Some Medicare Contractors Holding Up Claim Payments Amid the Shift to PDPM

Some of the private insurance companies that process Medicare claims on behalf of the federal government are holding up claims for skilled nursing facilities after the implementation of the Patient-Driven Payment Model (PDPM) in October.

But it’s not clear how widespread that is, BKD director John Harned and senior managing consultant Sherri Robbins said on a Wednesday webinar sponsored by the consulting firm and hosted by Skilled Nursing News.

Medicare Administrative Contractors (MACs) are used by the Centers for Medicare and Medicaid Services (CMS) to function as the “primary operational contact” for the Medicare fee-for-service program and the health care providers enrolled in that program, according to the agency.


Each MAC has a geographic jurisdiction in which it processes Medicare Part A and B claims, as well as durable medical equipment (DME) claims, for beneficiaries.

“We’re seeing, live-time right now, some MACs are putting a hold on everything, and other MACs are actually paying everything,” Harned said.

Some of those companies have argued that they have 45 days to pay the claims, Harned said on the webinar. Others have “bypassed the first payment floor after a hold and gone straight to the second floor, and then pay,” he said.


That said, Harned is not overly concerned, given how recently PDPM has taken effect. There were some claims with a single Health Insurance Prospective Payment System (HIPPS) code that were previously being held, but they’re “being released normally now,” he explained. Some with multiple such codes are still being held, but CMS is working on a solution, according to Harned.

“They assure us that those will be cleaned up and paid by late November,” he said on the webinar.

BKD, along with CMS and the nursing home trade group the American Health Care Association, is encouraging providers to submit all claims now, including those with multiple HIPPS codes, Harned said.

There are several reasons for that — one of them being that CMS begins the 14-day floor for claims processing at the day of submission, Harned said. The goal is to have the claims processed when the solution is in place during the third week of November.

“Don’t wait,” Harned advised providers. “If the November timeframe slips, having an accurate assessment of the number of outstanding multiple-HIPPS codes claims on hold will help rapidly move things forward to getting this fix made.”

It’s not clear what percentage of SNF claims have been held as the result of the MAC delays.

“What we can tell you is we have been seeing some of the MACs that have been holding 100% of the claims, and kind of putting them in… a hold status,” Robbins said. “We’re seeing other MACs that aren’t holding anything and are moving everything through … It really seems to depend on what MAC the facility is working with.”

SNFs also need to pay attention to their Medicare Advantage and managed care claims, since those companies can have several different systems for payment, even if they’re similar to each other.

“The first thing to do whenever you even have an inquiry about [Medicare Advantage patients], before admission, is find out how [the companies] are going to pay,” Harned said. “And then what information are they going to require to pay that claim? Then you need to disseminate that payment method to the billing office, as well as the information required to the [interdisciplinary] team, to make sure everything is gathered so you get paid for all your hard work.”

Comparing therapy invoices to the contracts

If providers contract out their therapy services to a third party, the first few bills should be coming in soon, and it’s imperative that SNFs compare those bills to the terms of the contract in place, Harned advised.

“It’s really important to understand the granularity of the contract, and making sure that that reconciles to the invoice,” he said. “Then, if payment is based on a percentage of the contract, of reimbursement, make sure you compare your remittance advice that you get paid by CMS back to your percentage.”

Some contracts BKD has seen, for instance, are based on federal figures rather than on a facility’s specific rates.

Another essential step for SNFs is to calculate therapy costs per minute every month, and compare those to what they were under the Resource Utilization Group (RUG) system.

“If it was $1 a minute under RUGs, is it $1.05 under PDPM?” Harned noted as an example. “Look for large spikes. Keep a rolling 12-month average of that, and see what those trend lines do.”

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