Medicare Compliance & Reimbursement

Nursing homes can protect their interests without jumping through legal hoops.

The newly promoted contract between skilled nursing facilities and suppliers is more than a regulatory headache: Simple agreements with suppliers and residents can help SNFs save thousands in fees paid unnecessarily to suppliers.

The hitch: Since the start of consolidated billing, nursing homes have wrestled with how to coordinate services supplied by outside suppliers to SNF residents in Medicare-covered Part A stays. In the past, too many suppliers wound up providing services to covered residents without knowledge of the Part A status, putting nursing homes in the position of unnecessarily forking over some of their PPS rate to the outside supplier.

Although the Centers for Medicare & Medicaid Services issued its Transmittal 183 back in May, long-term care providers - and the feds - are just now coming to terms with what's really required regarding nursing facilities' "under arrangement" agreements with outside suppliers.

The fix: The silver lining in CMS's call for buttoned-up arrangements between suppliers and SNFs is that the transmittal clarifies a point that's been cloudy: Can a resident freely choose any provider for outside services? Or does his admission to a SNF put the ball in the nursing home's court?

This summer, CMS has clarified that the latter is the case, confirms Lawrence Manson, an attorney in Highland Park, IL. The news is welcome, relays Robin Dale of Lane Powell Spears Lubersky in Olympia, WA. "It's really the clearest CMS has been on the question of the SNF's ability to limit the beneficiaries' choice of suppliers," he contends.

Essential info: The other good news is that supplier contracts don't have to be complicated, experts say.

"Drafting a complex legal contract" is definitely not the only way to comply with CMS' new clarifications, offered CMS representative Bill Ullman at a recent Open Door Forum.

SNFs do need to ensure that all supplier agreements are in writing and that they include a handful of essentials, advises Illinois-based long-term care consultants Frost Ruttenberg & Rothblatt.

To protect their interests without complicating matters unduly, SNFs should define the following in writing with all suppliers:

Specify payment terms and indicate that the supplier shall not receive reimbursements from any party other than the SNF.

Issue agreements for a set period of time, up to one calendar year. Include an expiration date and a cancellation clause.

Stipulate that the SNF shall exercise professional control and responsibility over the services provided to its residents.

State that the SNF is responsible for the quality and timeliness of the services provided.

To review the CMS transmittal on under-arrangement agreements between SNFs and their suppliers, go to www.cms.hhs.gov/manuals/pm_trans/R183CP.pdf.