How to Account for Hospice Changes Indiana Association for Home & Hospice Care Annual Conference May 10-11, 2016 marcumllp.com Disclaimer This Presentation has been prepared for informational purposes only from sources believed accurate and reliable as of the date of preparation. It is intended to inform the reader about the subject matter addressed. This is not to be used or interpreted as tax or professional advice. Those seeking such advice should contact a Marcum professional to establish a client relationship. 2 1
Your Speakers Scott Manson, CPA, CGMA, CMA Partner Marcum LLP 111 S. Pfingsten Road, Suite 300 Deerfield, Illinois 60015 Phone: 847 282 6458 Fax: 847 282 6303 Scott.manson@marcumllp.com 3 Your Speakers Joshua S. Banach, CPA Senior Manager Marcum LLP 111 S. Pfingsten Road, Suite 300 Deerfield, Illinois 60015 Phone: 847 282 6308 Fax: 847 282 6303 Joshua.banach@marcumllp.com 4 2
Objectives Learn the fundamentals about the changes to the Medicare Hospice system Learn to determine the effects on their agency s reimbursement Learn about changes to the hospice cost report and its effect Examine how the recent changes to hospice cap reporting will affect hospices financially and operationally 5 BACKGROUND: 2016 FINAL PAYMENT RULE 6 3
Legislation The Federal Register Final Payment Rule released by the Centers for Medicare and Medicaid Services (CMS) on August 6, 2015 details all of the mandated changes to the Medicare hospice reimbursement system CMS fiscal year 2016 reimbursement rate updates Updated Wage Indices New Core Based Statistical Area (CBSA) delineations Routine Home Care Changes Established the Service Intensity Add On (SIA) Payment 7 Timelines There were two major implementation dates associated with the release of the Federal Register on August 6, 2015: October 1, 2015 initiated the updated hospice reimbursement rates, the new CBSA delineations, and the wage index updates January 1, 2016 initiated the changes to the routine home care reimbursement and the SIA payment 8 4
Goals of the Changes CMS hopes to accomplish several goals through the changes they put forth for fiscal year 2016 Update the reimbursement rates for the 2016 fiscal year based on the federal budget and reimbursement legislation Update the wage index for the new fiscal year to align with the 2015 hospital wage index Adopt the new market area delineations as established by the Office of Management and Budget Better match hospice reimbursement with hospice care expenditure by providing more reimbursement during the beginning and ending of a hospice span of care Align the hospice cap reporting year with Medicare s fiscal year 9 THE NEW MEDICARE HOSPICE REIMBURSEMENT SYSTEM 10 5
Rate Updates The first changes put forth in the Final Rule were the reimbursement rates, wage index updates, and CBSA delineations, which were effective 10/1/2015 Level of Care National Rates FY 2015 National Rates FY 2016 Routine Home Care* $159.34 $161.89 +1.60% Continuous Home Care** $9.69 $9.84 +1.60% (Per 15 minutes) Inpatient Respite Care $164.81 $167.45 +1.60% General Inpatient Care $708.77 $720.11 +1.60% Percentage Change *Routine home care fiscal year 2016 rate only effective 10/1/15 12/31/15 ** Continuous home care percentage rounded due to small time interval of 15 minutes 11 Wage Index Updates As mentioned, the first changes put forth in the Final Rule were the reimbursement rates, wage index updates, and CBSA delineations, which were effective 10/1/2015 CBSA Area FY 2015 FY 2016 Percent Change Elkhart/Goshen 0.9424 0.9013 4.36% Evansville 0.8459 0.8537 +0.92% Gary 0.9506 0.9443 0.66% Indianapolis/Carmel 1.0202 1.0135 0.66% Rural, Indiana 0.8592 0.8416 2.05% 12 6
Rate Review Labor Portion X Wage Index Non Labor Portion Rate Base reimbursement rates are broken into labor and non labor portions Because the base reimbursement rate and the wage index will increase or decrease independently, and every CBSA area changes independently, each CBSA area will have different overall rate changes from one period to another 13 CBSA Delineations The first changes put forth in the Final Rule were the reimbursement rates, wage index updates, and CBSA delineations, which were effective 10/1/2015 The Federal Register put forth changes to the delineations of the CBSA breakdown of all 50 states Thus, effective with fiscal year 2016, counties may fall under a different CBSA area than they did in fiscal year 2015 Counties moved from urban to rural or rural to urban classification, or from one urban CBSA area to another urban CBSA area Many counties remained unchanged Because moving from one CBSA to another can have significant financial impact, CMS allowed a 50/50 blend of old area and new area for fiscal year 2016 to temper the transition, thus CBSA areas may have more than one wage index for fiscal year 2016 CMS also created temporary alternate codes for billing purposes to accommodate this 14 7
CBSA Changes in Indiana County Old CBSA New CBSA FY 2016 Madison Anderson Indianapolis Greene Bloomington Rural Franklin Cincinnati Rural Union Rural Cincinnati Gibson Evansville Rural Tipton Kokomo Rural Scott Rural Louisville/Jefferson County 15 Routine Home Care Changes Effective 1/1/2016, CMS changed the structure in which it reimburses for routine home care For routine home care, the aforementioned reimbursement rates were effective from 10/1/2015 12/31/2015 The aforementioned rates for continuous, respite, and inpatient care are effective 10/1/2015 9/30/2016 16 8
Routine Home Care Changes Effective with service dates 1/1/2016 and after, CMS changed the structure in which it reimburses for routine home care Routine home care now has a two tiered payment structure, based on where a patient is within their hospice stay A hospice stay is defined as beginning with the day they elect the hospice benefit and ends with the date of death or revocation of the benefit The reimbursement is structured as follows: Days 1 60 of hospice stay are reimbursed at the high rate Days 60+ of hospice stay are reimbursed at the low rate 17 New Routine Home Care Rates National Routine Home Care Rates Rate 1/1/16 9/30 16 High Rate Days 1 60 $186.84 Low Rate Days 60+ $146.83 The routine rate for 10/1/2015 12/31/2015 was $161.89, which falls between the newly established high and low rates 18 9
Routine Home Care Changes Several notes regarding the high and low rates No special claim coding is required, the Medicare Administrative Contractor has edits in their system to reimburse at the correct rate Both types of rates are subject to 2% reduction for non submission of quality data Both types of rates are subject to 2% sequestration If a 60 day gap occurs between a hospice benefit revocation and reelection, day count will begin at 1 If less than a 60 day gap occurs between a hospice benefit revocation and a re election, day count will resume where it left off at revocation A patient transferring from one hospice to another will not have any effect on the day count; the first day with the new hospice will simply be the next day of the sequence (the count does not restart) 19 Notes on Billing Even though the procedures for billing under the new reimbursement system have not changed, hospices should evaluate the charges they enter on claims to cover the new high rate Medicare policy states that hospices must charge Medicare the same they charge other payers Hospices should be conscious that contractual allowances will change based on actual reimbursement rates 20 10
Routine Payment Examples Determining the amount of reimbursement for a patient will depend on several factors When the patient elected hospice When the patient died or revoked the hospice benefit How these range of dates span the calendar The reimbursement rate and structure changes took effect October 1, 2015 and on January 1, 2016; hospices may have active patients in their care that pre date the changes 21 Routine Payment Example #1 Assume the following: Matt elected hospice on September 1, 2015 Matt died on September 30, 2015 Matt had 100% routine days in his home Matt resides in Indianapolis (Madison County) $161.55 Rate for FY 2015 30 Days on Hospice $4,846.50 Total Revenue 22 11
Routine Payment Example #2 Assume the following: Matt elected hospice on September 1, 2015 Matt died on October 31, 2015 Matt had 100% routine days in his home Matt resides in Indianapolis (Madison County) $161.55 Rate for FY 2015 30 Days on Hospice FY 2015 $163.39 Rate for FY 2016 31 Days on Hospice FY 2016 $9,911.59 Total Revenue 23 Routine Payment Example #3 Assume the following: Matt elected hospice on September 1, 2015 Matt died on January 31, 2016 Matt had 100% routine days in his home Matt resides in Indianapolis (Madison County) $161.55 Rate for FY 2015 30 Days on Hospice FY 2015 $163.39 Rate for FY 2016 92 Days on Hospice FY 2016 $147.90 Low Rate for FY 2016 31 Days on Hospice FY 2016 New Structure $24,463.28 Total Revenue 24 12
Routine Payment Example #4 Assume the following: Matt elected hospice on December 1, 2015 Matt died on January 31, 2016 Matt had 100% routine days in his home Matt resides in Indianapolis (Madison County) $163.39 Rate for FY 2016 31 Days on Hospice FY 2016 $188.20 High Rate for FY 2016 29 Days on Hospice FY 2016 (High Limit) $147.90 Low Rate for FY 2016 2Days on Hospice FY 2016 (Remaining Low) $10,818.69 Total Revenue 25 Routine Payment Example #4 Let s dissect Example #4 to see how the reimbursement changes effect the overall revenue Matt had hospice services for 62 days total 31 of these days were under the old reimbursement system 31 of these days were under the new reimbursement system For December (old system), Matt s hospice generated $5,065 For January (new system), Matt s hospice generated $5,754 The new system generated $689 more revenue for a one month period If Matt would have elected hospice November 1, the December revenue would have remained the same, but the January revenue would have dropped to $4,585 This would have been $480 less for a one month period 26 13
Service Intensity Add On (SIA) Payment Effective 1/1/2016, CMS has initiated a new additional payment available to hospices called the Service Intensity Add On Payment Just like the new routine home care reimbursement structure provides for more reimbursement at the beginning of a hospice election period when the expenses are greater, the SIA payment provides more reimbursement during the intense last 7 days of a patient s life The SIA payment allows hospice providers to bill for registered nurse and social worker visits made at the end of a patients life 27 Service Intensity Add On Payment Specifics The add on applies to registered nurse & medical social worker visits LPN visits to not qualify Phone calls do not qualify, must be in person visits A routine home care day must be billed SIA is available the last 7 days of patient s life SIA is paid at the continuous home care rate, in 15 minute units Limit per day is combined 4 hours (16 units) SIA payment is not intended to increase visits made to patients Example: Madison County hourly reimbursement (4 units) of SIA would be $39.64; this will be less than cost to send nurse or social worker 28 14
New Billing Codes To accommodate the SIA payment, CMS created two new billing codes to distinguish RN visits from LPN visits on billing claims The two new billing codes replace G0154 which previously billed for both RN and LPN services, which is retired for services on or after 1/1/16 The RN visit code is G0299 The LPN visit code is G0300 These new codes are also effective for home health agency billing 29 SIA Example #1 Assume the following: Matt elected hospice on January 1, 2016 Matt died on January 31, 2016 Matt had 100% routine days in his home Matt resides in Indianapolis Matt received RN visits on January 24 th, 27 th, and 30 th each lasting 1 Hour Matt received a 1 hour phone call from his social worker on January 28 th Matt received a 1 hour visit from his social worker on January 29 th 31 days; RHC high rate $188.20 = $5,834.20 8 RN/4 MSW units X $9.91 = $118.92 Total $5,953.12 The RN visit on the 24 th did not qualify because it was not within 7 days of death and the MSW phone visit on the 28 th did not qualify because it was not in person 30 15
SIA Example #2 Assume the following: Matt elected hospice on January 1, 2016 Matt died on January 31, 2016 Matt had 100% routine days in his home Matt resides in Indianapolis Matt received RN visits on January 24 th, 27 th, and 29 th each lasting 2 hours Matt received a 1 hour phone call from his social worker on January 28 th Matt received a 3 hour visit from his social worker on January 29 th 31 days; RHC high rate $188.20 = $5,834.20 24 RN/MSW units X $9.91 = $237.84 Total $6,072.04 The RN visit on the 24 th did not qualify because it was not within 7 days of death and the MSW visit on the 28 th did not qualify because it was via telephone Total units on the 29 th are limited to 16 (4 hours) 31 THE FINANCIAL IMPACT OF THE NEW REIMBURSEMENT SYSTEM 32 16
Grids of Daily Old vs New Payment Structure The following grids depict the day to day effect of the change to the new reimbursement system The grids only depict routine days; other levels of care would remain unchanged The grids do not factor in any SIA The grids assume the Indianapolis (Madison County) CBSA for all reimbursement other CBSA areas will have different impact Please note this grid only applies to one patient only 33 Old Structure Daily Old Structure Cumulative New Structure Cumulative Hospice Span of Care New Structure Daily Cumulative Comparison: Old to New Structure Day 1 163.39 163.39 188.20 188.20 24.81 Day 2 163.39 326.78 188.20 376.40 49.62 Day 3 163.39 490.17 188.20 564.60 74.43 Day 4 163.39 653.56 188.20 752.80 99.24 Day 5 163.39 816.95 188.20 941.00 124.05 Day 6 163.39 980.34 188.20 1,129.20 148.86 Day 7 163.39 1,143.73 188.20 1,317.40 173.67 Day 8 163.39 1,307.12 188.20 1,505.60 198.48 Day 9 163.39 1,470.51 188.20 1,693.80 223.29 Day 10 163.39 1,633.90 188.20 1,882.00 248.10 Day 11 163.39 1,797.29 188.20 2,070.20 272.91 Day 12 163.39 1,960.68 188.20 2,258.40 297.72 Day 13 163.39 2,124.07 188.20 2,446.60 322.53 Day 14 163.39 2,287.46 188.20 2,634.80 347.34 Day 15 163.39 2,450.85 188.20 2,823.00 372.15 Day 16 163.39 2,614.24 188.20 3,011.20 396.96 Day 17 163.39 2,777.63 188.20 3,199.40 421.77 Day 18 163.39 2,941.02 188.20 3,387.60 446.58 Day 19 163.39 3,104.41 188.20 3,575.80 471.39 Day 20 163.39 3,267.80 188.20 3,764.00 496.20 Day 21 163.39 3,431.19 188.20 3,952.20 521.01 Day 22 163.39 3,594.58 188.20 4,140.40 545.82 Day 23 163.39 3,757.97 188.20 4,328.60 570.63 Day 24 163.39 3,921.36 188.20 4,516.80 595.44 Day 25 163.39 4,084.75 188.20 4,705.00 620.25 34 17
Old Structure Daily Old Structure Cumulative New Structure Cumulative Hospice Span of Care New Structure Daily Cumulative Comparison: Old to New Structure Day 26 163.39 4,248.14 188.20 4,893.20 645.06 Day 27 163.39 4,411.53 188.20 5,081.40 669.87 Day 28 163.39 4,574.92 188.20 5,269.60 694.68 Day 29 163.39 4,738.31 188.20 5,457.80 719.49 Day 30 163.39 4,901.70 188.20 5,646.00 744.30 Day 31 163.39 5,065.09 188.20 5,834.20 769.11 Day 32 163.39 5,228.48 188.20 6,022.40 793.92 Day 33 163.39 5,391.87 188.20 6,210.60 818.73 Day 34 163.39 5,555.26 188.20 6,398.80 843.54 Day 35 163.39 5,718.65 188.20 6,587.00 868.35 Day 36 163.39 5,882.04 188.20 6,775.20 893.16 Day 37 163.39 6,045.43 188.20 6,963.40 917.97 Day 38 163.39 6,208.82 188.20 7,151.60 942.78 Day 39 163.39 6,372.21 188.20 7,339.80 967.59 Day 40 163.39 6,535.60 188.20 7,528.00 992.40 Day 41 163.39 6,698.99 188.20 7,716.20 1,017.21 Day 42 163.39 6,862.38 188.20 7,904.40 1,042.02 Day 43 163.39 7,025.77 188.20 8,092.60 1,066.83 Day 44 163.39 7,189.16 188.20 8,280.80 1,091.64 Day 45 163.39 7,352.55 188.20 8,469.00 1,116.45 Day 46 163.39 7,515.94 188.20 8,657.20 1,141.26 Day 47 163.39 7,679.33 188.20 8,845.40 1,166.07 Day 48 163.39 7,842.72 188.20 9,033.60 1,190.88 Day 49 163.39 8,006.11 188.20 9,221.80 1,215.69 Day 50 163.39 8,169.50 188.20 9,410.00 1,240.50 35 Old Structure Daily Old Structure Cumulative New Structure Cumulative Hospice Span of Care New Structure Daily Cumulative Comparison: Old to New Structure Day 51 163.39 8,332.89 188.20 9,598.20 1,265.31 Day 52 163.39 8,496.28 188.20 9,786.40 1,290.12 Day 53 163.39 8,659.67 188.20 9,974.60 1,314.93 Day 54 163.39 8,823.06 188.20 10,162.80 1,339.74 Day 55 163.39 8,986.45 188.20 10,351.00 1,364.55 Day 56 163.39 9,149.84 188.20 10,539.20 1,389.36 Day 57 163.39 9,313.23 188.20 10,727.40 1,414.17 Day 58 163.39 9,476.62 188.20 10,915.60 1,438.98 Day 59 163.39 9,640.01 188.20 11,103.80 1,463.79 Day 60 163.39 9,803.40 188.20 11,292.00 1,488.60 Day 61 163.39 9,966.79 147.90 11,439.90 1,473.11 Day 62 163.39 10,130.18 147.90 11,587.80 1,457.62 Day 63 163.39 10,293.57 147.90 11,735.70 1,442.13 Day 64 163.39 10,456.96 147.90 11,883.60 1,426.64 Day 65 163.39 10,620.35 147.90 12,031.50 1,411.15 Day 66 163.39 10,783.74 147.90 12,179.40 1,395.66 Day 67 163.39 10,947.13 147.90 12,327.30 1,380.17 Day 68 163.39 11,110.52 147.90 12,475.20 1,364.68 Day 69 163.39 11,273.91 147.90 12,623.10 1,349.19 Day 70 163.39 11,437.30 147.90 12,771.00 1,333.70 Day 71 163.39 11,600.69 147.90 12,918.90 1,318.21 Day 72 163.39 11,764.08 147.90 13,066.80 1,302.72 Day 73 163.39 11,927.47 147.90 13,214.70 1,287.23 Day 74 163.39 12,090.86 147.90 13,362.60 1,271.74 Day 75 163.39 12,254.25 147.90 13,510.50 1,256.25 36 18
Old Structure Daily Old Structure Cumulative New Structure Cumulative Hospice Span of Care New Structure Daily Cumulative Comparison: Old to New Structure Day 76 163.39 12,417.64 147.90 13,658.40 1,240.76 Day 77 163.39 12,581.03 147.90 13,806.30 1,225.27 Day 78 163.39 12,744.42 147.90 13,954.20 1,209.78 Day 79 163.39 12,907.81 147.90 14,102.10 1,194.29 Day 80 163.39 13,071.20 147.90 14,250.00 1,178.80 Day 81 163.39 13,234.59 147.90 14,397.90 1,163.31 Day 82 163.39 13,397.98 147.90 14,545.80 1,147.82 Day 83 163.39 13,561.37 147.90 14,693.70 1,132.33 Day 84 163.39 13,724.76 147.90 14,841.60 1,116.84 Day 85 163.39 13,888.15 147.90 14,989.50 1,101.35 Day 86 163.39 14,051.54 147.90 15,137.40 1,085.86 Day 87 163.39 14,214.93 147.90 15,285.30 1,070.37 Day 88 163.39 14,378.32 147.90 15,433.20 1,054.88 Day 89 163.39 14,541.71 147.90 15,581.10 1,039.39 Day 90 163.39 14,705.10 147.90 15,729.00 1,023.90 Day 91 163.39 14,868.49 147.90 15,876.90 1,008.41 Day 92 163.39 15,031.88 147.90 16,024.80 992.92 Day 93 163.39 15,195.27 147.90 16,172.70 977.43 Day 94 163.39 15,358.66 147.90 16,320.60 961.94 Day 95 163.39 15,522.05 147.90 16,468.50 946.45 Day 96 163.39 15,685.44 147.90 16,616.40 930.96 Day 97 163.39 15,848.83 147.90 16,764.30 915.47 Day 98 163.39 16,012.22 147.90 16,912.20 899.98 Day 99 163.39 16,175.61 147.90 17,060.10 884.49 Day 100 163.39 16,339.00 147.90 17,208.00 869.00 37 Old Structure Daily Old Structure Cumulative New Structure Cumulative Hospice Span of Care New Structure Daily Cumulative Comparison: Old to New Structure Day 101 163.39 16,502.39 147.90 17,355.90 853.51 Day 102 163.39 16,665.78 147.90 17,503.80 838.02 Day 103 163.39 16,829.17 147.90 17,651.70 822.53 Day 104 163.39 16,992.56 147.90 17,799.60 807.04 Day 105 163.39 17,155.95 147.90 17,947.50 791.55 Day 106 163.39 17,319.34 147.90 18,095.40 776.06 Day 107 163.39 17,482.73 147.90 18,243.30 760.57 Day 108 163.39 17,646.12 147.90 18,391.20 745.08 Day 109 163.39 17,809.51 147.90 18,539.10 729.59 Day 110 163.39 17,972.90 147.90 18,687.00 714.10 Day 111 163.39 18,136.29 147.90 18,834.90 698.61 Day 112 163.39 18,299.68 147.90 18,982.80 683.12 Day 113 163.39 18,463.07 147.90 19,130.70 667.63 Day 114 163.39 18,626.46 147.90 19,278.60 652.14 Day 115 163.39 18,789.85 147.90 19,426.50 636.65 Day 116 163.39 18,953.24 147.90 19,574.40 621.16 Day 117 163.39 19,116.63 147.90 19,722.30 605.67 Day 118 163.39 19,280.02 147.90 19,870.20 590.18 Day 119 163.39 19,443.41 147.90 20,018.10 574.69 Day 120 163.39 19,606.80 147.90 20,166.00 559.20 Day 121 163.39 19,770.19 147.90 20,313.90 543.71 Day 122 163.39 19,933.58 147.90 20,461.80 528.22 Day 123 163.39 20,096.97 147.90 20,609.70 512.73 Day 124 163.39 20,260.36 147.90 20,757.60 497.24 Day 125 163.39 20,423.75 147.90 20,905.50 481.75 38 19
Old Structure Daily Old Structure Cumulative New Structure Cumulative Hospice Span of Care New Structure Daily Cumulative Comparison: Old to New Structure Day 126 163.39 20,587.14 147.90 21,053.40 466.26 Day 127 163.39 20,750.53 147.90 21,201.30 450.77 Day 128 163.39 20,913.92 147.90 21,349.20 435.28 Day 129 163.39 21,077.31 147.90 21,497.10 419.79 Day 130 163.39 21,240.70 147.90 21,645.00 404.30 Day 131 163.39 21,404.09 147.90 21,792.90 388.81 Day 132 163.39 21,567.48 147.90 21,940.80 373.32 Day 133 163.39 21,730.87 147.90 22,088.70 357.83 Day 134 163.39 21,894.26 147.90 22,236.60 342.34 Day 135 163.39 22,057.65 147.90 22,384.50 326.85 Day 136 163.39 22,221.04 147.90 22,532.40 311.36 Day 137 163.39 22,384.43 147.90 22,680.30 295.87 Day 138 163.39 22,547.82 147.90 22,828.20 280.38 Day 139 163.39 22,711.21 147.90 22,976.10 264.89 Day 140 163.39 22,874.60 147.90 23,124.00 249.40 Day 141 163.39 23,037.99 147.90 23,271.90 233.91 Day 142 163.39 23,201.38 147.90 23,419.80 218.42 Day 143 163.39 23,364.77 147.90 23,567.70 202.93 Day 144 163.39 23,528.16 147.90 23,715.60 187.44 Day 145 163.39 23,691.55 147.90 23,863.50 171.95 Day 146 163.39 23,854.94 147.90 24,011.40 156.46 Day 147 163.39 24,018.33 147.90 24,159.30 140.97 Day 148 163.39 24,181.72 147.90 24,307.20 125.48 Day 149 163.39 24,345.11 147.90 24,455.10 109.99 Day 150 163.39 24,508.50 147.90 24,603.00 94.50 39 Old Structure Daily Old Structure Cumulative New Structure Cumulative Hospice Span of Care New Structure Daily Cumulative Comparison: Old to New Structure Day 151 163.39 24,671.89 147.90 24,750.90 79.01 Day 152 163.39 24,835.28 147.90 24,898.80 63.52 Day 153 163.39 24,998.67 147.90 25,046.70 48.03 Day 154 163.39 25,162.06 147.90 25,194.60 32.54 Day 155 163.39 25,325.45 147.90 25,342.50 17.05 Day 156 163.39 25,488.84 147.90 25,490.40 1.56 Day 157 163.39 25,652.23 147.90 25,638.30 (13.93) Day 158 163.39 25,815.62 147.90 25,786.20 (29.42) Day 159 163.39 25,979.01 147.90 25,934.10 (44.91) Day 160 163.39 26,142.40 147.90 26,082.00 (60.40) Day 161 163.39 26,305.79 147.90 26,229.90 (75.89) Day 162 163.39 26,469.18 147.90 26,377.80 (91.38) Day 163 163.39 26,632.57 147.90 26,525.70 (106.87) Day 164 163.39 26,795.96 147.90 26,673.60 (122.36) Day 165 163.39 26,959.35 147.90 26,821.50 (137.85) Day 166 163.39 27,122.74 147.90 26,969.40 (153.34) Day 167 163.39 27,286.13 147.90 27,117.30 (168.83) Day 168 163.39 27,449.52 147.90 27,265.20 (184.32) Day 169 163.39 27,612.91 147.90 27,413.10 (199.81) Day 170 163.39 27,776.30 147.90 27,561.00 (215.30) Day 171 163.39 27,939.69 147.90 27,708.90 (230.79) Day 172 163.39 28,103.08 147.90 27,856.80 (246.28) Day 173 163.39 28,266.47 147.90 28,004.70 (261.77) Day 174 163.39 28,429.86 147.90 28,152.60 (277.26) Day 175 163.39 28,593.25 147.90 28,300.50 (292.75) 40 20
Summary of Grid For the first 60 days of a person s stay, a hospice will see incremental increased revenue each day when comparing the old system reimbursement to the new system Starting at day 61, the hospice will still see increased reimbursement over the old system, but will see the amount it is over decrease each day Although the exact day number will vary based on location, the hospice will start to see decreased revenues as compared to the old system as a length of stay approaches 150 days 41 Assessing Overall Financial Impact The prior grids depicts the daily financial impact for one hospice patient as they go through their length of stay There are several methods that can be used to estimate the total impact on revenue for an entire hospice A hospice can take their average length of stay, plug it into the grid to see what the financial impact is per patient, and then multiply by expected census for a period It can also become tedious and cumbersome to calculate for every patient 42 21
Assessing Overall Financial Impact A hospice can use their average length of stay Find their average length of stay on the grid to determine impact from prior system Multiply this impact by number of current patients for period you want to assess This can be used to budget and forecast For Example, assume a hospice has an average length of stay of 50 days and they expect their census in the current accounting period to have 200 patients (assuming all routine days) From the grid, their total revenue per person will average $9,410 and this will be an increase of $1,240.50 over the old system For the year, the hospice can expect total revenues to be $1,882,000 with an increase of $248,100 over the old system This will provide a rough estimate. Using an ALOS of 50 days assumes all days paid at the high rate. The ALOS of 50 days could have patients with short stays and long stays over 60 days that would be reimbursed partially at the low rate 43 Assessing Overall Financial Impact A hospice can use the grid individually for each patient By utilizing the grid, a hospice can set up excel formulas to automatically calculate the financial impact based on each individual patient Once the length of stay is known, a simply lookup formula can pull the financial impact for each patient and sum it automatically A drawback to this method is that total impact will not be known until the period in question is complete and this can not be used for forecasting and budgeting 44 22
Accounting For The Changes Must know what day of the hospice stay the patient is in upon admission New election day 1 Transfer in from another agency Re elected hospice benefit without a 60 day break At the end of the month, calculate days times rates SIA Must wait until at least 7 days after month end in order to be exact Estimate the SIA impact 45 SIA Impact Similar to determining the impact of the new reimbursement structure, hospices can attempt to determine the impact of the new SIA payment In contrast to the reimbursement change, the SIA payment will only increase reimbursement when compared to the old system Typically, a hospice can take a cross section of their operations and dissect their data to determine how much of a SIA payment they can expect The hospice must be sure that the sample they take is representative of the entire population 46 23
SIA Impact Process A hospice can take a sample of one month of service, for example, January 2016 This hospice would take their census report and filter all activity to limit their January sample to just those patients that died between January 1 and February 6 th A log would be started to detail the date of death of each of these patients to determine which specific days were the last 7 days Then, charges would be examined on a day to day and patient by patient basis to determine how many hours of RN and MSW were completed on each of these qualifying days (check software system capabilities) Then, making sure to cap each day at 4 hours (16 units) per patient, multiply the 15 minute continuous care rate times the number of units each day and sum up each day 47 SIA Impact Example Patient # Date of Death 7 Days Before Death #1 1/25/2016 1/19/2016 7 #2 1/20/2016 1/14/2016 7 #3 1/31/2016 1/25/2016 7 #4 2/5/2016 1/30/2016 2 Number of SIA Qualifying Days in January Patient #1 Day 7 Day 6 Day 5 Day 4 Day 3 Day 2 Day 1 Date 1/19/2016 1/20/2016 1/21/2016 1/22/2016 1/23/2016 1/24/2016 1/25/2016 RN (hours) 1 2 5 3 2 2 2 MSW(hours) 2 1 4 1 1 2 1 Total Units (15 minutes) Allowable Units 12 12 36 16 12 16 12 12 12 16 16 12 16 12 48 24
SIA Example From the previous slide, patient #1 had 96 total allowable units during the last week of their life (some units over daily maximum) Total SIA payment for this patient would be $951.36 This is 96 units X $9.91 (Indianapolis Continuous Rate) This can be extrapolated across all patients The hospice can use as many patients to make their extrapolation as accurate as they feel they need 49 Change and SIA When doing extrapolations for budgeting or forecasting of an agency s change in revenue or anticipated SIA payment, care must be taken that a representative sample was taken If a hospice has a population that can easily be identifiable by distinct strata, the hospice would want to do several extrapolations For example, if a hospice notices that the average length of stay of their patients vary with their age, the hospice may want to first divide their population into age buckets and then extrapolate separately For example, if a hospice notices that patients with certain diagnosis codes tend to have more or less nursing visits during their span of care, the hospice would want to break their census down by diagnosis code before performing the analysis 50 25
EFFECTS ON THE MEDICARE HOSPICE COST REPORT 51 1984 14 Background New version required by Affordable Care Act of 2010 Last revision was in 1999 New version is named CMS 1984 14 Changes How the cost reports are prepared How data must be recorded Designed to provide additional and improved information for CMS and direct hospice payment reform Data they were receiving from the old version of the cost report did not provide sufficient information on the costs for each level of care Improve accuracy New forms will allow for more accurate and consistent data among all providers New forms will allow for cost report to gather cost per day on a level of care basis 52 26
1984 14 Background According to the August 29, 2014 Final Rule, the new Medicare hospice cost report is applicable only to freestanding hospice providers Cost reports periods beginning on or after 10/1/2014 12/31 year end 2015 cost report filed 5/31/16 6/30 year end 2016 cost report filed 11/30/16 Facility based hospices will have an effective date of cost reporting periods starting 10/1/2015 or 10/1/2016 53 Changes With the Cost Report The underlying purpose of the revisions to the hospice cost report is to assist with payment reform The improved data collection will provide CMS with the information needed to revise the method in which it reimburses hospices The data collected on these cost reports will also give CMS an indication of what it costs to provide patient services at each of the levels of care Even though the first cost reports using the new forms are just coming due (February 2016 May 2016) CMS implemented the reimbursement structure change and the SIA payment to immediately address the need for a U Shaped payment structure where more reimbursement is provided in the beginning and ending of hospice spans of care 54 27
Changes With the Cost Report Providers can expect CMS to use cost per day data across the levels of care provided by the new cost reports in conjunction with the data collected from claims data collected from fiscal year 2016 to evaluate the adequacy of the new reimbursement structure It is imperative to ensure adequate, full, and accurate filing of the hospice cost report as well as billing claims to ensure CMS gets useful data The home health industry is currently experiencing a 14% cut in rates partially from a lack of quality data in cost reports in a similar rebasing done by CMS 55 Procedural Changes To The Cost Report There will not be any changes to the cost report due to the new routine reimbursement structure and SIA payment However, as discussed earlier, the report was just updated to the new version 56 28
Accounting Concerns of Payment Final Rule As mentioned on the previous slide, there will be a few accounting entries that will result from the various changes To account for the SIA payment, monthly and yearly entries for revenues and accounts receivable will not be available to accurately be made until at least the 7 th of the following month Once the 7 th of the following month passes, if any patients died in this first week, the additional revenue can be booked for the qualified visits 57 CHANGES TO THE MEDICARE HOSPICE CAP REQUIREMENTS 58 29
Medicare Hospice Cap The Final Rule from the Federal Register from August 6, 2015 not only changed the routine home care reimbursement structure and created the SIA payment, but it also revised crucial elements of the hospice cap process Hospices are required to report how much reimbursement they received in relation to their cap amount to their Medicare Administrative Contractor each year Medicare contractors used to do this for hospices, but the process took up to two years to complete Starting in cap year 2014, hospices were required to self report their cap position in month 4 or 5 after the cap year ends 59 Hospice Cap Review Medicare imposes a limit on the amount of reimbursement it will provide a hospice for services given during a given time frame, called the hospice cap year The cap is different for every hospice because it is calculated based on the number of qualified beneficiaries it care for during the cap year Medicare issues the standard cap amount per beneficiary each year, which is applicable to all hospices The standard cap amount is multiplied by the number of qualified beneficiaries to determine a hospice s total cap limit Any Medicare payments in excess of the cap limit must be repaid 60 30
The Two Methods For Calculating and Reporting the Hospice Cap Streamlined Method Patient by Patient Method Counts one beneficiary in the first cap year that the patient elects hospice No beneficiary count in subsequent cap years If more than one hospice cares for the patient in that first cap year, the beneficiary count is prorated based on census days Once the first cap year ends, beneficiary count is determined Counts beneficiaries across cap years and across multiples hospices based on census days of a patient Beneficiary count is prorated based on number of days in each cap year and number of days served by each hospice providing care Beneficiary count credited to each cap year and to each hospice is a moving figure and will differ each day the count is taken until the patient dies or revokes forever 61 Hospice Cap Amount Traditionally, the hospice cap amount has been determined using the medical care expenditure category of the consumer price index for urban consumers Starting with the 2016 cap year (November 1, 2015 through October 31, 2016), the cap amount will be updated using the same percentage as the annual hospice payment percentage Current legislation allows this method until 2025, at which time the consumer price index will be used once again The change in method is expected to save Medicare $540 million because the cap amount will more align with Medicare payments 62 31
2016 Cap Amount 2015 Cap Amount $27,382.63 2016 Payment Update 1.016 % 2016 Cap Amount $27,820.75 63 Cap Year Changes In addition to the changes to the method for calculating the cap amount, CMS is changing the cap reporting year CMS is also changing the period for counting beneficiaries Prior to this final rule, the streamlined and patient by patient method had different periods for counting beneficiaries After these changes are fully implemented, the CMS fiscal year, the hospice cap year, and the beneficiary counting period will align 64 32
Hospice Cap Year Chart Cap Year Beneficiary Counting Period Medicare Payment Period Open Dates To File Cap Determination Streamlined Patient by Patient Streamlined Patient by Patient 2015 (11/1/2014 10/31/2015) 9/28/2014 9/27/2015 11/1/2014 10/31/2015 11/1/2014 10/31/2015 11/1/2014 10/31/2015 2/1/2016 3/31/2016 2016 (11/1/2015 10/31/2016) 9/28/2015 9/27/2016 11/1/2015 10/31/2016 11/1/2015 10/31/2016 11/1/2015 10/31/2016 2/1/2017 3/31/2017 2017 (11/1/2016 9/30/2017) 9/28/2016 9/30/2017 (three bonus days) 11/1/2016 9/30/2017 (11 months) 11/1/2016 9/30/2017 (11 months) 11/1/2016 9/30/2017 (11 months) 1/1/2018 2/28/2018 2018 (10/1/2017 9/30/2018) 10/1/2017 9/30/2018 10/1/2017 09/30/2018 10/1/2017 9/30/2018 10/1/2017 9/30/2018 1/1/2019 2/28/2019 65 Beneficiary Count The hospice specific cap amount requires an accurate number of beneficiaries before the calculation can be made CMS provides an avenue for obtaining this number of beneficiaries Medicare has built this beneficiary count into the Provider Statistical & Report (PS&R) The PS&R is the summary of all adjudicated claims processed by Medicare during a given period Prior to hospice cap self reporting, the PS&R was only used for the cost reports 66 33
Obtaining the PS&R Hospice providers must obtain their own PS&R report to be able to get their beneficiary count In order to obtain the PS&R report, providers must be registered on the CMS Enterprise Portal https://portal.cms.gov/wps/portal/unauthportal/home/ The Enterprise Portal is new as of this reporting period To register, a staff member of the hospice must sign up for a user account and then send in a letter from the IRS documenting the hospice name and Employer Identification Number Registration takes approximately 2 weeks, but can vary based on volume 67 IACS to Enterprise Conversion If a hospice provider was previously registered through the old Individuals Authorized Access to the CMS Computer Services (IACS) system, they must convert their account over to Enterprise Portal The IACS log on will be converted over to the Enterprise Portal However, for security purposes, providers must call to have their account moved, and a new, temporary password will be emailed to the user to the email address already on file (must be monitored) 1 866 484 8049 The user must then set up new security questions and change the temporary password 68 34
PULLING IDEAS TOGETHER 69 Pulling Ideas Together When looking at the hospice cap amount, a hospice can approximate how many days it could provide care before exceeding the cap (for one patient only) Keep in mind, the cap is an aggregate figure when reporting to Medicare For example, assume Indianapolis using the fiscal year 2016 routine rate before implementation of the high and low distinction 2016 Cap Amount $27,820.75 Routine Rate $163.39 170 Days 70 35
Pulling Ideas Together Under the new reimbursement system, looking at the grid, the $27,820.75 cap will be exceeded on day 172 The increase in days is due to the lower reimbursement on the long stays Now, look back to the grid showing the approximate day that hospices will begin losing reimbursement as compared to the old reimbursement system for routine days In the previous example grid, the first day showing less reimbursement as compared to the prior reimbursement was day 157, where a $13.93 decrease was expected 71 Pulling Ideas Together Finally, please refer to the Medicare Benefit Policy Manual: Hospice care is a benefit under the hospital insurance program. To be eligible to elect hospice care under Medicare, an individual must be entitled to Part A of Medicare and be certified as being terminally ill. An individual is considered to be terminally ill if the medical prognosis is that the individual s life expectancy is 6 months or less if the illness runs its normal course. Only care provided by (or under arrangements made by) a Medicare certified hospice is covered under the Medicare hospice benefit. Source: Medicare Benefit Policy Manual, Chapter 9, Section 10 72 36
Pulling Ideas Together As we can see, Medicare is aligning their polices with their guidelines to ensure that hospices are utilizing the Medicare Hospice benefit for the purpose it was intended Terminal Prognosis Limit (6 months) 180 days Loss Threshold Routine Home Care 157 Days Hospice Cap Limit on Days 172 days under new system 73 Indiana Medicaid As prescribed by CMS, every state was required to adopt the new reimbursement structure for routine home care as well as the new SIA payment, effective for the same time frame as the Medicare rates Indiana Medicaid posted their rates back in October 2015 The rates align with the new Medicare structure Rates can be found below: http://www.indianamedicaid.com/ihcp/bulletins/bt201573.pdf 74 37
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