Another revenue stream threatened?

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John O'Connor
John O'Connor

Believe it or not, there exists a tiny sliver of skilled care facilities that do not receive Medicare funds. And a few other operators have never encountered billing issues with Uncle Sam. Members of this exclusive fraternity do not need to worry about a rule released this week that could significantly change Medicare's rules of participation.

As for just about every other skilled nursing facility out there, this is probably a good time to break out the flop sweat. That is, unless the prospect of being culled from one of your most vital revenue streams is nothing to worry about.

For the government may soon be allowed to discontinue Medicare access for operators with recurring claims-submission issues, under a final rule released Wednesday by the Centers for Medicare & Medicaid Services.

What makes this development especially dicey is that it comes at a time when operators are relying more on Medicare payments to stay afloat. While Medicare as a percent of overall revenue varies by facility and region, it now accounts for more than half of the government-sourced revenue at many facilities. That's especially the case for operators who are larger and/or chain affiliates.

You get the feeling that what drove this rule is that some of the folks at CMS finally had their Howard Beale eruption. In other words, they decided they were fed up with the fraudsters, con artists and others unclear on the concept of how to accurately bill for services.

There's no doubt this rule has a certain “not-going-to-take-it-any-more” feel to it. And in a way, that sentiment is entirely understandable. In fairness, it must be extremely frustrating to see so many claims arrive in various shades of wrong.

But here's the thing: We typically conduct several compliance and reimbursement-related webcasts at McKnight's each year. Two recurring themes from these events hit me time and time again. One is that administrators are where the buck stops. If they have hired incompetent or unscrupulous subcontractors to help with Medicare-covered services, the government really doesn't care. It's the administrator and the facility that will be ultimately be held accountable if billings are found to be less than copasetic. Believe me: No administrator wants to lose his or her license. And I'm fairly certain no nursing home wants to be shut down. Administrators and operators already have very strong incentives to play by the rules.

The second is this: Government rules can be both tedious and contradictory. Yes, long-term care is a big-boy sport, and ignorance of what's required is hardly acceptable. Yet you sometimes have to wonder if the people writing the rules were actively setting out to make life miserable for operators. Just ask your MDS coordinator to name a few bizarre or contradictory rules off the top of her or his head. But don't make any plans for immediately afterward. The monologue that follows may be a real stem-winder.

So am I trying to defend sleazy operators who actively refuse to play by the rules? Hardly. Those rascals should have been thrown out a long time ago. But even the most reasonable person in the world would have to admit that it's not too hard to get sideways with the government over Medicare billing submissions.

Operators who make understandable mistakes with billing rules need to be held accountable. But they should not be facing the equivalent of a Medicare death penalty. At least, not while so many of those rules are just about impossible to figure out.

John O'Connor is McKnight's Editorial Director.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.

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