By Rick Collins
By now most of you have heard about the end-stage renal disease perspective payment system (ESRD PPS) rule changes for 2013 and everyone has heard of Medicare Advantage (MA) plans. However, surprising to me is that one of the items included with the proposed rule has received very little media coverage and yet, it will have a significant impact on institutional providers.
Most billers have to file claims to MA plans, but these plans continue to cause confusion. This month we will look at a few overlooked elements and provide you with a handy overview of the different MA plans.
MEDICARE GIVETH AND TAKETH AWAY-THE NEW PROPOSED RULE
As is often the case, the proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) for changes affecting the ESRD program for 2013 contained good and bad news. Most of the good news has been widely reported, including an increase in the base rate to $240.88 and allowing daptomycin to receive separate reimbursement if billed with any AY modifier.
A piece of good news that received less attention was the update to the outlier policy. CMS reported that their 1 percent target for outlier payments was not reached during 2011. Changes were made to the 2013 rule that should allow providers to receive more outlier payments for their patients during 2013.
The bad news is the reduction in bad debt payments for all Medicare providers.
Currently, outpatient dialysis facilities and hospitals report qualifying unpaid Medicare co-insurances and deductibles as bad debt on their annual cost reports. Depending on several factors, facilities can receive a payment for up to 100 percent of the bad debt reported.
The proposed rule recommends placing limitations on Medicare bad debts according to the requirements in The Middle Class Tax Extension and Job Creation Act of 2012. According to the proposed rule, the act mandates specific limitations for certain health care providers, including hospitals and SNF’s, but not for a few others, including ESRD facilities.
Beginning in 2013, CMS is recommending that ESRD facilities receive a 12 percent reduction to their allowable bad debt amount. Further, the reduction would increase to 24 percent in 2014 and 35 percent in 2015 and subsequent years.
Instead of receiving up to the full amount of Medicare bad debt claimed on cost reports, facilities will only be allowed 88 percent of the amount for 2013, 76 percent for 2014 and 65 percent for 2015.
The reductions will have a significant impact on many outpatient dialysis facilities, whether large or small. For example, if a facility reports $100,000 in allowable bad debt during 2012, they could receive a payment from Medicare for up to the full amount. During 2013, the most allowed would be $88,000; in 2014, it would be $76,000, and in 2015 the amount would drop to $65,000.
As of press time, the proposed rule has not been finalized so these numbers may change. However, due to the act passed by Congress earlier this year, cuts in the allowable bad debt amounts are mandated and the only debate is on how much to cut unless Congress acts to change the law.
