cah reimbursement and cost reporting update · learly state rna is for surgical services versus...

3/2/2016

1

1 Proprietary & Confidential Creating a Sustainable Future for Healthcare Organizations

CAH Reimbursement and Cost Reporting

Update

John Waltko

Vice President, Regulatory and Financial Reporting

2 Proprietary & Confidential

3/2/2016

2


• Please help us improve our educational sessions by completing an evaluation of this program. You will have two opportunities to complete an evaluation and receive a completion certificate: At immediate conclusion of webinar

Post event: within two business days of the webinar, you will receive an email containing links to the online evaluation and a recording of this webinar

• Upon completing the online evaluation, you will receive an email with a link to access your completion certificate.

• If you have questions or need assistance, please contact [email protected].

Evaluate this Session!


Today’s Presenter

John Waltko Vice President, Regulatory & Financial Reporting

As Vice President of Regulatory and Financial Reporting, Mr. Waltko is a senior level consultant with over 30 years in the healthcare industry. Prior to joining Quorum in 1994, John was a Manager with a Big 4 CPA firm in healthcare consulting practice. John entered health care industry in 1984 with a large fiscal intermediary as a Senior Auditor in provider reimbursement and audit. John is a Certified Public Accountant.

Mr. Waltko specializes in Medicare and Medicaid program payment issues, underlying Medicare and Medicaid program regulations, monitoring of developing federal public policies and estimating payment impacts and operating challenges such policies have on health care providers.

His experience includes a variety of financial areas such as budgeting, rate setting, financial forecasting, mergers and acquisitions due diligence, financial and operational auditing and hospital turnaround engagements with focus on Medicare and Medicaid reimbursement and payment issues.

3/2/2016

3


Legislation introduced in Congress

CAHs with Necessary Provider designation

Shared space arrangements

Specific Cost Reporting issues

RHC updates

Todays Topics


•REACH Act: Would create new provider type: Rural Emergency

Hospital

No inpatient acute care service

o ALOS of 1.0 for observation

110% cost reimbursement for ER and ER-related services

Unclear on whether “elective” and non-emergent, outpatient services could/can be provided

CAHs: On the Legislative Front

3/2/2016

4


• Critical Access and Rural Equity (CARE) Act (H.R. 4553) Clarifies that specific CAH and physician costs are allowable

o Emergency room services

o Standby/on-call costs for CRNAs

o Diagnostic tests and laboratory procedures

o Preventive community health services

o Services provided at off-campus CAH clinics

Removes CAH provider-based clinic mileage restrictions

o 35/15 Miles away from any other hospital/CAH requirement

Mandates that Provider Taxes allowable

o Percent of Medicaid patients to total CAH patients

o Currently, Provider Taxes allowable and reduced by Medicaid DSH payments received

CAHs: On the Legislative Front


•Many CAHs obtained CAH designation due to mileage waiver

State Department of Rural Health could waive 35/15 mile distance requirement

Hospital had to be deemed a “Necessary Provider” of health care services

Waiver expired 1/1/06

CAHs with Necessary Provider Designation

3/2/2016

5


• CMS confirms mileage and rural location during surveys Done prior to arriving on site at CAH

Necessary Providers MUST provide documentation to surveyor upon request

o IF survey team does not request documentation?

o Likely CMS has in files

CAH has 60 days to provide to surveyor

IF documentation not provided, CAH designation revoked in 12 months

CAHs with Necessary Provider Designation


• Necessary Provider letter from state issued prior to 1/1/06

• State issued Rural Health Plan that notes hospital by name, or

• Current state-issued Rural Health Plan: (1)

Edition of State Plan, issued prior to 1/1/06

Qualifying NP criteria included in State Plan

Documentation supporting qualification as NP at time of CAH certification

• State Law Enacted prior to 1/1/06: (1)

Describes NP designation criteria

Documentation supporting qualification as NP at time of CAH Certification

CAHs with Necessary Provider Designation Acceptable Forms of Documentation: One of Following

(1) CAH must also provide signed letter from state, stating hospital met NP status in accordance with State Plan

3/2/2016

6


•Dual Eligible:

Medicare deductibles and co-insurance allowable on Cost Report

Hospitals must STILL bill Medicaid program; however

o Medicaid Remittance Advice, denying payment, serves as documentation

o Also serves as documentation that patient is indigent

o Maintain in Cost Report work paper files

o See PRM Section I section 322

Medicare Bad Debt Reminders


• Indigent Medicare patients

Billing and collection efforts are NOT required if Medicare patient qualifies for financial assistance under hospital Financial Assistance Policy

o CMS deems these types of patients “indigent” in PRM Manual

o Can claim deductibles/co-insurance as Medicare bad debt

Do not confuse Medicare bad debt requirements with overall hospital financial assistance programs:

o They are not the same and not dictated by same rules

o Medicare requires that collection efforts must be at least the same across all payors

– You can have a “higher” Medicare collection effort, just not lower

– You can set account thresholds for purposes of setting collection policies and procedures

Medicare Bad Debt Reminders

3/2/2016

7


• PRM Section 310 requirements Patient attestation is NOT acceptable

Hospital must ensure no one else responsible for co-payment

Hospital must determine indigence based on patient total resources:

o Assets and liabilities

– Assets convertible to cash only

– Unnecessary for patients daily living

o Income and expenses

Patient file should contain documentation supporting indigence determination

o Income tax returns

o Proof of social security benefit(s)

o Other forms of documentation that patient or guardian can produce

Medicare Bad Debt Reminders: Indigent Medicare Patients


• Issue: Payments to physicians and mid levels are not allowable costs on the

Medicare Cost Report:

o Physicians and mid levels reimbursed through the Medicare Physician Fee Schedules

o Some exceptions to the above rule:

– CRNA Pass Through Status

– Emergency Room Physician Availability Costs

Rural hospitals: o Have need to maintain CRNA for medical emergency services, and/or

o Low surgical volumes pre-empt CRNAs from practicing in rural community

– CRNA Pass Through Status is intended to address this issue

– Does not address true “CRNA Standby Payments”

CRNA Standby Costs

3/2/2016

8


•Requirements: 42 CFR 412.113(c)

CAH located in Rural Area

Employed/contracted with CRNA as of 01/01/88

One FTE, may not exceed 2,080 hours

CRNA assigned billing to hospital

Fewer than 800 procedures requiring ANESTHESIA

o Including scopes

Must apply for CRNA status every Nov/Dec

CRNA Pass Through Reimbursement


•Audit issues:

Contract is with a “group” versus a CRNA

o If with a group, then clearly notate for one FTE @ xyz times

Clearly state CRNA is for surgical services versus “stand by time”

Contract must include an “allocation” schedule

o Time estimate related to surgical services,

o Standby services, and

o Pain clinic, etc.

CRNA Pass Through Reimbursement

3/2/2016

9


• Issue: Many CAHs report employee benefit costs in Cost Report Employee Benefits Cost

Center

o Line 4 of Cost Report, Worksheet A

o Benefits approximately 20% of compensation costs in a typical hospital

Benefit costs allocated to “all” hospital cost centers and non-reimbursable cost centers via WS B Step Down Process

o Allocation statistic is “Gross Salaries”

o Gross salaries are not reflective of employee benefit costs on a departmental basis

Potential over allocation of hospital employee benefit costs to:

o Provider owned and operated physician clinics

o Nursing homes and other non-Medicare-covered services

o HHAs, ambulance, and other non-cost-based reimbursed services

Employee Benefit Costs


•Best practice Record ALL employee benefit costs to hospital

departments through general ledger accounting process

FICA match and health insurance are the two largest cost items

401k plan can be up to 3% of compensation as well

Advisable to notify MAC 90 days prior to cost reporting year end

Employee Benefit Costs

3/2/2016

10


• Issue background Clinics often rent space to visiting specialist physicians and other practitioners

o Rental agreement includes exam room as well as front desk, nurses, medical assistant

Physicians retain billing rights, versus assigning to group practice or hospital

Provider-based clinics and RHCs

o Shared space creates “costing” issue on cost report

o Medicare effectively at-risk for reimbursing PBC twice for same costs:

– Once through fee schedule payment to physicians

– Once through the Medicare Cost Report

o CMS Provider-Based Regulations at 42 CFR 413.65 do not allow “shared space” arrangements

o CMS Conditions of Participation do not allow sharing of space either

Provider Based Clinics and Provider Based RHCs: Shared Space Arrangements


• PRRB appeal cases Denied Provider-Based Attestations

Hospitals, in two cases, required to refund Medicare large payment amounts received

• Bi-Partisan Budget Act of 2015, Section 603 Revoked off-campus, provider-based clinic payment differential,

effective Jan 1 2017

Congress now has noticed

Not applicable to CAHs:

• 340B program effect with loss of “provider-based” status

Provider Based Clinics and Provider Based RHCs: Shared Space Arrangements - Recent Developments

3/2/2016

11


• What hospitals and CAHs should do

Always place specialists in distinct office suite(s)

o Suite should not be part of any “provider-based” clinic or other provider-based service

o Separate entrance and waiting areas and receptionist

o Allows for cleanest accounting possible

All physicians and mid levels practicing in designated provider-based clinic

o Have assigned billing to hospital/CAH or

o Using Appropriate Place of Service Code on the UB 1500 claim

Provider Based Clinics and Provider Based RHCs: Shared Space Arrangements


•RHCs present a special twist CMS Coverage Manual implies that RHCs can share space

See CMS Manual on following two slides

The dilemma:

o Strict reading of 42 CFR 413.65 prohibits “sharing” of space and resources

o See attached CMS letter, dated 7/22/11 for detailed CMS commentary

o Coverage Manual does not directly address “splitting” of hospital/CAH general service cost allocations, allocated to RHC through Cost Report step down process!

Provider Based RHCs: Shared Space Arrangements

3/2/2016

12


• Medicare Benefit Policy Manual Chapter 13 - Rural Health Clinic (RHC) and FQHC Services

90 - Commingling (Rev. 173, Issued: 11-22-13, Effective: 01-01-14, Implementation: 01-06-14)

Commingling refers to the sharing of RHC or FQHC space, staff (employed or contracted), supplies, equipment, and/or other resources with an onsite Medicare Part B or Medicaid fee-for-service practice operated by the same RHC or FQHC physician(s) and/or non-physician(s) practitioners. Commingling is prohibited in order to prevent:

o Duplicate Medicare or Medicaid reimbursement (including situations where the RHC or FQHC is unable to distinguish its actual costs from those that are reimbursed on a fee-for-service basis), or

o Selectively choosing a higher or lower reimbursement rate for the services.

RHC and FQHC practitioners may not furnish RHC or FQHC-covered professional services as a Part B provider in the RHC or FQHC, or in an area outside of the certified RHC or FQHC space, such as a treatment room adjacent to the RHC or FQHC, during RHC or FQHC hours of operation. I

If a RHC or FQHC practitioner furnishes a RHC or FQHC service at the RHC or FQHC, during RHC or FQHC hours, the service must be billed as a RHC or FQHC service. The service cannot be carved out of the cost report and billed to Part B



• Medicare Benefit Policy Manual Chapter 13 - Rural Health Clinic (RHC) and FQHC Services 90 - Commingling (Rev. 173, Issued: 11-22-13, Effective: 01-01-14, Implementation: 01-06-14)

If a RHC or FQHC is located in the same building with another entity such as an unaffiliated medical practice, x-ray and lab facility, dental clinic, emergency room, etc., the RHC or FQHC space must be clearly defined.

If the RHC or FQHC leases space to another entity, all costs associated with the leased space must be carved out of the cost report.

RHCs and FQHCs that share resources (e.g., waiting room, telephones, receptionist, etc.) with another entity must maintain accurate records to assure that all costs claimed for Medicare reimbursement are only for the RHC or FQHC staff, space, or other resources. Any shared staff, space, or other resources must be allocated appropriately between RHC or FQHC and non-RHC or non-FQHC usage to avoid duplicate reimbursement.

This commingling policy does not prohibit a provider-based RHC from sharing its health care practitioners with the hospital emergency department in an emergency, or prohibit a RHC practitioner from providing on-call services for an emergency room, as long as the RHC would continue to meet the RHC conditions for coverage even if the practitioner were absent from the facility. The RHC must be able to allocate appropriately the practitioner's salary between RHC and non-RHC time. It is expected that the sharing of the practitioner with the hospital emergency department would not be a common occurrence. The MAC has the authority to determine acceptable accounting methods for allocation of costs between the RHC or FQHC and another entity. In some situations, the practitioner’s employment agreement will provide a useful tool to help determine appropriate accounting


3/2/2016

13


Rural Health Clinics

• Recent billing developments

Effective January 1, 2016

o Can bill for chronic care management services

– All CCM service and care requirements must be met

o Advanced care planning services are billable as stand-alone service

– Co-payment and deductible will apply

– Not payable when provided in conjunction with EM encounter or annual wellness visit

– Co-payment and deductible NOT applicable when provided in conjunction with AWV

Effective April 1, 2016:

o RHCs must start coding claims!!


• Physician presence and oversight of mid-level practitioners requirements:

Always follow state licensing law and state Scope of Practice and allow providers some latitude to determine presence and oversight

Physician presence requirement: 42 CFR 485(b)(2), 491.8(b)(2)

o Provide medical direction, medical services, consultation

o Supervision of clinical staff, review medical record charts

o Required to be on site once every two weeks

o Physician available via telecommunication for consultation, medical emergencies, and patient referral

o Oversight of mid-level practitioners

Medicare Conditions of Participation Revisions: Rural Health Clinics, FQHC, and CAH

3/2/2016

14


• Physician presence and oversight of mid-level practitioners requirements (continued):

New guideline for RHCs and FQHCs:

o Physician periodically reviews sample of medical record charts (unless state law requirements different), provide medical orders and provide medical care

o Eliminate two week on-site requirement

New guideline for CAHs:

o Physician presence required for “sufficient time” to provide medical direction, consultation and supervision

o Be available via direct radio or telephone for consultation, assistance with medical emergencies or patient referral

Medicare Conditions of Participation Revisions: Rural Health Clinics, FQHC, and CAH


•Rural Health Clinic revision: Included in FQHC PPS Final Rule, May 2014

RHCs can now contract with mid level practitioners and bill for services

o Currently, mid-levels must be W-2 employees

RHC must employ one mid-level before contracting with other mid-level practitioners

Final Rule for FQHCs, RHCs, and Clinical Labs

3/2/2016

15



Webinars • Reimbursement and Regulatory Update

March 23-25, 2016 2:00 pm Central Time • IRS Billing and Collections Requirements

May 5, 2016 2:00 pm Central Time • Reimbursement and Regulatory Update: Inpatient Proposed Rule

May 18-20, 2016 2:00 pm Central Time

Classroom Programs • Reimbursement Boot Camp for Critical Access Hospitals

September 26-29, 2016 (Brentwood, TN)

Register at www.qhrlearninginstitute.com

Upcoming Programs

http://www.qhrlearninginstitute.com/

3/2/2016

16


Quorum Learning Institute Recordings and Videos: Come Visit Our Library

http://videos.qhr.com/


• Thank you for joining us today. We value your feedback and hope that you will take a few minutes to evaluate this program so that we may continue to improve and bring you the quality educational programming you expect.

• As a reminder, you will have two opportunities to complete an evaluation and receive a completion certificate:

At immediate conclusion of webinar

Post event: within two business days of the webinar, you will receive an email containing links to the online evaluation and a recording of this webinar

• Upon completing the online evaluation, you will receive an email with a link to access your completion certificate.

• If you have questions or need assistance, please contact [email protected].

Program Evaluation

3/2/2016

17


34 Proprietary & Confidential Creating a Sustainable Future for Healthcare Organizations

For More Information

Contact:

[email protected]

(800) 233-1470, ext. 4513

3/2/2016

18


Creating a Sustainable Future for Healthcare Organizations

Intended for internal guidance only, and not as recommendations for specific situations. Readers should consult a qualified attorney for specific legal guidance.

cah reimbursement and cost reporting update · learly state rna is for surgical services versus...

Documents