New in Current payment risks. Tips & strategies. Revenue Cycle: The Ca$h Connection. CPAs & ADVISORS

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1 Revenue Cycle: The Ca$h Connection CPAs & ADVISORS M. Aaron Little, CPA Managing Director Springfield, MO New in 2017 Current payment risks Tips & strategies 2 1

2 3 Payment rates SN HCPCS G codes Outlier calculation Negative pressure wound therapy Payment validation 4 2

3 Payment rates 2017 payment rates effective for episodes ending on & after January 1, 2017, including National standard episode rates 0.8% increase from 2016 Wage-index adjustments low, high Case-mix weights OASIS scoring variables Groupings 5 Payment rates HIPPS Code 2016 Case-mix Weight 2016 Episode Payment 2017 Case-mix Weight 2017 Episode Payment 1AFPS $2, $2,749 2BHKS $3, $3,473 3CFLS $1, $1,973 4CHKS $4, $3,955 5BGKS $4, $4,712 Note: All rates based on Baton Rouge, LA, CBSA 6 3

4 Payment rates Resources Federal Register dated November 3, 2016 CMS Change Request 9820 dated October 14, 2016 Payment rate schedules on bkd.com 7 SN HCPCS G codes Effective for service dates on or after January 1, 2017 G0163 & G0164 are retired Four new codes are effective G0493 Skilled nursing (SN) by registered nurse (RN) for observation & assessment of patient s condition G0494 SN by licensed practical nurse (LPN) for observation & assessment of patient s condition G0495 SN by RN in training/educating patient or family member G0496 SN by LPN in training/educating patient or family member 8 4

5 SN HCPCS G codes What about claims that span 2016 & 2017? 9 Outlier calculation Outlier payments 1.4% of total episodes, nation 0.8% of total episodes, Missouri Based on 2015 Medicare cost report data PPS episode amount Outlier amount Adjusted PPS episode amount 10 5

6 Outlier calculation Episodes ending prior to January 1, 2017 Estimated cost per visit based on LUPA rates Compared to episodespecific outlier threshold 80% of estimated cost greater than outlier threshold paid as outlier amount Discipline Baton Rouge LUPA Rates Billed Visits Estimated Episode Costs Episode- Specific Outlier Threshold Estimated Cost Over Threshold Outlier Payment Skilled nursing $ $5,367 Physical therapy $ $2,608 Total $7,975 $6,000 $1,975 $1, Outlier calculation Episodes ending on & after January 1, 2017 Estimated cost per 15- minute increment based on new outlier per-unit rates Compared to episodespecific outlier threshold 80% of estimated cost greater than outlier threshold paid as outlier amount Discipline Baton Rouge Outlier Rates Billed 15-minute Increments Estimated Episode Costs Episode- Specific Outlier Threshold Estimated Cost Over Threshold Outlier Payment Skilled nursing $ $5,426 Physical therapy $ $3,358 Total $8,784 $6,000 $2,784 $2,

7 13 Outlier calculation Discipline Urban Outlier Per-Increment Rate Rural Outlier Per-Increment Rate Medical social worker $60.36 $62.17 Speech pathology $52.55 $54.13 Physical therapy $49.91 $51.41 Occupational therapy $49.72 $51.21 Skilled nursing $47.79 $48.92 Home health aide $15.29 $15.75 Note: All rates subject to 2% reduction if OASIS or HHCAHPS data are not submitted to CMS. Rates also subject to wage-index adjustment for patient location. Priority Outlier calculation Outlier cap Per-day limit New claim edit Continues to apply No more than eight hours per day No more than 96 units per visit No more than 10% of payments No more than 32 units allowed Otherwise claims will return to provider (RTP) 14 7

8 Outlier calculation 15 Negative pressure wound therapy New billable service for disposable negative pressure wound therapy (dnpwt) device for patients under HH plans of care Paid outside HH PPS episode payment based on outpatient PPS rates 16 8

9 Negative pressure wound therapy Outpatient Separately billed from HH PPS episode Payment Based on unadjusted payment rate of $292 before location adjustment Coinsurance Subject to 20% coinsurance to be paid by patient or thirdparty payer 17 Negative pressure wound therapy Two HCPCS codes cover professional service & dnpwt device Professional service Skilled nursing Physical or occupational therapy 18 9

10 Negative pressure wound therapy NPWT utilizing disposable, non-durable medical equipment including provision of exudate management collection system, topical application(s), wound assessment, and instructions for ongoing care, per session; total wound(s) surface area less than or equal to 50 square centimeters NPWT utilizing disposable, non-durable medical equipment including provision of exudate management collection system, topical application(s), wound assessment, and instructions for ongoing care, per session; total wound(s) surface area greater than 50 square centimeters 19 Negative pressure wound therapy Approximate payment: $292 x 2 = $584 $584 x 80% = $467 $584 x 20% = $ Or 042x or 043x 10

11 Negative pressure wound therapy HH visit for purpose of placing new, or replacing, dnpwt device? Bill visit on outpatient claim only HH visit for both placement of new or replacement of dnpwt device & additional HH services? Bill visit on HH PPS claim, & Bill visit on outpatient claim HH visit for wound assessment, management, &/or dressing changes where dnpwt device is not applied or replaced? Bill visit on HH PPS claim only 21 Negative pressure wound therapy Monday Nurse applies new dnpwt device & provides wound care education 22 Friday Nurse assesses wound replaces dnpwt with new device Both visits billed only on outpatient claim 11

12 Negative pressure wound therapy Monday Nurse applies new dnpwt device & provides wound care education Friday Monday & Friday visits billed only on outpatient claim Nurse assesses wound replaces dnpwt with new device 23 Wednesday Nurse assesses wound but did not replace dnpwt device Wednesday visit billed only on HH PPS claim Payment validation Payment validation New requirement effective April 1, 2017 OASIS assessment must be received by QIES prior to claim or claim will automatically be denied 24 12

13 Payment validation MEDICARE COVERAGE CRITERIA 5 days From SOC to complete comprehensive assessment 48 hours From transfer or ROC 30 days From completion date to transmit to QIES Claim Must be received by QIES prior to claim 25 Payment validation MEDICARE COVERAGE CRITERIA OASIS completed OASIS transmitted to QIES RAP billed RAP paid Final claim billed Final claim is paid or denied QIES returns validation file to MAC MAC sends validation file to QIES Final claim received by MAC 26 13

14 Match Payment validation MEDICARE COVERAGE CRITERIA If HIPPS code billed on claim matches HIPPS code on OASIS in QIES, then claim is processed using HIPPS code billed Non-match If HIPPS code billed on claim does not match HIPPS code on OASIS in QIES, then claim is processed using HIPPS code from OASIS Missing If no OASIS is found in QIES, & receipt date of claim is more than 40 days after OASIS completion date, then claim is automatically denied 27 Payment validation MEDICARE COVERAGE CRITERIA 17AA17AA11ADBEBACC 28 14

15 Payment validation MEDICARE COVERAGE CRITERIA Position Definition Example Value Code 1 2 Start of care date (M0030), two-digit year Start of care date (M0030), code for month & date January 1 AA 5 6 Assessment completion date (M0090), two-digit year Assessment completion date (M0090), code for month & date January 1 AA 9 Reason for assessment (M0100) Episode timing (M0110) Clinical & function severity points under each of the four scoring equations 0 A 29 Payment validation MEDICARE COVERAGE CRITERIA 17AA17AA11ADBEBACC January 1, days = February 10,

16 Payment validation MEDICARE COVERAGE CRITERIA Denied claims New Medicare Summary Notice (MSN) This claim was denied because the home health agency didn t submit the required patient assessment information

17 Probe & educate Pre-claim review (PCR) Program integrity contractors 33 Probe & educate Medicare HH physician FTF documentation compliance 34 to assess & promote provider understanding & compliance Round one completed Round two began December 15, 2016 (CMS SE1635) Includes all HH agencies other than those that had one claim or less denied in round one 17

18 Pre-claim review (PCR) Three year demonstration project to reduce inappropriate billing & move away from pay & chase?? August 3, 2016 April 1, 2017???? 35 Pre-claim review (PCR) Initiate PCR request Avoid 25% payment reduction Submit physician signed documentation Avoid additional development request (ADR) Receive provisional affirmation Bill unique tracking number (UTN) on claim 36 18

19 Pre-claim review (PCR) Source: CMS PCR week 24 affirmation rate in Illinois, dated January 20, Pre-claim review (PCR) Homebound status Physician FTF encounters Reasonable & necessary skill 38 19

20 Pre-claim review (PCR) Physician FTF encounter certification Physician FTF encounter document(s) HH supplemental documentation 39 Pre-claim review (PCR) 40 20

21 Pre-claim review (PCR) What s next? 41 Program integrity contractors 42 MAC CERT RAC SMRC UPIC PEPPER 21

22 43 MAC Medicare Administrative Contractor Claims processing & other administrative functions CGS, NGS, & Palmetto GBA Pre-pay medical review Additional development requests (ADRs) Electronic notification only S B6001 Random & probe edits 30 days to respond Automatically denied after day 45 Risk = low Impact = moderate 44 CERT Comprehensive Error Rate Testing contractor AdvanceMed Post-pay medical review 120,000 claims per year Notification by mail & phone Random 75 days to respond 2015 CERT program identified 59% of HH claims were paid improperly Majority of errors related to physician face-to-face (FTF) documentation Risk = low Impact = moderate 22

23 Source: The Supplementary Appendices for the Medicare Fee-for-Service 2016 Improper Payments Report RAC Recovery Audit Contractor Three year post-pay medical review Issues approved by CMS & published on RAC website Performant Recovery, Inc. Automated & complex reviews 15 day rebuttal, 30 day interest, 41 day offset Paid percentage basis Performant working very closely with CMS to initiate activities for these new contracts Risk = low Impact = moderate 23

24 47 SMRC Supplemental Medical Review Contractor StrategicHealthSolutions, LLC Target program vulnerabilities identified by CERTs Nationwide post-pay medical review Conducted nationwide post-pay medical review of HH FTF documentation Conducting current nationwide post-pay medical review of 2015 hospice GIP claims Risk = low Impact = low 48 24

25 UPICs Unified Program Integrity Contractors Newly created CMS contract recently awarded to AdvanceMed (Midwest) & Safeguard Services, LLC (Northeast) Combines functions of Zone Program Integrity Contractors (ZPICs), Program Safeguard Contractors (PSCs) & Medicaid Integrity Contractors (MICs) Fraud, waste & abuse detection & prevention Focus on data analysis lead screening; investigation; medical review; remedy implementation; and collaboration with CMS, federal, state and local government, law enforcement, and other CMS partners and contractors. Risk = moderate Impact = high

26 51 52 PEPPER Program for Evaluating Payment Patterns Electronic Report Provider-specific Medicare data statistics for services vulnerable to improper payments Intended to help providers assess risks 32% of Missouri HHs & 64% of Missouri hospices have downloaded their individual PEPPER reports Risk = low Impact = moderate 26

27 53 54 TIPS & STRATEGIES 27

28 Process People Performance 55 TIPS & STRATEGIES Poor use of automation Poor communication Optimal use of automation Intentional communication Poor collaboration Deliberate design 56 TIPS & STRATEGIES 28

29 Select sample of paid claims Compare paid claims to supporting documentation Document & quantify findings Track & trend findings Repeat, periodically Assess, act & educate on findings 57 TIPS & STRATEGIES Unfocused Unaccountable Critical thinkers, problem solvers Accountable & responsible What details? Detail oriented 58 TIPS & STRATEGIES 29

30 Senior financial leader Accountability void Medicare billing specialist(s) Medicaid billing specialist(s) Insurance billing specialist(s) 59 Insurance authorization specialist(s) Payment posting specialist(s) TIPS & STRATEGIES 60 Unclear expectations Lack of oversight Lack of data Key performance indicators Revenue cycle meetings Performance dashboards TIPS & STRATEGIES 30

31 Home Health Revenue Cycle Key Performance Metrics Metric Poor Average Best Medicare days in AR 45 days or more 35 days 25 days or less Non-Medicare days in AR 75 days or more 60 to 75 days 60 days or less Total days in AR 60 days or more 50 days 40 days or less Medicare AR older 10% or more 7% 3% or less than 120 days Total AR older than 15% or more 10% 7% or less 120 days Collections Less than 100% 100% More than 100% Medicare write-offs 2% or more 1% 0% Total write-offs 3% or more 2% 1% or less Days to bill RAPs More than 10 days 7 to 10 days Less than 7 days Days to bill claims More than 10 days 7 to 10 days Less than 7 days 61 TIPS & STRATEGIES 62 31

32 Monitor 2017 changes Keep aware of payment risks Measure, monitor, manage 63 Revenue Cycle: The Ca$h Connection CPAs & ADVISORS M. Aaron Little, CPA Managing Director Springfield, MO 32