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Oklahoma Rural Health Conference April 13, 2011

Oklahoma Rural Health Conference April 13, 2011. Medicare Bad Debts. Medicare Bad Debts . How do we get them paid?. Medicare Bad Debt Criteria. Debt must be related to covered services and derived from deductible and coinsurance amounts

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Oklahoma Rural Health Conference April 13, 2011

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  1. Oklahoma Rural Health ConferenceApril 13, 2011 Medicare Bad Debts

  2. Medicare Bad Debts How do we get them paid?

  3. Medicare Bad Debt Criteria • Debt must be related to covered services and derived from deductible and coinsurance amounts • Provider must be able to establish that reasonable collection efforts were made • The debt was actually uncollectable when claimed as worthless • Sound business judgment established that there is no likelihood of recovery at any time in the future

  4. Medicare Bad Debts • Careful completion of worksheet in Exhibit 5 of 339 format must be accomplished for allowance of bad debts • MACs are starting to require information not on Exhibit 5 form – collection agency return date.

  5. Medicare Bad DebtsData to Submit on Lists • Must include the following: • Patient name • HIC number • Service date(s)

  6. Medicare Bad DebtsData to Submit on Lists • Must include the following: • Indigent status – must indicate Y or N – can be due to Medicaid as secondary or charity status • If indigent is due to Medicaid as secondary then must include Medicaid beneficiary number • If Medicaid is secondary must bill to receive denial/verification of secondary coverage

  7. Medicare / Medicaid Crossovers • Beginning January 1, 2010 OHCA reduced the amount they would pay on crossover claims to – • 75% of the deductible • 25% of the coinsurance

  8. How To Handle Crossovers • Medicare assumes patients with Medicaid as secondary are indigent • As soon as Medicaid pays on claim, the remainder of the deductible and coinsurance can be written off and claimed as a Medicare bad debt.

  9. Medicare Bad DebtsData to Submit on List • Must include the following: • Date first billed to patient to collect deductible or coinsurance – if no secondary – is not required for indigent patients • Date written off as uncollectible – after all collection efforts have ceased – including those of collection agencies

  10. Medicare Bad DebtsData to Submit on List • Must include the following: • Medicare remittance advice date – the RA which shows deductible/coinsurance related to potential bad debt • Unpaid Deductible derived from Medicare primary service • Unpaid Coinsurance derived from Medicare primary service

  11. Medicare Bad DebtsData to Submit on List • Must include the following: • Recoveries should include amounts related to both amounts written off and claimed in prior years as well as any amounts recovered on claims for bad debts which may be included in the current year listing

  12. Medicare Bad DebtsData to Submit on List • Must include the following: • Total bad debts allowed – can not exceed amount of Medicare deductible or coinsurance from original claim and must be net of recoveries

  13. Medicare Bad DebtsData to Submit on List • Must include the following: • Must identify which program bad debt relates to • Part A Inpatient, Part B Outpatient • Skilled Swing Bed, Skilled Nursing Facility • Inpatient Rehab, Inpatient Gero-psych • Rural Health Clinic

  14. Medicare Bad DebtsMust have to be allowable • Must include the following: • Cannot claim bad debts until all active /passive collection efforts cease • Must document collection effort in patient files • Must treat all patients the same with respect to use of collection agency

  15. Medicare Bad DebtsWhat Should Not Be On List • Bad debts related to deductibles or coinsurance from fee schedule payments are not allowed • Part B therapy – PPS • Ambulance • Physician professional services – other than those which can be billed on a UB-04 as RHC services • Physician services billed under Method II

  16. Medicare Bad DebtsProblem? We don’t have no stinking problem! • Oklahoma state average was 4% to 7% of Medicare deductible and coinsurance for the years 2005 to 2009 • Look at that backwards – are you collecting 95% of Medicare deductible and coinsurance?

  17. Medicare Bad DebtsWhere are we missing the boat? • Early write off • Financial class changed • Cavalier about write-off codes • Multiple bad debt codes • Not billed – patient • Not billed - secondary

  18. Medicare Bad DebtsI Want to Fight • Protests • PRRB Appeals • Administrator Review • Court

  19. TrailBlazer Audit • Extrapolation of errors • Request for documentation • Bad debt policies

  20. How to Contact Us S. Craig Steen, CPA Senior Managing Consultant Tulsa, OK 918.584.2900 ssteen@bkd.com

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