Medicare Compliance & Reimbursement

Learn the details to secure your fair share.

There's no time like the present for skilled nursing facilities to fine-tune their processes for filing Medicare claims.

Once Oct. 1 rolls around, new inflation-adjusted rates for Medicare's prospective payment system will kick in for skilled nursing facilities, and they could make a big difference to SNFs' bottom line.

Taken together, the two inflation-related increases outlined in a final rule published in the Aug. 4 Federal Register promise to bring SNFs an additional $850 million in funding in the coming fiscal year, according to estimates from the Centers for Medicare & Medicaid Services.

To ensure their billing offices don't miss opportunities to secure their fair share of the coming year's increases, SNFs should take note of the final rule's highlights:

One bump. In the final rule, CMS bumped the annual inflation adjustment up one-tenth of a percent over May's proposed rule estimate, granting facilities a full 3.0 percent market-basket increase for fiscal 2004. CMS uses a SNF "market basket" to measure inflation in the prices of an appropriate mix of goods and services included in a covered SNF stay.

...and two. In addition, CMS adjusted the rates by 3.26 percent to reflect the difference between past forecast-based market-basket adjustments and the actual cumulative market-basket increase from the start of PPS in July 1998. In the rule, CMS is careful to note that in making this adjustment the agency was "not providing a source of new industry funding." But the change will add to facilities' collective cash flow an estimated $450 million.

"The news is pretty good - and it's particularly welcome with the Part B therapy caps still looming and the reduction in reimbursement for Medicare bad debts," notes consultant Steve Jones of Moore Stephens Lovelace in Clearwater, FL.

Index updates as usual. CMS still is pushing for a SNF-specific wage index, but for now the agency will continue using the most current available wage index data in determining SNF payment rates. "Very few of the wage indices changed significantly," confirms Jones.

Add-ons retained. CMS opted to keep the current classification system used to establish the appropriate daily rate for the various levels of services required by each patient. This means facilities can continue to receive an estimated $1 billion in temporary add-on payments.

Distinct-part redefined. Providers that have both skilled and unskilled beds should note the final rule's clarification on just what comprises a skilled "distinct part." Two notable changes: Skilled beds randomly scattered throughout the physical plant no longer make the cut, and "distinct part" may be a "composite" distinct part that meets the requirements

spelled out on pages 46071-46072 of the rule. For more details, view the final rule online at www.gpo.gov/su_docs/fedreg/a030804c.html.

Consolidated billing exclusions tweaked. Though the change will affect only a handful of providers, CMS has added a couple of new exclusions to consolidated billing. Specifically, CMS is adding the radiopharmaceutical Zevalin (HCPCS codes A9522 and A9523) and Bexxar (HCPCS code not yet available). Both new agents meet the criteria CMS used to create the original lists of items to be excluded because they are high-cost services that are unlikely to be used in the SNF setting, CMS says in the rule.

Facilities will receive notices with new rates from fiscal intermediaries soon - "hopefully in August, probably in September," says Jones.