1 2012 CAHF IO Conference Carlsbad, CA Future Survival In The New Reimbursement Environment.

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2012 CAHF IO ConferenceCarlsbad, CA

Future Survival In The New Reimbursement

Environment

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Presenters

Darryl NixonCAHF Director of Reimbursement Mike LesnickManaging Principle Axiom Health Group Susie MixMix Solutions, INC. Bruce BennettIndependent Owner/OperatorBennett Management and Consulting

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Dan Mendelson, CEO, Avalere Health NIC Conference March 2012

Market and policy changes will force skilled care operators to dramatically change their business practices.

The keys to future success include preparing for rate cuts, improving performance on outcomes and positioning for integrated systems.

Data systems that work seamlessly with those of hospitals, managed care companies and other new partners will become essential.

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The Changing Financial and Reimbursement Environment

Medicare Threats Short Term

• 2011 RUGs Overpayment Issue• 2013 RUGs • January 2013 – 2% Reduction

Long Term• Duals Managed Care• Fund Insolvency

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The Changing Financial and Reimbursement Environment

Medi-Cal (Medicaid) Threats National

• Provider Tax Reduction• Blended FMAP Rate• Block Grants

State • Budget/Funding• Continuation of AB 1629• Transition from Fee for Service (FFS) to

Managed Care

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Other Threats

Uncertainty Health Reform –Will it stay or will it

go? Economy – How much longer will

recovery take? 2013 Federal Budget – Who will win

the fight and what could it mean? Ongoing Federal Deficit

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Other Threats - Increased Risk Payment and Reimbursement

Reimbursement Method? Bundled Payment Episodic Payment Negotiated Payment Fee For Service RateWho controls? Government Accountable Care Organization (ACO) Hospital Managed Care Organization (MCO)

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Other Threats – Increased Risk Payment and Reimbursement

Cash Flow Claims submission

• Form• Electronic• Paper

Timely Payment• Claims processing turnaround• EFT or Paper Check

Claims Appeal/Resolution

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Other Threats – Increased RiskAccess/Utilization Control

Access/Level of Care - Who Directs and Who Controls?

Resident/Family Managed Care Plan Case Coordinator Independent Third Party Case

Manager Hospital Discharge Planner State Utilization Management

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Other Threats – Increased RiskValidation of Quality

Analytics – Your Report Card Hospital Readmission Rate Five Star Rating Quality Indicators Resident/Family Satisfaction Community Reputation

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Other Threats – Increased RiskEfficiency and Economy

Price/Cost – Highest quality at the lowest price?

Infrastructure Barriers Electronic Medical/Health Records Aging and outdated physical infrastructureFinancing Barriers Slim operating margin Access to new capital

1212Axiom Healthcare GroupAxiom Healthcare Group

Managing Managed CareManaging Managed Care

CAHF 2CAHF 2ndnd Annual Annual Independent Owners SymposiumIndependent Owners Symposium

Michael LesnickMichael LesnickAxiom Health GroupAxiom Health Group

[email protected](888) 662-9466 or (714) 323-5968(888) 662-9466 or (714) 323-5968

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Managing Managed CareManaging Managed Care

Can you make a profit working with Can you make a profit working with managed care organizations?managed care organizations?

YesYes

Axiom Healthcare GroupAxiom Healthcare Group


IntroductionIntroduction

Government Wants Out of Healthcare Government Wants Out of Healthcare ManagementManagement

The Government Will Purchase Healthcare The Government Will Purchase Healthcare Services (from managed care organizations) , Services (from managed care organizations) , But Not Be A Provider of Those ServicesBut Not Be A Provider of Those Services

Managed Care Activity Will Increase Managed Care Activity Will Increase DramaticallyDramatically

Your Approach to and Attitude about Managed Your Approach to and Attitude about Managed Care Needs to Change (dramatically for some)Care Needs to Change (dramatically for some)


Categories of Managed CareCategories of Managed Care

A Rose by any other name . . . A Rose by any other name . . .

For the purpose of this discussion I use the For the purpose of this discussion I use the term MCO for any situation where someone term MCO for any situation where someone other than the government controls the moneyother than the government controls the money

You will hear Many different names for this You will hear Many different names for this ACOs, Bundling, etc.ACOs, Bundling, etc.


Categories of Managed CareCategories of Managed Care

Medicaid ReplacementsMedicaid Replacements Medicare ReplacementsMedicare Replacements ACOsACOs BundlingBundling Dual Eligible ProgramsDual Eligible Programs Medicare Advantage SNPMedicare Advantage SNP And Many OthersAnd Many Others


How Should You Get Paid?How Should You Get Paid?

Payment ArrangementsPayment Arrangements• Fee for serviceFee for service• CapitationCapitation• Case RateCase Rate• % of Premium% of Premium

• It doesn’t matter – be creative and focus on the It doesn’t matter – be creative and focus on the bottom line, not the form of paymentbottom line, not the form of payment

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Who Will I Get Paid For?Who Will I Get Paid For?

Long Term / Custodial Level Long Term / Custodial Level ResidentsResidents

Short Term Complex PatientsShort Term Complex Patients Rehab vs. Medically ComplexRehab vs. Medically Complex All of the Above and MoreAll of the Above and More


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Where Will Patients Come FromWhere Will Patients Come From

From the ICUFrom the ICU Emergency Room DiversionsEmergency Room Diversions Won’t Need 3 Day StaysWon’t Need 3 Day Stays They Will Already Be In Your SNF and They Will Already Be In Your SNF and

Won’t Leave To Go To The Hospital Won’t Leave To Go To The Hospital At AllAt All



What Will Managed Care Look What Will Managed Care Look LikeLike

• Traditional MCOs / (HMOs)Traditional MCOs / (HMOs)• Medicaid Managed CareMedicaid Managed Care• ACOsACOs• BundlingBundling• Dual EligibleDual Eligible• Etc.Etc.

Who Cares? We are getting too hung up on the names and Who Cares? We are getting too hung up on the names and the format.the format.

All you need to know is the government will hand off the All you need to know is the government will hand off the responsibility and the money to a private for profit responsibility and the money to a private for profit organization you will need to work withorganization you will need to work with


Why Do You Want To Contract With A Why Do You Want To Contract With A Managed Care Organization?Managed Care Organization?

• CensusCensus• Revenue (Profit)?Revenue (Profit)?• Cover CostCover Cost• You Like HMOsYou Like HMOs

You will have no choice – The Dual Eligible You will have no choice – The Dual Eligible Program in California Is About To Take Hundreds Program in California Is About To Take Hundreds of Thousands Of Patients Out Of The Normal of Thousands Of Patients Out Of The Normal Payer StreamPayer Stream


Why Would A Managed Care Organization Why Would A Managed Care Organization Want To Contract With Your Facility?Want To Contract With Your Facility?

You Have Good Care? (Seminar Title You Have Good Care? (Seminar Title Suggestion – Quality, they don’t give Suggestion – Quality, they don’t give a . . .)a . . .)

Your Facility Is Special? (O K If you say so)Your Facility Is Special? (O K If you say so) Because So Many Elderly People Want To Because So Many Elderly People Want To

Stay In Skilled Nursing Facilities? ( We Stay In Skilled Nursing Facilities? ( We know the answer to this one)know the answer to this one)



Because You Take So Many Expensive & Because You Take So Many Expensive & Complex Patients? (SNF Admission People Complex Patients? (SNF Admission People Often Become World Class Track Starts Often Become World Class Track Starts and Run Away From Complex Patients As and Run Away From Complex Patients As Fast As They Can)Fast As They Can)

Because Your are a Low Cost Alternative? Because Your are a Low Cost Alternative? (SNFs Could Become This, But, Are (SNFs Could Become This, But, Are Typically NOT This Now)Typically NOT This Now)



Your Facility Is Special?Your Facility Is Special? There Are Over 1,100 Snfs In CA And 1,000 There Are Over 1,100 Snfs In CA And 1,000

Of Those 1,100 Do Exactly The Same Of Those 1,100 Do Exactly The Same ThingThing

There Are A Very Small Number That There Are A Very Small Number That Provide Exceptionally Complex Care And Provide Exceptionally Complex Care And Are “Special” (To MCOs) The Rest Are Not Are “Special” (To MCOs) The Rest Are Not “Special”“Special”



Because You Take So Many Expensive & Because You Take So Many Expensive & Complex Patients?Complex Patients?

Providers Typically Have No Clue What Is About To Providers Typically Have No Clue What Is About To Happen To The Level Of Complexity In Nursing Happen To The Level Of Complexity In Nursing HomesHomes

1,000 Of The 1,000 Snfs In CA Have Simple 1,000 Of The 1,000 Snfs In CA Have Simple Custodial Care Populations And Are Not Special To Custodial Care Populations And Are Not Special To McosMcos

Moving To The Level Of Complexity Required By Moving To The Level Of Complexity Required By Mcos Will Be Shocking And Dramatic.Mcos Will Be Shocking And Dramatic.



Because Your are a Low Cost Alternative?Because Your are a Low Cost Alternative?

Most SNFs Are NOT Cost Effective In The Most SNFs Are NOT Cost Effective In The Eyes of the Larger Healthcare Continuum, Eyes of the Larger Healthcare Continuum, Because of Two Words:Because of Two Words:

UNNECESSARY REHOSPITALIZATION!UNNECESSARY REHOSPITALIZATION!



Because You Can Benefit the Because You Can Benefit the Managed Care Organization?Managed Care Organization?• Now We’re Getting Somewhere!Now We’re Getting Somewhere!• Let’s Face RealityLet’s Face Reality• The Keys To Fabulous Relationships With The Keys To Fabulous Relationships With

Managed Care Organizations Are About Managed Care Organizations Are About To Be Revealed . . .To Be Revealed . . .


Keys To Fabulous Managed Care Keys To Fabulous Managed Care RelationshipsRelationships

Take Their Patients Out Of The Hospital Take Their Patients Out Of The Hospital Faster and Sicker Than Any Other SNFFaster and Sicker Than Any Other SNF

Keep Those Very Sick, Complex and Keep Those Very Sick, Complex and Expensive Patients Expensive Patients IN YOUR SNF IN YOUR SNF And Do And Do NOTNOT Send Them Back To The Hospital Send Them Back To The Hospital

Cure Them, Heal Them, Rehab Them And Cure Them, Heal Them, Rehab Them And Send Them To Their Send Them To Their OWN HOME OWN HOME Faster Faster Than Any Other SNFThan Any Other SNF


More Keys To Fabulous Managed Care More Keys To Fabulous Managed Care RelationshipsRelationships

Reduce Hospital ReadmissionsReduce Hospital Readmissions• This may be the single most important This may be the single most important

COST factor for the MCOCOST factor for the MCO• It is incredibly expensive for the MCO to It is incredibly expensive for the MCO to

have a patient readmitted to the have a patient readmitted to the hospitalhospital

• It is a LOT more expensive to care for It is a LOT more expensive to care for the patient in the hospital settingthe patient in the hospital setting



Physician InvolvementPhysician Involvement• Managed Care Organizations Want A Lot Of Physician Managed Care Organizations Want A Lot Of Physician

InvolvementInvolvement• Physician Extenders Will Be Attractive to MCOs As WellPhysician Extenders Will Be Attractive to MCOs As Well• You Need To Get The Physicians On Your Side (and listen You Need To Get The Physicians On Your Side (and listen

to them)to them)

• Please Note – Some MCOs are “Physician Poor”. You may Please Note – Some MCOs are “Physician Poor”. You may need to convince them that you can supplement their need to convince them that you can supplement their physician involvement with your staff.physician involvement with your staff.



Physician Poor MCOsPhysician Poor MCOs

• You need to convince the MCO that you have a You need to convince the MCO that you have a person on your staff that will make “Trusted person on your staff that will make “Trusted Decisions” on their behalf even if their Decisions” on their behalf even if their physicians cannot be involved as much as they physicians cannot be involved as much as they would like them to be.would like them to be.

• This extends to both clinical and financial This extends to both clinical and financial decisions.decisions.



High Volume / Lots of PatientsHigh Volume / Lots of Patients

If you take care of only a small number of If you take care of only a small number of an MCOs patients you have NO influence / an MCOs patients you have NO influence / leverage with them, you may not even be leverage with them, you may not even be able to maintain a contract with themable to maintain a contract with them

If you take care of a large number of their If you take care of a large number of their patients and you do the right things, you patients and you do the right things, you can gain significant influence / leveragecan gain significant influence / leverage



Case ManagementCase Management

You need someone You need someone on your staff on your staff to to manage the MCO patients like the MCO manage the MCO patients like the MCO wants you to manage the patientswants you to manage the patients• Shorter Length of StayShorter Length of Stay• No Hospital ReadmissionsNo Hospital Readmissions• Keep Complex Cases in your SNF even when Keep Complex Cases in your SNF even when

Changes of Condition OccurChanges of Condition Occur• Better communication with doctorsBetter communication with doctors



Statistics & DataStatistics & Data

You need to track and present key You need to track and present key statistics and data such as:statistics and data such as:

Rehospitalization RatesRehospitalization Rates Length of Stay Length of Stay

• By Clinical ConditionBy Clinical Condition• By Payer Source and ContractBy Payer Source and Contract

Utilization of Ancillary ServicesUtilization of Ancillary Services



Focus Only on a Small Number of Focus Only on a Small Number of MCO’sMCO’s

As Clint Maun would say , “Don’t try to As Clint Maun would say , “Don’t try to date everyone”date everyone”• Many MCOs are limiting the number of Many MCOs are limiting the number of

contracts they issue and the number of SNFs contracts they issue and the number of SNFs they refer patients to they refer patients to

• If you try to work with all of them you may If you try to work with all of them you may wind up with none of themwind up with none of them



Focus Only on a Small Number of Focus Only on a Small Number of MCO’sMCO’s

One possible exception is to use “Letters One possible exception is to use “Letters of Agreement” with MCOs you do not have of Agreement” with MCOs you do not have contracts with and charge a lot to Non-contracts with and charge a lot to Non-Contracted MCOs.Contracted MCOs.



Change The “Tone” of the Change The “Tone” of the RelationshipRelationship

Try to move from an adversarial “us Try to move from an adversarial “us against them” to a cooperative / against them” to a cooperative / partnership tone.partnership tone.



Contract People vs. Physicians & Contract People vs. Physicians & CliniciansClinicians

If the extent of your reach into the MCO If the extent of your reach into the MCO ends at the contract / finance office you ends at the contract / finance office you are likely to fail (or at least not be happy are likely to fail (or at least not be happy with the outcome)with the outcome)

If you get Physicians and Clinicians If you get Physicians and Clinicians involved in your facility in a meaningful involved in your facility in a meaningful way, your chances of a good result go way way, your chances of a good result go way upup



Distinguish yourselfDistinguish yourself

Complex PatientsComplex Patients Manage Changes of Conditions in the SNFManage Changes of Conditions in the SNF Reduce RehospitalizationReduce Rehospitalization Specialty Programs (emulate / mirror hospital Specialty Programs (emulate / mirror hospital

programs)programs) Do Something DIFFERENT for the FamiliesDo Something DIFFERENT for the Families Do Something DIFFERENT for the PhysiciansDo Something DIFFERENT for the Physicians Outcome Data (Statistics)Outcome Data (Statistics)


Keys To Fabulous Managed Care Keys To Fabulous Managed Care RelationshipsRelationships

If You Do These “Simple” Things You If You Do These “Simple” Things You Will Develop A Great Relationship Will Develop A Great Relationship With The Managed Care OrganizationWith The Managed Care Organization

. . . Over Time. . . Over Time


Ways To Fail Under Managed CareWays To Fail Under Managed Care

Act like you did with traditional Medicare Act like you did with traditional Medicare (when it use to exist)(when it use to exist)

Say no to admissions / be too selectiveSay no to admissions / be too selective Focus only on rates rather than the total Focus only on rates rather than the total

relationship and the net bottom linerelationship and the net bottom line

“ “ We don’t want their patients because their We don’t want their patients because their rates are too low”rates are too low”


How To Make Money Under Managed How To Make Money Under Managed CareCare

Understand The Financial Outcome Understand The Financial Outcome Analyze the Cost of Managed Care Analyze the Cost of Managed Care

PatientsPatients Negotiate Exclusions to the Rate(s)Negotiate Exclusions to the Rate(s) In lieu of, or in addition to Exclusions to In lieu of, or in addition to Exclusions to

the rate(s), Negotiate to have the MCO the rate(s), Negotiate to have the MCO give you expensive thingsgive you expensive things


Remember the 3 Simple Keys to SuccessRemember the 3 Simple Keys to Success

• Get ‘em in sickerGet ‘em in sicker

• Fix ‘em up fasterFix ‘em up faster

• Send ‘em home quickerSend ‘em home quicker


Let’s Compare The Medicare Profit to the Let’s Compare The Medicare Profit to the MCO Profit?MCO Profit?

I’m going to give you two financial examples, I’m going to give you two financial examples, assume the following:assume the following:

Patient DescriptionPatient Description• Rehab Rehab

3 hours per day 3 hours per day • Infectious Disease Infectious Disease

MSRA, CDIF, VRE MSRA, CDIF, VRE • Wound Care Multiple Wound Care Multiple

Complex Wounds - 3 separate Wound VacsComplex Wounds - 3 separate Wound Vacs• Patient's Weight Patient's Weight

478 pounds bariatric bed, chair and toilet 478 pounds bariatric bed, chair and toilet • Drugs Drugs

Blood ThinnersBlood Thinners Lovenox Lovenox Expensive I.V. Antibiotics Expensive I.V. Antibiotics Cialis Cialis


Which Payer Will Have A Better Bottom Which Payer Will Have A Better Bottom Line?Line?

Traditional Medicare Pays You Traditional Medicare Pays You $742 PPD $742 PPD for this patient under RUXfor this patient under RUX

MCO Pays you MCO Pays you $450 PPD $450 PPD for this patientfor this patient

Assume the COST of this patient is Assume the COST of this patient is $740 PPD$740 PPD

Which is the better deal?Which is the better deal?

It Depends . . . It Depends . . .


Which Payer Will Have A Better Bottom Which Payer Will Have A Better Bottom Line?Line?

Under Traditional Medicare You Incur ALL of Under Traditional Medicare You Incur ALL of the Costs the Costs

If You Have Negotiated A “Good Contract” with the If You Have Negotiated A “Good Contract” with the MCO Some or All of the following may be in placeMCO Some or All of the following may be in place• They Bring You The Bariatric EquipmentThey Bring You The Bariatric Equipment• They Bring You the Wound VacsThey Bring You the Wound Vacs• They Allow You to Bill Separately for the Expensive Drugs They Allow You to Bill Separately for the Expensive Drugs

and/or Bring Them To You As Welland/or Bring Them To You As Well

Which is the better deal?Which is the better deal?

It Depends . . . It Depends . . .


Managed Care Cost Savings / DifferenceManaged Care Cost Savings / Difference

Total CostTotal Cost $720 PPD$720 PPD Bariatric EquipmentBariatric Equipment ($100) PPD($100) PPD Wound VacsWound Vacs ($150) PPD($150) PPD Drugs the MCS Brings Drugs the MCS Brings ($ 50) PPD($ 50) PPD Separately Billed ItemsSeparately Billed Items ($ 75) PPD($ 75) PPD

Net CostNet Cost $335 PPD$335 PPD MCO Payment RateMCO Payment Rate $450 PPD$450 PPD Profit Under MCOProfit Under MCO $115 PPD$115 PPD


Medicare Picture & Cost SavingsMedicare Picture & Cost Savings

Total CostTotal Cost $740 PPD$740 PPD Bariatric EquipmentBariatric Equipment ($0) PPD($0) PPD Wound VacsWound Vacs ($0) PPD($0) PPD Drugs the MCS Brings Drugs the MCS Brings ($0) PPD($0) PPD Separately Billed ItemsSeparately Billed Items ($0) PPD($0) PPD Net CostNet Cost $740 PPD$740 PPD

Profit Under MCOProfit Under MCO $ 2 PPD$ 2 PPD But your length of stay will be twice as longBut your length of stay will be twice as long


Lesson LearnedLesson Learned

The The RATERATE doesn’t matter so much if doesn’t matter so much if you can get concessions on expensive you can get concessions on expensive items from the MCOitems from the MCO

This Could Be Through Having This Could Be Through Having Expensive Items Excluded (Billed Expensive Items Excluded (Billed Separately)Separately)

This Could Be Through Having The MCO This Could Be Through Having The MCO Bring You Those Items.Bring You Those Items.


Analyzing Your Managed Care ActivityAnalyzing Your Managed Care Activity

You Can’t Fix Something If You You Can’t Fix Something If You Don’t Know What’s BrokenDon’t Know What’s Broken

Cost and Profit AnalysisCost and Profit Analysis Utilization AnalysisUtilization Analysis Comparison To Other Pay SourcesComparison To Other Pay Sources


Analyze MCO Cost & ProfitAnalyze MCO Cost & Profit

You Can Analyze The Cost And You Can Analyze The Cost And Profitability Of Your Managed Care Profitability Of Your Managed Care Patients With Information You Patients With Information You Already Have In Your Possession.Already Have In Your Possession.

• Ancillary Cost AnalysisAncillary Cost Analysis• Routine Cost AnalysisRoutine Cost Analysis• Overall Profit (or Loss)Overall Profit (or Loss)


Ancillary Cost AnalysisAncillary Cost Analysis

What You Need:What You Need:• Ancillary Charges From The UB-04s (or Ancillary Charges From The UB-04s (or

your revenue journals) For The Managed your revenue journals) For The Managed Care PatientsCare Patients

• Ratio Of Cost To Charge Info From Your Ratio Of Cost To Charge Info From Your Cost ReportCost Report

• You Can Get More Elaborate And Dissect You Can Get More Elaborate And Dissect Direct Costs From Overhead Costs Direct Costs From Overhead Costs (Probably Not Necessary)(Probably Not Necessary)


Ancillary Cost AnalysisAncillary Cost Analysis

What You Need:What You Need:• Ancillary Charges Ancillary Charges $1,000$1,000• Ratio Of Cost To ChargeRatio Of Cost To Charge .50 .50• Cost Of Ancillary ServiceCost Of Ancillary Service $ 500$ 500


Routine Cost AnalysisRoutine Cost Analysis

What You Need:What You Need:• Average Routine Costs (Segregate By Average Routine Costs (Segregate By

Unit If Appropriate)Unit If Appropriate)• RUG Levels For Patients AnalyzedRUG Levels For Patients Analyzed• Nursing Index Figures For RUGs Nursing Index Figures For RUGs

CategoriesCategories



Simple MethodSimple Method• Simply Assume the Managed Care Simply Assume the Managed Care

Population Consumes the Average Population Consumes the Average Routine CostRoutine Cost

• Add A Little Something To The Average Add A Little Something To The Average Cost To Account For ComplexityCost To Account For Complexity



More Sophisticated Method:More Sophisticated Method:• Obtain The RUG IV Nursing Index For Obtain The RUG IV Nursing Index For

Each PatientEach Patient• Apply the Nursing Index To The Average Apply the Nursing Index To The Average

Routine CostRoutine Cost• Arrive At The Adjusted Routine CostArrive At The Adjusted Routine Cost• SEE SPREADSHEET WITH NURSING SEE SPREADSHEET WITH NURSING

INDEX FIGURESINDEX FIGURES



RUGRUG UnadjustedUnadjusted IndexIndex WeightedWeighted

AA RVARVA 150150 1.481.48 222222 BB LC1LC1 150150 1.221.22 183183 CC HD1HD1 150150 1.601.60 240240 DD CA1CA1 150150 .78.78 117117 EE RMBRMB 150150 1.631.63 245245 FF CB2CB2 150150 1.151.15 172172

AverageAverage 150150 ASSUME 1.0ASSUME 1.0 197197


MCO Cost Analysis ExampleMCO Cost Analysis Example

Analysis SpreadsheetAnalysis Spreadsheet

See Attached SpreadsheetSee Attached Spreadsheet


Another Method To ConsiderAnother Method To Consider“Net to Routine”“Net to Routine”

Determine What Is Included In The Bundle Determine What Is Included In The Bundle Of Services Encompassed By Your Of Services Encompassed By Your Medicaid Payment (or Your Private Rate) – Medicaid Payment (or Your Private Rate) – The “Routine” ServicesThe “Routine” Services

Determine How Much You Pay For Items Determine How Much You Pay For Items That Are NOT Encompassed By That That Are NOT Encompassed By That PaymentPayment

Arrive At The Amount Left Over To Pay For Arrive At The Amount Left Over To Pay For Routine CostsRoutine Costs


Another Method To ConsiderAnother Method To Consider“Net to Routine”“Net to Routine”

Total Payment Total Payment $400$400 Ancillary Costs Ancillary Costs $175$175

““Net to Routine”Net to Routine” $225$225

Private RatePrivate Rate $200$200 Medicaid RateMedicaid Rate $180$180


Opportunities For Excluded Item BillingOpportunities For Excluded Item Billing

Many Managed Care Contracts Have Many Managed Care Contracts Have Excluded Items That The Provider Can Bill Excluded Items That The Provider Can Bill Separately ForSeparately For

Many Providers NEVER Bill Separately Or Many Providers NEVER Bill Separately Or Even Understand What They Can Bill ForEven Understand What They Can Bill For

One Way To Ferret Out These Items Is To One Way To Ferret Out These Items Is To Look At Charges On The UB-04s and Look Look At Charges On The UB-04s and Look For High Charges (High Utilization) In For High Charges (High Utilization) In Likely AreasLikely Areas


Comparison To Other Pay SourcesComparison To Other Pay Sources Although You May Never Get The Same Although You May Never Get The Same

“RATES” “RATES” Medicare Pays From A Managed Medicare Pays From A Managed Care Organization, A Comparison Between Care Organization, A Comparison Between The Managed Care and Medicare Revenue The Managed Care and Medicare Revenue Is UsefulIs Useful

Determine What RUG Category The Patient Determine What RUG Category The Patient Would Have Been InWould Have Been In

Total The Managed Care Revenue Actually Total The Managed Care Revenue Actually ReceivedReceived

Total The Medicare Revenue That You Total The Medicare Revenue That You Would Have Received From Medicare Would Have Received From Medicare

Compare The Two NumbersCompare The Two Numbers


Comparison To Other Pay SourcesComparison To Other Pay Sources You need to compare the rates you get You need to compare the rates you get

from other MCOs to the contract you are from other MCOs to the contract you are analyzing analyzing

• If others are higher there may be leverage or If others are higher there may be leverage or you may want to shift focus to the better MCOyou may want to shift focus to the better MCO

• If you want more then others are paying you If you want more then others are paying you need a compelling reason to provide the MCO need a compelling reason to provide the MCO to convince them you are worth moreto convince them you are worth more

• Information is powerful in negotiations.Information is powerful in negotiations.


Apples To Apples ComparisonsApples To Apples Comparisons

Remember, There May Be Different Remember, There May Be Different Bundles Of Services You Are Bundles Of Services You Are ComparingComparing

Also, The Managed Care Organization Also, The Managed Care Organization May Be Providing Supplies or Drugs May Be Providing Supplies or Drugs That You Need To Pay For Medicare That You Need To Pay For Medicare PatientsPatients

Be Sure To Account For These Be Sure To Account For These Differences In Your ComparisonsDifferences In Your Comparisons


SummarySummary

You Can Make Money On Managed CareYou Can Make Money On Managed Care You Have Everything You Need To Analyze You Have Everything You Need To Analyze

Your MCO Cost & Profit Your MCO Cost & Profit You Need To Change Your Approach To You Need To Change Your Approach To

Care (Can’t Keep Thinking Medicare Care (Can’t Keep Thinking Medicare Thoughts)Thoughts)

Focus On A Few Key MCOsFocus On A Few Key MCOs Analyze Your Data - Get Started Analyze Your Data - Get Started


How Do We Make This How Do We Make This Happen?Happen?

Susie Will Now Tell You Susie Will Now Tell You How To Make All Of This How To Make All Of This

Start Happening Start Happening

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So How Do We Get Started?

Susie MixMix Solutions, Inc

18444 Ward StreetFountain Valley, CA [email protected]

(949) 285-8859

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So How do we get started..

Inventory/Analyze the current contracts in place

Research Health Plans in the area Set Priorities – Targets Get contracts in place with the health

plan Get your team ready Market, market, market A note on California dual eligible

initiative

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Inventory and Analyze Contracts

What contracts do you have in place? How current are they? Which contracts are utilized most? How do you know how your rates

compare with the market rates?

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Research Healthplans in Area

Ask Case Managers at hospitals what plans they work with the most

Ask docs/medical directors which plans they see in their office most often

Reach out to local IPA’s in the area to ask what healthplans they are affiliated with

Research on health plan websites

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Who Is “At Risk” – Who Pays The SNF?

You need to determine who actually pays the SNF

You need to know how the group or organization you are talking to relates to the company that actually pays the SNF

This will help you determine who you need to enter into contracts with.

It is also helpful to understand who pays the organization that pays the SNF (where the money originates)

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Set Priorities - Target

Decide with your team what health plans you would like to work with.

Consider alliances and relationships you would like to create

Consider membership numbers in your area

Focus on the ones you think will count the most. Put the time into building a strong relationship with those folks

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Get Contracts in Place

Gather all credentialing documents (i.e. facility license, insurance certificate, W-9)

Get a contract specialist involved to ensure you are getting at or above market rates

Always ask for exclusions within the contract

Review terms of the contract, term without cause, submission deadlines, appeal deadlines and look back periods and other pertinent business terms before signing

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Get your team ready

If you are currently running a “custodial care / long term” facility the philosophy will need to change

A HMO contract binder should be handy for the BOM, Case Manager, DOR and Admissions personnel *Important to keep binders updated*

Admissions and BOM will need to collaborate on eligibility, benefits, authorizations, levels etc. Communication lines should be established and clear

A team member should be identified to take on the role of case manager for managed care patients

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Market, Market, Market

Get to know the key players within each health plan that are responsible for placing patients

Notify/Educate all referral sources of the current contracts you have in place. You want to be the one stop shop

Get to know the medical directors of each health plan and make sure they know your building

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Dual Eligible Initiative When is it in effect – January 2013 What is it – a demonstration project to

transition dual eligible Medicare-Medicaid patients into managed care

What counties are involved – San Diego, San Mateo, Orange and Los Angeles County

Lives affected • LA 373,941• Orange 71,588• San Diego 75,724• San Mateo 13,787

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Provider’s Perspective

Bruce BennettBennett Management and

Consulting

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Questions?

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Contact InformationDarryl Nixon-email [email protected]

Office 951- 663-6545; cell 916-346-7284

Mike Lesnick-email [email protected] Office 888-662-9466; cell 714-323-5968

Susie Mix-email [email protected] Office 949- 285-8859

Bruce Bennett-email [email protected] Office 949-209-9712

1 2012 CAHF IO Conference Carlsbad, CA Future Survival In The New Reimbursement Environment.

Documents

Transcript of 1 2012 CAHF IO Conference Carlsbad, CA Future Survival In The New Reimbursement Environment.