Sherry Collins and Pam Madole by 8v41Q4

VIEWS: 10 PAGES: 53

									Medicare Reimbursement Hot
          Topics

          Pam Madole, Partner
      Sherry Collins, Senior Manager
          pmadole@eidebailly.com
          sacollins@eidebailly.com




               www.eidebai lly.com
Medicare Hot Topics – PPS and CAH

•   Health Care Reform Update
      •   Low Volume Adjustment
      •   Medicare Dependent Hospital
      •   OP Cost Based Lab
      •   Market Basket Updates
      •   340B Program
      •   DSH Update
•   IPPS Update
•   OPPS Update
•   CRNA Pass Through
•   Provider Based Status
•   Clinics
•   Hospital Reimbursement Methods
                            www.eidebai lly.com
Low Volume Hospital
FY 2011 and 2012 Improvements

• Expands program to provide a temporary
  adjustment to PPS hospitals that have < 1600
  Medicare discharges.
• Revised the distance requirements from ―25
  road miles‖ to ―15 road miles‖ from another
  hospital
• $400K to $600K per year for two years




                  www.eidebai lly.com
Medicare Dependent Hospitals

•   The MDH program is extended for one year
    until October 1, 2012.




                    www.eidebai lly.com
Rural Hospitals
Outpatient Cost Based Lab

•   Reinstates reasonable cost based payments for
    rural hospitals with < 50 beds in qualifying
    counties

•   Effective for cost report periods beginning on or
    after July 1, 2010 through June 30, 2011

•   Overpayments could occur on interim basis due
    to overall CCR being higher than lab CCR

                      www.eidebai lly.com
Market Basket Updates

•   ―Productivity Adjustment‖ inserted
    • Equivalent to the 10-year moving average of changes
      in annual economy-wide private nonfarm business
      multi-factor productivity
    • Projected by Secretary
    • Most likely result will be a 0% to a -% market basket
      adjustment




                        www.eidebai lly.com
Market Basket Updates (cont‘d)

•   Effective dates
    •   Beginning in 2012 – Inpatient and outpatient acute-
        care hospital services, skilled nursing facility (SNF)
        services, inpatient rehabilitation facility services,
        dialysis, ambulance services and clinical laboratory
        services
    •   Beginning in 2013– Hospice care
    •   Starting in 2012– Long-term care hospitals (LTAHs)
        and inpatient psychiatric hospitals (if base rates are
        subject to update)
    •   Beginning in 2015– Home health agency services

                           www.eidebai lly.com
Market Basket Updates (cont‘d)

 •   Starting in 2011– Ambulatory surgical center (ASC)
     services
 •   Beginning in 2011– Reduces consumer price index-
     based updates for durable medical equipment (DME)
     and other similarly based fee schedule updates
 •   Other market basket reductions planned




                      www.eidebai lly.com
Market Basket Updates (cont‘d)




                www.eidebai lly.com
340B Outpatient Drug Program

•   Expanded eligibility for certain hospital types
    • Critical Access Hospitals (CAHs)
    • Free-standing Cancer Hospitals (DSH > 11.75%)
    • Rural Referral Centers (DSH > 8.00%)
    • Sole Community Hospitals (DSH > 8.00%)
    • Children‘s Hospitals (DSH > 11.75%)




                       www.eidebai lly.com
Disproportionate Share Hospitals

•   Payment Cuts
    •   75% beginning in FY 2014
•   Additional Payments—
    •   Based on uncompensated care
    •   And uninsured individuals under 65
•   New DSH Formula—
    • 25% based on the old formula
    • Remaining 75% multiplied times a population factor
    • Hospital-specific factor based on uncompensated
      care

                         www.eidebai lly.com
IPPS Update

•   FY 2011 Final Rule
    •   .1% reduction in payments for operating expenses
        •   2.4% inflation
        •   (2.9%) coding adjustment
        •   Budget neutrality and outlier adjustments


    •   Expansion of quality measures
        •   43 measures for 2010
        •   55 in 2011
        •   2% cut for failure to report




                                www.eidebai lly.com
IPPS Update

•   FY 2011 Final Rule
    •   CAH – Method II billing
        •   In the past facility was required to submit an annual request
            30 days prior to the beginning of their cost reporting period
        •   Final rule eliminates requirement for annual request
        •   Current election remains in effect until terminated
        •   Cost report periods on or after 09/30/2010




                               www.eidebai lly.com
IPPS Update

•   FY 2011 Final Rule
    •   CAH – Method II billing
        •   New election or termination still requires 30 days prior to cost
            report period notice


        •   Requirement still exists to notify MAC of changes in
            physician reassignment




                                www.eidebai lly.com
IPPS Update

•   CRNA Pass Through Cost
    •   Previously providers in urban areas did not qualify

    •   Update allows for providers that have reclassed from
        urban to rural under 42 CFR § 412.103 to qualify




                          www.eidebai lly.com
IPPS Update

•   IPPS Transfers to CAHs
    •   Previously these transfers were not included in IPPS
        transfer payment policy
    •   Update for 2011 included transfers to CAHs
        •   Only impacts IPPS facility
        •   Transfers to swing bed unaffected




                              www.eidebai lly.com
OPPS Update

•   Supervision requirement for outpatient
    therapeutic services (provided ‗incident to ‗ the
    services of a physician)
    •   Services performed on campus
        •   Present on same campus
        •   Immediately available


    •   Services performed in off-campus setting
        •   Present in department
        •   Immediately available



                              www.eidebai lly.com
OPPS Update

•   Supervision requirement for outpatient
    therapeutic services (provided ‗incident to ‗ the
    services of a physician)
    •   Good news – On-campus supervision
        •   Supervising physician or NPP may be physically located in
            private office or medical office building located on campus


    •   Bad news – Off-campus supervision
        •   Supervising physician or NPP must be physically present




                               www.eidebai lly.com
OPPS Update

•   Delayed enforcement of supervision for CAHs
    •   Extends notice of non-enforcement for CAHs through
        2011
    •   Expanded to apply to small rural hospitals
        •   < 100 beds and;
        •   Geographically located in rural area or paid under PPS with
            rural wage index




                               www.eidebai lly.com
CRNA Pass Through

•   Issue
    •   Rural providers with less than 800 procedures
        requiring the use of anesthesia services may be
        eligible for cost based reimbursement for these
        services

    •   CMS has taken the position that the cost for on-call
        associated with these services is subject to offset




                          www.eidebai lly.com
CRNA Pass Through

•   Potential impact is significant
    •   MACs use various methodologies to determine offset
        •   Look to contract first
        •   May assume 8,760 hours of on-call
        •   Uses average hourly rate
        •   Estimates time per case from Operating Room records




                             www.eidebai lly.com
CRNA Pass Through

•   Example
    •   24/7 CRNA on-call
    •   300 procedures per year
    •   Average of 1 hour per case
    •   MAC assumption of 1additional hour per case before
        and after procedure
    •   CRNA costs of $150,000
    •   40% Medicare utilization in CRNA cost center




                         www.eidebai lly.com
CRNA Pass Through

•   Example
    • 600 hours of direct patient time
    • 8,160 hours of on-call
    • $17.12 per hour
    • $139,700 cost offset
    • $55,880 impact on Medicare reimbursement




                      www.eidebai lly.com
CRNA Pass Through

•   Example 2 (2 hours per procedure)
    • 900 hours of direct patient time
    • 7,860 hours of on-call
    • $17.12 per hour
    • $134,600 cost offset
    • $53,800 impact on Medicare reimbursement




                      www.eidebai lly.com
CRNA Pass Through

•   Strategies
    •   CMS appears to only impute on-call costs to
        contracted providers
        •   Could change relationship with CRNA provider(s) to
            employment based
        •   Could create issues with agencies
    •   Specifically identify cost for on-call services
        •   Based on Fair Market Value
        •   Little experience with how CMS will treat




                               www.eidebai lly.com
Provider Based Status

•   OIG focus on whether facility meets definition
    as found in 42 CFR 413.65
    • Common Licensure
    • Clinical Services---Integration
    • Financial Integration
    • Public Awareness
    • Fulfillment of Obligations
    • Off Site Locations
        •   Ownership and Control
        •   Administration and Supervision
        •   Location

                              www.eidebai lly.com
Clinics

• Free-Standing Clinics
• Free-Standing Rural Health Clinics
• Provider-Based Rural Health Clinics
• Provider-Based Clinics




                   www.eidebai lly.com
Free-Standing Clinics

•   Free-standing clinics describe the traditional
    physician clinic model
    •   Typically stand alone entity
        •   Physician owned
    •   Reimbursed by Medicare under the Medicare
           Physician Fee Schedule (MPFS)
    •   Billing processed on the CMS-1500




                              www.eidebai lly.com
Free-Standing Clinics

•   MPFS typically provides the lowest possible
    total reimbursement for clinic services
    •   Example – Level 3 Established Patient (CPT 99213)
        •   $65.73


•   Usually provides for the easiest claims
    processing




                         www.eidebai lly.com
Free-Standing Rural Health Clinics

•   Cost per visit reimbursement methodology
    •   Medicare
    •   Medicaid
    •   Cost per visit limit for free-standing
        •   $78.07 Medicare cost per visit effective January 1, 2011




                               www.eidebai lly.com
Free-Standing Rural Health Clinics

•   Cost per visit reimbursement applies to the
    following services:
    • Clinic
    • Nursing Home (Part A and Part B)
    • Swing Bed
    • Home


•   Reimbursement for inpatient and outpatient
    hospital visits remains under the MPFS


                       www.eidebai lly.com
Free-Standing Rural Health Clinics


•   Rural Health Clinic (RHC) services reported on
    UB-04 for Medicare and Medicaid
    •   Services to other payors continue to be reported on
        CMS-1500


•   Non-RHC services are reported on CMS-1500




                          www.eidebai lly.com
Free-Standing Rural Health Clinics

•   Cost per visit reimbursement calculation
    includes an application of productivity standards
    •   4,200 visits per physician FTE
    •   2,100 visits per mid-level FTE
    •   Practices with lower productivity may experience
        reduction in the cost per visit
•   Under Arrangements
    •   Does not automatically include contracted physicians
    •   Intended for locums replacing normal physician



                          www.eidebai lly.com
Provider-Based Rural Health Clinics

• Owned and operated by hospital, nursing home
  or home health agency
• Cost per visit does not apply if RHC is a part of
  a hospital with less than 50 available beds
    •   Cost per visit varies
    •   $80 - $200+ common




                          www.eidebai lly.com
Provider Based RHC

•   Productivity Standards
    •   4,200 per FTE physician
    •   2,100 per FTE mid-level


•   Under Arrangements
    •   Does not automatically include contracted physicians
    •   Intended for locums replacing normal physician




                          www.eidebai lly.com
Rural Health Clinics – General

•   Opportunity to enhance reimbursement from
    Medicare and Medicaid

•   Reimbursement potential is greatest for clinics
    with greater productivity




                      www.eidebai lly.com
Provider-Based Clinic

•   A provider-based clinic is a clinic that meets the
    Medicare definitions of a provider-based
    department of the hospital

•   Should not be confused with provider-based
    RHC
    • Different requirements
    • Different billing processes
    • Different payment levels



                         www.eidebai lly.com
Why Provider-Based Clinic Status?

•   To be appropriately paid for the operations of
    the clinics

•   The Medicare Physician Fee Schedule (MPFS)
    is not designed to pay for the costs typically
    found in provider-based or hospital owned
    clinics
    • Overhead
    • Billing
    • Life-Safety Code


                         www.eidebai lly.com
How Does It Work? – Provider-based
Department

•   The clinic becomes an outpatient department of
    the hospital and is no longer a ―free-standing‖
    clinic

•   Clinic services move from being reimbursed
    one payment for clinic service to being
    reimbursed two payments for each visit to the
    clinic or ―outpatient department‖



                     www.eidebai lly.com
How Does It Work? – Provider-based
Department (cont‘d)

•   A Medicare Part A payment is received for the
    non-professional costs of operating the facility,
    including appropriate overhead allocations
    • Building
    • Utilities
    • Housekeeping
    • Laundry
    • Nursing
    • Medical Records
    • Administrative and General


                       www.eidebai lly.com
How Does It Work? – Provider-based
Department (cont‘d)

•   A Medicare Part B payment is received for the
    professional services of physicians and mid-
    level practitioners
    •   This payment is reduced because payment for a
        portion of the Practice Expense RVUs will be made to
        the hospital under the hospital‘s payment provisions
    •   Ranges from $8 – $23 for established office visits




                         www.eidebai lly.com
Payment Example – E&M Codes
(PPS)
CPT Code            Current Pmt             PB Pmt             Pmt Increase
99211               18.63                   55.00              36.37
99212               39.27                   90.36              51.09
99213               65.73                   113.68             47.95
99214               97.65                   160.96             63.31
99215               131.57                  216.45             84.88

CAH impact will vary by facility.

Each facility should perform analysis of impact as potential
impact varies by practice.




                                www.eidebai lly.com
Hospital Designations and Medicare
Reimbursement
• PPS Hospitals
• Critical Access Hospitals
• Sole Community Hospitals
• Medicare Dependent Hospitals




                  www.eidebai lly.com
PPS Hospitals Medicare
Reimbursement
•   Inpatient –
    •   DRGs

    •   Wage Index – DRGs wage adjusted

    •   FFY 2011
            OKC -      88.57%
            Tulsa -    88.65%
            Lawton -   85.74%
            Rural -    80.21%

        .


                           www.eidebai lly.com
PPS Hospitals Medicare
Reimbursement

•   Occupational Mix Adjustment – wage index
    •   Public Law 106-554 mandates an occupational mix
        adjustment to the wage index

    •   Requires the collection of data every 3 years

    •   Controls the effect of hospitals‘ employment choices
        on the wage index




                          www.eidebai lly.com
PPS Hospitals Medicare
Reimbursement

•   Last survey based on pay periods ending
    between 07/01/2007 and 06/30/2008
    •   FFYs 2010, 2011 and 2012


•   Next survey based on pay periods ending
    between 01/01/2010 and 12/31/2010
    •   Due 07/01/2011
    •   FFYs 2013, 2014 and 2015




                        www.eidebai lly.com
PPS Hospitals Medicare
Reimbursement

•   Outpatient
    •   Ambulatory Payment Classifications (APCs)


    •   Fee Schedules – Clinical lab, PT, OT, Speech and
        Ambulance

    •   Cost Based reimbursement
        •   Some rural hospitals with fewer than 50 beds may qualify to
            receive cost based reimbursement for clinical lab test
        •   Certified Registered Nurse Anesthetists (CRNAs)



                              www.eidebai lly.com
Critical Access Hospitals Medicare
Reimbursement
•   Cost based reimbursed –101% of reasonable costs

•   Clinical lab based on fee schedule

•   Method II billing – 115% of Medicare fee schedule




                        www.eidebai lly.com
Sole Community Hospitals Medicare
Reimbursement

•   Inpatient – paid the greater of:
    •   The Federal rate applicable to the hospital (includes DRG,
        Outliers, GME, IME and DSH)
    •   The updated hospital-specific rate based on the FY 1982, FY
        1987, FY 1996 or FY 2006. FY 2006 effective for cost reporting
        periods beginning on or after January 1, 2009. (The hospital
        specific rates excludes additional payments for Outliers, GME,
        IME and DSH)


•   Hospital-specific rate can eliminate negative
    impact of transfer DRGs


                             www.eidebai lly.com
Sole Community Hospitals Medicare
Reimbursement

•   Low volume adjustment
    • Decrease of 5% or more in its total discharges
    • Inpatient operating cost exceed total DRG operating
      payments
    • Current year cost cannot exceed prior year cost
    • Must submit request no later than 180 days after the
      Notice of Program Reimbursement (NPR)




                        www.eidebai lly.com
Sole Community Hospitals Medicare
Reimbursement

•   Outpatient –

    •   APCs increased payment of 7.1%
    •   Clinical Lab increased payment of 3.3%




                         www.eidebai lly.com
Medicare Dependent Hospital Medicare
Reimbursement

•   Inpatient
    •   Receive the higher of either the Federal payment rate
        or the Federal payment rate plus 75% of the
        difference between the Federal payment rate and the
        hospital specific rate
    •   Hospitals may use their FY 1982, 1987 or 2002 for
        their hospital specific rate
    •   Removes the 12% cap on DSH payments
    •   Can also qualify for a low volume adjustment




                          www.eidebai lly.com
Questions?




           Pam Madole, Partner
       Sherry Collins, Senior Manager
             pmadole@eidebailly.com
             sacollins@eidebailly.com




                  www.eidebai lly.com

								
To top