Medicare Advantage Reimbursement Issues - SoCal HFMA

1 Medicare Advantage Reimbursement IssuesPresented by:Jason JohnsonJohn Garcia1 DISCUSSION AGENDA Brief background on Medicare Advantage ( MA ) Enrollment Rates And Trends Regulatory Environment Introduction To Shadow Billing MA Reimbursement Issues IME/GME/NAH HITECH SSI/DSH DSH and Bad Debt Deeper Discussion of Shadow Billing Reasons For Slippage Best Practices2MA Enrollment Rates and Trends3 TOTAL MA ENROLLMENT, 1999-20114 CURRENT MA ENROLLMENT BY STATE5MA ENROLLMENT - SOUTHERN CALIFORNIAC ounty NameMedicare Eligible PopulationEnrolled in Medicare AdvantageMA Penetration RateLos Angeles1,126,635247, ,856111, ,90791,293 Bernardino205,71663, Diego380,760 95,159 ,61915,002 : Effective June 2009, Excluding Kaiser and Other Cost Based PlansSource: OF MA PLANSHMO/PPOP rivate Fee for Service (PFFS)Special Needs Plans (SNP s) Plans must establish networks and sign contracts with providers Prior to 2011, no network required Patients can go to whichever hospital is most convenient Deeming Process Required to establish networks by 2011 Restricted to special needs beneficiaries7MA ENROLLMENT BY PLAN TYPE2007 - 20118MA ENROLLMENT BY PLAN TYPE20119MA ENROLLMENT BY PLAN TYPE - CA10 Source: Kaiser Family Foundation, Program on Medicare Policy, Data Spotlight, September 2011* PPO Includes Local and Regional Plan Types.

2 ** Other includes Cost and Special Needs Plan Types1,730,810 Enrollees in California in 2011MA ENROLLMENT BY COMPANY11 COMBINED MA MARKET SHARE OF THE THREE LARGEST FIRMS12MA ENROLLMENT BY COMPANY - CA13 Total CA MA enrollment, 2011 = 1,730,810 Regulatory and Medicare Payments Overview For Medicare Advantage Beneficiaries14 CMS SHADOW BILLING GUIDANCE 1998 - 201015 July, 1998 CMS Change Request 2476 Balanced Budget Act of 1997 Feb, 2003 CMS Change Request 5647 July, 2007 CMS Transmittal 6329 March, 2009 Change Request 6821 May, 2010 BALANCED BUDGET ACT OF 199716 SEC. 4622. PAYMENT TO HOSPITALS OF INDIRECT MEDICAL EDUCATION COSTS FOR Medicare +CHOICE 1886(d) (42 1395ww(d)) is amended by adding at the end the following: (11) Additional payments for managed care (A) In portions of cost reporting periods occurring on or after January 1, 1998, the Secretary shall provide for an additional payment amount for each applicable discharge of any subsection (d) hospital that has an approved medical residency training program.

3 (B) Applicable purposes of this paragraph, the term 'applicable discharge' means the discharge of any individual who is enrolled under a risk-sharing contract with an eligible organization under section 1876 and who is entitled to benefits under part A or any individual who is enrolled with a Medicare +Choice organization under part 4624. PAYMENTS TO HOSPITALS FOR DIRECT COSTS OF GRADUATE MEDICAL EDUCATION OF Medicare +CHOICE ENROLLEES. Section 1886(h)(3) (42 1395ww(h)(3)) is amended by adding after subparagraph (C) the following: (D) Payment for managed care (i) In portions of cost reporting periods occurring on or after January 1, 1998, the Secretary shall provide for an additional payment amount under this subsection for services furnished to individuals who are enrolled under a risk-sharing contract with an eligible organization under section 1876 and who are entitled to part A or with a Medicare +Choice organization under part AND GME Indirect Medical Education (IME) Additional payment for a Medicare discharge to reflect the higher patient care costs of teaching hospitals relative to non-teaching hospitals Direct Graduate Medical Education (GME)

4 Additional payment made to teaching hospitals for the direct costs of approved graduate medical education programs17 TIMING OF PAYMENTS FI/MAC will verify patient s Medicare Advantage eligibility in the Medicare Common Working file After Medicare Advantage verification, the operating IME payment will be made by Medicare part A for teaching hospitals only GME interim payments will continue to be made in their normal fashion for teaching hospitals NAH payments are calculated on the cost report using the data from the PS&R report type 11818MA IME/GME SLIPPAGE EXAMPLES19 Example #1 Example #2 Example #3 Small Teaching ProgramMedium Teaching ProgramLarge Teaching ProgramIME/GME Per Day200 600 1,000 part A Days37,622 23,909 46,459 Current MA Days12,852 12,857 20,753 MA Enrollment %25%35%31%Increase MA Days 5%643 643 1,038 Additional MA IME/GME$128,520 $385,710 $1,037,650 NAH Reimbursement Nursing and Allied Health Education (NAH) Additional payment made to teaching hospitals for the costs of approved nursing and allied health education programs NAH payments established in 1999 in the Balanced Budget Refinement Act NAH is funded by a reduction made to GME payments20 SHADOW BILL BASICS A shadow bill (no-pay or informational only)

5 Is a claim submitted to Medicare part A for Medicare Advantage beneficiaries The shadow bill triggers CMS to issue the IME payment for MA patients It also allows CMS to capture the MA days in the SSI ratio Condition Codes 04 (and 69 for teaching) must be present on bill21 SHADOW BILL22 Source: NORIDIAN Administrative Services LLCTIMELY FILING DEADLINE part A timely filing rules currently apply to shadow bills Until recently, providers had 15-27 months go bill Medicare (until following calendar year) Beginning January 1st, 2010, Medicare changed to a 12 month deadline Failure to meet the 12 month deadline will result in claims being rejected23 MMA 20032425 Source: CMS 26 Source: CMS 27 HITECH ACT OVERVIEW Health Information Technology For Economic and Clinical Health Act Medicare & Medicaid incentive payments for providers designated meaningful users of electronic health records (EHR)

6 Payments beginning in 2011, made over a four year payout After 2014, penalties may be levied for failure to demonstrate meaningful use of EHR28 TIMING AND BASIS OF HITECH PAYMENTS Paid 4 8 weeks after designation of meaningful use of electronic health records First initial payment based on the most recently as submitted and accepted cost report at the time deemed a meaningful user Final payment will be settled on the cost report period in which the provider was deemed a meaningful user29 EXAMPLES OF DETERMINING CORRECT COST REPORT FOR FIRST HITECH PAYMENT 6/30 FY provider attesting in March 2012 2011 cost report will have just been submitted by 1/31/2012 Initial HITECH payment based on 2011 cost report 6/30/2011 dates of service.

7 7/1/10 through 6/30/2011 Still opportunity to double check 11/17/2010 6/30/11 12/31 FY provider attesting in March 2013 2012 cost report not filed until May 2013, after attesting for EHR So, initial HITECH payment based on the 2011 cost report 12/31/11 dates of service: 1/1/11 through 12/31/2011 First deadlines to start hitting 1/1/201230 HITECH Medicare CALCULATIONI nitial Amount_____ Start with $2,000,000 base amount Add [(discharges 1,149) X $200)]_____Multiplied by Medicare Share_____Numerator IP part A Days + IP part C Days_____Denominator (Total Charges Total Charity Charges) / Total Charges Multiplied by Total Acute Days31 COST REPORT DATA FOR HITECH PAYMENTSThe CMS 2552-96 data elements are as follows:1) Total Discharges - Worksheet S-3 part 1, Column 15, Line 122) Inpatient part A Days - Worksheet S-3 part 1, Column 4, Line 1 + Lines 6 through 103) Inpatient part C Days - Worksheet S-3 part 1, Column 4, Line 24) Total Inpatient Days - Worksheet S-3 part 1, Column 6, Line 1 + Lines 6 through 105) Total Charges - Worksheet C part 1, Column 8, Line 1036) Charity Care Charges - Worksheet S-10, Column 1, Line 30 The CMS 2552-10 data elements are as follows.

8 1) Total Discharges - Worksheet S-3 part 1, Column 15, Line 142) Inpatient part A Days - Worksheet S-3 part 1, Column 6, Line 1 + Lines 8 through 123) Inpatient part C Days - Worksheet S-3 part 1, Column 6, Line 24) Total Inpatient Days - Worksheet S-3 part 1, Column 8, Line 1 + Lines 8 through 125) Total Charges - Worksheet C part 1, Column 8, Line 2006) Charity Care Charges - Worksheet S-10, Column 3, Line 20 SAMPLE HOSPITAL HITECH ANALYSIS5% INCREASE TO MA DAYSE stimated Payment Showing CR Reported DaysEstimated Payment Adding 5% MA DaysINITIAL AMOUNTINITIAL AMOUNTBase Amount$2,000,000 Base Amount$2,000,000 Total Discharges20,580 Total Discharges20,580 Total Initial Amount$5,886,200 Total Initial Amount$5,886,200 Medicare SHAREMEDICARE SHAREPart A Days24,201 part A Days24,201MA Days7,502 MA Days7,877 Total Acute Days81,002 Total Acute Days81,002 Total Charity Charges53,767,139 Total Charity Charges53,767,139 Total Charges115,219,088 Total Charges115,219.

9 088 Non Charity Charge Ratio53% Charity Charge Ratio53% Medicare Share Medicare Share FACTORTRANSITION FACTORYearFactorYearFactor11 1 2 4 Payment Year 1$4,319,450 Calculated Payment Year 1$4,370,556 Calculated Payment Year 2$3,239,587 Calculated Payment Year 2$3,277,917 Calculated Payment Year 3$2,159,725 Calculated Payment Year 3$2,185,278 Calculated Payment Year 4$1,079,862 Calculated Payment Year 4$1,092,639$10,798,624$10,926,390 RecoveryYear 1$51,106 Year 2$38,330 Year 3$25,553 Year 4$12,777 Total $127,766 SAMPLE HOSPITAL HITECH ANALYSIS20% INCREASE TO MA DAYSR ecoveryYear 1$204,426 Year 2$153,319 Year 3$102,213 Year 4$51,106 Total $511,064 Estimated Payment Showing CR Reported DaysEstimated Payment Adding 20% MA DaysINITIAL AMOUNTINITIAL AMOUNTBase Amount$2,000,000 Base Amount$2,000,000 Total Discharges20,580 Total Discharges20,580 Total Initial Amount$5,886,200 Total Initial Amount$5,886,200 Medicare SHAREMEDICARE SHAREPart A Days24,201 part A Days24,201MA Days7,502MA Days9,002 Total Acute Days81,002 Total Acute Days81,002 Total Charity Charges53,767,139 Total Charity Charges53,767,139 Total Charges115,219,088 Total Charges115,,219,088 Non Charity Charge Ratio53%Charity Charge Ratio53% Medicare Share Share FACTORTRANSITION FACTORYearFactorYearFactor111 Payment Year 1$4,319,450 Calculated Payment Year 1$4,523,875 Calculated Payment Year 2$3,239,587 Calculated Payment Year 2$3,392.

10 906 Calculated Payment Year 3$2,159,725 Calculated Payment Year 3$2,261,938 Calculated Payment Year 4$1,079,862 Calculated Payment Year 4$1,130,969$10,789,624$11,309,688 Shadow Billing Challenges35 REGISTRATION Incomplete and/or inaccurate information Medicare HICN is key SSN is not always enough Medicare Advantage Plans Who are they? ER admits Complex and confusing to patients Example Medicare v. Medicare Advantage Card Changing benefits mid-stream36 MISSING Medicare HIC NUMBERS37 MAC OPEN FORUM - Medicare HIC NUMBER QUESTIONP rovider s question to their FI/MAC during a teleconference: Question 15: MA plans tell their members not to use their Medicare cards but to use the MA plan identification card. This presents a problem when the provider has to submit an information claim to Medicare , but has no prior history on the patient and therefore no Medicare number to put on the MA information claim.