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Why billing Medicare Advantage no pay claims is important [PODCAST]

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The Hospital Finance Podcast

In this episode, we are joined by Russ Baker, Claims Data Analyst at BESLER, to discuss the importance of billing Medicare Advantage no pay claims.

Learn how to listen to The Hospital Finance Podcast on your mobile device.

Even the best hospital systems can find disconnects in their shadow billing processes resulting in revenue leakage. BESLER’s IME Revenue Recovery service quickly uncovers Medicare Advantage shadow billing opportunities.

Highlights of this episode include:

  • Which providers are required to submit no pay or shadow claims.
  • Guidelines for providers on how to properly submit these claims.
  • Details about the impact that the no pay claims have on the DSH calculation via the cost report.
  • What changes are on the way that will affect shadow billing for all providers.

Mike Passanante: Hi, this is Mike Passanante. And welcome back to the Hospital Finance Podcast.

Today, I’m joined by Russ Baker who’s a Claims Data Analyst on our Revenue Cycle Team here at BESLER. And he is going to be taking with us about the importance of billing Medicare Advantage no pay claims.

Russ, welcome to the podcast.

Russ Baker: Hi Mike. Thanks so much for having me.

Mike: So Russ, for our listeners who may not be familiar with what a no pay or a shadow claim, could you briefly explain that?

Russ Baker: Of course! Shadow bill is basically a colloquial term used to represent no pay or information only claims. These are really claims that acute care providers are required to submit to their MACs for inpatient services provided to patients enrolled in Medicare Advantage Part C plans.

Mike: Great! And Russ, which providers are required to submit these claims? Could you just give us some general guidelines for submitting them properly?

Russ Baker: Yeah! Medicare requires that all providers submit claims for all their Medicare beneficiaries including stays that are covered by Medicare Advantage. This means that IPPS hospitals or hospitals reimbursed under the Inpatient Prospective Payment System, along with non-IPPS acute care providers are required to submit claims.

So, for instance, acute care facilities with nursing and allied health education, rehab units in hospitals, psych units in hospitals, long-term care facilities, cancer centers and children’s hospitals should all be submitting claims.

If there’s one takeaway from today’s podcast, I hope it’s this. From my personal experience, many acute non-IPPS hospitals do not feel that shadow billing is necessary given the fact that these facilities will not receive IME reimbursement for these claims. It’s important to understand that these claims will still affect the facility’s GME reimbursement via the hospital’s cost report if the facilities are teaching.

Furthermore, rehab hospitals and LTACs that are non-teaching facilities should be submitting these claims since it will affect the DSH SSI ratio.

As for submitting these claims, non-IPPS hospitals that are teaching facilities and/or have nursing and allied health education should be submitting these claims to Medicare as no pay claims using a 110 bill type. Condition code 04 is used to identify the patient as a member of a Medicare Advantage plan and that the claim is for informational purposes only.

The claim should also contain condition code 69 to identify that the claim belongs to a teaching facility.

Mike: So Russ, beyond getting paid for that initial claim, that claim that you’re putting in for the actual reimbursement, could you give us some more detail about the impact that the no pay claims have on the DSH calculation via the cost report?

Russ Baker: Sure! As of 2008, Medicare has made it required of IPPS acute care hospitals, rehab hospitals and LTACs to submit to their MACs no pay claims for stays covered by Medicare Advantage.

Now, the point of this change was to include Medicare Advantage days in addition to Medicare Fee for Service Part A days into the SSI equation.

The SSI equation, as we all know, is part of the calculation that’s used to determine a hospital’s DSH percentage. Thus, if these facilities aren’t incorporating these days, most likely their DSH percentages are incorrect.

Now, I want to point out that non-IPPS teaching facilities also have an incentive to bill shadow claims because of their direct graduate reimbursement. This is because Medicare Direct GME payments are calculated by the hospital base-period per resident amount (or as we call it, the PRA) times the full number of residents working in the hospital (or the FTE) and the hospital Medicare share of inpatient days.

So, like the DSH calculation, MA days are to be included in the total sum of inpatient days, but also residents working in these facilities should be added into FTE calculations as well.

Mike: Russ, these days, as we know, most hospitals have pretty good processes in place for submitting no pay claims. But we’ve seen that technology changes can interrupt a process that’s already been working for a hospital.

So, can you tell us a little bit about what you’ve seen and how that might affect how shadow claims are billed?

Russ Baker: Of course! The good news is, like you said, Mike, that most if not all providers by now have a cemented system in place that identifies and bills IME shadow claims. From my own personal experience, however, providers should still be cautious when they’re in the process of converting to new billing platforms (as many are now doing). It’s extremely important that providers are making sure with these new platforms that the IME shadow bills are still being billed concurrently along with their MA claims. Shadow claims are recognized by Medicare as being an original bill. That means they must be billed within a year in order to be considered within the timely filing window. If these claims are not being submitted, providers are potentially losing both direct IME reimbursement and Medicare days off their cost report.

Other issues that I’ve found which could cause shadow bills to be missed is that some providers have older billing systems which require the shadow bills to be sent manually. Issues within the facility’s internal processes or with staff can then lead to claims not being sent on time or sent at all. Combine that with the HIC numbers not being collected at the time of service, this is usually where we see problems begin to accumulate.

Mike: So Russ, we know that there are some changes on the way that will affect shadow billing for all providers. Can you tell them what they can expect?

Russ Baker: Of course. As of April 2018, Medicare has begun issuing an MBI or Medicare Beneficiary Identifier. This is going out to all patients currently enrolling in Medicare. This identifier is set to replace the current Social Security-based HIC number on the new Medicare cards.

By January of 2020, Medicare plans to phase in MBIs for all existing Medicare patients. This change will be significant to those with a shadow billing process because it could potentially mean any errors in your hospital processes or staff could lead to permanent under-payments.

This is because the new identifier will be randomly generated. And using CMS’ own words here, it’s considered to be “non-intelligent,” meaning that the identifier has no special or hidden meaning unlike the current HIC number. Thus, if MBIs are not collected or not collected correctly at the time of service, an issue that is the underlying cause for the majority of shadow bills to be missed, then it may be impossible moving forward to identify and bill these claims.

Therefore, it is my recommendation, if anyone does not consider the third-party vendor and are worried about their shadow billing process, now would be the time to address the problem before it becomes potentially even more complicated.

Mike: Yeah, clearly, these no pay claims are something that every provider really does need to pay attention to.

And if you’d like to understand more about the value of an independent IME review, we invite you to come and download our free paper at which goes into much more detail about the topic.

Russ, thanks for joining us today and shedding some light on this very important topic for providers.

Russ Baker: Thank you so much for having me, Mike.


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