News to Note – January 2025

Medicare Part A pays for the first 20 days of patient care in a skilled nursing facility (SNF) at 100%. Data published two years ago looking at the day of discharge from SNFs for Medicare patients showed the probability of discharge on day 20, especially for those patients without a supplement, was significantly higher than other days. Is this coincidence? Hard to imagine.

A recent study from researchers in Texas and New York published in October took a close look at skilled nursing facility billing. They titled their article “Overbilling and Killing? An Examination of the Skilled Nursing Industry.”
The study examined SNF billing patterns before and after the implementation of the Patient-Driven Payment Model (PDPM) in 2019. Prior to this, SNFs were paid based on the amount of therapy provided to patients but PDPM looks at nursing needs, therapy needs, and non-therapy ancillary services which are all based on the patient’s diagnoses. Those diagnoses that raised the payment rates increased markedly as PDPM started.
The authors noted the data shows systems with higher levels of excess rehabilitation services during the pre-PDPM era subsequently experience more intense billing under the PDPM era.

Have you ever been made aware of a patient refused acceptance to a SNF because of excessive medication costs? SNFs have a reasonably valid reason for this as the consolidated billing system the Centers for Medicare and Medicaid Services (CMS) has in place for Part A SNF stays does not account for the ever-increasing costs of many drugs.

In October, the OIG published a study looking at this issue from a unique view – they looked for Medicare Part D expenditures for medications when the patient was in a Part A SNF stay. In other words, that suggested that the patient’s medication, instead of being provided by the SNF, was being filled at a pharmacy and then brought to the SNF for the patient to take, or the pharmacy that supplies medications to the SNF was billing the patient’s Part D plan rather than the SNF.
The most important part of this report is a case described as follows, “a SNF accepted admission of a Part D enrollee from a hospital only when the family assured the SNF that it would provide to the facility the drug the enrollee was taking. The SNF obtained from the family a drug used for the treatment of lung cancer and administered 27 tablets which cost $15,494. According to the SNF, the cost of this drug was more than Medicare paid the SNF for the entire stay and this was the only way they could provide the needed care to the patient to allow them to successfully return home.” Let’s hope CMS realizes it is time to reform the consolidated billing system.

We have a go-live date for the Medicare Change of Status Notice (MCSN) of February 14 but not every Medicare patient with a status change from Inpatient to Outpatient gets this notice. It is only for two limited groups of patients whose status has changed via the Condition Code 44 process – those with Part A and not Part B and those who have their status changed and then stay at least three days. CMS has published the updates to the manual https://www.cms.gov/files/document/mm13846-medicare-change-status-notice-instructions.pdf but as often happens, there are several points that are ambiguous.

For the second group, “the notice must be delivered as soon as possible after the hospital reclassifies the beneficiary from inpatient to outpatient receiving observation services and the third day in the hospital is reached.” But that’s not correct; it is not the third day.
From correspondence with CMS, it is actually the fourth day after the date of the Inpatient admission order. To quote CMS, “It is to be counted such that if a beneficiary would win an appeal to the QIO and have their status revert to inpatient, they could be eligible for Medicare covered SNF services.” And since the patient can appeal even after discharge, which could be the day you deliver the notice, they must have three days starting on the day of the admission order, and not counting the day of discharge.

A case manager on a case manager user group recently asked, “what would you do if a provider sent you an e-mail that stated that all of their patients had to be sent to a specific home health agency and your department director told you to follow that?”

Not one single respondent supported the provider or the director, with most referencing the CMS Conditions of Participation requirement to offer choice regardless of the provider’s preference.
Many pointed out that it is acceptable to inform the patient of their provider’s preference and even why, such as better outcomes for their patients, but full choice must be offered. Many also suggested reporting this to compliance.
It’s not difficult to see why a provider suggest such a thing as their job is to provide the best care possible to the patient, which in their mind might include using their preferred agency. But a case manager director supporting this is inexcusable. The director should have explained why this could not be done and explained the compliant alternatives.

In November, the Lown Institute released data on unnecessary back surgery. From their analysis of Medicare and Medicare Advantage data, over $2 billion was spent on unnecessary surgeries over a three-year period. At a well-known hospital in Ohio, fewer than 1% of patient visits with osteoporotic fracture resulted in an unnecessary vertebroplasty but at a well-known hospital in Arizona, the rate of vertebroplasty was nearly 20% showing a clear difference in utilization.