. 11 BALTC Q&A We answer common questions regarding obtaining signed physician certifications and streamlining interdisciplinary team processes. p. 12 Update: New process for manual medical review of therapy claims CMS recently clarified changes to the manual review process see how these changes will impact your facility. MAS, manager of healthcare research at FR&R Healthcare Consulting, Inc., in Deerfield, Ill. What facilities should expect Under the notice, SNFs are receiving roughly a 1.8% increase to Medicare payments. That s in stark contrast to last year s SNF PPS rule, which reduced Medicare payments by more than 11%. After the last few years with significant Under the FY procedural, operational, 2013 plan, SNFs and payment changes, will receive a SNFs finally get a reprieve 2.5% market basket update (cost from major changes with this notice. of living adjustment), but a 0.7% Janet Potter, CPA, MAS productivity adjustment due to the Affordable Care Act s (ACA) 10-year plan to reduce Medicare payments to SNFs by $14.6 billion. This results in a 1.8% increase, or approximately $670 million. While the CMS notice reveals only a 1.8% increase, it may represent over $600 million in an overall increase in payments. So we ll take what we can get since it s a positive change from last year s reductions, says Frosini Rubertino, RN, CPRA, CDONA/LTC, executive director at Training in Motion, LLC, in Bella Vista, Ariz. Using the same methodology as before, every RUG payment was increased using the SNF market basket index, which reflects changes in the costs of the mix of goods and services for SNFs. SNF business offices and billers will need to get the updated rates for their specific region and be sure their software is updated for payment dates beginning October 1, 2012, she adds. Whenever there is a change in rates, it is important to closely monitor the payments when the new rates are effective to make sure they have all been updated on the contractor s end as well.

2 Page 2 Billing Alert for Long-Term Care October 2012 Download the SNF PPS payment rates for FY 2013 at For a comparison of these payment rates with those for FY 2012, visit com/bmuwth4. No proposed rule It is important for facilities to recognize that this notice is not a proposed rule. Unlike the usual process of a proposed rule with public comment period followed by a final rule, CMS is only making statutory update adjustments to Medicare Part A, rather than proposing any new regulations that could radically affect payments. CMS originally announced its intent to forgo the proposed rule process for FY 2013 in April Rubertino notes that as required by the ACA, the original 2.5% market basket percentage was reduced due to a productivity adjustment. This was due to CMS Editorial Advisory Board Billing Alert for Long-Term Care Assoc. Editorial Director: Associate Editor: Contributing Editor: Kate Brewer, PT, MBA, GCS, RAC-CT Vice President Greenfield Rehabilitation Agency Greenfield, Wis. Diane Brown, BA, CPRA Regulatory Specialist & Boot Camp Instructor HCPro, Inc., Danvers, Mass. Karen Connor, MHA President and CEO Connor LTC Consulting Haverhill, Mass. Joseph Gruber, RPh, CGP, FASCP Vice President & Clinical Products Specialist Mirixa, headquartered in Reston, Va. Lee A. Heinbaugh President The Heinbaugh Group Cleveland, Ohio Elizabeth Malzahn National Director of Healthcare Covenant Retirement Communities Skokie, Ill. Elizabeth Petersen Melissa D Amico Matt Wickenheiser Mary H. Marshall, PhD President Management and Planning Services, Inc. Fernandina Beach, Fla. Janet Potter, CPA, MAS Manager of Healthcare Research Frost, Ruttenberg & Rothblatt, PC Deerfield, Ill. Frosini Rubertino, RN, CPRA, CDONA/LTC Executive Director Training in Motion, LLC Bella Vista, Ariz. Elise Smith, JD Finance Policy Counsel Finance and Managed Care American Health Care Association Washington, D.C. Bill Ulrich President Consolidated Billing Services, Inc. Spokane, Wash. Billing Alert for Long-Term Care (ISSN: [print]; [online]) is published monthly by HCPro, Inc., 75 Sylvan St., Suite A-101, Danvers, MA Subscription rate: $259/year. Billing Alert for Long-Term Care, P.O. Box 3049, Peabody, MA Copyright 2012 HCPro, Inc. All rights reserved. Printed in the USA. Except where specifically encouraged, no part of this publication may be reproduced, in any form or by any means, without prior written consent of HCPro, Inc., or the Copyright Clearance Center at Please notify us immediately if you have received an unauthorized copy. For editorial comments or questions, call or fax For renewal or subscription information, call customer service at , fax , or customerservice@hcpro.com. Visit our website at Occasionally, we make our subscriber list available to selected companies/vendors. If you do not wish to be included on this mailing list, please write to the marketing department at the address above. Opinions expressed are not necessarily those of BALTC. Mention of products and services does not constitute endorsement. Advice given is general, and readers should consult professional counsel for specific legal, ethical, or clinical questions. initiative to reduce Medicare payments by $14.6 billion over a 10-year period, she adds. Also, remember that CMS has not made any new policy that has dramatically affected payments recently, only statutory update adjustments. Policy changes would encompass a proposed rule, then a comment period, then a final rule, Rubertino says. Annual updates to the PPS rates for SNFs are required by section 1888(e) of the Social Security Act, as added by section 4432 of the Balanced Budget Act of CMS most recent annual update occurred in a final rule in August 2011 that set forth updates to the SNF PPS payment rates to provide for the implementation of a per diem PPS for SNFs, covering all costs (routine, ancillary, and capital-related) of covered SNF services furnished to beneficiaries under Part A of the Medicare program, effective for cost reporting periods beginning on or after July 1, According to the notice, major elements of the SNF PPS include: Federal rates for urban and rural areas using allowable costs from FY 1995 cost reports, including a Part B add-on. An initial, three-phase transition that blends a facility-specific rate (reflecting the individual facility s historical cost experience) with the federal case-mix adjusted rate. An attempt by CMS, where possible, to coordinate claims review procedures with the existing resident assessment process and case-mix classification system. A consolidated billing provision that requires a SNF to submit consolidated Medicare bills to its fiscal intermediary or MAC for almost all of the services that its residents receive during the course of a covered Part A stay. This provision places with the SNF the Medicare billing responsibility for physical therapy, occupational therapy, and speech-language pathology services that the resident receives during a noncovered stay. n

3 October 2012 Billing Alert for Long-Term Care Page 3 Mind your Ps, Qs, and ADLs Few areas are as basic as ADL coding, and, at the same time, few are as integral to a facility s revenue stream. Fully 30% 35% of a SNF s payment derives from the ADLs. They can be seen as the raw data that explains the level of care and attention each patient needs, as well as the analytical justification for different therapies. They are both a revenue source and a basis for other revenues. And they chart the most basic of human needs, broken down into the general areas of bed mobility, transfer, eating, and toilet use. Should your facility focus on ADLs? I think SNFs are definitely focusing on the ADL issue. With the Medicare changes and the reimbursement issues that we re looking at, organizations are looking for every dollar they can, and ADL is an area you have control over because there are inaccuracies that are more frequent than any other MDS area, says Maureen McCarthy, vice president of clinical reimbursement for National Healthcare Associations in Lynbrook, N.Y. I think they re the easiest to control as well. ADLs may vary from day to day, shift to shift, or within shifts, says Diane Brown, BA, CPRA, regulatory specialist at HCPro, Inc., in Danvers, Mass. Although it is not necessary to know the actual number of times an activity occurred, it is necessary to know whether the activity occurred three or more times within the last seven days, under CMS requirements. The staffing challenge The challenge, says Brown, is reinforcing to staff the importance of coding the amount of assistance provided to residents in each of the activities as they happen. Generally, she says, it is a facility s CNAs who are responsible for coding the ADLs on the floor. The least-paid employee with the least education is responsible for an area that contributes to most of a facility s revenue. That s the problem, says Brown. What staff members do is try to remember all of the ADLs at the end of the shift, rather than document them in real time. And if it s not documented in real time, life will take over and documentation won t be as thorough as it needs to be. she explains. And the expectation of this rigid documentation from the federal government means you have to capture it on a per instance basis it s a nightmare. Facilities do not have to let documentation of ADLs slip or lose priority to other tasks. When it comes to ADL coding, consider the following: Technology can make documentation easier. There are now electronic kiosks that can be mounted outside of patient rooms, allowing CNAs to enter codes for the ADLs (and other services). This can help simplify the process of documentation. While this may require an initial investment by the facility, the need for thorough, accurate documentation is invaluable to reimbursement and compliance. Without the right mind-set, resources are useless. While technology, such as the kiosk, is a step up from a paper-based system, CNAs and other staff members still need to develop the mind-set of entering the information immediately. That habit has to be built, explains Brown. If documentation doesn t happen immediately, the risk of inaccurate information continues to exist. Brown says she normally sees improved compliance directly after a facility receives ADL training. However, it only takes about six to 12 weeks before old habits resurface and staff members revert to putting down best guesses for ADL s at the end of the day, rather than coding the information immediately. Enforcing best practices So what should your facility be doing to both build successful documentation habits and maintain these habits over time? Brown and McCarthy offer the following advice:

4 Page 4 Billing Alert for Long-Term Care October 2012 Designate a staff educator. Depending on the size of the facility, says Brown, the facility may consider hiring a full-time staff educator (if the position does not already exist).the staff educator should be responsible for conducting this training for staff. Include the right staff members. Unit staff should be involved, as well as MDS staff members. Also include the nurses in the unit, suggests McCarthy when CNAs have questions on ADL coding, that s who they ll go to. Promote a positive staff training experience, not a stressful one. There s a variety of people who are there to reinforce what needs to occur and many of them are frustrated, McCarthy says. They re trying to build patterns, reinforce these patterns constantly, and may create a very stressful environment. As with any training, just remember that it s better to use carrots rather than sticks. Train staff to ask the right questions. The clinical staff on the unit should be trained to ask the right questions to ensure that ADL documentation is done daily, says Brown. If managers don t see the correct documentation, questions they should ask the CNA or other staff involved in the documentation may include the following: How many times have you helped the resident today. (Don t add the instances together; each instance must be coded separately.) How is the resident moving today? (Don t code only when the resident improves code both improvements and deterioration). How is the resident getting to bathroom? Are you assisting the resident with cleansing? (That s an ADL.) Accountability is critical. Hold staff accountable for documentation standards, Brown says. Treat ADL coding like any quality assurance issue. Get support from the administration and the director of nursing It s a team effort, she stresses. Be aware of the impact of poor documentation on the facility. Generally, a facility won t have audit problems if it is undercoding, says McCarthy. But if a patient has a high-intensity level of therapy that is not justified by the ADL scores, it may cause auditors to take a second look. Is there a higher chance you can be looked at? Absolutely, McCarthy says. And, adds Brown, there are real financial implications to undercoding as well. If they don t get the ADL, they re leaving money on the table, she says. If they get the ADL and document it wrong, they ll get money taken away. How much money could your facility lose? Facilities may not fully understand the financial impact of improper ADL coding. To illustrate this impact, consider the following hypothetical scenario from Karen Connor, MHA, senior consultant and owner of Connor LTC Consulting in Haverhill, Mass. If a resident s care is coded with an RUA category, this means that he or she was a rehab resident, requiring 720 minutes of therapy, but was almost independent with the other ADL functions. An estimation of reimbursement for an RUA is $503 per day. However, if the same resident required greater assistance with ADLs, the resident may fall into the RUB category. An estimation of reimbursement for an RUB is $621 per day. If an ADL score of 5 was documented for this resident, the resident would fall into the RUA category. But if an ADL function was coded incorrectly and the resident really scored a 6, the RUA would become an RUB with an impact of $118 more per day. If the documentation was done incorrectly on a first assessment, then $118 would be lost each of the 14 days associated with that assessment, and the facility would lose $1,652 in rightful reimbursement for that time period, according to Connor. If the resident is assigned to the wrong category for 750 days, the negative impact on the facility could be roughly $26,000 per year. Without enforcing proper documentation procedures for ADLs within your facility, the impact could be significant not only for the resident, but also for staff education, compliance issues, and your bottom line. n

5 October 2012 Billing Alert for Long-Term Care Page 5 Supreme Court decision means SNFs need a proactive approach Editor s note: This article originally appeared in the September issue of PPS Alert for Long-Term Care. For details on this newsletter, visit On June 28, the U.S. Supreme Court handed down a much anticipated decision to uphold President Obama s healthcare reform, the Affordable Care Act (ACA). The decision passed 5-4 with Chief Justice John Roberts providing the swing vote for approval. There are many layers to ACA, each of which has a profound effect on residents, employers, insurance companies, and, most importantly, providers. In the long-term care (LTC) sector specifically, the law will force SNFs and other LTC facilities into an era of greater accountability, with additional focus on cost cutting, quality care, and collaborative care across the spectrum of healthcare. However, the court did rule that one part of the law was unconstitutional, indicating that Congress could not force a state to expand its Medicaid coverage. The original law would cut federal funding to Medicaid states that refused to increase coverage to low-income people. It will be up to states to determine whether they want to extend that coverage; however, states that do so could be eligible for increased funding from the federal government. The law would have provided millions in Medicaid reimbursement; however, overturning the law means LTC facilities will have less competition from other healthcare facilities for Medicaid dollars. Ultimately the ruling ushers in an era of accountability for the LTC community, says Harry Nelson, cofounder and managing partner at Fenton Nelson in Los Angeles, which specializes in healthcare regulatory compliance. In general, we now know the accountable care models are entitled to more attractive reimbursement under the ACA, he says. The Medicare shared savings model of accountable care will go forward, so it becomes important for long-term care facilities to be thinking about how they integrate into hospitals and physician relationships and relationships with other providers in order to have their resident networks so they continue to see residents over the long term. In the short term, SNFs will be subject to a mandatory compliance and ethics program that must be implemented by March 23, Generally, LTC administrators need to rethink their business strategy going forward and take a proactive approach to meeting federal requirements in order to remain financially stable. There is a process that is under way where reimbursement is much more tied to demonstrative quality and not just quality in the facility, but also demonstrated efficiency and utilization patterns and coordination with other providers, Nelson says. So there is going to be a need to strategize about how you function in a much more aggressively managed environment. Document resident care with ease! Long-Term Care Clinical Assessment and Documentation Cheat Sheets is the ultimate blueprint for how to provide residentcentered care for any symptom or condition. Available on CD, this electronic-only resource provides nurses with a thorough list of what to check and what to document during every shift based on the specific circumstances of a given resident. Best of all, the new electronic format of this content enables long-term care clinicians to easily search for the condition they need to treat and access the appropriate checklist within seconds. For more information about this product, visit HCPro at

6 Page 6 Billing Alert for Long-Term Care October 2012 Compliance and ethics By March 23 of next year, LTC facilities need to have a compliance and ethics program in place with a dedicated compliance officer that will address issues related to billing, fraud, erroneous claims, and quality care. Some facilities may already have some form of committee that addresses compliance, but Nelson stresses the importance of having a dedicated committee that meets routinely and includes participation from doctors and nurses on staff. Surveyors are going to be looking for more proactivity and self-monitoring to catch instances of overbilling or excessive use of therapy utilization. Ultimately, with the passage of ACA, the government wants to see much more responsibility with quality control and giving back money when necessary. The consequences of not catching your own mistakes will be much higher for LTC facilities, Nelson says. It s going to be a major culture shift because they are entering an era where there is much more transparency and self-policing than has ever existed, he says. More focus on quality This push toward transparency extends beyond billing and ethics and into quality. One of the goals of ACA is to give residents and their families more information, allowing them to choose their own providers. As a result, tracking quality data and improving areas in resident safety and infection control will be attractive to prospective customers. Adding to the regulatory landscape is the fact that for the first time, family members who are helping their parents make decisions regarding LTC facilities are seniors themselves. The average age of people transitioning into assisted living is 86.9 years old, according to the Assisted Living Federation of America, meaning their children are often in their 60s already and have a greater awareness of quality of care, Nelson says. We will see that trend of aging keep pushing higher as the baby boomer ages, he says. Children that are 65 and 70 think like potential residents of the facility. Their sensitivity for the level of care is much more acute than I think if you re dealing with 40-year-old or 50-year-old children. They see themselves heading down that path of needing assisted living that their parents are getting. One major issue going forward is cutting back on medications in order to reduce healthcare costs, says Bonnie G. Foster, RN, BSN, M.Ed., owner and president of Foster Consulting, Inc., in Columbia, S.C. This has already occurred in the LTC arena to some extent. Previously, anyone at risk for pressure ulcers was prescribed specific vitamins, but most facilities have transitioned to simply prescribing residents a multivitamin. We are already beginning to cut back, Foster says. Transitioning to home health The ACA also places more emphasis on transitioning elderly residents into home healthcare, an arena that has largely been ignored in the past, Nelson says. Home health options are seen as a low-cost alternative to the high cost of assisted living and SNFs. Although this creates competing pressures, it s a theme that is present in ACA that permeates through all levels of healthcare. Hospitals are tasked with cutting costs, preventing readmissions, and maintaining a more efficient level of care. I see that same pressure translating downstream into skilled nursing contacts, and that will get people out of Avoid compromising compliance! Long-Term Care Skilled Services: Applying Medicare s Rules to Clinical Practice illustrates the role played by nurses, therapists, and MDS coordinators in the application and documentation of resident care. Don t miss out on the benefits and reimbursement you deserve. Author Elizabeth Malzahn provides easy-to-understand examples of the right way to manage skilled services! For more information about this book, visit HCPro at

7 October 2012 Billing Alert for Long-Term Care Page 7 skilled nursing, which will lead to more home health utilization, Nelson says. As a result, SNFs will be tasked with working with more home health agencies and providing residents the option for home healthcare to relieve the financial stress on the healthcare system as a whole. However, Foster notes, this approach will only be successful if the funding is there to provide home care for residents. Residents who don t receive the appropriate care and nutrition at home will become revolving-door patients for the LTC that tried to discharge them. ACA has built provisions including the Community Living Assistance Services and Supports Act, a voluntary, consumer-financed insurance plan to cover LTC expenses in order to assist people who want to stay in their homes longer. Right now I m not sure we have the services that we need in the community, Foster says. I think MDS 3.0 sets up a way for us to look at those services, but if it s not there, then it s not there, and that s dependent on the state government. Developing a new business strategy The biggest takeaway from the ACA for LTC facilities is to develop methods to provide more coordinated, costeffective care in order to stay financially viable, Nelson says. Facilities that are currently profitable will need to take a hard look at how they will remain profitable as these new changes and requirements take effect. The environment is changing, so I think anyone who is in this business and plans to stay in this business needs to have a strategy going forward of how they are going to fit into this system that is consolidating and integrating and will face all these new requirements to deal with diminishing reimbursement opportunities, Nelson says. Administrators should look specifically at how they can develop a more tightly integrated and managed environment that demonstrates their facility is a place where consumers want their families to stay and to which hospitals want to continue referring residents. Nelson predicts that those facilities that are unable to adjust their strategic plans accordingly will ultimately sell out to larger organizations since that adjustment is much easier to make with more capital. This necessarily leaves small LTC providers carrying the heaviest burden. I think it s creating a perfect storm, if you will, where the pressure is going up in such a way where the facilities that aren t committed to a long-term process of adapting to the new financial and regulatory enforcement realities aren t going to have a choice but to find a way out of the business, Nelson says. On the other hand, Foster argues that mom-and-pop facilities usually have fewer corporate policies and have the ability to easily adapt to culture changes. Larger systems have more money to work with, but more employees to train. While some facilities view the ACA as piling new burdens on the backs of providers, there is also a strategic opportunity to accept the new changes; focus on quality, efficiency, and transparency; and make the necessary improvements to remain viable. I think the winners will be the companies that successfully move proactively and strategically not just from minimum requirements, but to really figure out how to leverage those requirements within their day-to-day operations, Nelson says.n QIS prep made simple Unannounced Quality Indicator Surveys (QIS) can surprise any nursing home staff and management, threatening even the most prepared facilities with Stage II investigations of their protocols. QIS in Action: Establish a Culture of Continuous Readiness is a 30-minute DVD that guides nursing home staff on what to expect during every step of a survey team s visit to achieve ongoing readiness. CNAs, RNs, and LPNs will learn how to prepare for their encounters with a surveyor, while the accompanying tools and resources will help staff educators and directors of nursing guide a mock survey. For more information about this product, visit HCPro at

8 Page 8 Billing Alert for Long-Term Care October 2012 MedPAC report moves reform agenda ahead In mid-june, the Medicare Payment Advisory Commission (MedPAC) released its June 2012 Report to the Congress: Medicare and the Health Care Delivery System. In this report, MedPAC urges Congress to focus particular attention on the role of Medicare beneficiaries. While much of the Commission s work has focused on providers and their payment incentives, how beneficiaries view the Medicare benefit and how they make decisions about their healthcare are both vital to the program s success, according to a statement by MedPAC. According to Commission Chair Glenn Hackbarth, aligning the beneficiary, the provider, and the program has the potential to improve health, to improve the experience of healthcare provided through Medicare, and to control costs for the beneficiary and the taxpayer alike. The June report focused on three main areas, all of which have potential implications for SNFs: Reforming Medicare s benefit design Care coordination in fee-for-service (FFS) Medicare Care coordination programs for dual-eligible ( Medicare and Medicaid) beneficiaries MedPAC is a congressional agency that provides independent, nonpartisan policy and technical advice to Congress on issues affecting the Medicare program. The keyword is advice. Just because these recommendations are outlined in the 259-page report doesn t mean they ll be adopted by policymakers. But, says Lee A. Heinbaugh, industry consultant and founder of Cleveland-based The Heinbaugh Group, the report definitely reflects the Obama administration s overall goals of Medicare reform and shouldn t be discounted. This is stuff they ve wanted. They need the reform, they feel, because the number of seniors are growing, suggests Heinbaugh. This is real, I see this all happening. Medicare s benefit design Looking at the area of Medicare benefit design, MedPAC recommends reforms to give beneficiaries better protection against high out-of-pocket spending and to create incentives for them to make better decisions about their use of discretionary care, according to a release on the report. The Commission recommends that the Congress should direct the Secretary to develop and implement an FFS benefit design that would replace the current design and would include: An out-of-pocket (OOP) maximum for beneficiary spending. Deductible(s) for Part A and Part B services. Replacing coinsurance with copayments that may vary by type of service and provider. Secretarial authority to alter or eliminate cost sharing based on the evidence of the value of services, including cost sharing after the beneficiary has reached the OOP maximum. No change in beneficiaries aggregate cost-sharing liability. An additional charge on individually purchased and employer-provided supplemental insurance. According to the Commission, beneficiaries who choose supplemental plans to cover cost sharing do not face the real cost of such plans; they pay a premium for the policy, but its price does not reflect the costs of the additional medical services that individuals with supplemental coverage tend to use. Heinbaugh says the current system has Medicare paying its portion, then other payers picking up the balance. [The current system] is really not leading the beneficiary to manage their care. They figure someone else is paying for it, so they keep going to the doctor, the hospital there s no reason for them to curtail their usage, she says. From what I m reading, they re looking to build something in to give the beneficiary some risk a

9 October 2012 Billing Alert for Long-Term Care Page 9 copay, a deductible, something that makes them more aware, makes them responsible for their decisions. In theory, Heinbaugh says, she understands the reasoning behind this move. However, she adds, in the long-term care environment, you re talking about 80- and 90-year-old patients and/or their families managing these care decisions. There are potential implications in this recommendation for SNFs, she says, notably in the area of having to bill families for deductibles or copays. It requires us, as the nursing home, to have to collect from another party, says Heinbaugh. We ll have to go after private money. That can be challenging. We do it in the managed care arena, but not Medicare. Typically we re going after Medigap or Medicaid. Care coordination in FFS Medicare Poor care coordination can result in beneficiaries having to repeat medical histories and tests and receiving inconsistent medical instructions, poor transitions between care sites, and unnecessary use of higher- intensity settings, according to the report. MedPAC pinpoints the following reasons for the existence of gaps in care coordination: Fragmentation of service delivery Lack of tools to easily communicate across settings and providers Lack of a financial incentive to coordinate care These gaps are particularly important for Medicare beneficiaries because they are more likely to have multiple chronic conditions than younger patients and thus depend more heavily on the healthcare system, according to the Commission. Ideally, as more integrated payment and delivery systems evolve, the incentives for greater care coordination inherent in such systems will develop as well, leading to greater care coordination, says MedPAC. Until improved systems become available, MedPAC suggests additional methods for encouraging care coordination, including those that make explicit payments for related services to primary care clinicians the linchpin of more coordinated care and eventual system redesign. Policy options to improve care coordination in the current FFS system could include: Creating a per beneficiary payment for care coordination Adding codes or modifying existing codes in the fee schedule that would allow practitioners to bill for selected care coordination activities Using payment policy to reward or penalize outcomes resulting from coordinated or fragmented care The recommendations look at a care coordination plan that encompasses both the Medicaid and Medicare programs, to be administered by a third-party payer, says Heinbaugh. That third party will responsible for monitoring Medicare and Medicaid outlays for dual-covered patients, she says. SNFs will deal with that organization, says Heinbaugh. They need to be aware that change is coming and that they need to be listening and reading and preparing. For example, a possible change could be the timeline for submitting claims. Some insurers require claims submitted in 90 days, instead of the current 12-month framework we currently use for Medicare, she notes. Heinbaugh suggests that SNFs that haven t moved to electronic processing will need to do so ASAP paper claims just won t cut it. Paper claims to a third party payer in a 90-day time frame? Are you kidding me? says Heinbaugh. Dual-eligible beneficiaries Regarding dual eligibility, MedPAC said in its report that those eligible for Medicare and Medicaid represent a diverse group of beneficiaries some aged, some disabled, and all with a variety of care needs. In general, these individuals require a mix of medical, long-term care, behavioral health, and social services and have more limited financial resources than the

10 Page 10 Billing Alert for Long-Term Care October 2012 general Medicare population. Programs that help dualeligible beneficiaries access and coordinate services could improve their quality of care and have the potential to reduce Medicare and Medicaid spending, the Commission reported. In its report, the Commission looks at the two main programs designed to integrate care for dual-eligible beneficiaries the Program of All-Inclusive Care for the Elderly (PACE) and dual-eligible special needs plans and examines the structure of their care coordination models, quality outcomes, and Medicare payments. The Commission makes a set of recommendations for changes to the Medicare program to improve the PACE program and remove barriers to greater enrollment. These recommendations include: Congress should direct the Secretary to improve the Medicare Advantage (MA) risk-adjustment system to more accurately predict risk across all MA enrollees Using the revised risk-adjustment system, the Congress should direct the Secretary to pay PACE providers based on the current MA payment system for setting benchmarks and quality bonuses It is recommended that these changes should occur no later than Once these changes have been implemented, MedPAC recommends the following: Congress should change the age eligibility criteria for PACE to allow nursing home certifiable Medicare beneficiaries under the age of 55 to enroll The Secretary should provide prorated Medicare capitation payments to PACE providers for partial month enrollees and establish an outlier protection policy for new PACE sites to use during the first three years of their programs Congress should direct the Secretary to publish select quality measures on PACE providers and develop appropriate quality measures to enable PACE providers to participate in the MA quality bonus program by 2015 n Advisory Services Customized guidance from a trusted source. The demands on long-term care providers have never been greater. HCPro s Advisory Services are outcome-driven, individualized solutions to meet your most complex regulatory, financial, and operational challenges. Our value lies in the unique partnership we build with providers and the results we help them achieve. There is nothing standardized about our approach we will evaluate your current processes and outcomes, create action plans to improve them, build tools to use in practice, and implement a system for sustainable results. Our team of advisors offers a full range of services to long-term care providers, including: Documentation Improvement Review Survey Preparation and Response Case Mix Analysis MDS 3.0 & RUG-IV Review Compliance Program Development Medicare Coding and Billing Audits To discuss your needs with lead advisor Diane Brown, please call for a free, no-obligation conversation about how HCPro Advisory Services can benefit you today. MC104363B

11 October 2012 Billing Alert for Long-Term Care Page 11 BALTC Q&A Editor s note: This month s Q&A was modified from the HCPro book The Complete Guide to Long-Term Care Medicare Billing, written by Frosini Rubertino, RN, CPRA, CDONA/LTC. For more information or to order, call customer service at or visit prod To submit a question for upcoming issues, Associate Editor Melissa D Amico at mdamico@hcpro.com. Q What is the latest we can obtain a signed physician certification for a new Part A resident? A For Part A, the physician must recertify at intervals of at least every 60 days that there is a continuing need for services and estimate how much longer the services will be needed. There is no specific required form, just as long as the information and signatures are obtained. The information may be documented on a form, in physician progress notes, or by other means determined by the facility. The physician must be the attending physician, a physician on staff at your SNF with knowledge of the case, a physician assistant, or a nurse practitioner or clinical nurse specialist who does not have a direct or indirect employment relationship with your facility but is working in collaboration with the physician. The initial signed certification is required at the time of admission or shortly thereafter and must state that the physician certifies that the services are required to be given on an inpatient basis due to the beneficiary s need for skilled care and are related for any condition for which the beneficiary received hospital care. The first recertification is required no later than 14 days after admission and must state that the physician certifies continued skilled care is needed for any condition for which the beneficiary received hospital care, as well as the reasons why, the projected time frame, and the post-snf plans. Subsequent recertifications are required within 30 days of the first recertification and must state that the physician certifies continued skilled care is needed for any condition for which the beneficiary received hospital care, as well as the reasons why, the projected time frame, and the post-snf plans. Q While further incorporating the billing office into the team, we re trying to streamline our interdisciplinary team processes. Do you have any suggestions? A A common system error is lack of communication between the interdisciplinary team members. When there is no organizational structure to communicate the details of each resident s skilled need, claims may be denied due to errors in billing. Your SNF should review its current systems for admissions, accuracy in documentation, coding, and bill submission. Any answer of no or I don t know to the following questions should prompt your facility to reevaluate the effectiveness of its Medicare system and staff knowledge: Who verifies benefits prior to admission or prior to services being provided, and how are benefits verified? Do your MDS coordinator and director of nursing know what the skilled need is prior to admitting the resident? Do the nurses know what the actual skilled need is for each of the Medicare residents they are charting on, and does the documentation reflect this skilled need? Does your admissions or MDS coordinator have a clear understanding of what a principal diagnosis is? Do your Medicare team members know the categories of skilled services? Are your late-loss ADLs being coded accurately? Do therapy staff members communicate with nursing staff on at least a weekly basis? Is progress toward goals discussed in your Medicare meetings? Do your Medicare team members have a solid understanding of benefit periods? n

12 Page 12 Billing Alert for Long-Term Care October 2012 Update: New process for manual medical review of therapy claims In August, CMS clarified its plans to implement a manual medical review process for therapy cap exceptions that exceed the threshold of $3,700 for physical therapy and speech-language pathology services combined. A separate $3,700 threshold will be applied to occupational therapy. Facilities should be aware of the following changes regarding the exceptions and review processes: The KX modifier requirement has not changed for therapy services that exceed the $1,880 cap under the existing automatic exceptions process. For outpatient therapy services that exceed $3,700, an advanced approval process is required or a prepayment review will be imposed. Providers will be assigned to one of three phases for manual medical review. Each facility will be notified by CMS as to which phase the facility is included in. The three phases and corresponding deadlines are as follows: Phase I providers: Subject to manual medical review October 1 December 31 Phase II providers: Subject to manual medical review November 1 December 31 Phase III providers: Subject to manual medical review December 1 December 31 There will be no automatic exceptions granted for requests for exceptions above the threshold. Advanced prepayment exceptions can be requested in blocks of 20 treatment days beyond the $3,700 threshold. MACs will have 10 business days to determine whether they will approve advance requests for services that exceed $3,700; if the MAC does not respond within 10 business days, these claims will be automatically approved. If facilities provide services over $3,700 without an advanced prepayment request, claims will not be paid until the manual medical review has been completed which could take up to 45 days. For beneficiaries who have received $1,700 or more of therapy services in 2012, letters will be sent to inform them of their financial responsibility in the following situations: For services received over the therapy cap amount if the requirement for exception is not met For services received over the $3,700 that have not been approved by the manual medical review process Providers can CMS with therapy cap exception process questions at therapycapreview@cms.hhs.gov. n BALTC Subscriber Services Coupon Start my subscription to BALTC immediately. Options Electronic No. of issues 12 issues Cost $259 (BALTCE) Shipping N/A Total Your source code: N0001 Name Title Organization Address Print & Electronic 12 issues of each $259 (BALTCPE) $24.00 City State ZIP Order online at Sales tax Phone Fax (see tax information below)* Be sure to enter source code address Grand total (Required for electronic subscriptions) N0001 at checkout! Payment enclosed. Please bill me. For discount bulk rates, call toll-free at *Tax Information Please bill my organization using PO # Charge my: AmEx MasterCard VISA Discover Please include applicable sales tax. Electronic subscriptions are exempt. States that tax products and shipping and handling: CA, CO, CT, FL, GA, IL, IN, KY, LA, MA, MD, ME, MI, MN, MO, NC, NJ, NM, NV, NY, OH, OK, PA, RI, SC, TN, TX, VA, VT, WA, WI, WV. State that taxes products only: AZ. Please include $27.00 Signature (Required for authorization) Card # Expires for shipping to AK, HI, or PR. (Your credit card bill will reflect a charge from HCPro, the publisher of BALTC.) Mail to: HCPro, P.O. Box 3049, Peabody, MA Tel: Fax: customerservice@hcpro.com Web: