Medicare Reimbursement 101 Medicare Payments and Cost Reporting - PowerPoint PPT Presentation

Medicare Reimbursement 101 Medicare Payments and Cost Reporting December 2019 Julie DiFrancesco Executive Vice President Medicare Reimbursement Revint Solutions All information in this deck is confidential – property of Revint Page 1

Agenda Day 1: Introduction and Overview of the Medicare Program and Medicare • Payment Methodologies Day 2: Walkthrough of a Sample Medicare Cost Report • All information in this deck is confidential – property of Revint Page 2

Introductions • Name • Organization • Title • Number of years in healthcare • Number of years in reimbursement • What do you hope to get out of this class? • What was your very first job and how did you spend your first paycheck(s)? All information in this deck is confidential – property of Revint Page 3

Overview of the Medicare Program Medicare was established in 1965 as part of the Social Security Amendments of 1965 Title XVIII of the Social Security Act • Medicaid is Title XIX of the Act • All information in this deck is confidential – property of Revint Page 4

Overview of the Medicare Program Administration of the program • The Secretary of The Department of Health and Human Services (HHS) is responsible for the overall administration of the program • Within HHS, the Centers for Medicare and Medicaid Services (CMS), formerly known as the Health Care Financing Administration (HCFA), administers the program • CMS contracts with entities to act as Medicare Administrative Contractors (MACs) Non-governmental • Provides reimbursement and audits cost reports • Processes claims • Other • All information in this deck is confidential – property of Revint Page 5

Overview of the Medicare Program Eligibility: • Part A Automatic upon age 65 if entitled to Social Security benefits • Under age 65 if due to disability or End-Stage Renal Disease • (ESRD) Citizen or permanent resident of the U.S. • • Part B Voluntary program for those 65 or older who elect to enroll and • pay Possible to receive Part B benefits without being eligible for Part A • All information in this deck is confidential – property of Revint Page 6

Overview of the Medicare Program Benefits and services: • Part A Inpatient hospital care and skilled nursing • Home health – post-institutional services for up to 100 visits • • Part B Outpatient hospital services, physician services, home care, • durable medical equipment and ambulance services All information in this deck is confidential – property of Revint Page 7

Overview of the Medicare Program Initial intent of the Medicare program: • Pay actual costs incurred, regardless of variances among providers • Reasonable direct and indirect cost of providing, maintaining and delivering patient care related to services to Medicare beneficiaries • Limitations to costs: Reasonable • Directly related to patient care • All information in this deck is confidential – property of Revint Page 8

Overview of the Medicare Program Simplified cost reimbursement calculation: Hospital cost of rendering patient care $1,000,000 Hospital Medicare patient days 50,000 Total hospital patient days 100,000 Hospital Medicare utilization 50% Amount due to the hospital $500,000 All information in this deck is confidential – property of Revint Page 9

Overview of the Medicare Program Restrictive steps taken by government • 1982 – Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) • 1984 – Inpatient Prospective Payment System (IPPS) for certain hospital inpatient operating costs • 1985 – Graduate Medical Education (GME) • 1991 – PPS for capital costs All information in this deck is confidential – property of Revint Page 10

Overview of the Medicare Program Restrictive steps taken by government • 1997 – Balanced Budget Act (BBA) • 1999 – Balanced Budget Refinement Act (BBRA) • 2000 – Benefits Improvement and Protection Act (BIPA) • 2003 – Medicare Prescription Drug, Improvement and Modernization Act (MMA) • 2010 – Affordable Care Act (ACA) All information in this deck is confidential – property of Revint Page 11

Inpatient Prospective Payment System (IPPS) Operating Costs • Payment rates determined based on categories of illness: Medicare severity diagnosis-related groups (MS-DRGs) • MS-DRG payment rates are full payment for inpatient operating costs except for some specific items (add-on payments) • MS-DRG payment rates are updated annually • Patients continue to be liable for deductible and coinsurance All information in this deck is confidential – property of Revint Page 12

Inpatient Prospective Payment System (IPPS) • Weighting factors established for each MS-DRG (relative weights) – designed factors to measure resource consumption relative to a particular illness • Periodic adjustments made to reflect changes in resource consumption, treatment patterns, technology and other factors • Unique MS-DRG assigned to each Medicare discharge All information in this deck is confidential – property of Revint Page 13

Sample MS-DRG List from Federal Register TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MS-DRGS), RELATIVE WEIGHTING FACTORS, AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY—FY 2020 Correction Notice FY 2020 FINAL FY 2020 FINAL Geometric mean Arithmetic mean Post-Acute DRG Special Pay DRG LOS LOS MS-DRG MDC TYPE MS-DRG Title Weights 190 Yes No 04 MED CHRONIC OBSTRUCTIVE PULMONARY DISEASE W MCC 1.1440 3.6 4.5 191 Yes No 04 MED CHRONIC OBSTRUCTIVE PULMONARY DISEASE W CC 0.8928 3.0 3.6 192 Yes No 04 MED CHRONIC OBSTRUCTIVE PULMONARY DISEASE W/O CC/MCC 0.7092 2.4 2.9 193 Yes No 04 MED SIMPLE PNEUMONIA & PLEURISY W MCC 1.3335 4.2 5.2 194 Yes No 04 MED SIMPLE PNEUMONIA & PLEURISY W CC 0.8886 3.2 3.8 195 Yes No 04 MED SIMPLE PNEUMONIA & PLEURISY W/O CC/MCC 0.6821 2.6 3.0 196 Yes No 04 MED INTERSTITIAL LUNG DISEASE W MCC 1.6754 4.8 6.2 197 Yes No 04 MED INTERSTITIAL LUNG DISEASE W CC 1.0215 3.2 4.0 198 Yes No 04 MED INTERSTITIAL LUNG DISEASE W/O CC/MCC 0.7550 2.4 2.9 199 No No 04 MED PNEUMOTHORAX W MCC 1.7941 5.2 6.7 200 No No 04 MED PNEUMOTHORAX W CC 1.0821 3.3 4.2 201 No No 04 MED PNEUMOTHORAX W/O CC/MCC 0.7180 2.4 3.0 202 No No 04 MED BRONCHITIS & ASTHMA W CC/MCC 0.9480 3.0 3.7 203 No No 04 MED BRONCHITIS & ASTHMA W/O CC/MCC 0.6938 2.3 2.8 204 No No 04 MED RESPIRATORY SIGNS & SYMPTOMS 0.8125 2.2 2.8 205 Yes No 04 MED OTHER RESPIRATORY SYSTEM DIAGNOSES W MCC 1.6342 4.1 5.6 206 Yes No 04 MED OTHER RESPIRATORY SYSTEM DIAGNOSES W/O MCC 0.8725 2.4 3.1 207 Yes No 04 MED RESPIRATORY SYSTEM DIAGNOSIS W VENTILATOR SUPPORT >96 HOURS 5.7356 12.0 14.1 208 No No 04 MED RESPIRATORY SYSTEM DIAGNOSIS W VENTILATOR SUPPORT <=96 HOURS 2.4841 4.9 6.8 215 No No 05 SURG OTHER HEART ASSIST SYSTEM IMPLANT 12.8861 4.9 8.0 216 Yes Yes 05 SURG CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W CARD CATH W MCC 10.0424 13.7 16.0 All information in this deck is confidential – property of Revint Page 14

Transfer DRG Medicare reduces DRG payments when: The patient’s Length of Stay (LOS) is at least 1 day less • than the geometric mean DRG LOS The hospital transfers the patient to another IPPS- • covered acute care hospital, or for certain MS-DRG patients, a post-acute setting The hospital transfers the patient to a hospital without a • Medicare Program participation agreement The hospital transfers the patient to a Critical Access • Hospital (CAH) All information in this deck is confidential – property of Revint Page 15

Case Mix Index Case mix index (CMI) – A scale that measures the relative difference in resource intensity among different groups in a clinical model; the more severe the case(s), the higher the CMI All information in this deck is confidential – property of Revint Page 16