As the year winds down, the Principals and employees of HW&Co. wish you, your staff and your residents the best during this holiday season.  With only three weeks left in 2015, we’d like to remind you of a few key issues impacting your operations.

In this issue:

Preferences for Everyday Living Inventory (PELI)
July 1, 2016 Ohio SNF Medicaid Rates
RUG-IV vs. RUG-III Comparisons
Bed Surrender Opportunity
Comprehensive Care for Joint Replacement
2016 Medicare Part A Coinsurance & Medicare Part B Premium and Deductibles
Part A Coinsurance Reimbursement
Fiscal Year 2016 Medicare Rates
MyCare Ohio Update

Preferences for Everyday Living Inventory (PELI): What do Ohio SNFs need to do with PELI before 12/31/15 to earn the quality point in the 7/1/16 Medicaid rate?

Unfortunately, there is not a straightforward answer since there has been no guidance from Ohio Department of Medicaid (ODM) as to what facilities need to do with PELI before 12/31/15 to earn the quality point in your 7/1/16 rate.

Ohio Revised Code Section 5165.25 states that a quality point will be earned if “the nursing facility utilized the nursing home version of the preferences for everyday living inventory (PELI) for all of its residents”.  However, it does not define what constitutes utilizing PELI or what it means to utilize it for all residents during the measurement period (July 1, 2015 to December 31, 2015).  ODM officials have stated publicly that they “expect all” SNFs to earn the PELI measure.  Each facility will need to use their judgment to determine what they need to do to be able to answer “yes” to the following question on the 2015 cost report:

Does the nursing facility utilize the nursing home version of the preferences for everyday living inventory for all of its residents?

The cost report question itself is vague and the use of present tense (“does”) may imply that you don’t have to have completed the assessment for all of your residents by the end of the year.   The current status of PELI implementation has varied widely among providers.  Some providers have already begun assessments on all residents and others are just addressing it with only 3 weeks to the end of the measurement period.   Regardless, you need to determine the best policy for your facility.  Perhaps it is easiest to break it down between what does your facility need to do to be able to answer “yes” on the 2015 cost report versus how you will implement PELI going forward?

Here are just a few of the many issues you need to consider:

  • Will you use the mid-level PELI which is 10 pages or full form which is 30 pages?
  • How often will you conduct the PELI interviews? (i.e. upon admission, annually, significant change)
  • Will your policy vary for long-term vs. short-term residents?
  • How will you implement PELI in care planning?

The Ohio Health Care Association (OHCA) prepared a PELI White Paper for its members which does an excellent job of laying out the issues and provides various approaches to the implementation of PELI as well as links to tips for providers regarding usage of PELI prepared by Scripps Gerontology Center at Miami University.  OHCA has graciously granted permission for us to include a link for our clients and friends: OHCA PELI_White_Paper.   We are very appreciative as it is the most comprehensive guidance available on this issue and should be very helpful to you as you develop your PELI policy.

As always, HW Healthcare Advisors are available to assist with any reimbursement, billing and clinical needs.    Our PointClickCare team is currently helping facilities add the PELI questionnaire to PointClickCare and linking the responses to the admission care plan.   Please contact us if you need assistance or have any other questions.
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July 1, 2016 Ohio SNF Medicaid Rates

The FY2017 Ohio Budget (HB64) includes significant changes to Medicaid rates as of July 1, 2016:

  • Prices will be rebased for the first time in 10 years
  • Case mix scores will be calculated using the RUG-IV 57 grouper
  • New 5 point quality system with measures for pressure ulcers, anti-psychotics, hospital admissions, employee retention and the use of the Preferences for Everyday Living Inventory (PELI) will replace the 20 point system
  • Rates for PA1/PA2 will be reduced to $115 and further reduced to $91.70 if the facility does not cooperate with the Ombudsman on alternate placement
  • Allen and Trumbull County will be moved to Peer Group 2

Rebasing adds approximately $133 million to nursing facility reimbursement and the expectation is that 7/1/16 rates will be very favorable for many providers.  However, facilities are impacted very differently depending on peer group, case mix score under new RUG-IV system, and if they are in Allen or Trumbull County. The rebased prices are not yet final but based upon the 7/1/16 rate estimates that we have prepared for our clients, the average rate increase is approximately $12 per day.  Peer  Group 3 has the highest increases and Peer Group 1 generally has decreases.

Contact your HW Healthcare Advisor if you would like help estimating your 7/1/16 rate for budgeting purposes.
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RUG-IV vs. RUG-III comparisons

Ohio currently uses the RUG-III 44 grouper case mix system and the average score is approximately 2.2000.  Case mix scores for individual residents range from 1.0000 to approximately 3.6000.  RUG-IV will be effective for rates beginning on 7/1/16.  Since the 12/31/15 and 3/31/16 case mix scores will be used for that rate, RUG-IV will be effective clinically on 10/1/15. We estimate the average score will be approximately 2.5000-2.6000.  Individual scores range from 1.0000 to approximately 6.4000. There are important clinical differences between how case mix scores are calculated under RUG-IV and RUG-III including changes to case mix weights, counting of activities of daily living (ADLs), hierarchy orders, and elimination of hospital look backs.  Because of the significant variance in case mix weights across the various RUG-IV categories, we could see very disparate impacts on provider rates.  ODM has recently added a column to the weekly case mix reports which includes the RUG-IV 57 group.  The RUG-III group will remain until 4/1/16 but is for comparison purposes only. Your software company may still be working through the changes and not yet be able to generate the RUG-IV group; and therefore you need to be sure to review the ODM reports closely.  Significant decreases in scores could occur if your MDS nurse does not understand the differences between RUG-III and RUG-IV and the implications of not properly capturing and documenting all the care that you are delivering to your residents. In the following excerpt from a weekly report, 6 of 10 residents grouped differently under RUG-IV:

                           RUGS IV
RUGS III           Model 57
(MCAID)              (MCAID)

RVC                       RVC
RUB                       RUA
SE2                        RUB
SE2                        RUC
RUC                       RUC
SE2                        RUC
RUC                       RUC
RUB                       RUA
SE2                        RUB
RUC                       RUC

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Bed Surrender Opportunity

The estimated rebased prices for July 1, 2016 for all 3 Ohio peer groups are higher for small (<100 beds) facilities versus large (100+ beds) facilities. For some facilities, there is an opportunity to surrender beds by permanently giving up the license to get into the small peer group before December 31, 2015.  Based upon 2014 cost report data, there are 98 facilities that may benefit by surrendering just 1 or 2 beds.  The estimated average annual increase in revenue from increase in Medicaid per diem rate and corresponding decrease in bed tax is $52,000 in Peer Group 1, $64,000 in Peer Group 2 and $38,000 in Peer Group 3. There are many factors to consider when making this determination including debt agreements (i.e. HUD) and occupancy.   Contact your HW Healthcare Advisor if you would like more details.
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Comprehensive Care for Joint Replacement (CJR)

Beginning April 1, 2016, skilled nursing providers and hospitals in the Akron, Cincinnati, and Toledo Metropolitan Statistical Areas (MSA) will be included in Medicare’s new Comprehensive Care for Joint Replacement Payment Model for Acute Care Hospitals Furnishing Lower Extremity Joint Replacement Services (CJR).  The CJR final rule was issued on November 24, 2015.

CJR is a new, mandatory (with some exclusions) bundled payment program for 90-day hip or knee replacement episodes of care for 67 nationwide selected geographic regions (3 in Ohio). Admission to a hospital for a hip or knee replacement will trigger the start of an episode of care. The episode will end 90 days after discharge from the hospital. Payments made by CMS to the hospital, skilled nursing facility and physicians will be included in the bundle. If you are receiving referrals from a hospital in the program, these provisions apply even if your facility is outside the participating MSA.

Hospitals “hold” the bundle, meaning they share in financial risk and reward, dependent on whether total payments made by Medicare for the bundle exceed or are less than CMS’ agreed upon amount that it will pay. There is no financial risk to hospitals in year one of the program.  Hospitals may choose to share risk or reward with SNFs.

The program is intended to test a bundled payment methodology, to see if such a program can reduce costs to CMS for Medicare payments, while still maintaining a high standard of care. In the existing Fee-For-Service payment model, CMS sees more variation in costs for post acute care from one region to another than it would like to see.

Skilled nursing facilities in the affected MSAs should continue to make their facilities attractive to hospitals who are a part of this program by:

  • Demonstrating a reasonable average Medicare length of stay
  • Demonstrating low hospital readmission rates
  • Maintaining at least 3 stars out of 5 in the 5 star rating program to take advantage of
    the 3 day stay waiver beginning in 1/1/17

The 5 year project begins April 1, 2016 and runs through December 31, 2020, and is expected to save Medicare $343 million over 5 years.
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2016 Medicare Part A Coinsurance & Medicare Part B Premium and Deductibles

Effective January 1, 2016, the Medicare Part A coinsurance rate for SNFs will increase to $161.00 per day from $157.50 for days 21 through 100. The Part B deductible will increase to $166.00 from $147.00.  Since there won’t be a Social Security cost of living increase for 2016, by law most people with Medicare Part B will be “held harmless” from any increase in premiums in 2016. For those “held harmless”, the standard Medicare Part B monthly premium will remain unchanged at $104.90; otherwise it will increase to $121.80. This premium applies to most beneficiaries who currently have the Social Security Administration (SSA) withhold their Part B premium and have incomes of $85,000 or less (or $170,000 or less for joint filers). If income exceeds $85,000 (single) or $170,000 (married filing jointly), the Medicare Part B premium may be higher.
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Part A Coinsurance Reimbursement

Calendar year nursing facilities should make a final push on outstanding dual eligible coinsurance balances in order to claim reimbursement on your 2015 Medicare cost report.  As a reminder, both dual eligible and private coinsurance bad debts included on your 2015 cost report will be reimbursed at 65% but are reported at 100% as the cost report software does the statutory 35% reduction.

When writing off dual eligible coinsurance balances, be sure to follow your facility’s bad debt policy and have all necessary documentation on file.  Common mistakes include not reducing coinsurance amounts claimed by partial payments from Medicaid or other third party insurers and failing to remove the coinsurance amount from your aging and the resident accounts receivable history.  The only income statement impact of the bad debt write-off should be for the 35% reduction to the bad debt reimbursement and the 2% sequestration on the allowable write-off.  CGS is becoming increasingly tough on auditing bad debts and failure to follow all necessary procedures when writing off bad debts could result in significant reductions in your expected coinsurance reimbursement.

You must look at the benefit type for all dual eligible beneficiaries to determine if coinsurance bad debts are eligible to be claimed on your cost report and the documentation needed as follows:

Dual eligible beneficiary with traditional Medicare benefits but not in a MyCare Ohio region:
Must get a “paid remit” from Ohio Medicaid which may automatically cross over and if not, then needs to be billed through MITS.

Dual eligible beneficiary that has opted out of the Medicare portion of  MyCare Ohio and retains traditional Medicare benefits:
Must get a “paid remit” from the MyCare plan.  Medicare’s “must-bill” policy still governs these situations, so you must bill the MyCare Medicaid plan for the coinsurance to get a “paid” remit (even if no payment occurs).  You will not be able to get a “paid” remit from Ohio Medicaid.

Dual eligible beneficiary with MyCare Ohio for both Medicaid and Medicare:
Coinsurance amounts related to these patients cannot be written off on the Medicare cost report.  Medicare considers coinsurance related to MyCare Ohio Medicare beneficiaries to be a contractual issue between the plan and the provider, so no bad debt related to these beneficiaries will be reimbursed by Medicare Part A. The plans are treating coinsurance for skilled days differently.

Dual eligible beneficiary that has opted into a Medicare Advantage Plan:
As has always been the case, coinsurance amounts related to these patients cannot be written off on the Medicare cost report since they have opted out of traditional Medicare.
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Fiscal Year 2016 Medicare Rates

The Fiscal Year 2015 (FY16) Medicare SNF PPS Rates became effective 10/1/15. By now, these rates should be uploaded or input into your accounting software. For more information on FY15 Medicare rates, click here to read our August 2015 e-blast.

For a complimentary estimate of your facility’s average FY16 Medicare rate, forward a PS&R; reflecting your calendar year 2015 year to date Medicare days to your HW Healthcare Advisor.
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MyCare Ohio Update

Though MyCare Ohio is over eighteen months old, we continue to see significant problems related to both billing and clinical issues.  On the billing side, nursing facility providers continue to report issues with getting claims processed correctly.  While it appears that cash is flowing more consistently, we continue to see incorrect patient liability and payment rates, particularly for leave day and PA1/PA2 claims.  ODM is currently working with the plans to correct patient liability errors resulting from ODM system problems.  Facilities should not submit anything for liability adjustments while the plans are working through the information provided by ODM.  As always, follow-up is crucial to ensuring that you are properly paid for the services you are providing.

On the clinical side, there continues to be a shortage of care managers, resulting in providers not knowing the care managers to which each resident has been assigned.  Providers are also reporting issues with pre-authorizations,  transportation and a significant  lack of understanding of long-term care by plan representatives.

We encourage you to  report any issues you are  having with the MyCare  plans to your provider associations.    The associations are in constant  contact with  the plans and can assist in  getting some issues resolved.
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