Hospital providers from all over the country converged at this year’s Health Financial Systems User Meeting in hopes to hear updates on the latest issues affecting Medicare reimbursement. This year’s two-day meeting curated twenty-three different presentations ranging from Medicare cost report form changes to software reviews and Medicare information updates. We could write for days on all of the information we absorbed at this year’s assembly, but after reviewing our catalog of notes and identifying the recurring themes across presentations, we’ve compiled our top four takeaways we think hospital providers should be aware of to improve their reimbursement areas, their cost reports and maintain compliance with Medicare regulations.
1. Post-acute care payment changes:
Skilled Nursing Facilities (SNF) – SNFs will now use the Patient Driven Payment Model (PDPM) categories instead of the RUG categories. PDPM is a new case-mix classification model that is effective beginning October 1, 2019, and will be used to classify SNF patients in a covered Part A stay. The components of PDPM payments are:
nursing
non-therapy ancillary
non-case mix
PDPM will give increased weight to nursing services versus therapy services and, therefore, shift payments away from mostly therapy-centered patients. Additionally, CMS has revised the initial “5-day assessment” which can now be referred to as the Initial Medicare Assessment.
Rehab (IRF) – A recalibrated case mix classification system will be implemented on October 1st. Also, CMS will be using a different patient assessment instrument - IRF Patient Assessment - for assessing patients.
Home Health Agencies (HHA) – As they typically do each year, CMS has proposed new payment rates. The proposed base rate is likely to have a significant cut, roughly 8%, to offset behavioral assumptions of moving to the new Patient Driven Groupings Model (PDGM) classification model.
2. Facility Price Transparency:
With the outpatient proposed rule (OPPS), CMS included language to more clearly define how a facility is to publicly display their prices in order for consumers to be able to seek out this information clearly and easily. In doing so, CMS clarified the definition of a “facility’s charges” to be gross charges. CMS also broadened the definition of “hospital” to include all Medicare-enrolled institutions. Continuing with the definition theme, CMS also proposed to define hospital “items and services” as all items and services associated with a patient’s treatment whether inpatient or outpatient.
3. Specialty Care Models:
CMS proposed a rule (Medicare Program; Specialty Care Models To Improve Quality of Care and Reduce Expenditures) that would establish two new mandatory payment models:
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Radiation Oncology Model – This model would provide prospective, site- neutral, episode-specific payment amounts. CMS will announce which CBSAs (approximately 40% of all radiation episodes) will be selected in the final rule. There will be three types of participants chosen:
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Professional
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Technical
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Dual (both Professional and Technical combined)
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End-Stage Renal Disease Treatment Choices Model – CMS is proposing this model to advocate for greater use of home dialysis options and kidney transplants for dialysis patients. CMS is looking to find approximately 50% of the population of clinics to randomly participate in the model throughout randomly selected geographic areas.
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4. Worksheet S-10 and Uncompensated Care:
During the HFS User Meeting, there were several presenters who gave presentations on the uncompensated care and S-10 topic. Mostly, we were reminded of the audits taking place and how those are impacting the current Medicare cost report filings of S-10 worksheets. We also discussed charity care and bad debt, both being topics that should be closely reviewed prior to filing cost reports. The recurring theme in multiple presentations was, don’t let this worksheet be the worksheet that is thrown together at the end of the cost report and you must now have patient detail!
A new GAAP (generally accepted accounting principles) has made the uncompensated care cost reconciliation to the financials more involved. Now, it is recommended that a facility complete reconciliations from the Medicare cost report trial balance to the GAAP reporting and IRS reporting. This will provide the auditor, at the time of audit, a trail to follow for review.
Hospitals must now also ensure that the charity care can be separated out between uninsured and underinsured (coinsurance and deductible).
Additionally, bad debts must now be reported as operating expenses, not as contractual amounts based on GAAP.
With the new rules for GAAP, accounts receivable on financial statements are no longer broken out showing an allowance for doubtful accounts, however, hospitals must be able to show this in reconciliation.
Because this post just scratches the surface of all of the information that was shared at this year’s HFS User Meeting, we recommend hospitals review the full agenda along with the presentation slide decks posted here.
If you were in attendance at this year’s HFS User Meeting, comment below with your most important takeaway(s). We’ll expand on those takeaways in future blog posts.
