The Denial Problem

Elderpride: Chapter 4


To quote myself in a previous post, “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.”

Today we are discussing the denial of a Medicare claim by CMS Fiscal Intermediaries. For comparison sake, Medicaid also denies claims that do not meet their criteria for payment.

Just to recap the relevance of this topic for a moment – a systemic problem has been created by the claim review process which causes some claims to be “denied” because it isn’t clear that the care was medically necessary or required a licensed professional to deliver it. When a claim is “denied” that means it is not paid. The facility who delivered the care in good faith is punished by not receiving any payment until the matter is resolved. The facility still has to meet their expenses for the staff, supplies and other things that were used to care for the patient in their facility and they have to meet those expenses with no revenue. Obviously, this cannot go on for very long.

According to Jerry Rhoads, CPA, and CEO of Caregiver Management Systems, a consultant to the Long Term Care Industry, when SNFs work to return a patient to their highest level of functioning it takes on average 55 days to do so. A patient is entitled to 100 days of skilled care for every episode of illness as defined by a physician order and a three day hospital stay. However, the FI begins to scrutinize claims after 21 days (a rule of thumb) and if the facility is in the mode of “avoiding denials”, it is common practice to discharge the patient from Medicare at that point. Therefore, on average the patients are only getting 22 days of skilled care leaving a 33 day variance. For many patients, these 33 days mean the difference between spending the rest of their days in the nursing home on Medicaid instead of returning to their home or other community based program such as Home Health Care.

The “denial” equation includes several components. Another is that Fiscal Intermediaries look for “reasons to deny” a claim based on “rules of thumb”; in a 1987 landmark case Fox v Bowen, the judge ruled that both of these practices were a violation of the Medicare Law. Yet the practice is still prevalent today. According to the judge who ruled on Fox v Bowen, the fiscal intermediary is to look for reasons to pay. The implication is that the FI is only to issue a “denial” when they cannot find a reason to pay. This split of hairs (theirs, not mine, as I am only explaining it) makes the difference between a few denials and many denials.

When a claim is denied, the SNF can appeal the denial on behalf of the patient. In order to appeal the denial, the SNF will have to write a letter stating why they are appealing the denial and offer new information proving that the skilled care was medically necessary. If the fiscal intermediary denies the claim again, the SNF can request a hearing. All the work involved in the appeal process is overwhelming for a SNF and there is no guarantee that the denial will be overturned. It is easier for the SNF to encourage the patient to be discharged from Medicare on the 22nd day and state that the patient can’t meet their goals, or set the goals lower than the patient is capable of achieving than to take a chance on the system working properly

When the FI is looking for “reasons to deny” by using “rules of thumb” here is an example of what happens. Let’s say a patient who is in a SNF is progressing reasonably well however on the 21st day has not achieved his or her highest level of functioning. Since the facility knows the fiscal intermediary will begin scrutinizing claims on the 22nd day because that is the “rule of thumb”, they often discharge the patient from Medicare to avoid the scrutiny and accept that Medicare will “only” pay for the first 21 days of skilled care. By avoiding the scrutiny, the SNF will receive their payment promptly and not have to go through the burdensome appeal process.

This discharge from Medicare is most frequently initiated by the therapists. Most SNF facilities consider therapists the experts in determining which patients qualify for Medicare benefits. This is backwards, it should be the registered nurse who qualifies the patient for skilled care, initiates a comprehensive care plan that includes therapies and then supervises the accomplishment of the care plan. It is my experience that nurses do not understand the Medicare definition of “skilled care” leading to the therapists driving the process by default. This is yet another element of the problem and adds a subtle layer of complexity to an already complex process.

The truth of the matter is that the patient is entitled to their full Medicare benefits which means Medicare is obligated to pay for the beneficiary’s care until they reach the highest level of functioning of which they are capable.

When SNF facilities habitually discharge patients from Medicare before they have achieved their highest level of functioning, the patient goes directly into paying for their care on their own (spend down) and ultimately to go on Medicaid (welfare) when their money is gone. Since Medicaid pays a nursing home a lot less money than Medicare, the patient’s skilled care is truncated; the patient who can't pay for their own skilled care is doomed. And even patients with resources are sometimes doomed in this way because they don’t understand the intricacies of Medicare and opt not to pay on their own for skilled care once they are discharged from Medicare on the 22nd day because they are told it is unlikely they will meet their goals. These things all happen frequently enough to be labeled “systemic”.

From the perspective of the patient, accepting or avoiding the denial deprives the patient of their entitled benefits that they and others worked all their lives to have available in the form of Medicare coverage. Since the additional 33 days of “skilled care” can be crucial to the patient’s ability to survive and thrive it is a significant problem that instead the patients are discharged from Medicare early.

From the perspective of the government, they falsely think they have saved money. Hold that thought. We will revisit it later in this series because, in actuality, the government could save billions by restoring patients.

Please feel free to post questions, I will do my best to answer them or refer you to the correct place for the information.

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.

Intro to Elderpride

This is my first venture into blogging – it’s just that nothing is being said about the plight of America’s elderly population and how they are treated in their final years – and so I just have to speak up! The purpose of this blog is to dissect a complex issue and garner the interest of the 77 million baby boomers to put their heads together and convince America’s Congress to fix it before we need it! I don’t want to be blogging alone. Please join me with your comments!

I am doing this on behalf of the Dorotha C. White Foundation, a not for profit organization, established for the purpose of creating sweeping change in our nation’s capital that will result in improved quality of life for senior citizens especially the frail elderly who are using skilled nursing facilities and nursing homes either for transitional or residential care.

First and foremost, I realize that it will take a nation to make the kind of changes that will improve life for the elderly. The term Elderpride was coined by the founders of the foundation to indicate what life would be like for an elderly individual if we were able to make the changes that would enable and encourage restorative care in our nation’s Long Term Care industry triggering a movement towards carehouses, and away from warehouses.

Right now, the dirty little secret that everyone hears about and no one talks about is that a high percentage of patients are doomed once they enter a nursing home. Doomed in the sense that they will not recover, they will be routinely diapered even if they are continent, and placed in a wheelchair in front of the TV day in and day out. That is what I am referring to as a warehouse. No one can recover that way. In order to restore a patient’s highest level of functioning that patient needs daily attention to help the patient be able to walk again, eat by themselves, take themselves to the bathroom, take their own shower, dress and groom themselves. That is the description of a carehouse.

For the most part, none of us likes this sad state of affairs – and who among us wants to go to a nursing home? Raise your hand. I don’t see any hands raised! Since we the people don’t know what to do about it, we tend to look the other way thinking it can’t be fixed. And the problem goes on and on. Because who wants to deal with this unpleasantness?

I am here to tell you it can be fixed. It is complex and there are no simple answers – but there are answers. And as a group, we the people need to convince our legislators that we want them to pay attention.

If you are with me so far, it is my goal to add a chapter a week to this blog to inform and educate whoever will listen in a series format. Stay tuned.