The Payment System is at the Root of Other Problems

Elderpride: Chapter 3

I am going to begin with the payment system because typically when there is a business problem, the approach to solving it is to follow the cash. Problems created by payment methods, rules and regulations end up leading to other problems and is one of the ways that big problems are created from small problems, and big problems become systemic if not held in check. Systemic problems are at the root of failing to restore Elderpride.

There are two major sources of payment for America’s elderly who are in need of medical or health related care. Medicare is one and Medicaid is the other. Many people also have supplemental insurance policies to take up where Medicare leaves off. This discussion is about the Medicare Payment System.

Medicare is funded by taxing employers and employees; all workers pay into the Medicare program throughout their working lifetime. These monies collected are diverted to the Centers for Medicare and Medicaid (CMS); they determine how these dollars will be spent. CMS is supposed to apply the law to the payment of health benefits. CMS is not the lawmaking arm of the Federal Government in this regard; they are merely charged with acting on the law with good stewardship to insure that benefits are fairly and equitably distributed. As it applies to Long Term Care, Medicare health coverage covers the patient’s need for skilled care certified by a physician. Skilled care is care requiring a licensed professional such as a nurse, a therapist or a social worker.

Strictly for comparison, Medicaid receives its funding from revenue sharing to the individual states from the federal government and the states determine how those monies will be spent. Medicaid covers custodial care and low level restorative care. In other words, Medicaid covers care that can be rendered by an untrained individual. We will fully discuss Medicaid in a later post.

When a covered beneficiary (patient), often an elderly person, is admitted to a facility for care the facility usually files a bill (claim) to Medicare or Medicaid on behalf of the beneficiary for the care rendered. It is the job of the Centers for Medicare and Medicaid (CMS) to review the claim and pay the facility on behalf of the beneficiary in the case of Medicare.

Inserting a dose of reality here – the government is both the beneficent provider of reimbursement dollars and the chokepoint for their disbursement. This little considered fact is responsible for the seeming illogical patterns of payment or nonpayment of claims.

CMS could not possibly review the millions of claims that are filed each month and therefore they have designated Fiscal Intermediaries (FI) who review the claims and pay (or not) them on behalf of CMS. In order to be eligible for payment, the nursing home or SNF must prove that the care was skilled and medically necessary as certified by a physician. Proof is provided in the form of nurses’ notes or therapists’ notes; therefore, as nursing home staff is documenting patient care, they must be very careful to write up their notes in a manner that makes it clear that it was medically necessary for the patient to receive this care. That is a tricky proposition and assumes that all nursing home staff understand Medicare’s definition of “skilled”. It also assumes that they have the time to thoroughly document on each patient which may not happen if they are too busy.

And so, because Medicare dollars are tight, the FI frequently issues a “denial” on the claim taking advantage of the fact that the nursing home or SNF will have a difficult time appealing that “denial” because of the lack of proper documentation. And because it adds cost to the process with no guarantee of a higher reimbursement most nursing homes and SNFs do not appeal the denial. And systemically, the facilities try to avoid the denial in the first place! Each denial is a delay in payment which stretches the nursing home or SNF beyond its capability to meet its expenses.

And I digress for a moment to say that avoiding denials is a topic all by itself because it adds another layer of complexity, this will be our topic for the next post. We will discuss the definition of a denial, the appeal process for a denial, the avoidance of a denial and what a denial means to the patient and the facility.

What this means for the Medicare patient is that they do not always receive their complete entitled benefit which is whatever care is required to restore them to their highest level of functioning or, in other words, Elderpride. This is expressly stated in the Medicare law. This is the first way that the payment system creates a “systemic” problem.

I want to cover Medicaid claims in a separate post because I want to keep these short and interesting. There is a ton of information to cover – our next two topics will be denials followed by the Medicaid payment system.

Please feel free to ask questions or comment so that I know if the information is helpful.

Identifying The RIGHT Problem

Elderpride: Chapter 2


Let’s face it; identifying a problem is something we Americans take pride in --especially if it is someone else’s problem. Well then, I need to ask – why are we so horribly deplorable at solving the problems we identify? I don’t think Americans are apathetic, even though we are often accused of it. I think when Americans are under the impression that there is no solution, Americans go on to something else where they think they do have influence or the ability to solve something.

I think there is another component of why problems don’t get solved and that is that we haven’t identified the right problem or there is finger pointing when there should be working together. Identifying the right problem takes a lot of research and study no matter what the issue is. What seems on the surface to be the problem is often a symptom of the problem and solving symptoms leaves us nowhere. Solving symptoms is a Band-Aid™ at best and may even leave the problem in worse condition than before.

Sometimes the problems are so complex that we, the people get discouraged with the amount of research and study long before we know the whole story. This is what has happened in the Long Term Care industry which includes nursing homes, skilled nursing facilities (SNF) and assisted living facilities. Whenever someone thinks they have a solution, invariably they leave out an important piece of the puzzle. In some ways it is worse than a Rubik’s Cube because, any piece of the nursing home puzzle that is left out of the proposed solution mounts a fight against the proposed solution, and so the changes to the system happen in a haphazard and less than fully supported manner.

As we work our way through this maze let’s all keep in mind that we need to identify the right problem(s). It will take more time. I want to take the time to thoroughly examine the things that are ailing this industry while at the same time arriving at solutions that can be brought to the attention of our legislators during the 2008 elections.

I will begin next week by laying the foundation and opening discussion of the payment system for Long Term Care. Please feel free to comment on this blog.

Why Is There A Problem That Needs Fixing?

Elderpride: Chapter 1

We all know there is a problem in America’s nursing homes, we read about it in the newspapers, we hear about it on the evening news, we experience it when we visit an elder member of our family who is a nursing home patient. We might not be able to put our finger on every aspect of the problem but we know it is there – haunting us.

It is complex.

We may have an epiphany when we visit our grandmother, or our father who is a patient in a skilled nursing facility and notice that there are patients calling out and no one answers; or perhaps we take note that patients are lined up in front of the TV, but no one seems to be watching; or it might be that our own family member seems to have “lost it” after one short week in a nursing home. Perhaps we have read about elder abuse in the papers, or heard on the evening news about an elder patient’s spouse who brings a gun to the facility to end the misery.

And we ask for a brief second, “How did we get here?” But then our busy life takes over and we don’t think about it again until the next time we have to visit someone who is in a nursing home. And we hope against all hope that this won’t be us; the more determined of us tell ourselves we will find a way to be taken care of without becoming a nursing home patient. And, for a lot of us, it’s a long way away – years – and things will certainly be changed by then we tell each other.

And we know deep down that it is complex … too complex for us to fix. We have no clue how to get our hands around it and so we continue to turn our heads the other way. Even if we wish we could fix the problems, somehow we know that it is beyond our individual selves and we certainly don’t know where to begin.

Over the next few weeks I am going to attempt to make the complex more simple because I think if more of us could understand the problem, how we got here and what some of the solutions are, then we can work on a solution and do what it takes to fix it so that our mothers, our grandmothers, our fathers and grandfathers won’t have to live in such a situation.

Let’s start with – IT IS NOBODY”S FAULT. It is a systemic problem that has evolved over time. And previous attempts to fix it have failed, perhaps because no one understood what the problem was to begin with. I think at least 75% of being able to solve a problem is identifying what the right problem is. And as simple as that sounds, it has been my experience that more often than not most people don’t identify the right problem when trying to find a solution … to anything!

It would be the easy way out to blame the people who run or work in nursing homes… or the children who don’t pay attention to their elderly parent’s needs… or the physicians who oversee care ...or the government for not paying enough dollars for nursing home care… or our legislators for not listening… or our most intelligent university minds for not arriving at the right solution.

It is both all those things and none of those things! And we can’t have a solution without addressing all of these things. That is one of the things that makes this so very difficult. Creating change that has so many tentacles will not be easy – that is why, it will take a nation.

I invite comments and questions on this blog because it is my mission here to create understanding of a very complex issue – questions and comments will let me know if I am hitting home, or have more “splainin’ to do” – to quote a famous comedian.