MedNet, Inc. Prospective Pay

If you are a Skilled Nursing Facility. . .

Changing Regulations Mean Changing
Responsibilities for you.

Medicare reform is underway, and new regulations could make your job more difficult. For instance, part of the new Balanced Budget Act requires that payments for all Medicare Part "B" items be made directly to certified skilled nursing facilities. It prohibits full assignment arrangements with outside companies, like you.

NOW, YOU NEED TO BE PREPARED TO DEAL WITH THESE IMPORTANT CHANGES!

Profitable, correct billing to Medicare Part "B" is often confusing and constantly changing. With our experience in full assignment billing, we can show the SNFs (Skilled Nursing Facilities) how to effectively work with Medicare.

In September 1997, The Balanced Budget Act of 1997 was signed into law. With this comes sweeping changes in the way SNFs will be reimbursed by The Medicare Program. The current system of retrospective payment of Medicare-related costs through annual cost-reporting will be replaced with a Prospective Payment System, PPS. The SNF will now receive a per diem rate for Medicare Part "A" patients based on the acuity and resource utilization of the patient.

FREQUENTLY ASKED QUESTIONS

QUESTION 1. What is PPS? PPS stands for the Prospective Payment System. It is part of the Balanced Budget Act of 1997.

As of July 1, 1998, Medicare for the first time pay all Medicare Certified SNFs, not on the basis of "average costs" anymore, but on the basis of residents resource needs - specifically, clinical condition, extent of medical and rehabilitation services needed and amount of assistance needed due to functional status.

A resident's classification will determine the rate at which the SNF will be paid.

QUESTION 2. What are RUGS? RUGS stands for Resource Utilization Groups. The basic idea of RUGS is to calculate payments to the SNF according to severity and level of care. Under PPS, patients will be classified into one of 44 RUGS determining the per diem payment to the SNF.

QUESTION 3. Does PPS payment effect all of the SNF patient population? No. PPS only effects those patients in a SNF who have been recently discharged from a hospital and are covered by Part "A". This is usually about 10% of the SNF's patients.

QUESTION 4. If approximately 10% of the patients in a SNF are PPS patients, what is the medical coverage for the balance of the patient population? Medicaid, private pay, or other third party payers can cover these patients. They are still on a cost basis.

QUESTION 5. What is consolidated billing? Another Balanced Budget Act provision calls for a shift to consolidated billing for patients in a SNF receiving Part "B" services.

These include: physical & occupational therapy, laboratory services, medical supplies, diagnostic x-ray, orthotics & prosthetics, enteral & parenteral therapy, and ambulance services. Under the terms of this provision, nursing home providers will be responsible for billing the fiscal intermediary for these services.

The SNF may provide these directly or under arrangement with outside suppliers. The SNF may contract for these goods, services and billing tasks but the SNF must receive the payment directly from Medicare and pay the contracted supplier separately.

QUESTION 6. Will the SNF be required to bill the Regional DMERC's and will they have to have a surety bond? No. The SNF is billing the fiscal intermediary and does not have to have a surety bond.

QUESTION 7. Does Consolidated Billing effect patients in a Home Health Agency? No. Only skilled nursing facility patients are effected. Many dealers are providing orthotics and support surfaces to patients at home while accepting full part "B" assignment.