Common SNF billing struggles
Written by Lisa McIntire and Julie Bilyeu of BKD, LLP.
With ever changing billing requirements and increased payer scrutiny, skilled nursing facility (SNF) billing personnel encounter more challenges than ever. Providers that don’t stay on top of changes that impact billing are at risk for noncompliance and decreased cash flow. Oftentimes billing issues can be avoided with ongoing education, consistent review of outstanding accounts receivable, and a thorough process for pre-submission claims review.
Lack of understanding about payment methodology
It sounds simple enough, but understanding how each payer reimburses for services is critical to determining if claims are paid correctly.
Important components of Medicare payment methodology include knowing when rates change annually. This can be confusing since Part A rates are updated in October, while coinsurance and Part B rates change each January. If the new rates aren’t loaded into billing software in a timely manner, accounts receivable will not be accurate, which can make follow-up daunting.
Other considerations include accounting for the 2% sequestration cut that has been in effect since April 1, 2013, and the Multiple Procedure Payment Reduction (MPPR) that applies to certain therapy service codes, both of which your software may or may not apply automatically.
Knowing what to expect in reimbursement from insurance primary and Medicare Advantage (MA) plans can also be confusing. Providers often mistakenly assume these plans pay according to Medicare guidelines; however, contracted providers are generally paid a daily rate based on level of care or charges billed. Insurance payment rates may not change, depending on how often the contract is renegotiated, so it is advisable to review your contract on an annual basis.
Determining patient out-of-pocket costs is another burden, as it can vary greatly by payer. But the earlier patients are notified of their financial responsibility, the higher the likelihood the SNF will be able to collect.
Overlooked adjustments and bad debt write-offs
A common theme surrounding aged accounts receivable (AR) is that the claims have paid, but a balance or credit balance remains after the payment was applied. Just because the claim paid does not mean the situation is finalized. If a balance remains after payment posting, further investigation is in order?and the sooner, the better.
Otherwise, these incorrect balances build up over time, making it difficult and time-consuming to determine later if claims were correctly paid or if there are balances that need to be collected or reported as overpayments. This also contributes to inaccurate AR, which can lead to increased scrutiny by stakeholders as well as unrealistic expectations about cash yet to be collected. However, these issues can be easily avoided by researching any discrepancies at the time payments are posted as well as determining?and resolving?the core issue.
As previously mentioned, incorrect rates in billing software is a common contributor to inaccurate AR balances. Depending on the state, Medicaid rates may change as often as quarterly, which requires even more diligence in ensuring they are correct. Not adjusting for sequestration and MPPR, as detailed on the Medicare remittance advices (RAs), is another reason why balances remain after claims have paid.
For providers with a high volume of MA claims, contractual adjustments can come in many forms, depending on how the receivable is recorded in the billing software. The best way to mitigate the number of necessary adjustments is to take time to proactively set up each insurance payer in the software with detailed reimbursement criteria, which may be based on a daily rate, RUG rates, or total charges billed. If you invest the time on the front end, there will be fewer adjustments to make post-payment.
Reclassifications between payers also need to be done as quickly as feasible. For example, when Medicare processes full pay and coinsurance days differently than what was entered into the billing software, this often results in the need to reclassify a balance from one payer to another which, if not done, will result in an erroneous balance “due” from one payer and a credit balance under the other payer. Not reclassifying patient responsibility amounts also seems to be a pitfall particularly applicable to MA or insurance primary plans.
Reviewing AR to determine which accounts are uncollectible should be done on a quarterly basis, but no less than annually. It is imperative that write-off criteria and approval processes are clear and easily understood by billing personnel as well as monitored closely by management. This is especially important as it relates to Part A coinsurance bad debts that are potentially reimbursable on the year-end cost report.
Lack of adequate training and resources
Throughout the last several years, Medicare?and in many states, Medicaid?billing has become increasingly complex. Gone are the days of straightforward scheduled assessments and simple Part B claims.
With the addition of many types of unscheduled assessments?Start of Therapy (SOT), End of Therapy (EOT), and Change of Therapy (COT), just to name a few?Part B 59 and KX modifiers, and more recently, G codes, which are used to report functional limitations, the importance of providing thorough training and reliable resources for billing staff cannot be overstated.
As anyone who has billed for SNFs knows, it is very unlike billing for any other provider type. All billing is not equal, and expecting someone who has billed for a physician’s office or hospital, for instance, to acclimate to SNF billing with little or no training, is unrealistic and will likely have a negative impact on compliance and overall revenue cycle health.
But just as billing for SNFs is unique, not all training options are equal. It can be tempting to choose low cost or free options, such as articles or webinars offered by the Medicare Administrative Contractors (MACs), but keep in mind that these general resources, while helpful, do not typically provide the detailed knowledge your business office manager will need to not only create and submit claims but also to follow up on the claims appropriately and resolve any technical errors or payer disputes efficiently. Be willing to seek out?and invest in?quality training and consulting resources to ensure your billing team has ongoing access to the latest technical information and guidance around best practices.
To be expected, as billing has increased in complexity, so has billing software. Many integrated systems are highly customizable, which can be exciting or overwhelming, depending on the skill and knowledge of billing personnel. Also depending on the size of your organization, it may be necessary to review and change processes to improve overall efficiency and effectiveness.
Poor clinical to billing communication
Since the inception of minimum data set (MDS) 3.0, it is more important than ever that billers and clinicians communicate frequently and collaborate in a pre-claims submission review process each month. This review process is commonly referred to as triple check, since it includes representatives from nursing, therapy, and billing.
The purpose of the triple check process is to confirm information on the UB-04 claim forms against the supporting documentation. Many times providers only review the information generated by their clinical and/or billing software; however, that information can be overridden on the claims due to software glitches or other factors.
A thorough triple check review should include verifying patient demographic information, ancillary charges, and billing and diagnosis codes, among other items on the claim form. Triple check should also include verification of required items from a compliance standpoint, such as signed physician orders, certification for skilled care, and validation reports to confirm assessments were accepted. ?Conducting the triple check meeting should be the final step before any claims are billed?to improve compliance as well as providing billing and nursing with peace of mind that what is being billed is accurate and supported by the documentation on file.
Another benefit of triple check is helping billing identify any assessment issues, such as late, early, or missed assessments, all of which have billing implications. For example, if an assessment has an assessment reference date (ARD) that is outside of the allowed window, the claim must be billed with a default resource utilization group (RUG) code of AAA for the number or days the assessment was out of compliance. If an assessment was missed altogether, those days would be billed as provider liability, which results in no reimbursement to the provider. The guidelines for early, late, and missed assessments can be found in chapters 2 and 6 of the resident assessment instrument (RAI) manual.
Going forward, billing and revenue cycle management are not going to get easier. But by implementing some relatively simple but highly effective best practices, and ensuring that the personnel most directly responsible for cash flow have thorough training and helpful resources, SNFs can thrive despite increased regulatory complexity and oversight.