Medicare Compliance & Reimbursement

Try these 5 tips to avert a cash-flow crunch during the mandated hold.

Now's the time to crank up your billing procedures for a nine-day Medicare payment drought hitting in September.

Medicare will not pay any claims from Sept. 22 through Sept. 30, in accordance with the Deficit Reduction Act enacted in February, the Centers for Medicare & Medicaid Services (CMS) notes in a revised Medlearn Matters article about the hold.

A break: Home health agencies (HHAs) will be better off than some providers, because the nine-day payment hold at the end of the government's fiscal year won't apply to requests for anticipated payment (RAPs), CMS confirmed in a transmittal earlier this year.

But the payment hold for final claims still could cause "a serious nine-day cash flow problem," warns William Dombi, vice president for law with the National Association for Home Care & Hospice's (NAHC) Center for Health Care Law. That's an especially potent threat for providers used to surviving from payment to payment, Dombi says in NAHC's online newsletter.

Use these five tips to prepare now to avoid cash flow disruption later:

1. Bill RAPs more frequently. Although the hold doesn't affect RAPs, you should increase RAP billing starting Sept. 1, recommends consultant Melinda Gaboury with Healthcare Provider Solutions in Nashville, TN. More frequent RAP billing will "help step up cash flow prior to and during the nine days that final [claims] will not pay," Gaboury explains.

For example, agencies that usually bill RAPs once or twice a week should bill daily, she advises.

2. Bill final claims before Sept. 5. Gaboury strongly suggests billing as many final claims as possible prior to Sept. 5. That should give enough time for processing and the 14-day payment floor, getting HHAs their payments before the hold starts Sept. 22, she expects.

3. Secure back-up funding. Consider establishing a cash reserve and a line of credit to cover cash needs during the hold, NAHC offers.

4. Assess payouts. Evaluate and perhaps alter major purchases to avoid payments during the hold period, the trade group adds. And consider postponing payments to third parties if late payment penalties are reasonable.

5. Continue billing. Although the Medicare payment system is on hold during this period, your billing system shouldn't be, Gaboury stresses. "Do not discontinue billing for any time period," she urges. Final claims that are set to pay during the hold will pay on Oct. 2, she notes.

Claims will pay all at once on that date, not in a staggered fashion, CMS confirms in the article.

Note: The Medlearn Matters article is at www.cms.hhs.gov/MLNMattersArticles/downloads/MM5047.pdf.