Improving Payer Mix

Facility revenue levels depend directly upon the mix of reimbursement for resident care that you achieve through the admissions process. In most states, Medicare reimbursement represents the optimum payer. But optimum payer class is not always so obvious. For example, if your state bases it's Medicaid reimbursement on case mix of your Medicaid patients only, then admitting Medicaid patients who need rehab or subacute care might not pay off on the short term, but can greatly help to improve your facility case mix and overall Medicaid reimbursement. So the right mix of payers requires some careful analysis.

Once you arive at your optimum payor mix, then add your actual payor mix to your dashboard and monitor it weekly. Based on your data, you should redirect your marketing activities to target the particular payor class you need to improve on. You certainly won't turn away patients who are not in your targeted group, but you will focus your marketing and outreach activities to reach patients of your targeted payor group.

Finally, don't be caught in the trap of looking only at what a payor class reimburses you for care without also looking at what it costs you to provide the care. Careful and ongoing monitoring of expenses per payor class is critical, and also should be dashboard. Categories for close monitoring include pharmacy costs, rehab staffing expenses, and co-pay receivables.

Successful operation of long term care facilities is a complex challenge in today's fiscal environment. For more information on these strategies, contact Joseph Tomaino at joseph.tomaino@rsmi.com or 212-372-1640.

Continuing Care InSite is the blog of Joseph Tomaino, who assists his clients with smart approaches to improving continuing care organizations. He can be reached at jtomaino@continuingcareinsite.info

Health Care Reform Brings Heightened Provider Scrutiny

The proposed House and Senate plans for health care reform vary considerably, but the one common element of both, give or take a few billion, is that they are very expensive. The Office of Management and Budget discusses on their website the various sources of revenue that will be used to finance this expenditure. One category they point to is the billions of dollars that are lost each year to Medicare fraud and abuse. This means that the already active revenue recovery efforts by federal and state agencies will intensify over the coming years.

Despite their best intentions, providers can find themselves facing an Office of Inspector General or State Office of Medicaid Inspector General audit, and be surprised to find out that they have been submitting claims for reimbursement that are not supported properly. It may be that the wrong procedure or E&M code was selected; or the right code was selected for what was done, but the documentation doesn't support it; or the visit was not justified medically. Nursing home providers may find that MDS completion was not based on the true condition of a resident,or that the resident experienced quality of care issues while being covered by Medicare. A home care agency may find that the ICD-9 codes they selected for prospective payment were not appropriate for the client's medical diagnoses, or a hospice provider may find that they inadvertently billed for days after a patient died because of a breakdown in communication.

While these types of events are most often not intentional, they can happen very easily from a variety of factors:
1. Staff can become so absorbed in meeting the tremendous needs of patients that they don't pay enough attention to the "paperwork".
2. Interfaces between clinical and financial information systems can have glitches that remain unknown for months.
3. Providers become accustomed to doing things a certain way for years without being told it is not a proper procedure that they assume it is proper.
4. Staff can identify an issue as not being correct, but because of workplace politics, power structures, etc., nothing happens about it, so they stop bringing it up.

So what is a provider to do to prepare for the increased scrutiny of their claim submissions? Every provider organization should have a compliance plan where the principles of revenue integrity are spelled out for all staff to see, and the expectations for how that integrity will be monitored and what a staff member should do if he or she sees something they don't think is right, is laid out. This compliance plan should include ongoing monitoring of revenue cycle processes to make certain that claims submitted are based on proper coding and are supported with the appropriate clinical documentation. Staff who show a pattern of non-compliance should be given feedback and if they do not improve, should be subject to disciplinary action. It also is valuable to have both the compliance plan, as well as a sample of claims submissions for a period of time, reviewed by an outside consultant who will be objective and provide the perspective of external scrutiny.

For more information on this topic, or to discuss how a diagnostic assessment of how effective your organization's compliance and revenue integrity processes are, contact Joseph Tomaino at 212-372-1640, or joseph.tomaino@rsmi.com .