Anderson & Roers CPAs, LLC 1 Medicare Bad Debt - Getting What is Owed to You! Brian J. Roers, CPA Partner Anderson & Roers CPAs, LLC 612.235.4412 [email protected]

Anderson & Roers CPAs, LLC1

Medicare Bad Debt - Getting What is Owed

to You!

Brian J. Roers, CPAPartnerAnderson & Roers CPAs, [email protected]

West Virginia HFMA


Focus Today

1. Encapsulating process

2. Issues related to each class of bad debt 3. Assuring a smooth audit

Today’s Outline


Dream

Medicare bad debt logs created with the push of a button, capturing all eligible accounts, with zero audit loss.

How will we accomplish this

Ensuring proper transactions are in place and being used correctly, policies followed with religious zeal, and audits planned and executed.

Process


What Do You Need?

A. Patient responsibility Captured in PAS?

B. Amount paid toward patient responsibility

C. Amount of and type of write-off

Encapsulating Process


Medicaid Crossover Accounts

A. Proper Medicaid billing Billed regardless of collection expectation Coding denials to correct transaction Medicare repays – Medicaid re-billed for crossover

B. Specific transaction code for Medicare crossovers separate from Medicaid contractual write-off

C. Medicaid payments are posted even if zero payments occur

D. Medicaid HMOs properly coded

Classes of Bad Debt


Classes of Bad Debt

Charity Accounts (the current WV problem child)

A. Review your policy for compliance with CMS (Palmetto) requirements

Collect income, expense, assets and liabilities

Document decision and approval process

B. Self audit applications for complete documentation and authorizations

C. Analyze simplifying policy

Presumptive charity?


Classes of Bad Debt

Bankruptcy AccountsA. Maintain policy and follow it

B. Confirm bankruptcy discharge

http://www.pacer.gov/psco/cgi-bin/links.pl

C. Write-off posted at bankruptcy discharge date, not filing date

Deceased no Estate AccountsA. Maintain policy and follow it

B. File claim with the estate or confirm no estate

C. Document confirmation


Regular Bad Debt Accounts

A. Collection Policies

Careful consideration to length of time accounts remain at collection agency before recall No set time limit

Are allowed to discriminate against certain pools so long as payer is not criteria (e.g. collectability)

Ensure written policy is retained and periodically reviewed by hospital and collection agency

Create process for testing collection agencies’ compliance with stated policies

Classes of Bad Debt


Classes of Bad Debt


Regular Bad Debt (Continued)

C. Closeback

All collection efforts must be ceased Including credit bureau filings and liens

Identify reason for close – if indigence established, might want to include on an indigent listing

Classes of Bad Debt


The Process

A. Create audit process plan Define departments and individuals involved Agree on priority level Identify audit manager Compile all policies

B. Execution of plan Evaluate $$$ impact of each sample & communicate Start immediately Assign list of needed documents to planned parties Anticipate documents auditor will need that were not

requested

C. COMPILE AUDIT DOCUMENTATION One week

Assure A Smooth Audit


Final Packet

1. Cover Letter Hospital general information Explain contents Disclose expected audit adjustments

2. Original sample request with self-audit findings noted3. Patient Documentation

Tab for each patient Consistent documentation organization Highlight information to simplify auditor’s review

4. Additional support requested Policies Sample statements Contracts with collection agencies

5. Maintain copy for yourself Reference during audit Training for staff



Other Potential Audit Items

A. Examples of collection letters and bills

B. Contract between collection agencies and hospital

C. Written confirmation from collection agency that closed accounts will NEVER be collected upon

D. Collection or charity information on non-Medicare accounts



Rules of Engagement

1. Collaborate with & respect auditors

Disclose EVERYTHING – gain credibility

Don’t be a stranger – meet in person

2. Organization – Be the easiest audit

Pre-audit your packet

Support arguments with: Statutory/regulatory authority

Fact pattern

Mission of hospital

3. Be firm with bullies

Openly reveal – “We will appeal!”

No (maybe), No (maybe), NO (NO)



Main Points From Today

A. Process – Transactional Based Supported by Policies

B. Each Class of Bad Debt – Policy, Document and Monitor

C. Assure a Smooth Audit – Plan, Provide, Follow-up

Recap


Brian Roers

Anderson & Roers CPAs, LLC

11316 86th Ave North

Maple Grove, MN 55369

Phone: (612) 235 – 4400

www.andersonroers.com

Contact Information

Documents

Anderson & Roers CPAs, LLC 1 Medicare Bad Debt - Getting What is Owed to You! Brian J. Roers, CPA Partner Anderson & Roers CPAs, LLC 612.235.4412 [email protected]