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Slide 1: Medicare Advantage Implications for RHCs RHC Technical Assistance Conference Call February 1, 2006

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Slide 2: Ron L. Nelson, PA Health Services Associates, Inc. 2 East Main Street Fremont, MI 49412 Phone: 231-924-0244 Fax: 231-924-4882 Email: nelson@hsagroup.net

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Slide 3: History MMA - Medicare Modernization Act (2003) Created Medicare Advantage How is it different from Medicare Part D? How is it different from Medicare Part C?

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Slide 4: Medicare Advantage Provides for two types of plans PFFS - Private Fee for Service Regional/PPO Plans Must provide service to the entire region as defined by CMS

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Slide 5: Map of Region Image: Map of the United States with Medicare Advantage Regions

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Slide 6: Regional PPOs Require service to the entire region Relaxed network standards FQHC wrap around

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Slide 7: Regional PPOs Requires contract Negotiation of rates No requirement to pay RHC rate May pay RHC rate, if negotiated

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Slide 8: PFFS Plans No contract required/may sign contract "Deemed" status providers - If you accept beneficiary card and provide treatment you are considered a participating provider Beneficiaries may change plans monthly

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Slide 9: RHCs Traditional Medicare Must be paid rate as determined by cost report Traditional RHC services billed to intermediary - paid based upon AIIR

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Slide 10: RHCs Paid full cost for vaccines – included in costs Supply Vaccine Labor

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Slide 11: RHCs Bad Debt may be claimed if reasonable effort made to collect (120 days)

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Slide 12: RHCs Independent/ Provider-based (more than 50 Beds) Rate – all inclusive interim rate determined by projected or actual cost report paid subject to caps where appropriate.

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Slide 13: RHCs Provider-based Less than 50 Beds Entitled to full cost per visit with no limit

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Slide 14: Medicare Advantage Managed Care for Medicare beneficiaries Forms: Private Fee for Service (PFFS) Regional Network or PPO-plan (RPPO)

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Slide 15: Medicare Advantage Private Fee for Service (PFFS) Requires plans to pay rate to RHCs to equal cost based reimbursement No contracts Patient driven - marketing to patients

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Slide 16: Medicare Advantage (FFS) May include Medicare Part A & B and Co-insurance portion May also include Medicare D or Pharmacy benefit

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Slide 17: Medicare Advantage (FFS) RHCs – CMS not requiring cost settlement at this time.

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Slide 18: Medicare Advantage Regional Network Plans (RPPO) Negotiate rates with RHCs Must cost settle (provider-based less than 50 beds) No requirement for full rate payment (Independent, Provider-based greater than 50 beds) Must sign contract Wrap around not required for RHCs

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Slide 19: Negotiation Some issues in managed care may be negotiable Develop a rationale for desired contract changes

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Slide 20: Negotiation Will you sign a contract with the managed care organization? Does the plan limit the types of medical services that you can provide?

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Slide 21: Marketing How many lives does the plan insure? Who are the major employer groups?

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Slide 22: Financial condition of the plan Who owns the plan? What is the history of the plan's payments to providers? What is the experience of other providers?

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Slide 23: Practice management What laboratories participate in this plan? Accessibility Complaints Pick-up and delivery

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Slide 24: Practice management What information does the plan require for authorizing hospital admissions? Is it necessary to certify length of stay? Are non-covered services defined?

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Slide 25: Practice management How do you handle disruptive patients? Can you discharge them? Are you notified when an enrollee is no longer eligible? Who pays for treatment if not notified? What services does Utilization Review (UR) track?

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Slide 26: Reimbursement How does the fee schedule compare to my usual and customary charges? How does the fee schedule compare to my cost per encounter, including procedures? What is the turnaround time for claims payment?

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Slide 27: Reimbursement If I perform certain labs and/or x-rays in my office, will I be reimbursed?

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Slide 28: Contracting Issues Negotiate rates - when are rates adjusted? Definition of cost/payment Year End Settlement Vaccine Payment/Influenza/Pneumococcal

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Slide 29: Contracting Issues Medicare bad debt allowance Length of contract Claims processing UB92 (1452) or 1500 Time frame for payment of clean claims How are rate changes addressed?

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Slide 30: Contracting Issues How are you paid for non-RHC services? How does the plan address RHC services provided by PA/NP/CNM? Does the plan cover behavior health services? CP, CSW Is credentialing required? How do you credential PA/NP/CNM?

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Slide 31: Contracting Issues How are incidental services such as injections paid for? Do co-pays differ for RHC vs. Non-RHC providers? Recognize RHC services as separate from Part B; i.e.: clinic visits, hospital admission same day Definition of core RHC services; i.e.: SNF, patients home, RHC, "Incident-To" services

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Slide 32: Contracting Issues Tracking data Will the plan provide PS&R type of report? Visits Co-pays Deductible Payments

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Slide 33: Contracting Issues Will data report provide break down by provider type for: Visits Co-pays Deductible Payments

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Slide 34: Advice from CAH Administrators with MA Contract Experience Administrators must remember they have the power to negotiate: "Stand firm! Don't take anything less than cost-based reimbursement" "Try to negotiate as close as possible to current cost-based reimbursement"

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Slide 35: Advice from CAH Administrators with MA Contract Experience Administrators need to read contracts carefully and bring in experts who understand payment and contract language: "Talk to whoever does the cost reports (for your hospital) and a lawyer who is familiar with this area" "Read everything…look at every single detail." Watch the language used in the contract, (language) such as 'sole discretion of payer.'

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Slide 36: Advice from CAH Administrators with MA Contract Experience Administrators should be sure the contract states specifically the terms that are required to meet the needs of your hospital. "Be clear about time frames for payment and try to get prompt payment for services." "Make sure contract wording includes ability to make rate adjustments based on CAH cost report rules." "Get, or try to get, interim rate updates."

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Slide 37: Summary Negotiate - critical for RHCs not to accept without negotiation Giving up cost settlement has value - what are you receiving? Be prepared to negotiate the best rate for your RHC. Don't assume you must accept what is being offered without analyzing the impact on your RHC.

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Slide 38: Common Terms PFFS – Private Fee for Service RPPO – Regional Preferred Provider Organization PS&R – Provider Statistical and Reimbursement Co-Pay – Payment required associated with a service. SNF – Skilled Nursing Facility CP – Clinical Psychologist

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Slide 39: Common Terms CSW – Clinical Social Worker PA – Physician Assistant NP – Nurse Practitioner CNM – Certified Nurse Mid-wife UB92 – Part A billing format 1500 – Part B billing format

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Slide 40: Common Terms Provider – based – RHC is integral part of a provider operated as a unit of the provider with common systems for management. Independent – free standing rural health clinic AIIR – All Inclusive Interim Rate

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Slide 41: Questions Email: nelson@hsagroup.net