Avoiding Multi-Million Medicare Advantage Mistakes at SNFs

New payment models frequently shoulder the blame for the uncertainty surrounding the skilled nursing marketplace, as operators struggle to shift from the private-pay and Medicare of the past to Medicare Advantage and other new reimbursement methods.

But, according to one SNF consultant, the time for blaming new models is over — and the only thing left to do is adapt.

“We can bob and weave, but we can’t escape it,” says Susie Mix, founder of the Fountain Valley, Calif.-based Mix Solutions health care consulting firm. “So instead of avoiding it, prepare for it.”

Some savvy SNFs have already heeded the call: Managed Medicare patient day mix hit its highest point in five years this February, according to recent data from the National Investment Center for Seniors Housing & Care (NIC). So Skilled Nursing News asked Mix to share some of her clients’ biggest Medicare Advantage headaches, and how she and her fellow experts look to cure them.

1. Realize that Medicare Advantage is Not Traditional Medicare

One of the top mistakes providers make when accepting Medicare Advantage patients, Mix says, is assuming that a firm knowledge of Medicare reimbursements will easily transfer to the world of Medicare Advantage.

“Once you learn Medicare, you can go into any building, any state, and run a building and you know Medicare,” Mix says. “You know how to bill it. You know how to handle it.”

But this just isn’t the case with Medicare Advantage. The program involves a variety of private insurance companies, each with its own bureaucracy and unique billing procedures, forms, payment codes and contracts.

“Every contract, every health plan is different,” Mix says. “If you memorize the Humana contract, that’s wonderful, but it has nothing to do with the way Blue Cross does things.”

This means that even a simple oversight — penciling in the wrong code, assuming that insurer authorization isn’t required when it is, or even mailing a form to the company’s Medicaid billing address instead of its Medicare Advantage address — could lead to major reimbursement issues and a significant hit to a SNF’s bottom line.

2. Always Check the Contracts — Especially in M&A

Mix advises her clients to know each of their Medicare Advantage contracts inside and out. These documents spell out all of the idiosyncrasies that can come up during the claim submission and reimbursement process, and insurance companies will point to them as reference if a SNF makes a misstep.

Operators and real estate investment trusts (REITs) should pay particular attention to contracts during the transition process after an acquisition, Mix says, because ownership changes usually require new contracts — rendering the existing ones useless and costing ownership groups and operators millions.

“Having a sound system in place when you are acquiring a building, or doing a change of management, is imperative,” Mix says. “Otherwise, you’re looking at six, nine, ten months of utter chaos and millions of dollars having to be written off.”

Mix told SNN that she’s worked with operators who have outstanding reimbursements of $2 million to $3 million after failing to properly update contracts following a transition.

“The management team — no matter how big and how great they are, how many buildings they have under their belt — they are not successful with managed care unless they have a plan in place to transition their managed care contracts,” Mix says.

3. Don’t Go it Alone

Employing an expert, either in the form of a third-party consultant like Mix or an in-house employee, is the key to avoiding most of these problems, Mix says — both to help set up new contracts with Medicare Advantage providers, and to maintain existing ones in case of any changes.

In her experience, it’s the larger chains, with 40 buildings or more, that tend to use dedicated employees, while the smaller chains generally use consultants. But either way, a decision to forge ahead with no one at the Medicare Advantage helm has a serious financial impact: The average provider loses $650 per claim due to Medicare Advantage billing issues, according to one study that her firm commissioned.

“If you have 30, 40, 50 patients per month, and you’re losing that amount of money on each patient, that’s huge,” she says.

In addition, incorporating a trusted Medicare Advantage voice can also help shift the perception of accepting managed Medicare residents from a burden to a necessary market adaptation.

“You have to look at this as an opportunity,” she says, adding that seeing managed care and other new payment models as the enemy is a destructive mindset.

“At the end of the day, that mentality is going to kill you,” Mix says. “You’re going to have open beds.”

Written by Alex Spanko

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