• E-mail
• Print
• RSS

Tip of the week: Preventing demand bills that tie up your SNF's cash flow

Contemporary Long-Term Care Weekly, December 20, 2007

Let's say your skilled nursing facility (SNF) discovers during the admission process that a resident is not eligible for Medicare benefits under the technical requirements of the program. Or a resident already admitted in your facility is no longer considered medically eligible according to Medicare coverage criteria.

In either case, the resident does not agree with you and requests that the fiscal intermediary (FI) review his or her record and make a final determination of coverage.

The above situation-when a resident asks that a demand bill be sent to the FI-leaves SNFs with few choices, industry experts say. Upon the resident's request, the SNF cannot receive payment for that resident's care until the FI makes its determination. And while some FIs respond quickly, others can take months to review the file, which means your facility can experience a cash flow problem.

How it works

Anytime a SNF admits a resident, the facility must make a determination of coverage as to the resident's Medicare status, says John Barber, executive vice president and chief financial officer for White Oak Manor, Inc., a 14-facility chain based in Spartanburg, NC. In order to be covered by Medicare, the resident must meet the following two criteria:

Technical requirements. The resident must meet these requirements, such as the three-day hospital qualifying stay prior to SNF admission or admission to the SNF within 30 days of hospital discharge.

Medical eligibility. The resident may qualify under the technical requirements, but the SNF's clinical staff does not believe that he or she would fall into one of the upper 26 Resource Utilization Group levels to qualify for the Medicare program.

It's imperative that SNFs give residents what is commonly known as a denial letter-outlining its position-upon admission or when the staff decides the resident is no longer medically eligible for coverage, says Mary Marshall, PhD, president of Management and Planning Services Inc. in Fernandina Beach, FL.

If a resident disagrees with the decision, he or she is entitled to ask the SNF to submit a demand bill to the FI, says Marshall. The FI, in return, asks the facility to forward the resident's medical records and then makes a decision. There is no time limit set for FIs to make decisions. While some may act relatively quickly, others can take a longer time to review the claim, which can cause cash flow problems at your facility.

"There is a Medicare requirement that you have to notify the resident of noncoverage," Marshall says. "The beneficiary then makes a decision about whether he or she agrees with the nursing facility. If [he or she] does not, then the SNF is obligated to submit the demand bill."

What you need to remember

It's important for you to remember the following points when it comes to submitting demand bills, industry experts say:

Complete a denial letter. A SNF must notify the resident in writing that it considers him or her ineligible for Medicare benefits, Marshall says. The SNF must complete this process before submitting a demand bill.

Don't charge secondary payers. You need to receive determination from the FI on whether the resident is covered or not before you can be paid. Until you receive notice from the FI, you cannot bill coinsurance or charge the deductible, Barber says. If the FI agrees that the resident is not eligible for Medicare, then you can submit the bill to the secondary payer, whether it be Medicaid, private insurance, or the beneficiary.

Keep the resident in a Medicare-certified bed. As you await the coverage decision by the FI, it's important that you treat the resident as you would any other Medicare recipient within the facility, Marshall says. The resident should be kept in a Medicare-certified bed, and you should continue to gather documentation daily.

"In the usual event that the fiscal intermediary does decide to cover [the resident], you will be able to bill Medicare," Marshall says. "If you take the resident out of a Medicare-certified bed, you are not going to be able to bill for that time."

• E-mail to a Colleague
• Print
• RSS
• Archive