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Hospitals that are denied payment for services delivered under Medicare Part A have a recourse today: They can file follow-up claims for some of these services under Medicare Part B. But hospitals must make their voices heard if they are to retain this option.
In mid-March, the Centers for Medicare & Medicaid Services (CMS) issued CMS Ruling 1455-R, which allows hospitals to rebill Medicare Part B for an expanded range of services following denial of a Part A stay. The Ruling is only an interim measure, however. On the same day, CMS issued a proposed rule, CMS-1455-P, which will virtually eliminate expanded Part B billing if it is finalized (“Medicare Program; Part B Inpatient Billing in Hospitals,” Federal Register, March 18, 2013).
The issuance of CMS-1455-P means hospitals have their work cut out for them in the short term. They need to object to the proposed rule and lay the foundation for challenging the rule if it is finalized. Hospitals also need to act now to take advantage of the limited relief provided in CMS Ruling 1455-R. To do so, they must first understand the ruling, which can be confusing, and then establish a process to follow it.
Both CMS Ruling 1455-R and CMS 1455-P provide for expanded Part B rebilling following the denial of a Part A inpatient stay. The Ruling offers a real promise of expanded rebilling because CMS has waived the timely filing deadlines for submitting new Part B claims after the Part A claim is denied. If CMS 1455-P were finalized, however, hospitals would almost never be able to take advantage of this expanded Part B rebilling option for denials covered by the final rule.
Hospitals would lose this option under the rule as proposed because it would require hospitals to file Part B claims within one year of the date the services were provided, instead of affording them latitude to file such claims by a deadline falling after the date the Part A claim is denied or an appeal is exhausted. This shortened timeframe for filing the claims seems unfair given that recovery audit contractors (RACs), which are responsible for virtually all of the Part A denials on appeal, can reach back three years to deny a claim.
What is more, CMS also proposes to take power away from the administrative law judges (ALJs) to order Part B payment in Part A claims appeals. With the time to file Part B claims expired and no appeal route open to them, hospitals would be shut out of Part B payment.
Hospitals can avoid these circumstances through one of three actions:
Whatever action may ultimately be deemed necessary, commenting on the proposed rule is a critical first step that can determine whether the effort will be successful. It is not unprecedented, for example, for CMS to shift policy in response to strong industry reaction to a proposal, particularly if the comments can provide facts that undercut CMS’s assumptions about its policy. Moreover, even if CMS is not persuaded by the comments, the act of commenting demonstrates to Congress that hospitals have tried to resolve the problem administratively but failed only because of the agency’s refusal to respond, increasing the likelihood that Congress might consider a statutory remedy.
Further, if CMS were to adopt the proposal, litigation would become a viable option, and hospital comments in response to the proposal could be instrumental in securing a favorable judicial decision. Parties that are considering challenging a final rule are in a better position if they articulate their factual and legal arguments in rulemaking comments. In the case of CMS 1455-P, for example, CMS cites data suggesting that hospitals would be able to submit Part B claims within the timely filing deadline about 25 percent of the time following a denial. By submitting rulemaking comments, hospitals can build a factual record that shows how CMS’s assertion ignores hospitals’ real experience.
The broad lesson for hospitals is simple: Commenting on a proposed rule is always well worthwhile.
Unlike the proposed rule, CMS Ruling 1455-R does provide a real opportunity for Part B rebilling, and hospitals should prepare to take advantage of it. The ruling applies to all pending administrative appeals in which a hospital is challenging a Medicare contractor’s denial of a Part A claim because the inpatient stay was not medically necessary. The ruling also applies to Part A claims denied after its March 13, 2013, effective date—a point that has created much confusion and many questions about hospitals’ options under the ruling.
Under the ruling, hospitals have the same basic option whether they had appeals pending on March 13 or were denied payment for Part A services after that date: They can either appeal denied claims to get the denials reversed or forgo the appeals and file Part B claims to be paid for the services in question. This situation requires that hospitals perform a sort of “claims triage” to determine which approach they will take with each denied claim, because the ruling prevents a hospital from simultaneously submitting a Part B claim and pursuing a Part A claim appeal.
A hospital’s first order of business, therefore, should be to review these denials and separate them into two groups: those that are likely to result in a favorable outcome on appeal and those that are not.
At this point, the hospital also should consider the stage of the appeal and how soon it may expect a decision. If an ALJ decision is expected soon, for example, the hospital may want to follow through with the appeal even if it has a lower likelihood of succeeding. On the other hand, the hospital should strongly consider withdrawing appeals that are in the early stages of appeal if the claims are relatively weak.
Another consideration is how urgently the hospital needs to receive payment in the short term. Aggressive RAC denials have created financial strains for many hospitals, and hospitals may need to consider their short-term financial needs when evaluating the likelihood of a favorable outcome on appeal.
The analysis is the same for claims denied after March 13, 2013: The hospitals should consider the likelihood that the claim might be reversed on appeal. If low, Part B rebilling may be the better option.
Despite some confusion regarding the ruling’s claims filing deadlines, the deadlines are fairly straightforward: Hospitals have 180 days to file their Part B claims. The confusion has surrounded the question of when these 180 days should begin. There are three possible answers:
In the first two instances, receipt of notice is assumed to occur five days after the date of the decision. In the third instance, CMS has stated at an industry open door forum that it considers the date a claim is denied to be the date of the remittance advice.
Hospitals that are preparing their Part B claims should be aware of one possible pitfall. To put the ruling into effect, CMS issued Change Request 8185 on March 22, 2013, instructing its contractors to accept Part B claims that were coded appropriately and not to reject them as untimely. Providers also must follow the coding instructions in the Change Request, but the contractors are not required to have their systems ready until July 1, 2013, raising the question of whether Part B claims will be accepted and paid before July 1, 2013. Hospitals that submit Part B claims under the ruling before this date should establish a system for monitoring these claims and resubmitting them if they are denied for technical reasons.
Before CMS Ruling 1455-R, hospitals that could not follow the Condition Code 44 requirements for changing a patient’s status from inpatient to outpatient were permitted to bill Part B only for a small set of ancillary services. Those services were expressly listed in the Medicare Benefits Policy Manual. In its ruling, CMS now says hospitals can bill Part B for an “expanded” list of Part B services beyond what is listed in the manual. The Ruling now allows hospitals to submit two types of Part B claims: Part B outpatient claims and Part B inpatient claims.
A Part B outpatient claim can be filed for any service that was provided before the time of admission and that was bundled into the Part A claim because it was provided within the three-day payment window. A Part B inpatient claim can be submitted for any service that was provided after the point of admission and that would have been payable if it had been provided on an outpatient basis. Generally, this definition applies to any service payable under the outpatient prospective payment system.
The ruling does not provide a specific list of expanded services, however, and CMS does not intend to provide one. Instead, hospitals must go through the process of identifying the exact time the beneficiary was admitted (looking at the admit order), identifying those services that were provided both before and after that time, and then recoding the services—taking into account the required HCPCS, CPT, and revenue codes for the services—as if they were provided on an outpatient basis.
One additional element of confusion exists: The ruling and subsequent guidance say that hospitals may not submit Part B inpatient claims for services that by statute, Medicare definition, or coding definition require an “outpatient status.” Again, CMS does not provide a complete list of such services, but it does provide examples, including emergency department visits, clinic visits, and observation services. Obviously, a clinic visit cannot be attributed to an inpatient. But by what criteria does CMS define the circumstances when observation services can be delivered only on an outpatient basis? To answer this question and similar questions about other services, hospitals will need to closely monitor and keep informed of agency coding statements, CMS manuals, and other guidance to ascertain whether a service requires “outpatient status.”
Mark Polston, JD, is a partner, King & Spalding, Washington, D.C. (firstname.lastname@example.org).
Publication Date: Thursday, April 25, 2013
In this Business Profile, Bruce Haupt, president and CEO of ClearBalance, discusses how a patient loan program can increase patient collections, reduce bad debt, and speed cash flow.
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
In this Business Profile, Jerry Bruno, principal with Deloitte Consulting LLP, discusses the importance of choosing revenue cycle solutions that help an organization meet the challenges of a quickly evolving healthcare environment.
No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.
In this business profile, Lane Jackson, a partner in the Grant Thornton LLP Health Care Advisory Services practice, with extensive experience in overseeing system implementations and revenue cycle reorganizations, discusses best practices for elevating revenue cycle performance during an EMR implementation. Grant Thornton LLP is a sponsor of the Large System Controllers Council Affinity Group.
This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.
In this business profile, Amy Gross, senior vice president of Key Government Finance, discusses the benefits of private placement transactions to support large-scale financing projects.
This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.
In this business profile, Doug Polasky, executive vice president at Xtend Healthcare, explains the importance of having sound workflow processes in a consolidated business office to ensure optimal performance and reduce costs.
Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
In this business profile, sponsored by SSI, Jay Colfer, vice president of sales and marketing, shares how patient access solutions are reversing the trend toward increased bad debt resulting from the rise in high-deductible consumer health plans.
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
In this business profile of Deloitte Consulting, Matthew Hitch and David Betts explore the potential benefits of elevating the customer experience and outline strategies to change service delivery.
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
TriMedx helps health systems control costs and uncover savings opportunities by optimizing the clinical engineering function.
Read how Gwinnett Medical Center provides clear connections to financial information, offers multiple payment options for patients, and gives onsite staff the ability to collect payments at multiple points throughout the care process.
Read how Orlando Health was able to perform deeper dives into claims data to help the health system see claim rejections more quickly–even on the front end–and reduce A/R days.
To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.
Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.
Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.
Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.
As the critical link between patient care and reimbursement, health information enables more complete and accurate revenue capture. This 5-Minute White Paper Briefing shares how to achieve cost-effective revenue integrity by your optimizing HIM systems.
Speedier cash flow starts with better CDI and coding. This 5-Minute White Paper Briefing explains how providers can improve vital measures of technical and business performance to accelerate cash flow.
Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.
The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.
How Lucile Packard Children’s Hospital Stanford increased payments received within 45 days by 20% and reduced paper submission claims by 70% by using ZirMed solutions.
The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.
Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.
Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.
Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.
Physician practices must improve organizational efficiency to compete in this era of reduced reimbursement and escalating administrative costs.
Many healthcare organizations are pursuing next-generation health information systems solutions. Learn more about Navigant's work with University of Michigan Health System.
The proper implementation of healthcare information technology systems is crucial to an organization’s financial health.
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