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The Centers for Medicare and Medicaid Services (CMS) Part A to Part B rebilling rules allow hospital revenue cycle departments to recover payment for certain denied claims. However, the ability to rebill is presenting new challenges, including a tighter deadline to rebill claims and some revenue cycle departments experiencing limited advice on reconciling patient accounts after a rebilled claim is accepted, explains Mark Polston, a partner in the healthcare practice of King & Spaulding in Washington D.C., and former chief litigation counsel at CMS.
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What recent changes have been made to the CMS rules on rebilling Medicare Part A inpatient claims as Medicare Part B outpatient claims?
Polston: Often, when a Part A claim is denied for lack of medical necessity, the denial is based on the notion that the care was provided in the incorrect setting (inpatient versus outpatient) rather than on the basis that the services themselves were not medically necessary. In such cases, revenue cycle leaders could rebill for those medically necessary services under Part B except in limited circumstances, such as ancillary items like supplies. Procedures, such as surgeries, could not be billed for.
In March 2013, the agency adopted an interim rebilling policy change for Part A claims denied for lack of medical necessity. Hospitals could rebill Part B for services that were provided after the point of formal admission as long as those services would be medically necessary if provided on an outpatient basis. For example, if a patient was admitted and subsequently a procedure, such as cardiac catheter, or a surgery were performed, revenue cycle leaders could bill for those procedures on an “inpatient Part B” claim if the Part A claim was denied on the basis that the inpatient stay was not medically necessary.
As of Oct. 1, CMS adopted the rebilling policy permanently. However, the final rule gives revenue cycle leaders much less time to rebill Part A claims. Under the March interim policy, which applies to Part A claims with dates of admission before Oct. 1, 2013, that are denied for lack of medical necessity, revenue cycle leaders can submit rebilled Part B claims up to 180 days after the Part A denial, or if the hospital appeals the denial, up to 180 days after they receive notice that their appeal is final.
The new policy, which is effective for claims with dates of admission after Oct. 1, 2013, requires that revenue cycle departments rebill Part A denied claims under Part B within one year of the date of service. In many cases, hospitals won’t receive notice of the denial until well after a year has passed from the date of service, which means revenue cycle departments won’t be able to take advantage of rebilling. Furthermore, there is no option to appeal the Part A denial and then pursue Part B payment in the event you lose the appeal. CMS is aware of the impact of its policy, and many people opposed the policy during rulemaking, but the agency adopted it anyway.
How can hospitals avoid missing rebilling opportunities because of the limited timeframe?
Polston: Hospitals can avoid this conundrum, at least in some cases, by conducting self-audits, which, under the new rule, allow hospitals the opportunity to change their minds after the beneficiary has been discharged and determine their services should be billed on an outpatient basis under Part B rather than Part A. If this is done within one year of the date of service, then Part B claims can be submitted. There are many requirements to rebilling pursuant to a self-audit, including the beneficiary notice, but I have seen some hospitals beginning to turn to this procedure.
Are there any other recent CMS rules that affect rebilling?
Polston: At the same time it finalized the A to B rebilling policy, CMS also finalized the new inpatient coverage standard— the two-midnight rule—and imposed new physician certification and inpatient order requirements as a condition of Medicare payment. These rules are very controversial, and they raise many operational questions. For example, if a hospital becomes aware that a physician order or certification is technically defective and cannot be fixed because the patient has been discharged, what rules apply as to whether the hospital can rebill for those services under Part B? Does it require all of the cumbersome self-audit procedures?
Now that some hospitals have been rebilling Part A claims as Part B claims for approximately six months, what challenges are their revenue cycle leaders encountering as they work through the process?
Polston: Some hospitals are finding that MACs [Medicare administrative contractors] aren’t giving revenue cycle staff adequate remittance advice when a rebilled claim is accepted. Payments are being received without adequate information to link the MAC payment to the beneficiary at the patient account level. Without adequate remittance advice, it is difficult for revenue cycle staff to reconcile these claims and patient accounts based on the new Part B criteria. For example, when a claim switches from Part A to Part B, revenue cycle staff use remittance advice to determine whether the hospital owes Medicare patients deductible or copayment refunds or whether patients owe the hospital money based on the new Part B claim.
To resolve this problem, revenue cycle leaders should first contact the MAC to obtain the additional remittance advice. Some of my clients have not been successful and have had to go to the next step, which is to contact CMS. The agency should open a line of communication between revenue cycle leaders and MACs to resolve this problem.
Another challenge encountered by some revenue cycle leaders is that CMS’s new Part B billing policy actually requires providers to submit two Part B bills—an outpatient Part B bill for services that are provided in the three-day payment window before the patient is formally admitted and an inpatient Part B claim for services provided after the point of admission. It sounds easy in principle, but it can be difficult in practice. For example, some revenue cycle operations find it difficult to determine exactly what procedures or services should be billed on which claims. This requirement seems like an unnecessary splitting of the Part B claim and the better approach would be to allow submission on one bill type.
Can revenue cycle staff offset patient payments made toward the Part A claim against any patient financial responsibility owed on the Part B claim?
Polston: CMS states that if a beneficiary is charged a deductible for a Part A hospital stay, and that stay has been denied, the hospital must refund the deductible to the beneficiary. However, CMS has not provided express guidance on whether providers could use Part A deductibles already paid by patients to cover new patient financial responsibilities for the rebilled Part B claim. The ability to offset patient responsibility due on a Part B claim with payments already made on the denied Part A claim would offer greater efficiency to revenue cycle departments, as well as Medigap insurers, but CMS has dragged its feet in expressly stating that this is acceptable. As long as there is no confusion to the beneficiary, it seems irrational not to allow it.
What is your advice to revenue cycle leaders who are facing the challenge of applying these new rebilling rules?
Polston: Spend the time to familiarize yourself and your staff with the new CMS guidance on Medicare rebilling. It requires a time investment, but understanding how these rules work will pay off in the long run. At the end of the day, you will be left with unanswered questions, so apply the guidance in as reasonable as a fashion as possible. However, continue to press and demand answers from CMS through all channels of communications, such as emails to the agency personnel who are implementing the A to B rebilling policy.
Mark Polston is the former chief litigation counsel for CMS and a partner in the healthcare practice of King & Spalding, Washington D.C.
Forum members: Please share your insights, questions, and comments about the content in this article. You can use the "inshare" button at the top of this web page or visit the Revenue Cycle Forum LinkedIn discussion board.
Publication Date: Thursday, November 14, 2013
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.
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, 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.
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, 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.
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 of Deloitte Consulting, Matthew Hitch and David Betts explore the potential benefits of elevating the customer experience and outline strategies to change service delivery.
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.
TriMedx helps health systems control costs and uncover savings opportunities by optimizing the clinical engineering function.
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.
A leader from McKesson discusses how healthcare reform is forcing hospitals and health systems to take a different approach to capacity management and patient flow.
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.
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
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.
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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.
From payment incentives to value-based purchasing penalties, the national focus in healthcare is on improving patient care and lowering costs. Coordinating care for patients as they move from one care setting to another can help meet these goals, but the greatest success will come when the patients healthcare providers work together. By enhancing a team approach to care and providing cost efficiencies, partnerships between acute and post-acute settings benefit patients and the healthcare providers taking care of those patients.
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