Medicare Compliance & Reimbursement

Part A is poised to run out of money — but it’s four years later than previously projected.

The latest Medicare Trustees’ Report, which was released on July 28, offers some good news and bad news for the future of Medicare Part A. The bad news is that Part A is set to remain solvent for only another 16 years, until 2030. The good news is that last year’s report indicated Medicare would go broke in 2026, which means that the Centers for Medicare & Medicaid Services (CMS) has slowed spending and therefore apparently figured out how to stretch a dollar a bit further.

Nevertheless, Part A spending is growing faster than taxes are coming in to pay for the program, and the Part A coffers will be empty by 2030 unless the government takes action, according to the “2014 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.”

Part B and Part D accounts “are adequately financed because premium and general revenue income are reset each year to cover expected costs,” the report notes. “Such financing, however, would have to increase faster than the economy to match expected expenditure growth.”

Cost Savings Came from Multiple Sources

Despite the bleak outlook, CMS reps were quick to point out that changes implemented over the past year allowed the Medicare program to stay funded longer than previously expected.

“The Medicare Hospital Insurance trust fund is projected to be solvent for longer, which is good news for beneficiaries and taxpayers,” said Marilyn Tavenner, CMS’s administrator. “Thanks to the Affordable Care Act, we are taking important steps to improve the quality of care for Medicare beneficiaries, while improving Medicare’s long-term solvency. Specifically, we have made major progress in improving patient safety, decreasing hospital readmissions, and establishing new payment models such as accountable care organizations aimed at reducing costs and improving quality. These reforms slow the rise in health care spending while improving the quality of care for beneficiaries.”

If Congress takes no action to correct Medicare’s depleting funds, the program will be able to cover just 85 percent of estimated expenditures in 2030, and only 75 percent of projected costs in 2050, CMS notes. “Policy makers should determine effective solutions to the long-range hospital insurance financial imbalance,” the report states.

To read the Trustees Report in its entirety, visit www.cms.hhs.gov/ReportsTrustFunds/downloads/tr2014.pdf. 

Reporting Inpatient Services Instead of Outpatient Cost This Hospital $98 Million

When you think of your place of service codes and your inpatient vs. outpatient services, you may not think that you’re making expensive differentiations. But one hospital found out that performing services for inpatients vs. outpatients was an extremely costly mistake.

On Aug. 4, the Justice Department announced that an acute care hospital chain agreed to pay $98.15 million to resolve False Claim Act allegations. The hospitals are alleged to have admitted scores of ER patients who could have easily been treated in the outpatient or observation setting, and billed for inpatient cardiac and dialysis procedures on an inpatient basis when they should have taken place as outpatient services.

“Health care providers should make treatment decisions based on patients’ medical needs, not profit margins,” said U.S. Attorney Anne M. Tompkins for the Western District of North Carolina in a statement. “We will not allow this type of misconduct to compromise the integrity of our health care system.”

Excluded Employee Costs Hospice Six Figures

Multiple cases of excluded individuals rack up CMPs around the country. Are you running periodic checks of your employees against the OIG’s excluded list? If not, you could pay a big price.

Case in point: Hospice by the Sea in Boca Raton, Fla., paid nearly $430,000 after self-disclosing that it employed an individual excluded from Federal health care programs, the HHS Office of Inspector General (OIG) says in a recent post to its Civil Monetary Penalties website. Hospice By The Sea didn’t respond to a request for comment.

In another recently revealed case, Hospicare and Palliative Care Services of Tompkins County in Ithaca, N.Y., paid more than $10,700 for the same violation, the OIG says. Hospicare also self-disclosed the conduct.

And in Pennsylvania, health care staffing agency ePeople Healthcare paid more than $10,000 to settle charges that it employed an excluded individual, the OIG reports. “The excluded individual was a licensed practical nurse who provided items and services to nursing facilities that were billed to Federal health care programs,” the OIG elaborates.

Links to the OIG’s online searchable database and other exclusions resources are at http://oig.hhs.gov/exclusions/index.asp.

Observe 5-Day Respite Care Limit Or See Claims Kicked Back

Don’t forget: The Centers for Medicare & Medicaid Services (CMS) started enforcing Medicare’s five-day respite care limit for hospice patients as of July 1.

Reminder: Medicare regulations limit payment to five consecutive days of hospice inpatient care, CMS said in Feb. 5 Change Request 8569. “Currently, Medicare systems do not provide standard editing to enforce this payment rule,” according to the CR. “In an effort to prevent potential overpayments in the Medicare Hospice benefit, new edits are being implemented to prevent payment of respite care for more than 5 days at a time for any hospice claim submitted on or after July 1, 2014.”

How it works: “For claims with receipt dates on or after July 1, 2014, Medicare contractors shall return to the provider (RTP) hospice claims (type of bills 081X and 082X) reporting units greater than 5 on revenue code 0655,” CMS explained.

“This does not mean that hospices cannot provide and bill for this level of care more than once per month or benefit period,” pointed out the National Association for Home Care & Hospice (NAHC) at the time. “It means the hospice cannot submit a claim for respite care that exceeds 5 days per occurrence.”

Billing tip: “When there is more than one respite period in the billing period, the provider must include the M2 occurrence span code for all periods of respite,” CMS instructed in revised Claims Processing Manual language included in the CR. “The individual respite periods reported shall not exceed 5 days, including consecutive respite periods.” See the CR, including billing scenario examples, online at http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2928CP.pdf.