Congratulations! You’re ready to start billing Medicare. Now what? For those Skilled Nursing Facilities new to Medicare, making heads or tails out of where to put your focus and resources might feel overwhelming. This guide explores how to jump into Medicare billing with confidence.
In order to submit Medicare claims, your organization and your individual billing team members must have the appropriate IDs established. Individuals who bill or work Medicare claims need a DDE/FISS ID, which is always tied to that individual, no matter where he or she works. Additionally, each facility (or facilities if you have multiple locations) needs a Medicare Submitter ID.
This is where your Medicare Network Service Vendor comes in. You’ll use a certified Medicare Network Service Vendor to set up and manage multiple IDs and ensure smooth access to DDE/FISS.
SNFs may submit claims manually or use Electronic Data Interchange (EDI). Submitting claims electronically requires an EDI agreement with Medicare. Some SNFs choose an RCM partner who has direct access to DDE/FISS and can securely transfer claim files to Medicare. RCM partners may also possess technology that analyzes claims before submission to ensure they’re complete and error-free, whether it’s a batch file or single claim. This technology is highly advantageous to busy billing departments, as it identifies claims Medicare didn’t accept and highlights errors you can resolve quickly.
Like other types of claims, a Medicare claim has a specific cycle it follows from time of service to adjudication.
A Medicare claim starts with you, the provider. SNFs may use a variety of technology solutions to streamline operations, verify eligibility and generate claim files. Once you submit Medicare claims, you’ll want to keep an eye on their reimbursement cycle status. When a claim is in “Suspense”, it usually means no action is needed. However, if Medicare finds something wrong with a claim, it may take a number of paths while in Suspense.
Medicare assigns a status and location code to each claim that indicates exactly what’s happening. These codes tell you if and when a claim is going to be paid or denied, or alert you to fix an issue.
Here are a few common claim statuses:
Medicare is processing the claim normally through the system and should pay without intervention.
Rejected claims contain errors Medicare refuses to process. Patient eligibility issues are the primary cause of rejected claims.
Medicare would like additional medical documentation to ensure payment is appropriate. ADRs are also known as Medicare Records Requests, Prepay ADRs, or SB6001.
Medicare has adjudicated the claim and refuses to pay. Providers may appeal a denied claim through the formal appeals process. Failure to respond in a timely fashion to an ADR is the most common reason for claim denials.
Medicare has returned the claim to a provider because there’s some level of error. RTP claims aren’t physically returned to you. These claims are placed in the “T” file and will remain there until you correct them.
Indicates a claim was fully paid or partially paid. A partially paid claim contains denied line items. These line items don’t require appeal, but they do require you to file a replacement claim within Medicare filing parameters.
One of the most common pitfalls of SNF billing is lack of a thorough patient intake process that properly addresses referrals, eligibility and prior authorization. Learning everything you can about the patient’s coverage at intake lays the foundation for timely payment.
For example, you may assume a patient is a Medicare beneficiary, only to discover later that he or she has an HMO or Medicare Advantage Plan. Unfortunately, payers won’t allow you to retroactively verify eligibility or obtain prior authorization, so you’re stuck holding the bag for those dates of service. This pitfall is all too common, yet thankfully avoidable with thorough intake procedures.
Although your patient accounting software is a powerful tool, it’s likely limited in its ability to analyze and report on the status of submitted claims. Providers often don’t work RTP or ADR claims because they lack visibility into the claims cycle. When these claims are discovered, worked on, and submitted, your organization collects the associated revenue.
Your patient accounting software cannot help you work suspense claims. Your Medicare Network Service Vendor will provide the Medicare portal needed to successfully address RTP and ADR claims.
The Bipartisan Budget Act of 2018 repealed Medicare’s outpatient therapy caps. The legislation removed therapy caps for all physical therapy (PT), occupational therapy (OT), and speech-language pathology (ST) services provided after Dec. 31, 2017. Providers must continue to attach KX modifiers to the claim for therapy service exceptions. Using the KX modifier justifies the services are medically necessary and supported by documentation in the medical record.
This legislation also lowered the threshold for potential targeted medical reviews from $3,700 to $3,000. What does this mean for SNFs? Billed PT and ST combined services exceeding $3,000 and OT services exceeding $3,000 may be subject to targeted review. Your billing staff should carefully watch claim status for indication of prepayment review and have clear procedures to respond to requests on time.
Medicare is an incredibly complicated system that generates vast amounts of data. This data generally does not receive the in-depth analysis it should, and without proper insight into this data, you can’t improve billing procedures. If you’re willing to crunch the numbers, the benefits to your revenue cycle can be transformative.
Patient accounting software and Electronic Health Record (EHR) systems offer reporting that’s vital to your organization. But these systems typically cannot handle Medicare payment data analysis and accurate reporting that directs you toward action. This is why an investment in the right RCM technology provides a high return for SNFs.
Tracking as much claim data as possible is beneficial for any SNF. However, there are a couple key metrics all SNFs should monitor.
SNFs should track metrics that directly impact cash flow, especially the number of days in accounts receivable (A/R). SNFs and other Medicare providers sometimes believe they’re getting paid within the 14-day Medicare payment window. It’s important for your organization to track the time between date of service and actual submission of the claim. Any billing delays or inefficiencies during this timeframe can substantially impact full aging of your cash flow.
GOAL: SNFs should strive to bill claims within two weeks of the last date of service. Use the following guidelines to gauge performance:
If you have outstanding claims more than 40 or 50 days out, it’s clear your process has problems. An RCM technology partner can offer reporting on days in A/R and alert you to cash flow trends that you probably hadn’t noticed.
The number of claims paid 60 days or more after discharge is a true indicator of your business health. If this number is high, it creates a detrimental lag in cash flow. Working to decrease claims that fall into this category will dramatically improve reimbursement rates and decrease days in A/R.
Detecting claim trends in the DDE is impossible when you can view only one claim at a time. A successful claims resolution strategy provides insight into why claims are rejected, denied or returned.
Identifying the top 10 reason codes for rejections, denials and RTPs will maximize timely recovery and reimbursement levels, allowing you to take steps to protect revenue. According to MGMA, the cost to rework a claim is $25. If your team reworks 100 claims a month, that’s $2,500 plus wasted staff time. That’s expensive business!
A viable RCM solution helps you identify recurring problems using reason code reporting. You can then work with your team to create an action plan and make workflow changes that remove road blocks and improve cash flow.
Eligibility is the foundation for proper reimbursement.
Patients must meet two requirements before Medicare will pay for skilled nursing care:
SNF admission must follow a minimum hospital stay of three consecutive days. The patient must have been officially admitted to the hospital, not just held under observation.
SNF admissions must be within 30 days of hospital discharge. If a patient leaves the SNF after coverage begins, but is readmitted within 30 days, that second period in the SNF will also be covered by Medicare.
SNF Three-Day Rule Waiver
Medicare’s Shared Savings Program Accountable Care Organizations Model allows a waiver of the SNF three-day hospital stay rule. Patients whose doctor participates in the Model can be admitted to a SNF directly from their home or doctor’s office.
The Patient-Driven Payment Model (PDPM) starts October 1, 2019. As a result, the way you calculate and receive reimbursements will change dramatically.
With PDPM, CMS is shifting the incentives away from the volume of physical, occupational, and speech therapy and toward patients’ true need for those services. In the SNF industry, reimbursement has been based mostly on hours of therapy, not quality of care. But PDPM will bring new rules and new ways of doing business.
With the changes in mind, understanding how to prepare for and effectively adjust to the new payment model is key to success. Here are some important things to consider before October 1:
For more details on how PDPM will affect your facility, follow this link to our special PDPM blog post.
Medicare Secondary Payer (MSP) claims are those claims where the beneficiary is covered by group insurance, Workers’ Compensation, or other third-party providers. Medicare doesn’t accept primary payer responsibility for patients who have other payer benefits. Claims that include MSP information must be submitted either directly or electronically to Medicare.
Because billing secondary payers adds more complexity to the billing process, many SNFs don’t accept patients with active secondary payers. If SNFs choose not to accept MSP patients, they may miss opportunities to generate revenue. However, there are RCM vendors who automate MSP billing and offer reporting on crossover claims, showing SNFs when and where to take action so nothing slips through the cracks.
For many years, Medicare has required hospitals to reduce their 30-day readmission rates or face potential penalties. SNFs and other post-acute care providers are now required to make concerted efforts to reduce readmissions, just like hospitals. This means SNFs must focus on keeping patients as healthy as possible to avoid hospital readmission.
CMS publicizes SNF quality data, including 30-day hospital readmission rates, and this information is included in the public Five-Star Ratings information. In addition to this information being public, SNFs face several consequences for high readmission rates and failure to report quality measures, all of which have financial implications. This includes the loss of coveted hospital referrals, patients who may use readmission data to make decisions about where to receive skilled nursing care, and beginning Oct. 2018, the potential for a two percent Medicare payment reduction.
SNFs must rely more on key data and metrics to reduce readmission rates. It’s never been more important to invest in platforms that continuously measure and report on quality levels, and technology that delivers live updates on patient progress. This includes tools that offer advanced reporting on SNF Medicare claims throughout the entire reimbursement cycle coupled with reports that monitor readmission dates.
SNFs new to Medicare billing will face challenges related to the complexity of Medicare. Keep these key ideas in mind when navigating new waters:
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