Medicare Audit Update

Marty Lothes and Brenda Merriweather

Provider Audit and ReimbursementMarch 22, 2012

Agenda

FCSO OrganizationDisproportionate Share Hospital (DSH)Bad DebtsCost report extensionsPS&R - IACSMember questions

First Coast Service Options

FCSO is a subcontractor to Palmetto GBA – Provider Audit and Reimbursement– Provider Enrollment

Primary location is Jacksonville, FL– PARD J1office locations include

◦ Tampa, Fl◦ Columbus, GA◦ Camarillo, CA

FCSO J1 PARD OrganizationMarty Lothes

Director PARD J1

Jacquoline BurkeSenior Manager

Brenda Merriweather Senior Manager

Anne Westmoreland Senior Manager

Kelvin DellTampa

Ron KaufmannTampa

Lewis CantrellJacksonville

Aryn LinnaneJacksonville

Ellen CorwinCamarillo

Marilyn GeorgeCamarillo

Donna WrightColumbus

Pam PefferReimbursement

Lisa TravisReimbursement

Star OrtizReimbursement

Tony MatosCRC

DSH

JSM/TDL 09379– Hold on providers that use FY 2007 SSI%

JSM/TDL 09380 L&D days prior to FY 2004 in 9th Circuit Court of AppealsCMS Ruling 1498-RTDL 11456 L&D days FY 2004 and afterJ1 COTR gave technical direction

Update – DSH Hold

CMS-1498-R– Issued April 28, 2010– Applies to 3 Medicare DSH issues:

◦ Data Matching Process used to calculate SSI ratios

◦ Non-covered Medicare Days prior to FY 2005◦ Labor and Delivery days prior to FY 2010

– Applies to appeals and all open cost reports– No reopenings

Update – DSH

• JSM/TDL 09380 dated 8/14/2009– Inclusion of labor/delivery patient days for C/R

prior to FY 2004 for providers in 9th Circuit Court of Appeals

– For appeals and Open cost reports • TDL 11456 dated 9/6/2011

– Inclusion of labor/delivery patient days per instruction in 1498-R after FY 2004

– Appeal must be remanded– Must be the single issue in the case

• TDL 12261 dated 3/13/2012– Issue reopening notice for 2007 reports settled

Update - DSH

The 2006 – 2009 SSI Ratio have been posted

http://www.cms.gov/AcuteInpatientPPS/05_dsh.asp#TopOfPage

Contractors waiting instructions– Draft Change Request should be issue within

the next 10 days

Update – DSH

CMS will provide a timeline for settling the 4 years that the SSI ratios are availableCMS will provide instruction on reopening any cost reports settled (2006 and 2007)SSI Ratios available for appeals remanded will have a timelineApproximately 827 reports for the 4 years (2006 – 2009)

DSH

Title 19 restricted-eligibility that are paid with identified aid codes can be allowed as an emergency without further need for backup of emergency.See attachment

Bad Debts

Cross over bad debts are required to be written off the provider’s records to be claimed as bad debtFinding cases where it is written off a year to two years after the RA dateWe will require proof that cross over bad debts have been written off on the providers records

Bad Debts

Providers and State moving to electronic RAElectronic RA is acceptable if it comes the state electronic RA fileOtherwise, hard copy RA is required

Bad Debts and Share of Costs

Since October 1999, the Medicare Fiscal Intermediary/MAC has allowed providers in California to eliminate 2% of deductible and coinsurance amounts applicable to crossover claims with RAD codes 442 and 401 to determine the allowable Medicare bad debt amount.

Bad Debts and Share of Costs

CMS has stated they do not want us to use an estimate to eliminate SOC

CMS has instructed us to stop applying the 2% SOC adjustment and to follow the requirements found in Chapter 3 of the Provider Reimbursement Manual Part 1 [PRM 15-1] which requires that actual payments be used to reduce deductible and coinsurance.

Bad Debts and Share of Costs

Providers must ensure that bad debt listings submitted for Medicare reimbursement are net of SOC amounts as well as any payments received from other payors.

Providers must utilize their records in order to identify and exclude SOC amounts and other payor payments from Medicare deductible and coinsurance amounts prior to claiming these as Medicare bad debts.

Bad Debts and Share of Costs

The amounts Providers identify as SOC must be supported by documentation received from the State when determining Medicaid eligibility.

Without this documentation to support both Medicaid eligibility and the SOC amount, the bad debt cannot be allowed. Examples: Eligibility verification from the State with SOC identified, Aid code with No SOC, Remittance Advice with SOC

Bad Debts and Share of Costs

Providers can split their crossover bad debt listings based on aid codes with potential SOC and aid codes without potential SOC. This will save provider time as they will only have to research SOC for aid codes with potential SOC.

Bad Debts and Share of Costs

Audit staff are sending requests to Providers to submit bad debt listings net of SOC. Requests for extensions should be submitted to the Audit Manager and these will be accommodated whenever possible.Cost reports must be reviewed in accordance with CMS guidelines which require completion of desk reviews within 12 months of acceptance.

Cost Report Filing Extensions

TDL 11452 dated 9/2/2011New cost report 2552-10, 2540-10 and 265-11Hospitals and ESRDs were given extensions CMS gave contractors extensions to accept reports from 30 to 45 days

PS&R

CMS switched to the new PS&R system for all cost reports with FYE 1/31/2009 and laterProviders were to gain access to new PS&R through Individual Authorized Access to CMS Computer Services (IACS) Problems gaining access with IACSContractors continued to distribute copies of the PS&R due to problems

PS&R

Concern that contractors distributing PS&R cause providers not to register in IACSJSM/TDL 11126 issued 1/10/2011 requiring contractors to stop distributing PS&RsThe 12/31/2010 cost reports would be the last to receive PS&R from contractorsLetters mailed to all providers notifying them they would no longer receive the PS&R from the contractor and they would need to register in IACS

PS&R

As of 1/27/2012 IACS has reported that for J1 only 55.3% of providers are register.The count is for all providers types except home offices and LPIC

HFMA Meeting

Question # 1 –

When does CMS expect to issue the new SSI ratios and what will the procedures be for issuing final settlements. Are they just going to incorporate the new SSI ratio with the proposed adjustments previously received by hospitals and issue the settlements, or are they going to review any additional items prior to finalizing the reports?

HFMA Meeting

Response to Q # 1 –

Four years of the SSI ratios have been posted. Reports will be settled without inclusion of additional issues. Once settled reopenings will be considered following manual instructions.

HFMA MeetingQuestion # 2 –

What is your current position regarding accepting vendor generated electronic Medi-Cal RAs? If you are still not accepting the electronic Medi-Cal RAs, please explain why, and what can be done to allow you to accept electronic Medi-Cal RAs?

Response to Q # 2 –

HFMA Meeting

We will accept the State Medi-Cal electronic RA. RA created from the claims paid file is not acceptable.

HFMA Meeting

Question # 3 –

When FCSO reviews a bad debt listing for SOC, what is acceptable support to document the SOC amount? Will an electronic POS receipt be sufficient? Will the UB04 that shows the cleared SOC amount be sufficient? Will either of these items be sufficient?

HFMA Meeting

Response to Q # 3 –Acceptable support consists of documents received from the State which show the SOC amount. This includes remittance advices which show SOC, eligibility response from Medi-Cal, and the Point of Service Eligibility(POS) receipt. The electronic version of these items is acceptable.

HFMA Meeting

Question # 4 –

Will FCSO allow the bad debt listings to be separated between aid codes with potential SOC and aid codes without potential SOC? This may facilitate a more efficient audit review in terms of limiting the work for SOC determination to only aid codes with possible SOC.

HFMA Meeting

Response to Q # 4 –

Yes it is acceptable to create separate listings

HFMA Meeting

Question # 5 –Has FCSO and/or CMS contacted the Department of Health Services and/or ACS regarding why the SOC amounts are not included on the Medi-Cal RAs? It seems that the MAC and CMS would have a vested interest in trying to work with Medi-Cal to improve their programming to include the SOC amount on applicable RAs for cross-over and non-crossover Medi-Cal claims?

HFMA Meeting

Response to Q# 5 –

We are willing to work with the State to find a more effective method to identify SOC.

HFMA Meeting

Question # 6 –Will FCSO grant reopening requests for applicable NPRs where the provider wants to revise the SOC adjustment to actual from the estimated 2%? Early indications are that the 2% adjustments were an overestimate based on doing the work to determine actual.

HFMA Meeting

Response to Q# 6 –

Yes a reopening will be consider if all documentation is available and it meets the dollar threshold.

HFMA Meeting

Question # 7—

CMS finally released the SSI ratio for FFY 2006-2010. What is FCSO’s plan and timeline in issuing the NPR’s? Can we expect some to be issued by June 30th?

HFMA Meeting

Response to Q# 7 –It is assumed depending on CMS final instructions that NPRs will begin to be issued in June, but most likely July and August. Our settlement staff are the same staff accepting incoming cost reports and the 12/31/2011 are accepted in June, so resources have to be balanced.

HFMA Meeting

Question # 8 –We noted significant fluctuations in the SSI ratios from one year to the next for some hospitals. Will CMS make available to the providers the patient data used for calculating the revised SSI for verification?

HFMA Meeting

Response to Q# 8 –Yes per CMS web site – “Providers who are interested in obtaining the data used to calculate their FY 2006–FY 2009 ratios are encouraged to submit a Letter of Request along with a DSH Data Use Agreement. For additional information, please visit the link below in the related links section.”

HFMA Meeting

Question # 9 –Cost Report Settlements – NGS used to have a department handling inquiries about cost report settlements. We used to get a quick response on questions regarding when the cash transaction was processed. Is it possible for FCSO to reinstate such unit within the Audit and Reimbursement dept? It appears that the Palmetto AR dept handles both patient and cost report accounts and it has been slow and difficult to get a response especially on sold facilities and old cost report settlements. Is there a quicker and better way to request such information from Palmetto?

HFMA Meeting

Response to Q# 9 –In the MAC environment funding for these services are with Palmetto AR department. Palmetto requires all inquires to be sent to Palmetto Contact Center (PCC) at 866-931-3906. Palmetto’s process is to contact the provider within 48 hours.

HFMA Meeting

Question #10 –Reopenings – We have a reopening that the auditors have started back in 2009. After 3 years, we have not seen any proposed adjustments and each time we follow up, we are told they will look into it. I suspect this has fallen through the cracks and no longer part of the audit team’s production. What course of action can we take to resurrect the reopening?

HFMA Meeting

Response to Q#10 –Any concerns on the progress of any work in PARD should be address to me at martin.lothes@fcso.com and I will address your issue.

Questions?