Safeguarding Your Medicare Program

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Safeguarding Your Medicare Program Session
F-1 October 7, 2007 200 400 PM Jane C.
Belt, MS, RN, Consulting Manager Betsy V. Rust,
CPA, Consulting Manager Plante Moran, PLLC
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Session Objectives

• Identify MDS assessment issues affecting length
  of stay and RUG determination
• Review documentation requirements and guidance in
  responding to Fiscal Intermediary (FI) Additional
  Documentation Requests (ADR)
• Learn tools and metrics that can assist in
  evaluating your facilitys Medicare operations
• Identify strategies for improving Medicare
  financial results
• Considerations in ancillary service contracting
  and provider liability for consolidated billing

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The Compelling Case for Medicare.

• Medicare operations typically generate per diem
  revenue in excess of operating expense
• Higher operating margins than other payors and
  decreased reliance on Medicaid
• Greater flexibility than other payors
• Census building opportunity (attract private pay)

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Average Financial Results Medicare Operations
Based on 366 Ohio Cost Reports from 2004 and
2005
Results in other Midwest States range from 50 to
75 per patient day
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Medicare Utilization

• Ohio 14
• Indiana 13
• Illinois 12
• Kentucky 13
• Michigan 15

• Ohio Rehab 87
• National Rehab 83

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Elements of a Strong Medicare Program
Metrics for Evaluation
Marketing
Cost Control
Pre-Admissions Admissions
Medicare Operations
Ancillary Utilization and Efficiency
Resident Assessments
Care Planning Delivery, and Outcomes
Documentation
Metrics for Evaluation
Metrics for Evaluation
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Marketing is Critical

• Target Audiences
• Hospitals and Discharge Planners
• Physician Specialty Groups
• Consumers and their families
• Marketing Strategies
• Facility Open House
• Print collateral materials
• Internet
• Other multimedia
• Post Discharge Follow-up

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Pre-Admission and Admissions

• Admission Staff are critical to establishing and
  cultivating referral relationships
• Utilize technology where possible
• Accept admissions 24 hours a day and 7 days a
  week
• Utilize a pre-admission screening tool to
  identify coverage, skilling services, probable
  RUG group, length of stay, cost issues

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Metrics for Evaluating Admissions

• Number of admission inquiries
• Number of admissions
• By referral source
• By payor type
• Number of patients declined
• Census by payor type
• Average length of stay
• Competitor utilization

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Resident Assessments

• Minimum Data Set (MDS) is the most important cog
  in the Medicare wheel
• Drives resident care planning
• Influences regulatory process and oversight
• Determines revenue rate (RUG) for care delivered
• It is essential that all members of the
  interdisciplinary team have adequate training and
  expertise in the MDS process

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Medicare Pre PPS
Financial Silo
Regulatory Silo
Little integration between Clinical and Financial
Operations
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Financial Success Under Medicare The Olden Days

• Maintain distinct part
• Accountant utilizes cost allocation methodology
  to maximize reimbursement.
• Spend up to limits on routine

The Controller is the Man!
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Financial Success Under Medicare PPS Environment

• Accurately capture assistance with ADLS, mood,
  services
• Monitor ancillary utilization and efficiency
• Selection of Assessment Reference Date

Nurses Rule Accountants Drool!
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Creating a Winning Medicare Program
The average Medicare rate has increased!
The facility ADL score has really improved!

MDS
MDS
The team must be talking the same language
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The MDS Language of Medicare Operations

• Assessment Reference Date
• Nursing case mix index
• Activities of Daily Living (ADL)

• Therapy services (rehabilitation) index
• Therapy efficiency

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Factors Influencing RUG Rate
Rehab Case Mix
Nursing Case Mix
Therapy Minutes Estimated or Delivered
Primary Diagnosis
Extensive Services prior 7 or 14 Days
ADL Score
Mood and Behavior
Selection of Assessment Reference Date
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Separate index for Nursing and Rehab
Whats case mix index?
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Low Nursing Case Mix
No Rehab index for non therapy categories
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Calculation of Therapy Services Index
Allows you to measure rehab volume with one
metric
Calculate using therapy days only
Index of 1.10 Mostly High
Monitor facility trend and comparison to State
and National averages
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Calculation of Nursing Case Mix Index
Allows facility to measure nursing acuity with
one metric
Monitor Trends
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Nursing Case Mix Index

• Monitor trends in the index
• Are the trends consistent with resident
  population?
• Do they indicate a need for modification to
  staffing levels or education?
• How does the trend in the index compare to trends
  in operating costs?
• National Average 1.28

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Therapy Case Mix Index

• Monitor trends in the index
• Are trends consistent with resident population?
• Why the increase or decrease in services?
• Does the index trend compare to the trend in
  operating costs?
• How does the trend in therapy CMI compare to the
  trend in therapy efficiency?
• National Average 1.27

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What is an ADL Score?
I have no idea but I hope Its a big number. I
hear that the higher the ADL, the more the RUG
rate.
Measures maximum assistance given by nursing
staff over the last 7 days across all shifts. My
staff are experts in capturing this.
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ADL Score and Impact on Reimbursement - Less is
NOT More

• The ADL score can be as low as 4 and as high as
  18
• The lower the score the less assistance the
  resident needs from staff, the higher the score,
  the more dependent the resident is on staff and
  the more Medicare will reimburse the facility for
  the care and services rendered

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ADL Score and Impact on Reimbursement - Less is
NOT More

• ADL score is 30 of each RUG rate
• The ADL score is the sum of
• Bed mobility
• Transfer
• Eating
• Toilet use
• These ADLs are items in section G of the MDS

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Know the ADL Definitions (MDS)

• INDEPENDENT (0) no help from staff
• SUPERVISION (1) staff uses eye and mouth no
  hands
• LIMITED ASSISTANCE (2) staff uses hands to
  guide, but not bearing any weight of the resident
• EXTENSIVE ASSISTANCE (3) staff uses hands and
  IS bearing some/any of residents weight OR staff
  fully performed some part of the task
• TOTAL DEPENDENCE (4) staff performs entire task
  each and every time

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Know the ADL Definitions
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ALLEY, KIRSTI
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HARTMAN, LISA
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ADL ScoresBed mobility, transfer, toilet use and
eating

• Medicare average?
• Goal 13.24
• Medicaid average?
• Goal 12
• What percent independent (4-6 ADL score)?
• Goal lt 20 Medicaid
• lt 10 Medicare
• Establish your benchmarks and monitor changes to
  identify need for staff education and training

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Impact of Understating of ADLsWhat Is One Point
Worth?

• 605.49
• 531.74

• RUX 16 - 18
• RUL 7 - 15

73.75 x 14 days 1,032.50
Medicare Rates for Urban (Columbus, OH) 10/1/07
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How Much is 1 ADL Point Worth?

• Ext Very High Rehab
• ADL Index 7
• RUG Category RVL
• Rate 428.09
• However, if someone under codes bed mobility by
  1 point (2 instead of 3), then
• ADL Index 6
• RUG Category RVA
• Rate - 352.87
• Difference 75.22 per day (1,053.08 - 14)

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Monitoring ADL Scores

• Trend for facility
• Comparison to statewide and national averages
  13.24
• Scrutiny of residents within one ADL point of
  next category to ensure accuracy
• Scrutiny of residents with ADL scores lt7
• Inability to capture new RUGs groups
• High level of independence

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ABC Nursing Home
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Monitoring ADLs

• 1 NA watches for transfer staff NWB
• 1 NA touches for toilet use staff NWB
• Part of toilet use is transfer
• Needs gt500 min of PT and OT

1 NA for bed mobility 2 NAs for transfer
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ARD Selection (A3 on MDS)

• Assessment Reference Date
• Determines the observation period
• the look-back date for answering all items on
  the MDS
• MDS sections have a 7, 14, 30 or 90 day
  look-back period or window
• Determines RUG classification

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Accuracy is Essential
Who sets ARD? Administrator, DON, ADON,
Business Office Manager, SSD, MDS, Director of
Rehab, Activities, Dietary
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Why is the ARD so Important?Rate Variance Example

• High acuity resident meets the criteria of
  several RUG III categories Rehab, Extensive
  Services, Special Care, Clinically Complex
• Rehab orders day 1 evaluation treatment begins
  on day 2 (lt65 minutes)
• Day 3 begins schedule that allows for 500 minutes
• ADL index is 13

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All Dates are NOT Created Equal
Same resident, same care, same rehab, same cost
of care BUTvery different reimbursement based
on accurate ADL, clinical indicators, and
ARD 19.48 per day x 14 days 272.72
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Therapy Services
720 Ultra High 500 Very High 325 High 150
Medium 45 Low
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Therapy ServicesIf the World were Perfect.

• Resident would always need therapy exactly at
  threshold
• Facility would get paid RUG rate for exact amount
  of therapy services rendered
• Facility would pay contractor or staff for exact
  amount of therapy services

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Therapy Reality

• Resident needs vary
• Therapy services can be provided to residents
  under arrangement or by employees
• Providers need to monitor revenue and expense
  implications of resident care decisions

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Therapy Service Options
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Monitoring Therapy Services

• What is the volume of services rendered to
  residents in general?
• How many minutes over threshold are we treating
  in the facility? Trends?
• Are we treating many residents at threshold?
  Trends?

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Monitoring Therapy Services

• Are we treating significantly over threshold?
• Are we close to the next category based on
  minutes or days?
• Are we accurately capturing residents that meet
  the requirements for the combination categories?

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Monitoring Therapy Efficiency
But many MDSs with significant treatment over
threshold and many that were close to the next
category
Overall looks good
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Monitoring Therapy Utilization by Resident
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Monitoring Therapy Utilization by Resident
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Medicare Resident Profile Comparison
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Medicare Rehab Profile
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Concentration of RUGs Groups
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Integrity of Documentation
Clinical notes and documentation support the need
for skilled level of care in SNF which supports
the bill to Medicare All three components must
agree!
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CMS Medicare Medical Review Safeguard Program

• Payment Safeguard Review
• Transmittal A-00-08 (3/2000)
• Random Post Pay purpose is to obtain a cross
  sectional overview of trends in beneficiary care
  and utilization under PPS ADRs (Additional
  Documentation Requests)
• Focused Medical Review for identified aberrant
  providers must be done on post payment basis

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Payment Safeguard Review

• Bill Review Process
• Request records
• Make a coverage determination
• Level of Care requirement must be met
• Services are not statutorily excluded
• Services are reasonable and necessary

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Payment Safeguard Review

• Bill Review Outcomes
• Beneficiary falls to non-skilled level of care
  deny coverage effective date skilled coverage
  criteria no longer met
• Services furnished not reasonable and necessary
  and/or no skilled care needed or provided deny
  in full

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Responding to an ADR

• Begin collecting information immediately
• Follow Fiscal Intermediary checklist
• Nurses Notes
• Physician Progress Notes/Consultation Reports
• Labs/Diagnostic Reports
• Physician Orders
• Therapy evals and progress notes
• MDSs
• History and Physical
• Other relevant documentation to demonstrate
  skilled services (i.e., MARs, TARs, Dietary,
  Social Services)

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Responding to an ADR

• Send only documentation to support claim
  identified in ADR
• May need to include prior documentation to
  support MDS coding
• May need to include prior documentation to
  support residents clinical needs (History
  Physical, Discharge Summary)

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Responding to an ADR

• Review medical record prior to sending to FI
• Is all requested information included?
• MDS coded accurately?
• MDS supportive documentation included?
• Documentation supports daily skilled services?
• Certs/Recerts completed? Or documentation
  contains required information?
• Orders signed/dated?
• Claim billed correctly?

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Medicare Operations Measuring Success ?
Resident Care

• Patient/resident satisfaction surveys
• Resident functional improvements
• Clinical Quality Indicators/Measures
• Survey outcomes
• Discharge dispositions for residents
• Readmission rates to acute care

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Analyzing the Cost of Medicare Operations
Ancillary
Capital
Routine
Pharmacy
Dietary
Therapy
Other
Staffing
Focus on Big Ticket Items
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Medicare Part A Cost Per Day Analysis
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Analysis (continued)
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Linking Cost and Clinical Data

• Track and trend to help identify opportunities
  for cost reduction
• Staffing hours ppd and case mix index and ADL
  score
• Pharmacy cost ppd and QI/QM for Nine or More
  Meds
• Diagnostics, supplies and percentage of residents
  in non-rehab categories

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Consolidated Billing Issues

• Coverage
• What is the SNF responsible for?
• Contracts
• Is your SNF protected through contracts with
  ancillary providers?
• Claims
• How should your SNF review claims from ancillary
  providers?

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Objectives of Consolidated Billing

• Bundle Part A Services into one all inclusive
  payment rate
• Enact upon SNF full responsibility for
  supervision of care to all outside vendors
• Prevent duplicate payments to providers
• Decrease out-of-pocket beneficiary coinsurance
  and deductible liability

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SNF Responsibilities.

• For any Part A or Part B service subject to SNF
  consolidated billing
• SNF must either furnish the service directly with
  its own resources or obtain the service from an
  outside entity under arrangement
• If services provided under arrangement, the SNF
  must reimburse the outside entity for the
  services subject to consolidated billing

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Determining Coverage General Guidelines

• Its Included unless its Excluded!
• Exclusions identified by HCPCS codes that should
  be billed by line item date of service and can be
  identified in Common Working File (CWF)
• Be careful with services that cross midnight and
  with services that have a professional and
  technical component
• In theory, CB should exclude sophisticated
  services that are beyond the scope of traditional
  and customary services of a SNF

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Contract Considerations

• Initiate contracts with commonly-used providers
  like hospitals and labs
• Contract Terms should include
• Exclusivity, or not
• Term and termination
• Compensation to provider
• Billing and Payment Timeframes and terms
• Control of Medicare appeals, if any
• Miscellaneous missed appointments, immediacy

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So You are Liable....How Much to Pay?

• Charges or Discounts

• Medicares Fee Screens

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Negotiating Payment with Providers

• Consider the value and importance of the
  relationship with the provider (is it a
  significant referring hospital?)
• Consider the timeliness of the claim submission
  to your SNF by the provider
• Consider the amount of the claim
• Dont be afraid to offer a reasonable settlement
  value
• Identify the appropriate provider representative
  with which to offer settlements

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Researching Claims..

• Appoint facility staff to champion process and
  maintain expertise in researching claims
• Analyze each claim on a line item basis
• Utilize spreadsheets to facilitate organization
  and minimize time

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The Devil is in the Detail.......Scrutinize Line
Item Charges
Detroit Claim from 2005
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Consolidated BillingMitigating Risk

• Educate residents and family
• Explain non-coverage of PPS services obtained
  outside of SNFs arrangement
• Explain SNFs prerogative to limit and control
  provision of PPS services, regardless of resident
  preferences
• CMS approves ability of SNF to direct PPS
  services under proper contractual arrangement

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Consolidated BillingMitigating Risk

• Be proactive with ancillary providers
• Send cautionary information with residents who go
  off-site describing CB and preliminary assessment
  of liability
• Respond to payment demands with informational
  materials on CB
• Propose reasonable payment for services rendered

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In Summary..Safeguarding Medicare Operations

• Strong marketing and admissions programs
• Expertise in MDS assessments at all levels in all
  disciplines
• Continuous monitoring of critical MDS information
  related to both quality and financial indicators

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In Summary..Safeguarding Medicare Operations

• Accurate and compliant documentation of resident
  care planning and delivery
• Diligent cost containment strategies that focus
  on clinical factors, best practices and operating
  efficiency
• Integrated team approach with continuous training
  and education for all staff

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For Additional Information
Jane Belt, RN Jane.Belt_at_plantemoran.com614-849-302
0
Betsy Rust, CPA Betsy.Rust_at_plantemoran.com
248-223-3437
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Thanks for attending today! Enjoy the rest of the
convention Come see us in Booth 733 Health
Information/Technology Hall