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Document your ’under arrangement’ agreements with SNFs

Rehab Regs, February 10, 2005

Outside rehab agencies should get it in writing

Rehab company X provides therapy services to a handful of local skilled nursing facilities (SNF). Understandably, company X wants to receive adequate and prompt reimbursement, limit its liability, and be clear about what the SNF expects of it and its therapists.

Sound like a tall order? Not if the facility has a written agreement with the nursing homes it serves. If you provide rehab in a SNF, here are some reasons why you shouldn't leave home without a written agreement.

CMS doesn't require you to have a written agreement with the SNFs you partner with, but it's a good idea to do so. With a contract in place, you can avoid problems before they start.

"Under arrangement" agreements, as they're called, are essential components to a successful partnership between a SNF and a contract rehab company, says Tracy Gregg, PT, president of SunDance Rehabilitation Corporation in Alexandria, VA.

"If your intent is to have a long-term arrangement, it's best to have [an agreement]," says Gregg.

She refers therapists to CMS Transmittal 183, dated May 21, 2004, which states that SNFs and suppliers must operate under a written agreement to "reimburse the outside entity for Medicare-covered services subject to consolidated billing (i.e., services that are reimbursable only to the SNF as part of its global PPS [prospective payment system] per diem or those Part B services that must be billed by the SNF)."

In addition, CMS Transmittal 412, released December 23, 2004, specifies that the SNF and its outside provider must have an agreement that forms the basis for reimbursement. It also stipulates that nothing in consolidated billing will relieve the SNF of financial responsibility for those products and services that are subject to consolidation.

Gregg suggests including the following components in your written agreement:

By initiating the agreement yourself-rather than allowing the SNF to draw it up-you control what it contains.

"You're the vendor, so you write up the contract," says Frances J. Fowler, president of Fowler Health Affiliates, Inc., in Atlanta. "You have to think of yourself as a business person with a goal of limiting your legal exposure and following CMS' rules."

If you are an individual therapist who works for a contract rehab company, Fowler also stresses the importance of the contractual obligations of that relationship.

"If you work for a company instead of directly with a nursing home, that doesn't mean you don't need [an agreement]," says Fowler. "Protect yourself no matter what."

Remember to factor in the time and cost of commuting to your rate, because that is time you can use to treat additional patients. Also renew contracts yearly and always adjust your rates according to inflation. Consider issues such as liability, benefits, business costs, and compensation if you work more hours than those stipulated in the contract.

"It doesn't have to be a fancy contract, but there does need to be some type of agreement," says Fowler. "Build in a few additional benefits and then negotiate them later."

Editor's note: Visit www.cms.hhs.gov/manuals/pm_trans/R183CP.pdf to view CMS' Transmittal 183. Visit www.cms.hhs.gov/manuals/pm_trans/R412CP.pdf to view CMS' Transmittal 412.

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