Calling all 77 million baby boomers! This blog site encourages feedback and discussion on how we will spend our concluding years and what quality of life we will have. Change is needed -- we, the people need to fuel change before our time comes!
Google PageRank Checker - Page Rank Calculator

Thursday, June 28, 2007

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.

1 comment:

Jack said...

Great blog. I really enjoy your articles. With your permission I would like to put a link to your blog on my blog.


Good luck!

Best wishes,