Growth of managed care has deepened reimbursement challenges for Covenant Living Communities and Services, much like for many providers in the nursing home sector. However, a centralized intake model launched three years ago and certain contract negotiation strategies have enabled efficient revenue cycle management.

With an extensive network of communities spread across many states, the organization’s diverse footprint presents a complicating factor in the midst of this rise in managed care. Currently, Covenant has more residents overall using managed care than Medicare, executives said, with its facilities in Florida and Minnesota leaning more heavily on managed care for reimbursement compared to other regions.

“It presents a lot of opportunities for each one of us dealing with all of these different communities and states [but] it gives us challenges with insurance companies,” said Jon Dunker, director of reimbursement at Covenant. “It really keeps us on our toes quite a bit to make sure that we keep up on all the changes and all the different ways that they want us to do admissions, referrals and authorizations.” 

In addition to several large insurance providers such as Blue Cross Blue Shield and UnitedHealthcare, Covenant also has to communicate with regional health plans, such as Priority Health and Medica. 

Dunker joined other executives from Covenant for a panel discussion at the recent LeadingAge IL conference near Chicago to share insights on effective revenue cycle management for their facilities, including the details of how centralized intake models are set up and the role their managing team plays.

Covenant Living has 20 long-term care communities, including those featuring skilled nursing,  in 11 states.

Centralized intake model

Lauren Kublank, director of intake and admissions at Covenant, said the organization’s centralized intake and admissions model was established about three years ago, and is designed to streamline the admission process across inpatient and outpatient settings.

Kublank explained that her team, consisting of four intake specialists located in Illinois and California, handles all aspects of intake, including verifying eligibility, securing authorizations, and entering data into the electronic medical records (EMR) system. The centralized approach allows for a consistent and thorough review of each admission, which is crucial given the variety of health plans and insurance requirements across Covenant’s facilities.

Managing the varying requirements for Medicare and managed care authorizations presents tremendous challenges. For example, Medicare typically requires a three-day inpatient hospital stay for coverage, while managed care plans often have different criteria and require prior authorizations. Kublank emphasized the importance of understanding these nuances to avoid costly errors and ensure proper coverage.

Her team has come up with a revised, updated centralized verification method for intake in 2024.

“We upload it into the EMR system, so that anyone throughout their skilled nursing stay or throughout their therapy coverage [can get answers] on what their copay is, if authorization is required, if they have deductible or out-of- pocket costs,” Kublank said.

And visibility on relevant patient details begins at the outset with a verification of benefits form, which includes information on the deductible, the copay, the maximum allowed for reimbursement and the authorization required, she said.

“This document is uploaded into the emails so anyone can reference it at any time,” Kublank said. Allowing greater access to information related to preauthorization certainly also saves time when dealing with representatives from insurance companies later.

“Once you get the representative, just to make sure that you’re not calling them back multiple times, have the information that they typically need [ready].”

Some of the key pieces of information Kublank recommends keeping on the fingertips includes an anticipated admission date, the facility master patient index (MPI) and the diagnosis code.

Service providers should be aware that the time frame for submitting documentation following an application for benefits is swift. Insurance providers will request to submit clinical documentation and require history and physical progress reports within 48 hours, she said.

‘Managed care cheat sheet’

Among the best practices for managing authorizations and documentation is precise documentation to support claims and prevent denials, Kublank said. She described the development of a managed care “cheat sheet” for each facility, which includes crucial details about insurance companies, reimbursement levels, and specific requirements for different managed care plans.

These cheat sheets, according to Kublank, are invaluable for ensuring that claims are submitted correctly and efficiently. They help billing staff navigate complex contracts and avoid common pitfalls, such as using incorrect revenue codes or failing to meet authorization deadlines. By keeping these documents up-to-date and accessible, Covenant minimizes the risk of claim denials and delays, she said.

“So since we have so many different facilities in multiple states, we created what we call managed care sheet sheets,” with patient and insurance information, Kublank said. “It just helps in knowing who they’re taking, what their reimbursement is, and what levels we can try to fight for authorization.”.

Timely notifications to insurance companies is of prime importance, said Kublank, explaining that some insurers, such as UnitedHealthcare, require notification within 24 hours of admission. Failure to comply can result in denials and financial setbacks. To address this, the Covenant team has implemented rigorous procedures for tracking and documenting notifications to ensure compliance, she said.

Technology is also a key feature for revenue cycle management at Covenant. The executives emphasized the use of electronic billing systems, clearinghouses, and automated data entry to enhance accuracy and efficiency. For instance, Covenant uses Waystar and other tech-based systems to manage claims and track payments, including Inovalon for Medicare billing. In the end, this reduces the reliance on manual processes and improves cash flow.

And last but not least, by ensuring that all ancillary charges and services are accurately captured and billed, Covenant avoids missing out on reimbursement and minimizes audit risks.

Contract negotiations still pose challenges

Despite minimizing the insurance-related challenges through an improved intake and claims submission process, the final stage of negotiating and managing contracts with insurance providers presents several of its own challenges, particularly for a large provider like Covenant with facilities spread out across regions.

Dunker noted that Covenant’s extensive network requires constant vigilance in renegotiating contracts, as reimbursement rates and terms can vary widely between states and insurers.

“Getting that initial authorization, making sure they have coverage is number one, because you never want to bring someone in and then find out later they didn’t even have coverage … but once all that’s in place, then our job really is getting to know the contracts,” said Dunker.

And the cheat sheet can help with these too.

“The cheat sheet has really been helpful because any of these contracts can be 60-70 pages with all kinds of legalese,” he said. 

Another successful strategy has been to use an outside organization to assist with contract negotiations, and Dunker mentioned recent renegotiations where the external organization successfully increased reimbursement rates with some insurers, despite facing pressure to lower rates.

Moreover, staying on top of contract specifics, such as time limits for filing and appeal processes, and using electronic funds transfers (EFT), can go a long way. Dunker advised that being proactive and well-informed about these terms is essential for managing denials and ensuring prompt payments.

He also suggests minimizing use of snail mail, and using electronic remittance advice (ERA) systems. The ERA transaction supplies information about any payments to the provider, including any adjustments to claims and other payments based on factors like contract agreements, secondary health plans, patient benefit coverage, expected copays and coinsurance, among other issues. Also, the ERA helps providers link an EFT with the specific services covered, allowing providers and health plans to easily track transactions.

“Sign up for any portals that allow you to submit, check claim status or authorizations. Sign up for newsletters [to monitor for] changes constantly,” he said.

Covenant executives suggested knowing well the revenue codes for services in order to curtail denials.

“Managed care gives us enough grief, as it is, with denials … We don’t want to cause our own problems by not dealing with the right revenue code when it’s readily available for us in the contract,” Dunker said.

An added headache is dealing with nuances of Medicare Part B coverage.

“Part B therapy is definitely growing for us, and that presents challenges to make sure that your contract even includes it – we run into that, particularly with some of our Blue Cross Blue Shield contracts around the country, where they will cover the Part A services and not Part B. And we will go to them to try to get that added,” Dunker said.