The following excerpts are from our regular newsletter on health issues. To receive future newsletters via e-mail, sign up with the form at the bottom of this page.

DPW Defends its Statement of Policy on Nursing Facility Expansion

Occupational Health and Safety Administration announced two new enforcement measures for 1999 that will have a direct effect on Long Term Care providers

Tax Exempt Organization Public Disclosure Requirements Become Less Taxing: Recognizing Technology and Reality in 1999.

U.S. Supreme Court states that Social Security Disability Claims and Claims under the Americans with Disabilities Act are not mutually exclusive

HCFA Extends Deadline for Medicare 12/31/98 Cost Reports to June 30, 1999

Alert on Corrections to 2/1/98 Picture Date

HCFA Issues Revised Program Memorandum

Billing Medicare for Glucose Testing May Also Involve Refunds to Residents and Limits on Reimbursement

Veritus Accepting Requests for Post-PPS Lump Sum Payments for Bad Debts

DPW Enforcing CMI Reporting Requirement Contrary to Regulation

DPW Changes Position on Year MA-CMI Computation 

Deducting Residents Private Pay Balances from Their Patient Pay Amounts
 

Calendar of Events

Firm Happenings

ARCHIVES
 

DPW DEFENDS ITS STATEMENT OF POLICY ON NURSING FACILITY EXPANSION AND CONTINUES TO DENY EXCEPTION REQUESTS

By: Daniel K. Natirboff

DPW officials have been selling their plan for the future of Long Term Care in the Commonwealth and it does not include expansion of Medicaid certified Long Term Care Nursing Facility beds. On May 26, 1999, Andrew Major, Director of DPW’s Bureau of Long Term Care Programs outlined the Department’s policy and agenda before the House Majority Policy Committee’s Subcommittee on Long Term Care. DPW plans to "end the institutional bias" in Long Term Care by shifting utilization from nursing facilities to Home and Community Based services through the expansion of the Department of Aging’s Waiver Program, DPW’s Long-Term Care Capitated Assistance Program (LTCCAP). Mr. Major responded to tough questions from representatives expressing concern over the current lack of sufficient alternatives to nursing beds as evidenced by waiting lists for these programs.

Mr. Major outlined the Department’s rationale behind the Department’s Statement of Policy at 55 Pa. Code §1187.21(a) which states that the Department will terminate the Provider Agreement of any Medicaid licensed facility that expands its bed complement without first obtaining an exception from DPW pursuant to the Exception Request Guidelines at 55 Pa. Code §1187.21(a). Mr. Major testified that DPW had a duty to protect against unnecessary utilization, which coupled with inflation and the higher acuity of MA recipients, accounted for the growing increase in costs of the Medical Assistance Program. DPW as a "prudent purchaser of services" is determined to end the alleged "institutional bias" and emphasize Home and Community based services. Mr. Major testified that DPW used to rely on the Department of Health’s Certificate of Need (CON) program to safeguard against unnecessary over-utilization, but when that law sunset DPW still had an obligation to curtail utilization and therefore the Department announced the Statement of Policy.

Based on information available to DPW in 1997 from findings of the Inter-Governmental Council on Long-Term Care and projections of the Department of Health, DPW concluded that the Commonwealth had a more than adequate supply of nursing facility beds and more home and community based alternatives were needed. DPW also found that since the DOH bed need projections were based on a 95% average overall occupancy statewide and the overall average occupancy percentage is closer to 92% per DPW cost report data, the bed need was also overstated. Mr. Major quoted statistics that of the 97,330 beds in the Commonwealth, 90,907 were currently occupied. DPW’s strategy is to encourage current providers to raise average occupancy to 95% thereby serving an additional 3,509 people; add beds only in areas where beds are needed and serve any additional need by expansion of home and community based services. DPW’s long term goals are to increase home and community based services to raise the ratio of waiver slots to nursing beds from the current utilization of 90% beds and 10% slots to 60% beds and 40% slots as in Oregon.

Mr. Major faced tough questions on plans to expand the use of waiver slots and curtail the use of nursing facility beds. Representative Cornell asked about the current availability of home and community based services and DPW’s time frame for implementing the expansion of these services. Mr. Major responded stating that there are currently 3,589 PDA slots, however, the utilization data was unavailable. Through the Department’s LTCCAP program, DPW is currently serving only about 750 individuals in Pittsburgh and Philadelphia. With respect to DPW’s timeframe of implementing the conversion to home and community based utilization, Mr. Major admitted "we have a long way to go" based on the current slot to bed ratio. Representative Vance asked if the Department was ready to cope with the need generated by baby boomers in need of Long Term Care Services. Mr. Major responded that "hopefully it [utilization] will rise on the community side rather than the institutional side."

Representative Benninghoff asked what DPW’s expectations were for people to seek nursing facility beds in other geographical areas in light of transportation problems that recipients might face. Mr. Major stated DPW does take geographic factors such as mountainous terrain into account when considering exception requests. Other factors mentioned by Mr. Major to review exception requests are: 1) The need for the beds in the primary service area; 2) If there is a need, is the provider the suitable choice to get the additional beds; and 3) Whether there are home and community based slots currently available or are more slots becoming available through the budget process or by transferring those slots from areas without as much need.

Representative Bard asked how DPW planned to cope with the current home and community based waiting list of approximately 10,500 people. Mr. Major stated that only a small percentage of these people were MA nursing facility eligible. When asked whether more assisted living beds were needed, Mr. Major responded that he was not sure what the exact definition of assisted living was. Mr. Major did acknowledge that there needed to be "some baseline of institutional beds."

Mr. Major also faced questions from Representative Clymer and Representative Bard regarding the availability of Continuing Care Retirement Community (CCRC) beds and factors used in granting/denying exception requests for those beds. Mr. Major stated that DPW looks at broader community need and encourages the provider to liaison with the community to try and provide services in an alternative. When asked to respond to the problem of DPW denying beds in counties with a projected bed need, Mr. Major announced that the DOH projections were just one factor to be considered in review of exception requests. In responding to questions on how the Department’s administrative process compared to the old CON process, Mr. Major stated that he thought that DPW’s exception request process was better because it focused on the need for MA nursing facility beds.

Based on DPW’s determinations on the latest round of exception requests (Group Two 1998) for nursing facility beds, it is clear that the Department is putting its policy initiative of curtailing nursing facility bed expansion into effect. Of the 783 new beds requested, many of which were in counties with a projected bed need, only 2 new beds were granted in Lancaster County (which has a projected bed surplus). DPW also granted a request for the consolidation of two 120-bed facilities into one 240-bed facility in Luzerne County.

DPW apparently has not sufficiently addressed the House’s concerns regarding the availability of home and community based services. On June 9, 1999 the House passed House Bill No. 1099 directing the Departments of Aging and Public Welfare to develop a study and to submit a proposed course of action to address the issue of waiting lists for persons in need of home and community-based long-term care services.

Occupational Health and Safety Administration announced two new enforcement measures for 1999 that will have a direct effect on Long Term Care providers

On April 19^th and 21^st, the Occupational Health and Safety Administration announced two new enforcement measures for 1999 that will have a direct effect on Long Term Care providers. First, OSHA plans to conduct inspections of approximately 2,200 work sites that it deems to be "risky." Second, OSHA will be issuing letters to approximately 12,500 employers who have the highest injury and illness rates. Both initiatives are to be completed before the end of 1999.

OSHA’s "site specific" inspection will focus on work sites that reported lost workdays due to injury or illnesses at a rate of 16 or more per 100 workers. The criteria for selecting work sites for inspection will be based on 1997 injury and illness data reported by employers on a 1998 OSHA survey. It is commonly reported that health care facilities rank among the highest of employers in workdays lost due to injury or illness. Therefore, any long term care facility that responded to a 1998 OSHA survey and reported a lost workday rate of 16 or more per 100 workers is likely to be subject to an OSHA inspection sometime this year.

The 12,500 letters that OSHA deems to have the highest injury and illness rates will request that employers take steps to reduce injuries. OSHA’s suggestions include hiring an outside safety and health consultant, talking to an insurance carrier, seeking advice from the State Worker’s Compensation agency, or asking for assistance from OSHA’s consultation program. The OSHA suggestions are strictly voluntary.

If you have any questions regarding OSHA inspections, the recent OSHA letter, or any other OSHA or work safety issue, contact Steve Miller or Lou Capozzi at (717) 233-4101.

Tax Exempt Organization Public Disclosure Requirements Become Less Taxing: Recognizing Technology and Reality in 1999.

The Internal Revenue Service issued final regulations, effective June 8, 1999, that can lessen the burden of tax exempt organizations’ public disclosure requirements. 26 CFR § 301.6104(d)-2 through 301.6104(d)-5 (64 FR 17279). The IRS Code requires that tax exempt organizations allow public inspection of their application for tax exemption and their three most recent annual information returns. 26 U.S.C. § 6104. An organization that willfully fails to make the required documentation available to the public faces a $5,000 penalty. This penalty is applicable "with respect to each return or application." 26 U.S.C. § 6685. Furthermore, individuals who are denied access to such information can seek assistance from the IRS by filing a statement with the district director.

Under the Taxpayer Bill of Rights II, enacted July 30, 1996, and the Tax and Trade Relief Extension Act, enacted October 21, 1998 [private foundations regulations will be forthcoming], the compliance requirements of the disclosure statute have been significantly revised. On June 8, 1999, the following changes became effective for tax exempt organizations:

Organizations that are required to make documents available for public inspection or to provide copies upon request must do so at its principal office and at certain regional or districting offices. Sites that do not serve as offices of management staff and managers who are involved solely in managing activities that further the organization’s exempt purpose are not considered regional or district offices.

Generally, when a request is made in person, the organization must furnish the information the same day. In unusual circumstances, however, the organization may satisfy the request on the next business day after the unusual circumstances cease to exist. Such circumstances include, for example, when the manager capable of fulfilling this request is at an offsite meeting or convention.

When a request for copies is made in writing, the organization must mail copies of requested materials within 30 days from the date it receives the written request. This deadline may be extended if the organization requires a reasonable fee for reproduction and postage. The 30-day clock will then begin to run when payment is received from the requester.

Subordinate or local organizations that are tax exempt under a group exemption letter are required to proceed in a different manner. These organizations must obtain and make the requested documents available with a reasonable amount of time. The IRS considers a reasonable amount of time to be not more than two weeks.

The content of the Annual Information Returns may be limited to reflect the schedule of the particular organization. Information on other subordinate organizations under the parent organization does not need to be disclosed. In contrast, the parent or central organization is obligated to comply at its principal office with requests relating to its local or subordinate organizations.

To defray the costs associated with public examination requirements, the IRS permits organizations to charge a "reasonable fee" for the cost of copying and mailing the requested documents. A fee is reasonable if it does not exceed the IRS charges for copies: $1.00 for the first page and $.15 for each subsequent page. Postage fees should reflect the actual mailing cost. In addition, the organization may accept any form of reimbursement (e.g., credit card and personal check), however, it must accept cash and money orders.

If an organization chooses to charge a fee, it may do so before the request is processed (i.e. require prepayment). Requests for prepayment must be made within seven (7) days of receiving the request. If an organization does not require prepayment, it must receive the requester’s consent before providing copies for a fee of $20.00 or more. The purpose of the requester’s consent is to eliminate any unexpected fees.

Organizations can avoid "paper intensive" compliance that are involved with the public disclosure requirements if they have already made the documents widely available. By posting the required documents on its Internet Web site, the organization can comply with the public availability requirements of the statute. If your organization does not have a Web site, the documentation can be posted on another organization’s Web site as part of a database of similar materials.

Regulations require that any individual with access to the Internet must be able to view, download, and print the posted documents without fee or special hardware or software requirements. Software that is readily available to the public and free of charge (e.g., Adobe Acrobat^©) is a permissible requirement to access the data. In addition, the documents must be available in a format which "exactly reproduces" the image of the original document. Portable Document Format (PDF) currently meets these criteria. While Internet access can relieve the organization of copying requirements, the organization must still permit public inspection of the documents.

At times, an organization’s statutory duty to provide public access to documentation may be exploited. The purpose of a harassment campaign is to disrupt operations rather than collect information. Through a campaign of harassment, an organization can be overwhelmed with copy requests, which result in significant personnel and equipment commitments and cost. Furthermore, the risk of non-compliance increases.

An organization may suspend compliance with a request if the organization "reasonably believes that the request is part of a harassment campaign." Filing an application for a harassment determination with the IRS is required within ten (10) business days when the organization suspends compliance. An organization may disregard two requests per month or four requests per year without filing an application, where the requests are made by a single individual or are to be sent to a single address.

An example provided by the IRS of a potential harassment campaign involves an organization that received 100 requests in one month. Three-quarters of the requests are similarly worded form letters containing hostile language. The organization also discovers that the form letter, and an appeal to request as many copies as possible, has been circulating on the Internet. To confirm that it may ignore the 75 requests, the organization must apply to the IRS district director for a determination. The organization may disregard the 75 requests during this period of review. However, it must appropriately respond to the other 25 requests, which are not part of the harassment campaign.

Organizations determined to have lacked a reasonable belief for suspending compliance can face retroactive penalties for non-compliance. The IRS intends to publish additional details on Harassment Campaign Determination Procedures. In addition, the Service is also considering factors that may mitigate penalties in certain circumstances.

Such tax-exempt organizations that are required to make documentation public should take steps to ensure that appropriate personnel are prepared to respond to written and in-person requests. Internal policies and procedures should be created to instruct employees on the required documents, the location of the documents, the response deadlines, possible fees, and monitoring for potential campaign harassment.

Organizations should consider posting the required documentation on a Web site. Once the data is in place, it should only require updating once a year to coincide with the filing of IRS Form 990. With minimal maintenance, an organization can effectively minimize its risk exposure for non-compliance.

_______________________________________

U.S. Supreme Court states that Social Security Disability Claims and Claims under the Americans with Disabilities Act are not mutually exclusive

The United States Supreme Court resolved a split amongst the Circuits this week regarding whether an individual who files a Claim for Social Security Disability benefits is estopped from pursuing a Claim against the individual’s employer or former employer under the Americans with Disabilities Act. The Court answered both questions in the negative and held that Courts must allow Claimants an opportunity to explain why their Claim for disability benefits under the Social Security Act should not preclude them from pursuing a claim under the Americans with Disabilities Act against their employer.

In Caroline C. Cleveland v. Policy Management Systems, Corp., et. al. (97-1008), the Plaintiff, Caroline Cleveland, worked for Policy Management Systems, Corp., conducting telephone background checks of prospective employees. Cleveland worked for Policy Management for approximately six months prior to suffering a stroke. In January of 1994, Cleveland suffered a debilitating stroke, which had an effect on her memory, concentration and language skills. Subsequently, Cleveland took a leave of absence from her position with Policy Management Systems, Corp. and applied for Social Security Disability benefits.

As a part of her Social Security Disability application, Cleveland stated that she was not able to work because of limitations related to her stroke. Later in 1994, Cleveland’s doctor cleared her to return to work, and she subsequently notified the Social Security Office about her improved condition and then returned to her job with Policy Management Systems, Corp. In July of 1994, Social Security denied Cleveland’s application for benefits because of her return to work. Four days later, Policy Management Systems fired Cleveland. Cleveland followed with an ADA complaint against Policy Management Systems. In her complaint she claimed that she had requested, but was denied, accommodations including training and additional time to complete her work.

In September of 1994, Cleveland filed a Request for Reconsideration of the denial of her Social Security Disability benefits. In her Request for Reconsideration, Cleveland stated that she was terminated by her employer because of her medical condition and had not been able to return to work since and that she continued to be disabled. Later, she added that she attempted to return to work and had worked for about three months, however Policy Management Systems terminated her because she could no longer do the job in light of her condition. SSA denied Cleveland’s Request for Reconsideration. Cleveland proceeded with the Appeal to hearing after which she was granted benefits retroactive to the day of her stroke, January 7, 1994.

In addressing Cleveland’s ADA claims, the District Court granted summary judgment to Policy Management Systems holding that by applying and receiving disability benefits, Cleveland had conceded that she was totally disabled. The Court held that Cleveland was now estopped from proving an essential element of her ADA claim, that she could "perform the essential functions of her job, at least with reasonable accommodation." 42 U.S.C. §1211(8). On review, the Fifth Circuit affirmed the District Courts’ grant of summary judgment. However, the Circuit held that the application for receiving Social Security Disability benefits creates a rebuttable presumption that the Claimant or recipient of the benefits is judicially estopped from ascertaining that he or she is a "qualified individual with a disability." The Circuit Court indicated that in some circumstances it is possible that the two claims would not be mutually exclusive. The United States Supreme Court granted certiorari in order to resolve a conflict among the Circuits regarding the effect of an application for SSDI benefits on an ADA Claim.

Prior to the Court’s ruling, the Tenth, Sixth, and DC Circuits all held that while an application for SSDI benefits is relevant to an ADA Claim it did not estop a Plaintiff from bringing such a Claim. The Third and Ninth Circuit declined to apply judicial estoppel, but held that the Claimant who declared a total disability in a benefits application failed to raise a genuine issue of material fact as to whether she was a qualified individual with a disability.

In deciding that the SSDI and ADA claims were not mutually exclusive, the Court held that a statement to the Social Security Administration that one is disabled for purposes of the Social Security Act does not necessarily mean that the Plaintiff is a "qualified individual with a disability." The Court focused its reasoning on the fact that under the Social Security Act, the Social Security Administration does not take into consideration whether an individual could perform their prior employment, or any other employment in the market place if the employer were provided with a reasonable accommodation. Under the Act, the Social Security Administration merely determines whether given the requirements of the Claimant’s past work and given the standard requirements of jobs available in the market place, the Claimant is precluded from performing their past work or any other work available in the market place by their disability. The Court found that because the possibility of a reasonable accommodation is not taken into consideration when determining whether an individual is disabled for the purposes of Social Security Disability benefits, there exists the possibility that in some circumstances an individual may be disabled for purposes of Social Security but may be able to perform their previous employment with a reasonable accommodation from their employer. Given this discrepancy, the Court found that the application of judicial estoppel and the application of a rebuttable presumption was inappropriate. The Court held that in such circumstances, on summary judgment the District Court must provide the employee with an opportunity to explain why the individual is disabled for purposes of Social Security but could still perform their previous employment with a reasonable accommodation from the employer.

The Court’s decision means that merely because an ADA Claimant has filed an application for Social Security Disability benefits stating that they are "totally disabled" does not mean that they can not make a seemingly contrary assertion in their ADA claim against their employer. This decision removes a barrier that Plaintiffs face in bringing ADA Claims, or at least reduces it to a hurdle. It will be even more critical that Defense counsel be cognizant of the employee’s physical condition and how it relates to the performance of their job duties. Counsel should carefully consider statements made in the employee’s disability applications and analyze carefully the employee’s claim that they are totally disabled to determine whether or not the statements made in the application show that even with reasonable accommodation the employee could not perform the functions of the position. This decision increases the burden on defense counsel to be fully aware of the Claimant’s actual functional limitations and how it impacts on their ability to perform their job.

SUBJECT: Extension of Due Date for Filing Provider Cost Reports

TRANSMITTAL NO. (CHANGE REQUEST 884)

In accordance with 42 CFR 413.24 (f), providers are required to file their cost reprots on an annual basis on or before the last day of the fifth month following the close of the period covered by the cost report.

Program Memorandum, Transmittal No. A-99-7, provided for a 60 and 30 day extension for the Hospital and Hospital Complex cost report, Form HCFA-2552-96; the Skilled Nursing Facility (SNF) cost report, Form HCFA-2540-96; the Home Health Agency (HHA) cost report, Form HCFA-1728; and the Outpatient Rehabilitation Provider cost reprot, Form HCFA-2088, for fiscal years ending September 30 and October 31, 1998. Due to the complexities of the changes required by the Balanced Budget Act (BBA), a number of electronic cost reporting vendors, including the free software provided for SNFs and HHAs, will not be approved in time for providers to file the cost reprot due by April 30, 1999. As a result, the providers utilizing the cost reporting forms identified above are granted an additional month for filing their respective cost reports. Cost reports with fiscal years ending September 30, 1998, October 31, 1998, or November 30, 1998 will be due June 1, 1999. (May 31, 1999 is a Federal holiday.) Cost reporting periods ending December 31, 1998 are also granted a 30 day extension. The cost report for the providers indentified above is due June 30, 1999. All subsequent fiscal years follow the normal requirements set forth in 42 CFR 413.24(f).

For purposes of determining interest on overpayments to a provider, a cost report filed no later than the extended due date, as determined under this program memorandum, will be considered a timely filed cost report within the meaning of 42 CFR 413.24(f)(2). With respect to a cost report not filed on or before the extended due date, interest and penalties will commence, within the mneaning of 42 CFR 405.378, on the day following the date the cost report was due until the cost report is filed.

You must forward this program memorandum to all your providers.

These instructions should be implemented within your current budget.

Contact person: Tom Talbott on (410) 786-4592.

This program memorandum may be discarded June 30, 1999.

[end]

Providers currently involved in correcting the Year 3 Picture Date information for Year 3 should be aware that DPW has changed the method it is using to compute the Total Facility CMI and, while it did not require providers to do so when it initially calculated the 2/1/98 Picture Date CMIs, that DPW is now requiring providers to include in the 2/1/98 Picture Date corrections to be used to recalculate the Year 3 Total Facility CMI data for persons who were discharged from the facility prior to or on 2/1/98 and were not present in the facility on 2/1/98, but were expected to return thereafter. This requirement is currently being appealed before DPW's Bureau of Hearings and Appeals (BHA) as inconsistent with 55 Pa. Code § 1187.93(3), which describes how the Total Facility CMI is to be calculated.

We are recommending that providers attach the following PROTEST LANGUAGE to their corrected submitted and verification forms for the corrected 2/1/98 Picture Date in order to preserve their rights to contest DPW's new requirement and that they file timely appeals with BHA of the corrected 2/1/98 Total Facility CMI if the correction is due to the inclusion of data related to persons who were discharged from the facility prior to or on 2/1/98 and were not present in the facility on 2/1/98:
 

While we verify the computations included in this document according to the instructions provided by DPW, we reserve our objection and continue to protest that those instructions are contrary to DPW regulations in that DPW has required providers to include in the computation of the Total Facility CMI (non-MA portion) CMI data related to residents who were discharged between 11/2/97 and 2/1/98 and are expected to return, but who were not present in the facility on the 2/1/98 Picture Date, which we believe is contrary to the regulatory requirement and definition at 55 Pa. Code § 1187.93(3) and other regulations, and, thereby, is distorting the database used to compute provider resident care limited prices and peer group prices.

[end]

Heeding calls from provider associations about changes to the new Medicare PPS payment system for Skilled Nursing Facilities, HCFA has issued Transmittal No. A-99-20 (May 1999), a Program Memorandum for Intermediaries dealing with Payment Safeguard Review of Skilled Nursing Facility Prospective Payment Bills in which HCFA returns to its original position in the Interim Final Rule (May 12, 1998) that:
 

...a beneficiary who is assigned to one of the upper 26 RUG-III groups is considered to meet the level of care requirement. Accordingly, when reviewing SNF bills with HIPPS codes that indicate that the beneficiary was assigned to one of the upper 26 RUG-III groups, you [the Intermediary] are to presume that the beneficiary has met the level of care requirements (i.e., ordered by a physician, required daily skilled nursing or rehabilitation, and furnished directly by, or under the supervision of a professional). 

NOTE: Intermediaries will still review services to check that they are not excluded from coverage for other reasons, including whether the services are REASONABLE AND NECESSARY. Intermediary will use MEDICAL REVIEW BASED ON THE OBSERVATION AND LOOK BACK PERIODS RELEVANT TO THE MDS(s) FOR THE BILLING PERIOD AND WHETHER, AS REFLECTED IN MEDICAL RECORD DOCUMENTATION, THE CLINICAL CONDITION AND/OR SERVICES INDICATED ON THE MDS ARE REASONABLE AND NECESSARY FOR THE BENEFICIARY'S CONDITION DURING THE OBSERVATION PERIOD ONLY. 
 

IT IS IMPORTANT TO REMEMBER THAT IF THE MEDICAL RECORD SUPPORTS THAT (1) SERVICES WERE DELIVERED AS DOCUMENTED ON THE MDS, AND (2) THAT SUCH SERVICES WERE REASONABLE AND NECESSARY DURING THE RELEVANT ASSESSMENT PERIOD, THE BILLED RUG-III GROUP SHOULD BE ACCEPTED FOR PAYMENT. IT IS ALSO IMPORTANT TO RECOGNIZE THE POSSIBILITY THAT THE NECESSITY OF SOME SERVICES COULD BE QUESTIONED AND YET NOT IMPACT THE RUG-III CLASSIFICAITON.

THE PROGRAM MEMORANDUM ALSO NOTES THAT HCFA IS DEVELOPING GUIDANCE FOR PROVIDERS ON OFF-CYCLE ASSESSMENTS (I.E., SIGNIFICANT CHANGE IN STATUS ASSESSMENTS ---OR SCSA's --- AND OTHER MEDICARE REQUIRED ASSESSMENTS --- OR OMRA's). THE PROGRAM MEMORANDUM DOES NOT RESOLVE QUESTIONS PENDING BEFORE HCFA CONCERNING CONFLICTS IN CURRENT HCFA GUIDANCE ON THE EFFECTS OF OFF-CYCLE ASSESSMENTS ON THE ASSESSMENT REFERENCE DATE. WHILE HCFA IS NOT CURRENTLY FOCUSING MEDICAL REVIEW EFFORTS ON WHETHER THESE ASSESSMENTS ARE TAKING PLACE, THE PROGRAM MEMORANDUM NOTES THAT: 
 

SNFs SHOULD BE CONDUCTING REASSESSMENTS WHEN SIGNIFICANT CHANGES OCCUR IN BENEFICIARY'S CONDITION OR TREATMENT. FOR MEDICARE BENEFICIARIES IN PART A STAYS, ANY SUCH CHANGE MAY ALSO AFFECT THE BILLED HIPPS CODE. 

PENDING THE ISSUANCE OF HCFA'S GUIDANCE OF THESE OFF-CYCLE ASSESSMENTS, INTERMEDIARIES ARE ADVISED IN THE PROGRAM MEMORANDUM: 
 

IF THE FISCAL INTERMEDIARY QUESTIONS THE NECESSITY OF SOME SERVICES TAKING PLACE BETWEEN REGULAR ASSESSMENTS, THE FI IS ONLY TO MAKE APPROPRIATE PAYMENT ADJUSTMENTS FOR SITUATIONS INVOLVING A BENEFICIARY'S DISCHARGE FROM THE FACILITY FOR REASONS OTHER THAN A TEMPORARY VISIT HOME OR IF ALL THERAPIES HAVE BEEN DISCONTINUED BY THE PHYSICIAN. 

THE PROGRAM MEMORANDUM INDICATES THAT INTERMEDIARIES ARE TO FOLLOW ITS GUIDELINES AND THE INTERIM FINAL RULE, RATHER THAN TRANSMITTAL NO. 405 (July 1998) or PROGRAM MEMORANDUM A-98-45 (December 1998), UNTIL HCFA PROVIDES FURTHER INSTRUCTIONS BASED ON THE FORTHCOMING FINAL RULE.

THE PROGRAM MEMORANDUM ALSO NOTES THAT: 

THE PRIMARY REVIEW STRATEGY FOR SNF PPS BILLS WILL INITIALLY BE A MANUAL RANDOM POSTPAYMENT PROCESS....[BUT THAT] FIs ARE ALSO REQUIRED TO CONTINUE REVIEW OF DEMAND BILLS AND TO PERFORM FOCUSED MEDICAL REVIEW ON ABERRANT PROVIDERS. 

THE PROGRAM MEMEMORANDUM EMPHASIZES PROVIDER EDUCATION AS A KEY TO ENSURE PROPER BILLING: 
 

WE BELIEVE EDUCATION IS KEY TO ENSURE PROPER BILLING. AS PROBLEMS ARE IDENTIFIED, Fis SHOULD NOT ONLY EDUCATE THE INDIVIDUAL PROVIDERS OF PROBLEMS, BUT ALSO THE SNF COMMUNITY ABOUT THE RESULTS OF THE RANDOM REVIEW AND OF COMMON PROBLEMS FOUND THROUGH MEDICAL REVIEW. THIS EDUCATION SHOULD BE AS INTERACTIVE AS POSSIBLE. FIs SHOULD BE PROACTIVE IN USING THE RESULTS OF MEDICAL REVIEW TO EDUCATE PROVIDERS AND PREVENT FUTURE ERRORS.

BUT NOTE: 

. . . . WHEN REVIEWING BILLS, IF YOU SUSPECT FRAUDULENT BEHAVIOR, e.g., A PATTERN OF INTENTIONAL REPORTING OF INACCURATE INFORMATION FOR THE PURPOSE OF PAYMENT OR THE BILLING OF SERVICES WHICH WERE NOT FURNISHED, IT IS [THE FI's] RESPONSIBILITY TO COMPLY WITH HCFA'S FRAUD AND ABUSE GUIDELINES (MIM § 3950). 

A COPY OF TRANSMITTAL NO. A-99-20 IS ATTACHED in HTML format below [the charts for Exhibit V are not included]

Click here to view the transmittal
 
 

[end]

Nursing Facilities may now bill Medicare for certain Glucose Testing for nursing facility residents (Code 82962), which has a Medicare reimbursement rate of $4.37. Medicare has advised that these services are covered as of January 1, 1996 (HCFA Program Memorandum No. AB-95-12, November 1995). Note that such coverage was confirmed and expanded in Section 4105 of the Balanced Budget Act of 1997 (see also: HCFA Pub. No. 60B, Program Memorandum No. B-98-33 (August 1998). Please note that in order for such services to qualify for Medicare reimbursement, they must include FDA-approved testing equipment.

If a provider has charged a Medicare-eligible resident for a Medicare-covered service, the provider must refund the charge to the resident, since the provider has an affirmative duty under the participation requirement not to make such charges (42 CFR § 483.10(c)(8)), as well as a duty to provide information to residents on how to receive refunds of previous payments made for covered services (42 CFR § 483.10(b)(10)).

If a provider bills Medicare for glucose testing, but has previously billed residents (including any non-Medicare residents) for such services at a charge lower than the Medicare fee, the provider must disclose to Medicare their actual charge for such tests, since payment for such services is based on the lower of the actual charge or the fee schedule amount. See: OIG Report on Medicare Payment for Home Blood Glucose Monitors, No. A-09-92-00034 (December 1, 1992).

Misrepresentation of the actual charge implicates Federal Medicare Fraud statutes (e.g., 42 U.S.C. § 1320a-7b, relating to any false statement in an application for payment). See: U.S. v. Corson (consent decree reported at CCH New Developments, at ¶41,554, U.S. District Court for the Eastern District of Pennsylvania, January 1, 1993).

Refunding payments made by the Medicare beneficiaries in error does not change the actual charge in place at the time of service, since providers are required to provide notice to residents about the charges in effect for services not included in the per diem rate or covered by Medicare payments prior to the time services are rendered (42 CFR § 483.10(b)(6)).

For more information on billing Medicare for glucose testing or on the compliance steps necessary to correct charges and rebill Medicare, you may call our offices or send your inquiry using the Q&A function on this website.
 
 

[end]

For clients with Veritus Medicare Services as their Intermediary:

To obtain interim Lump Sum Payments for Medicare Bad Debts, the following information must be sent in:

1. Patient name, HIC #, dates of service, MA Number or Recipient I.D. Number, and amount(s).

2. Differentiate between Qualified Medicare Beneficiaries (QMBs) and Non-QMBs.

3. Unless patient is indigent, account must be 120 days old from date of the 1st bill sent to the patient. Date the account is written off.

4. Do NOT include Bad Debts claimed in prior year(s).

SEND INFORMATION FOR PROCESSING TO:

LORI GRIPPO, Reimbursement Analyst
Veritus Medicare Services
120 Fifth Avenue (Suite P5301)
Pittsburgh, PA 15222
FAX: [412] 544-1870
PHONE: [412] 544-1884

NOTE: VERITUS IS ONLY MAKING INTERIM PAYMENTS FOR BAD DEBTS RELATED TO INDIGENT PATIENTS. BAD DEBT PAYMENTS FOR OTHERS WILL BE SETTLED THROUGH THE AUDIT AND SETTLEMENT PROCESS.
 
 

[end]

While the Department of Public Welfare (DPW), after continued settlement efforts by the associations and the commencement of litigation in the Board of Claims filed by this Firm, changed its position on the use of quarterly assessments in the computation of resident CMI's and has applied its corrected position to February 1, 1999 Picture Date computations to be used in Year 5 rate-setting, a different problem has now emerged which threatens not only to taint the February 1, 1999 Picture Date database and Year 5 rates, but also to require re-examination of all prior case-mix rates as well. On February 23, 1999, DPW's contractor for the collection of assessment data, Myers & Stauffer, published Bulletin No. 2 on its electronic bulletin board, in which they stated that providers are required to submit assessments for persons who have been discharged from the facility, are not present in the facility on the Picture Date, but are expected to return on some later date. 

DPW has advised that this "interpretation" has been available for providers since the inception of the case-mix system and the "interpretation" is consistent with some information previously made available to providers; however, some providers were told during case-mix training that they were no to include such assessments and, prior to the February 1, 1999 Picture Date, DPW has not enforced this "requirement" and, in fact, has confirmed CMI calculations by providers in CMI audits by DPW staff in which providers did not include persons not present in the facility on the Picture Date. As a result, prior case-mix rates for Years 1-4 may be based on CMI's which inconsistently reflect this "requirement".

This Firm has filed a Protest with DPW requesting that they cease and desist from requiring providers to include persons who are not present in the facility on the Picture Date in the computation of CMI's to be used in computing the Total Facility CMI. We have argued again, as in the prior assessment dispute, that DPW's own regulations preclude the practice. DPW's regulations defining the Total Facility CMI (55 Pa. Code §§ 1187.2, 1187.93(3)) provide that the Total Facility CMI is the result of CMIs for all residents, regardless of payor, "admitted and present in the nursing facility on [February 1]." 

We have been advised that while Myers & Stauffer has deleted Bulletin No. 2 from their electronic bulletin board, they are still requiring providers to submit assessment data for persons who are not present in the nursing facility on the February 1, 1999 Picture Date. We are continuing our efforts to stop this practice.

We have advised DPW that we are recommending that providers comply under protest with this "requirement" pending corrective action by DPW so that the providers will not be victimized with "default rates" for noncompliance. We have advised DPW and providers that they should attach to submittals verifying DPW's calculations of the CMIs the following protest language:

While we verify the computations included in this document according to the instructions provided by DPW, we reserve our objection and continue to protest that those instructions are contrary to DPW regulations in that DPW has required providers to include in the computation of the Total Facility (non-MA portion) CMI data related to residents who were discharged between 11/2/98 and 2/1/99 and are expected to return, but who were not present in the facility on the 2/1/99 Picture Date, which we believe is contrary to the regulatory requirement and definition at 55 Pa. Code § 1187.93(3) and other regulations, and, thereby, is distorting the database used to compute provider resident care limited prices and peer group prices.

DPW's inclusion of persons not present in the nursing facility on the Picture Date to determine the Non-MA portion of the Total Facility CMI has the effect, in most cases, of deflating provider Resident Care audited costs used to determine both the provider's Limited Resident Care Rate and the provider's Resident Care Peer Group Price. As a result, this practice tends to decrease DPW case-mix payment rates to all providers in every Peer Group. The impact of the practice on prior period case-mix rates is not known at this time because DPW has not provided any discovery to date in on-going case-mix litigation (and is not expected to prior to May 15, 1999). Quantifying the impact will be difficult because, as DPW has conceded, provider reporting and DPW audits of CMI were inconsistent on this issue and each February 1 Picture Date for each provider would have to be re-calibrated. We intend to explore the issue with DPW and settlement alternatives to redoing each provider's Picture Date data.

In the meantime, providers should assess whether this issue is impacting or has impacted their own Total Facility CMI calculations, work with their provider association to monitor the issue and collect information related to the impact on provider rates, and consult with their health care counsel to assure that their payment rights related to this issue are preserved. 

[end]

Last year Capozzi and Associates filed a complaint in the Board of Claims challenging DPW's use of quarterly assessment reviews to set the MA-CMIs used in year 4 case-mix rates, as well as Right-to-Know litigation which required dpw to release detailed information to providers on the components of their year 4 rate determinations. While DPW released the rate detail information in response to our complaint, they have not issued final rate notices to providers and they advised last October that they intended to continue use of quarterly assessment reviews in case-mix rate setting.

The provider associations had advised DPW that DPW's failure to continue to use comprehensive assessments, as required by DPW regulations, was costing nursing facility providers more than $75 million. The claim, filed on behalf of one group of 19 provider facilities, argued that year 4 rates were set in violation of not only DPW regulations, but also in violation of other provisions of state and federal law.

After Capozzi and Associates, P.C., filed the complaint, the associations continued their settlement efforts with DPW. These combined efforts have reached a positive result ---

Last week, DPW agreed to set rates for Year 4 (July 1998 through June 1999) without using quarterly assessment reviews and to revise provider payments to reflect corrected final rates by the end of this summer.

In the interim, DPW will continue to make payments to providers for Year 4 services at the current "interim rates" adjusted for inflation as of 10/1/98, 1/1/99, and 4/1/99. DPW will also be requesting provider assistance with filling in gaps in the assessment database in order to complete its computation of the correct MA-CMI's.

DPW has also advised that, because of its continuation of the use of comprehensive assessments, it does not expect to implement the transition payment option described in its 10/31/98 public notice.

We have requested DPW to confirm this agreement to all nursing facility providers. DPW and the associations are preparing worksheets to assist providers in computing the amount due from DPW as a result of the final rate computations. 

If you have questions concerning the implications of DPW's new position on Year 4 rates for your facility, please feel free to click here to contact our office or by phone at [717] 233-4101.
 
 

[end]

In attempt to obtain full payment for the care and services they provide, nursing facility providers and their counsel regularly seek effective approaches to obtain collection of providers’ accounts receivable, within the strict limitations of federal and state law and regulation. Recently, some providers have begun utilizing a little known and little used method for collection of their Medical Assistance residents’ outstanding private pay balances. Specifically, once their residents obtain Medical Assistance eligibility, these providers apply the residents’ Patient Pay Amounts against the residents’ outstanding private pay balances. The providers then deduct those payments from the residents’ Patient Pay Amounts as payments for necessary medical expenses. 

As most providers know, residents are determined to be eligible for MA benefits based upon their assets and incomes. Once eligibility is obtained, residents are assigned an amount of money that they personally must pay for their care and services. This amount is called their Patient Pay Amount, and is deducted from their MA benefit. Title 55 of the Pennsylvania Code Section 181.451(a), relating to general policy on post-eligibility determinations of a patient’s personal payments towards the cost of his care, provides that "[a] person who is eligible for MA and who requests an MA payment . . . shall have his total gross income considered to determine the amount he is expected to pay toward his cost of care." Thereafter, Section 181.451(b) provides that "[t]he Department will reduce its payment . . . by the amount of income available . . . ." As a result of these two sections, once a person is found eligible for MA, his Patient Pay Amount is calculated by offsetting his adjusted gross income against the MA payment. 

However, nursing facilities with residents who incur necessary medical expenses that are not paid for by the MA program or by some other third party payer, but are instead paid for by the residents, may deduct those expenses from the residents’ Patient Pay Amounts. Title 55 of the Pennsylvania Code Section 181.452(c)(5), relating to post-eligibility determinations of income available from an MA eligible person toward the cost of his care, provides that "medical expenses which are not subject to payment by a third party are deducted from the MA eligible person’s total gross income in the calendar month the medical expenses are paid [and include] expenses paid by the MA eligible person for necessary medical or remedial care recognized under state statutes or regulations but not covered under the MA program." Under this section, to be deductible from the MA eligible person’s gross income, expenses must be:

1. medical or remedial expenses;

2. not subject to payment by third parties;

3. paid by the MA eligible person;

4. necessary and recognized under state law; and

5. not covered by the MA program.

This section supports provider charges for care and services accrued by residents who later become eligible for MA against those residents’ MA Patient Pay Amounts as they are paid. Private pay balances accrued prior to MA eligibility are necessary and recognized medical expenses, are not subject to payment by third parties or the MA program, and must be paid by the MA eligible persons. At least one facility has been directed by its county assistance office to obtain payment for unpaid care and services through these deductions, and two county assistance offices have confirmed the legitimacy of this practice. DPW's Office of Income Maintenance has advised county assistance offices in two "Policy Clarifications" (Tr. No. 3849 sent May 5, 1994 and Tr. 1972 sent July 14, 1992) that such deductions are permitted under state and federal regulations:

Transmittal 3849 (Title: Can Deducant Private Pay Payment)

Question: We authorized a nursing care case in 2/94. In 4/94, the client received a bill for medical expenses for several days of skilled care in 2/93 at which time she was in private pay status. If she pays this bill, is it an allowable deduction from her patient pay?

Response: Yes. According to NCH 468.32, a deduction may be allowed in the cost of care computation for medical expenses paid by the client for necessary medical or remedial care recognized under state statutes, not paid for under MA and not previously used as a deduction. This includes nursing care expenses which were incurred at the private pay rate prior to MA authorization. The deduction may be allowed for the month in which the client acutally makes the payment. Please note that since the deduction is from income, the deduction is allowed only to the extent that her income will cover the bill. The deduction may be spread out over several months if necessary.

Transmittal No. 1972 (Untitled)

Question: In the post eligibility determination toward cost of care, are deductions allowable for medical expenses incurred prior to MA eligibility but currently being paid on a monthly basis? If a client is currently paying on a prior nursing home bill, can this be used as a deduction?

Response: Yes, deductions may be allowed. Any medical or remedial expense incurred by the patient and not paid by MA or a third party is an allowable deduction when paid with the patient's income. Information from HCFA indicates that current payments on bills incurred before the MA eligibility period are an allowable expense for MA purposes. This would extend to the post-eligibility computation.

Please note that facilities should advise their residents that they should pay the facilities the amount of their Patient Pay Amount, instead of the facilities actually billing or charging the residents for those amounts. Thereby facilities avoid any aspect of "charging" the outstanding account balances to residents. Furthermore, written receipts should be kept that document each residents’ payments. Additionally, facilities should avoid taking any amount directly from the residents’ accounts at the facilities without specific written authorization.

Capozzi & Associates, P.C. is skilled and experienced in developing and exercising effective collection practices. Furthermore, we are experienced in integrating effective practices into the larger accounts receivable collection plans of health care providers. For more information on collection of your accounts receivable, please contact Jeff Miller at (717) 233-4101, or e-mail us at BRUCEB@CAPOZZIASSOCIATES.COM.

[end]

• August 21, 1999
  Slippery Rock University
  Slippery Rock, PA
  

  Katherine E. Stine, Esquire and Bruce Baron, J.D., will be presenting a seminar as part of the Core of Knowledge for Nursing Home Administrators on the Government's role in Health Policy, Reimbursement and Regulation.

• September 8-9, 1999
  Hershey, PA
  

  1999 Statewide Labor-Management Conference, Hershey, PA Eighteen workshops are scheduled; 9 CLE credits area available

• September 9, 1999
  Nemocolin Resort
  

  Louis J. Capozzi, Jr., Esquire will be presenting a seminar at the PHCA Annual Meeting Corporate Compliance Debate with Assistant U.S. Attorney Larry Selkowitz.

• September 29, 1999
  Grantville, PA
  

  Louis J. Capozzi, Jr., Esquire will be presenting a seminar at the PALA Annual Meeting on Corporate Compliance.

• December 7, 1999
  Cherry Hill, New Jersey
  

  Louis J. Capozzi, Jr., Esquire will present a seminar entitled Health Care Collection Law issues sponsored by Lorman Education Services.

 

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