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The Impact of CMS Changes on the FQHC Revenue Cycle

November 4, 2013

By Robert Skeffington, CHBME, PMG Inc.

2011 has already seen the most significant changes to the revenue cycle for Federally Qualified Health Centers (FQHCs) in many years.

By Robert Skeffington, CHBME, PMG Inc.

2011 has already seen the most significant changes to the revenue cycle for Federally Qualified Health Centers (FQHCs) in many years.

Some changes have been positive for community health organizations, while others have merely created an administrative burden. With the uncertainty surrounding funding for healthcare reform and tightening of state budgets, FQHCs must review and understand these changes to ensure collections continue unabated.

Emerging Billing Issues Related to Annual Wellness Visits
The recently implemented Annual Wellness Visit (AWV), which includes Personalized Prevention Plan Services (PPPS), has created several billing quandaries. For example, how should FQHCs bill if the services are provided by a health educator, registered dietitian, other licensed professional (e.g. RN or LPN) or teams working under the supervision of a physician?

The source statement in the Centers for Medicare & Medicaid Services (CMS) documents (Change Request 7079, MLN Matters MM7079) states that these individuals are eligible to provide the AWV and PPPS:

  • A physician who is a doctor of medicine or osteopathy (as defined in section 1861 (r) (1) of the Social Security Act (the Act); or,
  • A physician assistant, nurse practitioner, or clinical nurse specialist (as defined in section 1861 (aa) (5) of the Act); or,
  • A medical professional (including a health educator, registered dietitian, or nutrition professional or other licensed practitioner) or a team of such medical professionals, working under the direct supervision (as defined in CFR 410.32 (b)(3)(ii)) of a physician as defined in the first bullet point of this section.

Thus, a variety of medical professionals can provide the AWV. However, we contend that in an FQHC, the requirement of a face-to-face encounter with a core provider remains in effect. So while non-core providers may render some of the AWV services, a core provider MUST do so for it to be reimbursable.

New Fee Imposed for Medicare Credentialing from the CMS
On March 25, the CMS began assessing a fee of $505 per institutional application and reapplication. This fee was created to raise funds to combat fraud and abuse of the Medicare system. [The National Association of Community Health Centers (NACHC) lobbied to waive the fee, which will impose a hardship on already strained FQHC budgets, but was denied.]

This is a recent change, so scant information is available on its implementation. However, health centers that wish to have this fee waived (on the grounds of financial hardship) should submit a letter with the application explaining their reasons for the request.

The CMS is expected to deliver an update soon on whether this program will continue as stated.

Transition from NGS/UGS to Local MACs
The transition from National Government Services (formerly United Government Services) as the intermediary for FQHC Medicare claims is continuing with mixed results.

The local Medicare Administrative Contractor (MAC) intermediaries manage all Medicare claims submitted in a geographic region, not just FQHC claims. Therein lies the real issue. FQHC organizations have different claim formats submitted for both encounter rate and fee for a hybrid option straddling the styles of hospital (i.e., ANSI 837I/UB-04) and professional claims (i.e., ANSI 837P/CMS-1500).  The uniqueness of this dual claim format does not look like the vast majority of claims received by these carriers and intermediaries.

In 2009 FQHC Medicare patients comprised abount 9% if total claims submitted (6.58 million claims). In 2010 Medicare processed an estimated 900 million claims, which means less than 1% came from FQHC organizations.  (DO YOU HAVE 2009 DATA SO YOU ARE NOT COMPARING 2009 AND 2010 DATA??)

The new MAC organizations that are receiving FQHC claims are fairly new to this style of claims and method of reimbursement (PPS).  FQHCS must educate the MACs on why FQHC claims are different so that they are paid in a timely manner.

Medicare Advantage
Medicare Advantage (MA) plans are growing in most markets and may continue to do so. According to a recent Kaiser Family Foundation report, MA enrollment has doubled in the past five years with growth anticipated in the near future as well. Billing departments in FQHCs will need to address this trend.

From a reimbursement standpoint, directly contracting with the MA plan to receive a blended cost-based rate or using the wrap-claim method are the easiest ways to bill as they offer the fastest payment timeline. FQHCs are getting paid for visits though these plans, but the process is a bit more onerous than standard Medicare claim adjudication.

As an FQHC administrator, you must work to optimize payments from MA by attempting to contract for full encounter rate payment vs. their standard FFS compensation. You must also assess your organization’s exposure to these plans in your region to decide whether contracting with the MA plan is best for your organization.

Behavioral Health Co-pay Calculation
Medicare claims for behavioral-health services use a different methodology for calculating co-insurance due from the patient. The calculation is arguably inefficient and biased against those patients with behavioral-health conditions, but the CMS is trying to rectify the situation.

For years, the patient responsibility portion due was initially calculated at 20% of 62.5% of the charge amount with the patient also responsible for the difference between the charge and the 62.5% charge total. There exists a four year transition plan which will afford behavioral health beneficiaries a straight 20% co-insurance vs. this confusing and prejudicial calculation presently in place. The eventual goal is to have the patient responsibility be calculated identically to medical visits for Medicare.

2011 Date of Service Medicare Claims
Change Request (CR) 7038 created some unusual claim expectations for FQHCs in 2011. All 2011 Medicare claims must include HPCPS Codes (E & M Codes 99213) in addition to the revenue codes sent in years past This process has been bogged down in complexity for various reasons, including billing-system limitations, the CMS adjudicating claims with additional information, and inaccurate co-insurance calculations.

This process still has not been fixed, but the CMS has acknowledged the problem. As of the writing of this article, the CMS has instituted a fix in its reimbursement calculations that is supposed to address this issue. We are optimistic it will soon be resolved for FQHCs nationwide.

Medicaid RAC Contractors
The Recovery Audit Contractor (RAC) program started in 2003 with a focus on recovering improper payments made by Medicare. In effect, private companies contract with the CMS to act as auditors and submit to Medicare information they find on payment of improper claims. The CMS then pays the RAC a percentage of recovered monies.

The RAC program has recovered hundreds of millions of dollars of funds in the Medicare program. As with any successful recovery program, the plan is to duplicate the efforts elsewhere. In this case, the health insurance reform law mandates all state Medicaid plans begin a similar RAC programs.

The Medicaid version is now on hold, as state Medicaid administrators are not yet ready for its implementation. (REALLY??? Source?)However, these RAC organizations will begin their work eventually and it is fair to expect a review FQHC claims in fairly significant numbers.

Pre-hire Exclusion Checks
All FQHCs should require a check of the Office of Inspector General (OIG) List of Excluded Individuals/Entities database on all new and existing staff members. The individual check is not a time-consuming task, taking less than five minutes to complete Since the list is updated quarterly, it is conservatively recommended that a check occur at the beginning of each quarter.

More and more, the market is suggesting and in some states/regions even requiring ongoing checks. In fact, New York Medicaid recently released a new requirement for monthly checks of its database for excluded individuals. This check may soon be required in your state as well. Including such a process in your compliance plan is an important step toward identifying a possible issue and planning to address it.

ICD 10 and 5010 Implementation
The clock is ticking, as these changes are imminent; i.e., v5010 effective 1/1/12 and ICD-10 as of 10/1/13. Both involve organization-wide planning,training, and billing-system/operational changes. Testing of these changes should be mandatory. The CMS and NACHC offer robust education options, such as Web-based training, implementation checklists, sample schedules of events, and sample project-management tools. Don’t be unprepared. At an FQHC conference in Washington, D.C. in March, CMS representatives reiterated the implementation dates are firm and will not be extended. Be prepared, not scared.

2010 has brought a wide range of changes to the FQHC revenue cycle. With the implementation and management of optimal billing practices, revenue opportunities abound. In today’s uncertain budget environment, both at the federal and local levels, maximization of each opportunity for additional revenue must occur so FQHCs can continue to fulfill their mission.

Source Materials
Medicare Learning Network (MLN) 7079
Medicare Change Request (MCR) 7038
Kaiser Family Foundation – Medicare Advantage Plans 2005-2010


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