Recent Legislative Provisions Help Nursing Homes Maximize CMS Reimbursements & Cash Flow
Nursing homes have been particularly vulnerable to the health and economic effects of the COVID-19 crisis. Taking measures to maximize your nursing home’s Centers for Medicare and Medicaid Services (CMS) Medicare and Medicaid reimbursements and your cash flow is critical, now more than ever.
Numerous federal and state relief-funding efforts and legislative provisions targeting nursing homes have come about since the onset of COVID-19. To assist nursing homes with their efforts to receive the fullest reimbursement benefits available, I want to look at some annual policy updates, recent COVID-19-related legislation, and incentive program details.
Annual Medicare Policy Updates
In July, CMS released its annual rule, which updated certain payment policies and rates. The rule is effective as of October 1st, and raised the baseline Medicare payment rate by 2.2%, with no downward productivity adjustment.
The rule also updated certain ICD-10 code reimbursement category mapping under the Patient-Driven Payment Model (PDPM). For the purposes of maximizing and accelerating your reimbursements, it is essential to understand updated codes and coding guidelines. An ICD-10-CM browser tool is available on the CDC’s website.
Recent Medicaid Reimbursement Flexibilities
CMS has made Medicaid reimbursement flexibilities available, which provide enhanced payments for nursing homes that implemented COVID-19 infection-control practices, such as designating a COVID-19 quarantine area or establishing an isolation wing. The nursing facility payment enhancements available to states are per diem dollar increases or percentage increases to existing base rates; new payment methodologies for facilities acting as isolation centers; temporarily modified rate-setting strategies; the removal of certain payment penalties; the allowance of specialized payment adjustments; new and modified supplemental payments; and increased payment rates for bed hold days.
As for states using a managed care delivery system, their payments made by managed care plans may be sent to providers through a state-directed payment, a system for which CMS has implemented an expedited review and approval process. CMS provided states with a few considerations for modifying provider payments during the COVID-19 public health emergency. Massachusetts, for example, chose to require managed care facilities to provide all Medicaid services and provider flexibilities at the same level and rate as the MassHealth fee-for-service program.
Your ability to maximize benefits is tied to your understanding of your state’s filing requirements, application of guidance, and allotment of funding. To find out what COVID-19 response measures other states are taking, check out the CMS’s Toolkit for State Actions.
Provider Relief Fund (PRF) Incentive Payments
The U.S. Department of Health and Human Services (HHS) has announced the program details for phase III of the Provider Relief Fund (PRF). The third phase of the program intends to distribute up to $2 billion in performance-based incentive payments to qualifying nursing homes. Performance is assessed based on your ability to maintain low COVID-19 infections and death rates among residents. Nursing homes do not have to apply for the program, but, in order to qualify, a facility must have an active state nursing home or skilled nursing facility certification and must receive CMS reimbursements. Applications must be completed by November 6, 2020.
Additional Massachusetts Relief Efforts
In support of nursing home residents and staff, the Commonwealth of Massachusetts has provided more than $260 million in state funding, and more than $180 million in federal funding. In September, the Baker-Polito Administration announced a new Nursing Facility Accountability and Supports package, effective as of October 1st. Among other things, the package outlines an additional investment of up to $140 million, with roughly $82 million going to MassHealth rate restructuring. The package allots up to $60 million in COVID-19-specific funding, the majority of which is on deck for disbursement if statewide infection rates rise and industry-wide staffing shortages occur.
As of the extended October 30th deadline, nursing facilities enrolled as MassHealth providers are only eligible for targeted supplemental COVID-19-related payments if they are timely in submitting their initial attestation and reporting requirements baseline survey on room density. I encourage these facilities to fill out this online survey as soon as possible.
Contact Livingston & Haynes
Maximizing CMS reimbursements and cash flow during a pandemic does not come without its challenges. My team at L&H is made of healthcare industry leaders who help nursing homes stay on the leading edge of industry best practices and develop strategies that focus on every aspect of clinical and billing operations. If you’re ready to take the next step, contact me today. I look forward to working with your facility.
Maria Bunker, CPA, became a partner at Livingston & Haynes in 2017. She specializes in audits and tax planning and has worked with clients across a wide range of industries.