Reimbursement Primer for Compliance, Ethics and Legal Officers:

1
Reimbursement Primer for Compliance, Ethics and
Legal Officers Everything You Have Always
Wanted to Know About Reimbursement but Were
Afraid to Ask.
Post Acute Care Nursing Facilities, Skilled
Nursing Facilities, Assisted Living April 17,
2007

• Janine Boudreau, Janine Boudreau Healthcare
  Consulting, Inc.
• Lynda Hilliard, Senior Manager, Life Sciences
  Healthcare Regulatory Services,Deloitte Touche
  LLP
• W. Scott Plumb, Senior Vice President,
  Massachusetts Extended Care Federation
• Moderated by Lawrence W. Vernaglia, Foley
  Lardner, LLP

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Session Objectives

• Gain insight into the market for the primary care
  sectors for Post Acute Care
• Obtain a general understanding of the primary
  reimbursement streams for skilled nursing
  facilities (SNF), assisted living faciities
  (ALF), and nursing homes (NH).
• Gain insight into government reimbursement
  compliance issues in this marketplace

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Post Acute Care

• Discussion will be segmented into 3 areas
• Industry Overview Scott Plumb
• High Level Revenue Cycle Overview Janine
• Reimbursement Compliance Issues Lynda Hilliard
• Questions and Answers from Participants

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Industry Overview
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Provider Payer Mix ComparisonNursing homes are
uniquely dependent upon Medicaid to provide
quality health care
Nursing Home Payer Mix
Home Health Payer Mix
Acute Hospitals Payer Mix
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The Nursing Facility DollarBreakdown of
Nursing Home SpendingSalaries and benefits
represent 71 cents of every dollar spent by
nursing facilities
Administration (Administrator, Accounting,
Clerical)
Physical Plant (Mortgage and Property Taxes)
General Expenses/Operating (Supplies, Food,
Utilities Liability Insurance)
All Staff Wages Benefits
Based on Division of Health Care Finance and
Policy nursing facility cost reports
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50,000 Nursing Facility EmployeesThe nursing
facility provider community is a major economic
engineand is the largest employer in some
communities
Social/Medical
32,000
Source DHCFP Nursing Facility Annual Cost Reports
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Nursing Facility Direct Care Nursing Staff
Median Wage Increases19992006Nursing
facilities are good employers Average annual
increase of 4.2
3.0
3.1
3.0
3.8
4.1

7.9
4.6
Sources MECF Annual Wage Surveys 1999-2006
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3,700 Nursing Facility Direct Care Staff
Vacancies Despite Investment in Staff Wages
Benefits, Significant Vacancies Exist
Certified Nurse Aide 1,800
Sources DHCFP Annual Nursing Facility Cost
Reports and MECF Annual Wage Surveys
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Average Daily Minutes of Nursing Care Reimbursed
By Medicaid1
Source MassHealth and Division of Health Care
Finance and Policy Prepared by Massachusetts
Extended Care Federation
1The average daily minutes of nursing care
reimbursed by Medicaid (197 minutes in 2007)
falls short of the average daily minutes of care
provided by nursing homes (204 minutes in 2007).

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Medicaid Nursing Facility Resident Acuity
2006Nearly all nursing home residents require
extensive nursing care
of Total Medicaid Residents in Case Mix Category
MMQ Category H
J,K L,M
N,P R,S T
Minutes (Range) ?30 30.1
110 110.1 170
170.1 225 225.1 270
270.1
Minutes (Median) 30
81 142
199 244
288
Source MassHealth Unaudited Management Nursing
Minutes Score
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Nursing Facility MEDICAIDUNCOMPENSATED CARE Per
Day, 1999-2006 500,000 annual Medicaid loss per
Medicaid participating nursing facility
Sources 1999-2004 BDO Seidman Reports MECF
Estimates 2005-2006 User Fee Program Implemented
(2003) User Fee Program Maintained In Subsequent
Years
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Consumer Satisfaction in Massachusetts Nursing
HomesIndependent state survey shows nursing
facility consumers are highly satisfied
of nursing homes
Consumers who are
Source Massachusetts DPH Nursing Home
Satisfaction Survey Results, December 2005
14
Nursing Facility Spending As a Percentage of
Total Medicaid Spending FY1999-FY2006
of Total Medicaid Spending
Sources SFY 1999-2004 Actual (MassHealth Budget
Office) SFY 2005-FY2006 Massachusetts Taxpayers
Foundation (April 2005 Report, p.14) and MECF
Nursing Home Data
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Continuum of Long Term Care
At HomeRoutine Care
At HomeInformal Support
AssistedLiving
At HomeFormal Support
Facility-Based Care

• Short Term Care
• Hip Fractures
• Knee Replacements
• Stroke
• Cardiac Disease

• Long Term Care
• Alzheimers Disease
• Advanced Dementia
• Multiple Illnesses
• Congestive Heart Failure
• Advanced Diabetes
• Neurological (MS, Severe Brain Injury)
• Hospice

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High Level Revenue Cycle
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Pre-Admission Checklist

• Review and Log Referral
• Verify Benefits
• Co-Insurance
• Medicaid Eligibility Date/Type
• Managed Care Policy
• Hospice Provider
• Other Review with Administrator
• Price Out P.O. Medications
• Call for IV Medication Pricing
• Review Clinical Information with DON or designee
• Review Whole Referral with Administrator/COO
• Offer Bed Immediately for Approvals
• Contact Chief Clinical Officer for Denials
• Admissions Stand Up Meeting
• Assign Guardian Angel
• Sign Resident In

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Payor Mix

• Medicare
• HMO/Managed Care
• Private
• Medicaid

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Special Populations

• Palliative
• Hospice
• HIV

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Billing Cycle

• Pre-billing for
• Private
• Patient Paid Amount (PPA)
• HMO/Managed Care
• Prior Authorization
• Medicare/Medicaid
• Verifying level prior to actual billing

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Rebilling and Reconciliation

• Credit Balances
• Adjustments
• Denied or Suspended Claims

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Reimbursement Compliance Issues
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SNFs - Focus of 2007 OIG Work Plan

• Billing/Reimbursement
• Skilled Nursing Facilities Involvement in
  Consecutive Inpatient Stays
• Skilled Nursing Facility Payments for Day of
  Discharge
• Skilled Nursing Facility Consolidated Billing
• Submission of Skilled Nursing Facility No-Pay
  Bills
• HMB (Hospice) Payments to Nursing Home

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SNFs - Focus of 2007 OIG Work Plan

• Covered Services
• Skilled Facility Rehabilitation and Infusion
  Therapy
• Imaging and Laboratory Services in Nursing Homes
• Implementation of Medicare Part D in Nursing
  Facilities
• Inappropriate Psychotherapy Services in Nursing
  Facilities

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SNFs - Focus of 2007 OIG Work Plan

• Quality of Care and Licensing Concerns
• Nursing Home Residents Minimum Data Set
  Assessments and Care Planning
• Enforcement Actions Against Noncompliant Nursing
  Homes

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Assisted Living Facilities

• Primarily Private Pay
• Medicaid Nursing Home Waiver
• Future State
• Need to set up systems for monitoring coverage
  requirements and on-going eligibility
• Eligible for certain Part A, Part B and HMB
  benefits in their home
• Home Health services Part A/B
• Hospice Medicare Benefit ALF Home

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Nursing Homes

• Primarily Medicaid and Private Pay
• Medicare Part B Coverage
• For those NH patients who have exceeded their 100
  day SNF benefit, they can receive Part B
  services, e.g, Rehab Services
• Based on Medicare eligibility (enrolled in Part
  B)
• Documentation supports medical necessity
• Physician orders are present and meet
  reimbursement requirements

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• Question and Answer
• Session

• Janine Boudreau, Janine Boudreau Healthcare
  Consulting, Inc.
• Lynda Hilliard, Senior Manager, Life Sciences
  Healthcare Regulatory Services,Deloitte Touche
  LLP
• W. Scott Plumb, Senior Vice President,
  Massachusetts Extended Care Federation
• Moderated by Lawrence W. Vernaglia, Foley
  Lardner, LLP