Good day, ladies and gentlemen, and welcome to today's Rural Health Clinic Technical Assistance Conference Call.

At this time, I'd like to turn the conference over to your host, Mr. (Bill Finerfrock). Please go ahead, sir.

(Bill Finerfrock):

Thank you, Operator. And I'd like to welcome everyone to today's call. This is, I believe, the seventh in a series of the technical rural health technical assistance calls that we've been doing on behalf of and in conjunction with the Federal Office of Rural Health Policy.

Today's conference call will be on the Medicare Advantage Plans, and our speaker will be Ron Nelson with Health Services Associates. The program is scheduled for one hour. The first 45 minutes will be Ron's presentation, and the remaining 15 minutes will be dedicated to questions and answers. As I said, this call is sponsored by the Federal Office of Rural Health Policy and is in conjunction with the National Association of Rural Health Clinics.

In order to register for the series all of you should, if you haven't, be registered, but you can go to www.ruralhealth.hrsa.gov/rhc, and if you have questions for future calls you can send them to info@narhc.org, and put teleconference question on the subject line.

With that being said, I'd like to welcome Ron, and we look forward to your participation.

Ron Nelson:

Thank you, Bill. Today, we have a topic that affects all of us in rural health clinics as it relates to the new Medicare product out there, formerly referred to as Medicare Choice or Medicare Plus Choice, now referred to as of the Medicare Modernization Act as Medicare Advantage.

I want to preface this presentation by also pointing out that there are lots of inconsistencies out there in the application of the Medicare Advantage Program. We've had inconsistencies in terms of interpretation at times from regulators, as well as inconsistencies in terms of communication from the companies that are developing the plans under the Medicare Advantage Program.

What I'm going to do today is try and provide you with information that will provide some clarity and also, hopefully, to identify some specific principles or questions that you should be asking as it relates to entering into any type of managed care agreement, but also specifically looking at questions you should be asking in terms of providing care to Medicare Advantage beneficiaries.

I will also preface this by telling you some of the things that I'm going to tell you are based upon market experience and what plans are telling clinics and providing in their marketing materials, and at times seems to be in conflict with regulation, and other times seems to be different than regulations. So, I want to preface it by saying there still is, I think, a lot of information and interpretation to occur within this program.

The first thing I think is important is to understand that the Medicare Advantage Program has evolved out of what was previously referred to as Medicare C or the Medicare Plus Choice, and that occurred with the Medicare Modernization Act of 2003. It created a program to offer two basic types of products, which we will talk about in a minute. But I'd like to just address where Medicare C and Medicare D, the prescription drug benefit, fall under this Medicare Advantage Program.

The Medicare C, as it was referred to previously, is now what is referred to as the Medicare Advantage products. The Medicare D, which is the prescription drug benefit may or may not be part of the particular plan you're dealing with under Medicare Advantage. In some cases it may be a separate benefit. In other cases, it may be included as part of a Medicare package which includes the traditional Medicare coverage, the coinsurance portion, and the prescription drug benefit.

I think it's important to understand that Medicare Advantage really provides two types of plans. The first type is a private fee for service plan which can be marketed and provided in any area by a plan that has met the requirements in providing a certain set of benefits that are required to Medicare beneficiaries. The private fee for service is probably the most significant portion at this time that is affecting rural health clinics because the other type of a plan which is a regional plan have not proliferated nearly as much because of requirements and marketing differences, which we will talk about in a few minutes.

The regional are plans that have been created based upon regions that have been developed by CMS and you have in your handout a map which shows the actual regions of the country. The regions are made-up of either a single state or multiple states to form a particular area that a regional plan might provide or would be required to provide services if they're going to service a region.

The regional plans do require service to the entire area. There are some interesting differences in the regional PPO plans in that they have some relaxed network standards as compared to the normal standard of providing certain types of networks, such as travel time and number of providers in a particular region or community. It appears that CMS has allowed a relaxation of some of these standards as compared to the Medicaid model which many of us are familiar with has been implemented over the last several years.

The regional plans also require a contract for which you must enter into a contract with a regional PPO. There is another model as a subset of the regional PPO referred to as the local network PPO, and they also will require a contract with the RHC. It requires a negotiation of rates and there's no requirement for the plan to pay the RHC rate. They may pay the RHC rate if it is negotiated but certainly is not required and there is no wraparound protection in legislation or regulation that requires that you be paid an additional amount up to your full cost based rate.

The private fee for service plans, on the other hand, have different characteristics in that there is no contract required. However, you may sign a contract with a private fee for service plan. They do create what's referred to as a 'deemed status,' whereby a patient may come into your rural health clinic, and if you accept their card and see the patient they are then deemed that you are a deemed participating provider because you've accepted that patient and treated them. But it does not necessarily require that there's a contractual relationship between you and the beneficiary.

One of the things that seems to be in conflict is that beneficiaries may change their plans monthly. I've attended several presentations where plans have informed individuals, providers and beneficiaries that they may change. On the other hand, I've heard communications from individuals at the federal level indicating that this is not allowed in the private fee for service market; however, I think at this point in the marketplace it indicates that members have been able to change plans if they choose on a monthly basis.

I think it's important that before we go into some more of the specifics on Medicare Advantage to just review some of the requirements of the RHC Program under traditional Medicare. First of all, the RHCs must be paid a rate as determined by their cost report and subject to the appropriate limits or caps. The traditional RHC services are billed to the intermediary and paid based upon an all inclusive interim rate which is determined by the cost report.

The RHCs are paid their full cost as an add-on in the cost report for vaccines based upon supply costs, vaccine costs, and labor. RHCs are also entitled to recovery of bad debt under Medicare for Medicare beneficiaries as an allowable item on the cost report based upon a reasonable effort of the minimum of 120 days and appropriate documentation of reasonable effort to collect that money.

RHCs that are provider based that have more than 50 beds are paid a rate which is an all inclusive interim rate determined by a projected cost report and paid subject to the caps, as we've already stated. Those provider based with less than 50 beds are entitled to the full cost per visit with no limit or no cap on the rate.

The Medicare Advantage, as I've said already, has created two basic types of plans, the private fee for service and the regional network of PPO type of plan. It seems from the data that I've looked at most recently that the greatest proliferation has been in the private fee for service market.

On the private fee for service market there is a requirement for the private fee for service plan to pay a rate to the RHC that is equal to their cost based reimbursement. There is no contract. It is patient driven, and this is where it sometimes creates conflict for those of you in the rural health clinics you will find that salespeople representing these plans are selling cards to patients covering them under this plan and, in fact, not giving them necessarily all of the information.

Unfortunately, the patient presents to your office, there's no requirement for a contract, and the patient assumes based on the conversation with the marketing representative for that plan that they can come into your office and get the services as was outlined to them, generally for a minimal co-pay of $10 or $15.

What happens is no one has discussed with the patient that there are specific requirements for payment for rural health clinics, and so we get into a conflict between the patient or beneficiary and the rural health clinic that's been created by the sale of that particular card to the beneficiary.

The fee for service Medicare Advantage Plan may include both the Part A and Part B portions of Medicare.

It may also include the prescription coverage. It is not uncommon in many of the plans to see that they offer options. Option 1, option 2, option 3, which may include both Parts A and B and the coinsurance portion and not include the prescription portion, or may include all of those above, including the prescription portion with different deductibles and co-pays relative to prescriptions.

One of the things that's important for us to understand is while I said earlier that the fee for service plans are required to pay up to your rate there is no requirement at this point or at least CMS is not requiring the RHCs to cost settle. I think some of us would argue that the regulations legally do require the ability for you to get your full costs which could necessitate cost settlement. However, CMS at this point has not directed the plans in the private fee for service market that they have to cost settle with the RHCs.

What that creates is the opportunity for you to now negotiate with the plan and determine how you might increase the rate that they're paying you in exchange for not cost settling. And I think that's a point we will talk about a little later when we get into discussion regarding negotiation.

The regional network plans as I've talked about already, are plans that are required also to negotiate rates with RHCs. They are generally required to cost settle with those that are less than 50 beds, but there's no requirement for a full payment rate to independent or provider based greater than 50 beds, and they must have a contract with the rural health clinic. There is no wraparound that is required for the private PPO plans in terms of payment to the RHCs, nor is there a wraparound required for CMS to facilitate to make the RHC whole as it relates to their full RHC rate.

Now that we've covered some of the basics relative to the differences in the Medicare Advantage Plans, I want to move to really trying to give you some information and what I hope are some tools to deal specifically with the Medicare Advantage Plans.

And the first thing that I cannot stress enough is as rural health clinics we need to understand we do not have to accept someone walking in and saying, 'here's what you're going to get paid, sign this,' or 'here's what you're going to get paid, accept this." You have the opportunity for negotiation. And it's important that you develop a rationale and a methodology as to how you will negotiate. Who within your practice is going to conduct that negotiation? And what information do they need to be able to negotiate with a plan?

Some of the questions that you must ask when you start to talk about negotiation is who is going to be signing the contract with this organization if a contract is required? Does the plan limit particular types of medical services? In other words, is it more inclusive in terms of the types of benefits that are covered or is it limited only to the traditional Medicare benefits in terms of what's covered?

How many individuals are currently in the plan? Who are the major employer groups that may be involved with the plan? People typically don't think of the Medicare Advantage as being a product that is part of the employer groups, but what clearly seems to be evolving is a strategy for Medicare Advantage Plans is to look at providing the opportunity for the retiree type of benefits for some of the major employers. So, it's important to understand if they have relationships with major employers currently.

What is the financial condition of the plan? Who owns the plan? What is the history of the plan's payment to providers? In a recent presentation someone asked, 'are they held to the minimum payment floor for Medicare?" And the plan's response was, 'our payment is far better than Medicare's, so we don't worry about a minimum floor in terms of payment for our RHC services."

What is the experience of other providers? If you have the opportunity to communicate with other providers who have had experience with that plan it's important to talk to them and share some of your experiences as it relates to negotiation and how they might recognize and pay for the services in your rural health clinic.

One of the things that comes out frequently in managed care type of plans is the requirement to use a specific laboratory service. So, what are the laboratory services if there's a specific required lab? Or can you send patients to any lab to receive laboratory diagnostic services? How do they deal with complaints and problems relate to pick-up of specimens and services? Those are all important issues to those of us in rural health clinics who rely many times on reference labs to perform services for our patients.

What does that plan require in terms of authorizing a hospital admission? Is there a prior authorization process? Is it necessary to certify any type of length of stay for the patient? And are there non-covered services in that plan which are defined?

Some of the other questions that you might ask that are specific to your practice but may also affect all of your managed care is how do you handle disruptive patients? What if you have a patient who comes in and is threatening or is disruptive and you want to discharge them, do you have specific requirements as to how you discharge them from the practice?

Are you notified when someone is no longer in the plan? Do they have them in the plan and then all of a sudden they've dropped them from the plan but they don't bother to notify you? How do you get notified, and who pays if, in fact, you are not notified and aware that they're not in the plan?

What services do they track in terms of profiling? One of the things that we know is part of the impetus for moving more and more to managed care is to collect data and information that allows us to analyze how services are provided and hopefully begin to look at outcomes and best practices. So, what kind of data is going to be collected regarding your practice? And how will you access that data as you become a participating member of that particular plan?

Some of the specific questions when we get down to the RHC issues and being paid, I think we have to begin to look at how the payment compares to your own fee schedule or your own current payment from Medicare?

What I suggest to people is that you take your current per encounter rate and look at what you're getting as 80% of that rate from your FI, and do a modeling of the proposal that you are getting from the plan. What I have found from some is that based on the way they're doing their calculations you may be getting less from the plan than you're getting from your current FI.

And be careful because plans will show you models, and I've seen this recently in a couple of occasions, where the models they've used has assumed a $100 charge to calculate how they're going to pay you. And $100 charge may not be the average charge in your practice, and, in fact, I would submit for many of you it's probably closer to $70 as an average. So, therefore, their calculations are off at the outset because they're using an inflated, unrealistic charge to use as a model.

How does it compare to your encounter rate? What are the turnaround times in terms of claims payment? Those are all critical questions that you need to ask when talking with the plan. How are they asking you to submit claims, and what is the turnaround time that you will get on a clean claim?

If you perform certain lab or X-ray studies, diagnostic studies in your office, how are you paid? For example, many of the plans are proposing to pay your rate plus they're going to pay you fully on the fee schedule for the diagnostic studies, such as EKGs, and other studies that you do within the office. And in those particular cases the reimbursement on their fee schedule is significantly higher than what you're currently getting under Medicare Part B. Therefore, you may do better in terms of looking at the ancillaries that you're performing and billing within your offices.

So, some of the other questions that we need to begin to focus on as rural health clinics are when you negotiate a rate and you say to the plan, 'look, I'll accept your patient, private fee for service, or regional PPO,' that when you negotiate that rate that you ask them when they're going to adjust your rate? And an example, rural health clinics have fiscal yearend that can exist more commonly 12/31 but maybe 6/30, maybe 9/1, maybe anytime during the year based upon your fiscal year. It is important that you ask the plans when they are going to adjust your rates based upon when your rate will be adjusted also from your cost report.

As you all know, you submit your cost report within five months of the end of your fiscal year, then you normally within about a 90-day timeframe receive notice of your new rate. so, when is the plan going to implement that rate? And are they going to coincide the implementation rate with the same effective date that you're hearing or you're getting currently from your FI. I believe that based on the regulations they have to adjust it based upon those dates, but I think those are questions that you have to ask to try and gain some clarity and some understanding of how they intend to pay you.

How do they define their cost and payment? Those are some questions that you need to ask in terms of how they're defining what services fall into the particular service that you're providing. For example, are injections billed separately on the fee schedule and paid separately? Therefore, they're not included as part of the visit as they are in the rural health clinic billing model. That's obviously a difference and may be an opportunity for you to capture additional revenue.

The year end settlement is a question that we have been told by CMS they will not require settlement from the plans as it relates to working with RHCs. However, I have heard at least two plans say that they are willing and open to if the RHC demonstrates to them additional revenue that should be due to them and that they were not able to capture their full rate that the plan is willing to pay them based upon appropriate documentation. The question obviously is always in the details, what's appropriate documentation? And I haven't seen any examples that I could share with you at this point.

Another question that has come-up is how are you paid for vaccines? How do you get your influenza and pneumococcal vaccines? Currently, you calculate the cost based upon supply costs, labor costs, and vaccine cost to come-up with a cost per vaccine, and you keep a log of those Medicare patients and it is an add-on in your cost report to be reimbursed at full cost for those vaccines.

My experience is that the plans have offered a model that allows you to get paid at a reasonably calculated fee screen but is not at the cost based level. You have to do some comparison of the impact that that will have on you in terms of receiving less on a fee schedule than you would have received on the cost basis but there are some other tradeoffs when you look at other injectibles that you will now also be paid on a fee screen that were previously bundled with a visit. So, it's important that you take a look at the vaccine issue.

Medicare bad debt allowance, you are entitled to bad debt recovery from Medicare. Some of the plans will argue with you, you won't have bad debt. For example, I have seen plans, private fee for service plans offer a reimbursement of the full rate that you currently are being paid plus you get to keep the $10 patient co-pay. Therefore, you are receiving now more than you would have received under your Medicare RHC program reimbursement.

What they say is you have no bad debt, therefore, we're not going to offer to pay you any bad debt recovery. There are other plans that are not quite as generous in their offers and have talked about offering the opportunity to submit at yearend appropriate documentation of what you believe is valid Medicare bad debt and they would entertain paying that bad debt obligation.

Questions that you need to ask related to the contract include the length, if you enter into a contract, how long is the contract? You need to ask questions for claims processing. It seems we have enough complexity as we started this program in 1977 it was to be simplistic and one rate was paid for all services. As those of us who have been involved for many years have seen, we have created more and more complexity and carve-outs and diagnostics not being part of the rate. Hospital services no longer being part of the rate.

And it seems to me that we do not want to add additional complexity in the billing to this process, therefore, I have seen many of the plans have said that they would process the claims exactly the same as if you were submitting them to their FI. You would just submit that UB92 format now to the Medicare Advantage Plan and they will pay it from the UB92 format. The question you have to ask is will you bill them the other services on a 1500 or do you add each service as an additional line on the UB92, different than what you do now, as you bill for those services? Those are questions that you need to ask of the plan when you're negotiating.

Timeframe for payment of clean claims, what is the typical time? Should you expect payment within 10 to 12 days on a clean claim? And, again, I want to reemphasize the importance of asking the question how are the rates adjusted? On what basis are they adjusting your rates, and when do they go into effect. If you send them a copy of your notice of your new rate today does that mean they're going to implement the rate as of today even though it was effective five months ago? Or are they going to implement the rate effective five months ago and pay you some type of adjustment? So, you need to ask, I think, specifically how those rates are going to be adjusted.

How are you paid for non-RHC services is another very critical question. What about other services that you provide within the rural health clinic. Within the rural health clinic might be the other diagnostic services that you provide, procedures that you provide in the clinic, and even questions such as hospital services, how are you reimbursed for those services?

How does the plan address the services provided by PAs, nurse practitioners, or certified nurse midwives? Since these providers are statutorily required to be in the clinic how are they, in fact, going to pay for those services. Unfortunately, many of the insurance companies who have gotten into the Medicare Advantage business have previously had history of taking an approach with non-physician providers, such as PAs, NPs, and CNNs, that they are not going to recognize or cover those services. So, here you now have companies that are now in the Medicare Advantage business providing services where clearly PAs, NPs, and CNNs are authorized, how are they going to recognize and how are they going to process claims for services provided by these individuals?

Does the plan cover behavioral health? The behavioral health is part of that benefit, then how is it covered and are they going to cover a clinical psychologist, a clinical social worker? Does the clinical psychologist have to be a Ph.D., such as current Medicare regulations allow? Or can it be a limited licensed psychologist, such as most of the Medicaid programs now accept in terms of providing services to RHC beneficiaries.

Is there a credentialing requirement? Are they going to require that the providers in your rural health clinic must be credentialed in order to provide those services? And, again, you must ask the question, "how do they credential PAs, NPs, and CNNs since they are a critical part of the requirement for the delivery of services?"

How are the incidental services, such as injections are paid for? I've stated this once. I want to restate it. It's important to understand. You have an opportunity potentially if these are paid in addition on the fee schedule to capture some additional revenues.

Do the co-pays for RHC versus non-RHC services differ? Is there, for example, a different co-pay for service provided in the rural health clinic versus a service you might provide at a skilled nursing facility, at the patient's home, or in the emergency room or the hospital?

Do they recognize certain RHC services as separate for Part B similar to what we have currently in the RHC program? As an example, hospital admissions on the same day and a clinic visit? Currently, under the regulations that exist, and RHC is a distinct separate benefit. If I see a patient in the rural health clinic and then the patient is admitted to the hospital and the work is done in both places I can bill both the RHC visit and the Part B portion for the hospital visit. If the Medicare Advantage Plan is now covering both are they going to pay for both? Or are they going to try to implement a rule saying, 'we'll only pay for one service in a single day.'

A definition of what the core services are in the rural health clinic by the Medicare Advantage Program. What do they recognize as RHC services. Is the skilled nursing facility considered to be an RHC service and, therefore, you rate is paid? Or are they going to pay you on a fee schedule for that? Is the patient's home considered to be a RHC service or is it going to be paid based on the fee schedule? The patient's home, for example, you may receive greater reimbursement on the fee schedule from the Medicare Advantage Plan than you would from the RHC program under your rate if you are currently subject to a cap. And, of course, how do they deal with the services that are incident to a professional visit from an RHC provider?

Some of the other questions that I think we have to ask as we look at this program is the tracking of data. And I've had several questions funneled to me and to others that have been presented regarding well, how does this fit within the cost report? And, unfortunately, the only general answer that I can give you is that the cost report currently is for those services that are Medicare covered under an RHC and do not include those services for private insurance, and, therefore, the Medicare Advantage would be treated very much like a private insurance. While it's a Medicare service and it's a Medicare visit you would not be including those as part of a count that you would be submitting to your FI because they would only be cost settling on those visits that are recognized regular Medicare services or patients that you provided services to.

So, you're going to have to create a separate tracking mechanism for your Medicare Advantage patients to keep track of the services that are provided. If nothing else, for administrative and management purposes to be able to effectively understand what it's costing you to deliver service and if this is having a positive or negative impact on your practice?

So, some of the questions that I would ask a plan is will they provide a PS&R type of report? Can I get a report from the plan on an annual basis, at least, and maybe even more often detailing the visits that were provided, the co-pays, the deductibles, and any payments that were made? This would greatly enhance from a management administrative standpoint your ability to track this data. It's, again, a negotiating point. You're potentially going to give-up cost settlement. You're potentially giving up several other areas where they would be required to administratively calculate your payment.

And the question you have to ask them is what is it worth for me to give-up these things for you to pay me to assure that when I give them up that I'm not losing in the end? So, the tracking is a reasonable request to ask of those plans.

What kind of data, report and breakdown will they provide by provider? For example, if you could get them to provide you the same reports by provider that can be very effective and I believe powerful information going forward as you look at contracting with a particular plan.

The last portion of the presentation that I have today highlights some information that I thought was important based upon a multi-center approach to surveying critical access hospitals and taking a look at what critical access hospital administrators had had in experience in dealing with Medicare Advantage.

And this comes from a rural health policy brief which was December of this, '05, just this past month. And I have some quotes in the handout that highlight some of the issues that critical access administrators saw in dealing with Medicare Advantage. And I think, most importantly, was the ability to negotiate. And the fact that many of the administrators felt that they previously didn't have as much opportunity as they may now to really negotiate with the plans.

The other problem that we heard, and I think at least from the information that I read in the policy brief and some discussion with the researchers that collected that survey data is that many of the administrators felt that they weren't contacted by the Medicare Advantage Plans. So, for you to sit back and just assume that someone will contact you is probably the wrong thing to do, and, in fact, you need to reach out. If you know there are plans in your area that are actively marketing either as a regional PPO where they're going to have to come to you with a contract or as a private fee for service where they don't have to come to you, you need to reach out and ask to sit down with them to have some discussion.

Another area that was highlighted, I think, by the administrators was relative to contract language. Be sure that you look at the contract language if you're offered a contract, closely, to have a good understanding of what they are really offering. Be sure you're clear about timeframes and how you're going to be paid, and try as best you can to maximize your position to get as close as possible, if not at or above your current rate.

So, in summary, I think it's important to recognize that the Medicare Advantage has now created a different model and a greater influence of market forces on rural health clinics as one of the safety net providers in rural America today.

What it has done, however, is it has put rural health clinics in a position whereby you can negotiate. You have the ability to look at a plan and say, 'if you want me to take your card, private fee for service, or accept your contract as a reasonable PPO I need to know what it's worth for me to, for example, not require a cost settlement on my patients. What is it worth for you not to have to pay me costs on vaccines? What are the opportunities for you?"

I think the most important and key part of this is to recognize the opportunity that exists for negotiation. It has value. Don't assume that you have to accept what's being offered to you. And I have listened to I think almost every line about, 'oh, we can't negotiate, we're not allowed to negotiate." And yet I've seen those same plans when actually sitting down with their feet to the fire, so to speak, have negotiated with the rural health clinics. So, I really want to stress to you the importance of sitting down with them and negotiating what is best for your rural health clinic.

I have attached, also, as part of the presentation several common terms that I think are being used in this scenario. I would like to encourage any of you who have interest in understanding more about the regional PPOs and the regional contracted plans in your regions to go to the CMS web site and pull off the map, the map that I have for you in the presentation is one of many that exist that look at the regions and how they're broken out which might give you some additional information.

CMS also has a list on their web site of the various plans that are currently in the regions and will be apparently locked in for the next two years in terms of no new plans being created in those areas.

Again, I want to stress to you the importance of trying to understand your marketplace. Who, from a Medicare Advantage, is in your community? Most likely it's a private fee for service plan. Some of you may be affected also by regional PPOs. On the private fee for service because a patient presents to your practice and says, 'I'm here, I now have a card from X, Y, and Z,' I think it's important for you to understand that doesn't mean you have to accept X, Y, and Z.

I also am not aware of any regulation that precludes you from saying to your patients, 'these are the plans that we're going to take, or that 'the' plan we're going to take, and this is the one that we would like to see you enroll in if you're going to go into a Medicare Advantage product."

That, again, is a very powerful negotiating tool for your ability to influence patients and use that as a negotiating tool when you're talking with plans in terms of ensuring your rate.

I want to take this opportunity now to also suggest to you that the National Association of Rural Health Clinics is doing a Spring institute March 9th and 10th in San Antonio, Texas. A large portion of that conference is going to be dedicated to Medicare Advantage. It is our belief that in another six weeks we will have a lot of additional information and maybe even some additional clarity on some of the issues that seem to be gray as it relates to Medicare Advantage.

I would encourage all of you to participate if you can and try and attend or send a representative to attend this important meeting as Medicare Advantage has the potential to have significant impact on us in the rural health clinics.

I think we've completed the first 45 minutes of the hour, and at this time I'd like to turn it back for the q-and-a portion.

(Bill Finerfrock):

OK, Operator, would you please explain to the participants the call-in, how to be able to open their line to pose their question?

Operator:

Yes. If you'd like to ask a question at this time, you may do so by pressing star one on your telephone. A voice prompt on your phone line will indicate that your line has been opened. We ask that you please state your name before posing your question. Once again, that's star one please.

(Bill Finerfrock):

And if you could also let us know where you're calling from, what state, area of the country you're calling form?

Operator:

And we'll take our first question.

(Jerry Payne):

My name is (Jerry Payne). I…

(Bill Finerfrock):

Speak up caller?

(Jerry Payne):

My name is (Jerry Payne). I'm with Pacific Care. And we are offering private fee for service plans in the service areas in Texas involving RHCs. I, first of all, wanted to make a comment that much of what I have heard today certainly applies to the regional PPO plans.

There's one distinction I would like to make with respect to the private fee for service. The direction we have received from CMS is that because these private fee for service plans are supposed to be portable and taken to any provider who is willing to agree to the terms and conditions of the plan that we cannot contract and we cannot negotiate because what we do with one we do with all.

Secondly, we have developed a reimbursement method that has been approved by CMS as well as the National Association of Rural Health Clinics that in essence pays above your interim rate and pays above the RBRBS for services that fall outside of that.

I have an example that I can provide to anyone who is interested.

(Bill Finerfrock):

Jerry, I appreciate that. I don't know that this is a reasonable way to do that. But I think you guys are going to be participating in the San Antonio Conference?

(Jerry Payne):

That is correct.

(Bill Finerfrock):

And you'll have information there. And we'd certainly be happy to try and put information out to help folks better understand whatever you want to share. We can post that on our web site or get it out.

The only thing I would say is that while we - you said that we approved what you did. We have no approval process.

(Jerry Payne):

I said you had reviewed it.

(Bill Finerfrock):

OK, I'm sorry. I thought…

(Jerry Payne):

No, you have reviewed it and found it acceptable.

(Bill Finerfrock):

OK, thank you. I mean was there any specific question that you had?

(Jerry Payne):

I think I just basically wanted to draw the distinction from the regional PPO plans about their being no negotiation and we're not allowed to do any written contracts. That was my - that was the thrust of my comments.

Ron Nelson:

Jerry, let me just say, I appreciate your comments. And I have just spent the last, the better part of the last three days at a conference in Washington with many people, a large portion of which was focused on Medicare Advantage. And I can tell you that there were three different people there who all felt that there was an opportunity for contracting.

And I can tell you under the private fee for service and I can tell you of plans who are proposing that, which gets to part of my point earlier for people to understand is while we believe that there is uniformity in how this is being applied it's becoming more and more clear, if I can use that word in this discussion, that there is not necessarily uniformity in how it's being applied. So, I think that's the important point for the clinics to get understanding and appreciate what you've been told and what you've been instructed from CMS. Other plans are doing other things. Thank you.

You had another caller?

Operator:

We'll take our next question.

Jim Dixon:

Yes, this is Jim Dixon from Copper Queen Hospital. We operate two rural health clinics inn (Disbe), Arizona, and we are an access waver state and the problem we're running into is with the duals. Access is our Medicaid and what has happened is with the duals the access provider, which is the Arizona AP IPA, Arizona Physicians and that, are not negotiating. What they did was gave us a rate of the fee schedule for Medicare, not our cost as indicated in our cost report to Medicare, and told us that they wanted to give us a 5% discount off that rate. There was no negotiating. They told us they would switch the patients if we didn't sign to other providers. And also we were formerly doing Medicare labs in the hospital and they told us that we can no longer do those, they've got to send them to an outpatient lab. This is really, has a detrimental affect to the hospital.

But the states that are highly Medicare Advantage care penetrated are seeing this heavy handedness being performed, and they're not negotiating. I wish I could use all the negotiating points that you had put forward. But basically they are not understanding. First of all, they didn't understand what an RHC was. So, we had to explain that to them. They didn't understand how we're reimbursed. And then what a critical access hospital was. And so these plans are ill prepared for negotiating at this point.

We signed a bunch of contracts that said they'd pay us the Medicare rates. They don't understand who they're signing with or what they're signing with. And so it is really a mess right now, and it is not getting any better.

Ron Nelson:

I would certainly agree with you. And what I've heard from you is not unlike things I have heard from other individuals, hospital administrators, clinic administrators, in terms of the kinds of problems that are existing out there.

And the biggest one is the lack of knowledge on the part of the plans in understanding what a rural health clinic is. But I think more importantly is then the requirement for CMS to, in fact, make sure that they are properly following the regulations.

And I think you're also affected here in the managed care side by if there are other providers in the community is that the managed care model says that they're going to threaten you with, 'well, if you don't sign it and take what we offer we're going to send the patients elsewhere.'

Jim Dixon:

That was eminently clear.

Ron Nelson:

And I think…

(Bill Finerfrock):

One of the problems you've got, though, is somewhat what you're experiencing in Arizona is unique in that Arizona does operate under a statewide waver under the access…

Jim Dixon:

Absolutely.

(Bill Finerfrock):

Which eliminates on the Medicaid side beneficiary freedom of choice. And so some of the ways that they're able to do some things, I think in Arizona, are not completely unique but somewhat unique because of the way that the state has established its Medicaid program.

Jim Dixon:

The other thing is I know that there's a federal law, HR880, which was going to give us in affect a waver, making them pay us under the current existing system which stalled in committee. They did give FQHCs a waver from this Medicare Advantage. And I think that it's important that everyone listening, that we should push the Congress of the United States to pass some form of 880 to put us back on the same footing we were prior to this Medicare Advantage program. Otherwise, if it doesn't happen this year it's going to happen next year or the following year, because once they're held, that 8 billion or 10 billion of hold harmless is gone then they're going to start applying heavy handed managed care tactics to make a profit. And they're going to really decimate the rural system.

(Bill Finerfrock):

In terms of that the bill that you're referring to, 880, would also provide some coverage for RHCs. It deals with critical access hospitals and rural health clinics. The wraparound payment, there is, a few HCs are non-exempt from Medicare Advantage. What they have is a wraparound payment that Medicare would make them whole relative to whatever they've negotiated or get paid from by the managed care entity. It may be less than what they were entitled to as an FQHC.

Jim Dixon:

The question that comes to my mind…

(Bill Finerfrock):

We are also working to get that done, as well. We, as a national association of rural health clinics, we appreciate that, and that is something that we are working on. So, you know, we would welcome your support and we're very interested in getting that kind of legislation enacted.

Jim Dixon:

What, in your experience, would lead you to believe that why would they do it for FQHCs and not do it for RHCs and hospitals. It would seem to me that they're trying to back-off the commitment that they've made to these two other entities and out of a belief that there are too many or they're too costly, and think the FQHCs are more important. Why weren't they - we weren't included with the wraparound originally?

Ron Nelson:

I think it was a political decision that was made and there were things that were going on during the Medicare Advantage debate and the way this all came about that is really more reflective of why that happened. But I can tell you that the cause and the RHCs are looking to try and get a similar kind of a wraparound payment.

One can draw whatever conclusion they choose from why one was done and the other not, but we are working to try and get that rectified. And I know that NRHA on behalf of the cause is trying to do that, as well.

Jim Dixon:

Thank you.

Operator:

We'll take our next question. Linda, your line is open. Please go ahead.

Male:

Hello.

(Bill Finerfrock):

Hello.

Linda Willis:

Hello?

(Bill Finerfrock):

Yes.

Linda Willis:

OK, I guess that's me then. This may be a very stupid question. Is - we have a provider based rural health clinic here. I'm in Louisiana. I'm Linda Willis with the rural hospital coalition. That wants to open up a provider based mobile rural health clinic, and we are being told, this hospital is being told they cannot do that.

(Bill Finerfrock):

Who is telling them that?

Linda Willis:

The state agency.

(Bill Finerfrock):

Well, the federal law and the regulations provide for mobile rural health clinics, so I'm not sure on what basis they are determining - if they're telling you flat out that it can't be done that's not true, unless there would be some kind of a state law that prohibits a mobile clinic from existing in the State of Louisiana, but there's nothing in the RHC statute that would prevent you from having a mobile rural health clinic.

Linda Willis:

Even though it's provider based?

(Bill Finerfrock):

Yes, there's nothing that would restrict you in terms of, again, your ability to have it. You know, we'd have to look at the details, what it is that you're proposing, the market, the locations that you're proposing to have that based in, et cetera. But there is not an absolute prohibition against having a mobile rural health clinic and, in fact, the regulations specifically say that a clinic can be mobile.

This is probably a conversation that would be best to have in more detail individually rather than on this call, and if you want to give me a call it's 202-543-0348, and I'd be willing, I'd be happy to talk to you more offline.

Linda Willis:

Do you mind giving me that number again?

(Bill Finerfrock):

202-543-0348

Operator, I wanted to take a question that we got e-mailed in prior to the call. This is from (Diane Cartimone) from Hickory, North Carolina. She said that she's been informed by River Bend that encounters with patients on a Medicare Advantage plan cannot be used on the RHC cost report, is this correct?

Ron?

Ron Nelson:

Well, the answer is while it will be part of your total visits but it will be treated like an other or commercial insurance, it will not be cost settled because River Bend is only required and will only cost settle for those regular Medicare RHC visits. So, the answer is that is correct.

(Bill Finerfrock):

Yes, I think that's one of the important things. When a Medicare beneficiary enrolls in one of the Medicare Advantage plans they have effectively removed themselves from the Medicare program and are now covered by the rules and guidelines of that private insurer. And as far as the RHC is concerned for your cost report purposes they are not a Medicare beneficiary and would be treated the same as if they were a commercially insured individual.

It also points out that there's some unscrupulous, what they maintain are unscrupulous activities going on by agents who are selling the plan which they're telling people to signup for a prescription drug plan without informing them that they're also signing up for a managed care plan along with that. And who should they contact, and they contact their department of insurance is one place and I'm just curious if this is a problem nationwide and, if so, how is it being handled?

I've heard anecdotally of similar kinds of situations. I can't say that it's something I've heard that I would characterize as being systemic. But if you hear of that or if you have that, let us know. I would also encourage you to contact your elected officials, your congressmen and your two senators and make them aware of what you believe to be unscrupulous marketing activities by plans if you believe that that's occurring in your communities.

Operator, next question.

Operator:

Yes, we'll take our next question, please.

(Diane):

Hi, this is (Diane) from North Carolina. And, in fact, you just read my e-mail, so I have no further questions. And I'll leave the line open for the next person.

(Bill Finerfrock):

OK, thank you, (Diane). Next question, Operator.

Operator:

And we will now move on.

Mary Peterson:

Mary Peterson, (Mileblus Clinic), (Moston), Wisconsin.

(Bill Finerfrock):

Hey, Mary.

Mary Peterson:

I guess when you, you know, we really truly don't negotiate a fee for service plan on paper, but you certainly are going through all the hoops, practically, because you've got to tell them how they're supposed to pay you. And you end up in a negotiation even though you don't have a contract. And then once that happens you're constantly auditing to make sure they're paying you the way they're supposed to pay you, which nine out of ten times does not happen correctly.

So, you have about as much scrutiny as you do as when you are doing a contract, and one of the things, we have a HMO Advantage plan here. And I'm not sure if the implication was that there were no HMO managed care plans or if you were encompassing them with the PPO when you're discussing PPOs? But there certainly are Medicare Advantage plans that are HMOs and more restrictive than the PPOs.

Ron Nelson:

Mary, that's a unique situation to Wisconsin and just a few states where there are actually HMO. In fact, the presentation that we had in Washington this week, I think they actually referenced that there were very, very few actual HMO plans. And Wisconsin is one of the states that does have a fairly high penetration of what I would categorize together the regional PPO and within that might also be the regional HMO or a local HMO plan. So, there's no question, I know that you have those there in Wisconsin, but it is also unique to the Wisconsin area.

Mary Peterson:

And then I have one other question, I know we had talked previously about some kind of meeting of the minds with CMS and these Advantage plans and perhaps the National Association about payments correctly or educating them. And I talked to a (Frank Suflinski) this week as a result of the rural health call, he's CMS out of Denver.

(Bill Finerfrock):

Right.

Mary Peterson:

I mentioned that to him, and, you know, I really think there has to be done - we, no matter what plan we get we're educating them. We now have three fee for service plans and we, and they started with 2004 with them and we're still not getting paid. I mean it's a constant battle.

(Bill Finerfrock):

Right. I have spoken with Frank, and when he and I spoke he was, he felt that it was a good idea, as well. Unfortunately, the people who do the plan relations have not been as easy to deal with in terms of working with us to try and set something up. But we still are interested in trying to do that and get a handle on what the plans are and what they know. Our first caller, (Jerry Payne) was one who has had conversations with us. They've endeavored on their own to try and better understand the RHC program. Some other plans have done that, but there are others who don't seem to care too much whether they learn a lot about RHCs.

Mary Peterson:

Well, I think what happens is the local reps that we deal with sort of try to get, understanding what's going on, but it has to get, somehow it has to either be programmed into their computer systems or whoever is paying the claims has to understand what's going on. And, you know, we would love to do this by sending a manual claim alerting them it's a rural health clinic claim, but they want to get them into their automated system which I think is faster, only to turnaround and we're paid wrong, and we're dealing with it back door. So.

Ron Nelson:

Mary, I'd just like to suggest, also, I actually sat at the table this past few days with a representative from Wisconsin who seemed to believe that things were really going well with the contracting with rural health clinics in Wisconsin. So, you may want to make sure that your hospital association and other organizations are aware of some of the problems that you're having in terms of payment adjudication, because it is clear and we're hearing it across the country that plans don't necessarily, while they've now figured out how to put together a proposal that doesn't necessarily mean that the back shop activities or the administrative activities of processing and adjudicating and paying a claim correctly are happening.

Mary Peterson:

Right. Well, we have no contracts with our fee for service plans, so it is mainly a process and a procedure that has to be carried out correctly at the insurers, and that's what we're continuing to try to deal with is to get that process to get it right the first time.

(Bill Finerfrock):

All right. Thank you, Mary.

Mary Peterson:

Yes.

(Bill Finerfrock):

Last call, Operator?

Operator:

Yes, your line is open. Please go ahead.

Male: Hello.

(Bill Finerfrock):

Hello.

Ron Nelson:

Go ahead if you have a question?

Operator:

Hearing no response, we'll move on.

Ernie Parisi:

Hello, this is Ernie Parisi in (Clifton), Texas.

(Bill Finerfrock):

Hey, Ernie.

Ron Nelson:

Hi, Ernie.

Ernie Parisi:

How are you doing? My concern has to do with the fact that all the Medicare Advantage patients are being lost as Medicare patients. If you - the more penetration you get the more loss you're going to have, which means essentially you're going to lose all your cost based reimbursement if it goes 100%. And my concern is, is whether or not the Association should take that on as an issue because I mean essentially we could lose everything we've worked for over the past years.

(Bill Finerfrock):

I guess we could debate. I mean I'm not, I don't know that you'll ever see a situation where Medicare, regular Medicare goes away and you have 100% representation by a private, of individuals enrolled in private plans. But certainly the cross-over implications are something that we've at least given some thought to, and what are the long-term implications if more and more individuals enroll in private plans?

Ernie Parisi:

I mean we can negotiate all the rates we want, especially as they are right now, but the more penetration you have in the Medicare Advantage plans the less reimbursement you're going to get on a cost based basis, which means you're going to get less payment on a continuing basis until it's gone. That's my concern.

(Bill Finerfrock):

Yes, I mean I don't - I mean, as you know, some of the private fee for service plans are paying your cost plus a little bit more. Whether or not we can assure that that's going to continue, I don't know. I mean I know some of the folks in Texas have looked at some of the programs and feel that what the private plans are offering them is very reasonable and fair reimbursement relative to what they were getting under regular Medicare, so I mean I think it's something that we've got to keep an eye on and watch. And then if we're successful at getting the wraparound, obviously, that's another factor in there, as well.

Ernie Parisi:

Well, Ron, I appreciate the presentation. It certainly was informative. And I certainly picked up something from it. And I certainly do appreciate it. And thanks, again.

Ron Nelson:

Thanks. And, again, I think, Bill, before we wrap-up it's important for those that are on the call to understand the opportunity to gain additional information by attending that conference March 9th and 10th in Texas and San Antonio.

(Bill Finerfrock):

Yes. And you can get - we will have representatives of the plans there, we will have panel discussions to talk about what they're doing, how they're viewing the RHC program, et cetera. To get information you can go to the web site which is www.narhc.org and you can sign-up to attend the conference online there.

You should have received a link to Ron's PowerPoint presentation, so hopefully you all had that.

A transcript of this call will be available typically it takes us a couple of weeks to get it back, get it cleaned up, and get it posted, but a notification of its availability will be sent out to the Rural Health Clinic technical assistance list serve.

I want to thank everybody for participating in today's call and look forward to having you participate in future calls. Thank you and we'll talk to you probably next month. Thanks. Bye.

Operator?

Operator:

That does conclude our conference. Everyone, we thank you for your patience. Have a great day.

END