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Medicare Managed Care: Know Each Payer’s Rules and Be Ready to Appeal

Traditional fee-for-service Medicare Part A is a national program with a core set of program guidance from the Centers for Medicare & Medicaid Services (CMS) in the Internet-Only Manuals and the Long-Term Care Facility Resident Assessment Instrument 3.0 User’s Manual. This guidance applies to every participating skilled nursing facility (SNF) in the United States. Many nurse assessment coordinators (NACs) expect Medicare managed care (Part C) plans, the most common being Medicare Advantage plans, to follow parameters that are similar to Part A because they insure the same pool of Medicare beneficiaries and are theoretically required to comply with the general coverage guidelines for Part A, points out Maureen McCarthy, RN, BS, RAC-MT, QCP-MT, DNS-MT, RAC-MTA, president/CEO of Celtic Consulting in Torrington, CT.

“However, that’s often not the case even though many Medicare Advantage plans hide behind the premise that they do follow Medicare rules,” explains McCarthy. “NACs need to understand that Medicare Advantage plans are at heart commercial insurers, and like other commercial insurers, they largely get to set and follow their own rules. For example, most Medicare Advantage plans have case managers who manage a resident’s care from outside the SNF, determining whether the resident is covered and what their length of stay should be based on information provided by the SNF staff.”

The disconnect that often occurs between the Part A rules and the rules set by individual Medicare Advantage plans means that SNFs may be surprised by unexpected claims denials, says McCarthy. “However, in many communities, the volume of Medicare Advantage beneficiaries continues to increase rapidly, so SNFs have to learn how to play this game to keep their beds full.”

McCarthy identifies the following regional trends that could be problematic for all SNFs if they go nationwide:

Preauthorization/authorization letter diagnosis denials

“For a Medicare Advantage resident, SNFs typically receive an authorization letter at admission that states that the resident is approved to come to the SNF for care and that spells out the services that should be provided, the number of days they will be covered, and how the SNF will be paid, either by level (1 – 4) or by Patient-Driven Payment Model (PDPM) HIPPS codes,” says McCarthy. “Unfortunately, that authorization letter is not always the safety net that it should be for providers.”

Sometimes, SNFs provide the skilled care as outlined in the authorization letter and follow the Medicare Advantage plan’s rules for giving updates about the resident’s skilled needs—and they still don’t get paid, explains McCarthy. “Some plans renege on the authorization letter at the end of the stay, and then the facility is left providing the care with no opportunity for reimbursement.”

One common reason that claims are denied in this way involves the ICD-10-CM diagnosis codes that are put on the authorization letter, says McCarthy. “The diagnosis codes approved on the authorization letter don’t always match up with why the resident is coming to the SNF for care. For example, while some mismatches are less extreme, I have seen an authorization letter that paid for abdominal pain when the resident was admitted to the SNF for skilled care related to a hip fracture. So, the diagnosis code on the authorization letter sometimes is not even close to the focus of care in the SNF.”

This can be a problem because some Medicare Advantage plans will not pay the claim if that diagnosis code on the authorization letter is not also on the UB-04 claim form, says McCarthy. “This isn’t a Medicare rule, but some Medicare Advantage plans will enforce it—even if the diagnosis on the authorization letter has been resolved and is not active during the SNF stay. These plans don’t take into consideration the rules that SNFs are supposed to follow for reporting ICD-10 diagnosis codes on either the MDS or the UB-04.”

PDPM case-mix group denials

Some Medicare Advantage plans that pay by PDPM case-mix groups generate their own PDPM scores for each case-mix-adjusted payment component, notes McCarthy. “Sometimes, these plans deny claims when the PDPM scores that come from the MDS don’t match their predetermined PDPM scores. However, the plans are using documentation from the hospital stay as their primary information source, while SNFs of course use the SNF stay as their primary information source, having very limited ability to look back into the hospital stay to code a PPS MDS.”

Using two different information sources means that those PDPM scores are never going to match, stresses McCarthy. “However, some plans are denying those claims anyway because the case managers don’t understand the reasons behind the difference. That puts NACs and billing staff in a difficult situation.”

Physician cert/recert denials

Historically, physician certifications and recertifications (certs/recerts) have only been required for traditional Part A, not Medicare Advantage, says McCarthy. “The whole reason behind certs/recerts under traditional Part A is to prove that the physician is in agreement with how the SNF is managing the resident’s Part A benefit, including the reason for skilled care and the projected length of stay. With Medicare Advantage plans, certs/recerts don’t serve any purpose because the insurance company is managing the resident’s Part A benefit—the SNF doesn’t have a lead role in how that is handled.”

However, some Medicare Advantage plans are now denying claims in medical review if there are no physician cert/recerts for the resident’s care, says McCarthy. “While it may be fairly easy to set up a Medicare Advantage cert/recert process, the issue here is that it seems like Medicare Advantage plans that implement this requirement are just looking for another reason to deny claims. They want to kick the can down the road so they don’t have to pay providers. That makes it a troubling trend.”

On the positive side for SNFs, this requirement could end up working in their favor, suggests McCarthy. “Having certs/recerts gives the SNF a significant level of supporting documentation from the attending physician. Certs validate that the resident meets the Medicare coverage criteria for a skilled level of care, and recerts confirm the continued need for skilled services, as well as estimating the resident’s remaining length of stay, and the potential for discharge with the need for any home care.”

Therefore, if a Medicare Advantage plan that requires certs/recerts clearly limits resident access to SNF care, the SNF has evidence to help question that plan’s decision if they believe the resident needs additional care, says McCarthy. “For example, if the 14-day recert says that physician estimates that the resident needs to remain in the facility for another 30 days and the Medicare Advantage plan wants to cut off skilled services, SNFs have a clinical basis to try to get that decision reversed. Medicare Advantage plans are opening up Pandora’s box with this requirement.”

Keys to success

Fighting arbitrary rules implemented by Medicare Advantage plans takes some advance planning, says McCarthy. “However, NACs can work with other interdisciplinary team members to mitigate the damage.”

McCarthy recommends NACs take the following steps:

* Know what’s in the contract. “With Medicare Advantage plans, the contract is the primary driver of all SNF/plan interactions,” says McCarthy. “The contract should include the expectations for coverage, authorization, documentation reporting and its required time intervals, and billing. If the contract doesn’t have this information or the SNF is providing services without a contract, someone needs to contact the plan and get these details so that you can follow the rules for that specific plan.”

* Keep the MDS intact—and document discrepancies. “Providers are legally bound to following the coding guidelines in the RAI User’s Manual. If there is an issue with the SNF’s PDPM scores not matching the plan’s predetermined PDPM scores, you have to keep that MDS accurate,” says McCarthy. “Don’t skew that document. Instead, work with the case manager at the Medicare Advantage plan to help them understand the legal requirements of the MDS. If there is a medical review, include a cover letter noting the discrepancy and explaining why it occurred.”

* Keep billing in the loop. “Billing staff need to be educated about how each Medicare Advantage plan works,” says McCarthy. “Sometimes, billers have to figure out the billing process through trial and error. For example, there may be three errors on a claim, but each error is reported one at a time. Consequently, the biller doesn’t know what is going on until the fourth time they submit the claim, and it finally goes through cleanly. Making sure that the billing staff is aware of the billing requirements in the contract will help reduce the time it takes to submit a clean claim.”

* Be prepared to appeal. “Some Medicare Advantage plans may be counting on the fact that many providers walk away rather than appeal,” says McCarthy. “NACs shouldn’t assume that the Medicare Advantage plan staff are experts on the Part A coverage rules. Don’t be afraid to use your knowledge. You should advocate for your residents and what they deserve.”

Providers may need to go up to the third level of appeal, the administrative law judge (ALJ), for relief, says McCarthy. “The first level of appeal, called reconsideration, is a review by the health plan that made the denial in the first place. The second level of appeal is an independent review entity (IRE) reconsideration. Both of these are essentially desk reviews, and providers don’t have a strong history of getting reversals at those levels. The ALJ level is actually your first chance to state your case to another human, and it’s worth taking the time to make that effort.”

CMS has developed Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance and the Medicare Managed Care (Part C – Medicare Advantage) Organization Determination/Appeals Process flow chart to help guide providers through appeals. Interestingly, however, the appeals process also shines another spotlight on how important it is to know what is in each plan contract. Section 50.1, Who May Request a Level 1 Appeal, in Parts C & D Appeals Guidance makes clear that the guidance only applies to no-contract providers, stating:

Contract providers (including subcontracted entities) do not have appeal rights under the provisions discussed in this guidance. Contract provider disputes involving plan payment denials are governed by the appeals/dispute resolution provisions in the contract between the provider and the plan.

Note: For more information about Medicare managed care appeals, visit the CMS website here.

* Contact CMS. Another option is to contact the Drug and Health Plan Operations Group at the appropriate CMS regional office if the SNF is asked to compromise specific CMS requirements to fulfill the expectations of the health plan, says McCarthy. “Sometimes, it is worth complaining to CMS, and if enough SNFs take that step, the health plan may revoke compromising requirements.”

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