Healthcare Provider Solutions

Medicare has always looked to liability insurance policies, no-fault insurance policies, and workers’ compensation plans to pay for services related to injuries associated with those policy types. Recent changes to Medicare policy should improve compliance with these requirements and make it a little bit harder for home health agencies and hospices to get paid by Medicare in situations where one of these policy types is open in the common working file. See transmittal 114 with an effective date of 10/05/2015.

Medicare has always looked to liability insurance policies, no-fault insurance policies, and workers’ compensation plans to pay for services related to injuries associated with those policy types. Recent changes to Medicare policy should improve compliance with these requirements and make it a little bit harder for home health agencies and hospices to get paid by Medicare in situations where one of these policy types is open in the common working file. See transmittal 114 with an effective date of 10/05/2015.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R114MSP.pdf

CMS is updating the reporting in the Common Working File (CWF) and will now require responsible Reporting Entities (RRE) such as liability policies, workers’ compensation policies or no fault insurance policies to report an acknowledgement of On-going Responsibility for Medicals (ORM). This responsibility will be reflected in the MSP detail record with the addition of a new one byte character in the record. This will be a “Y” if the RRE has accepted responsibility related to specific diagnosis or a space if not.

Currently, when a claim is submitted to Medicare for a beneficiary who has an open liability, no-fault, or workers’ compensation case Medicare will evaluate the diagnosis codes on the claim to determine if the care provided by the home health agency or hospice appears to be related to the open policy in the CWF. If the diagnosis codes on the claim are identical to or within the family of diagnosis codes on the open policy in the common working file then Medicare will deny the claim.

Often home health agencies and hospices will find out, once they receive a denial from Medicare, that the benefits on an open policy have been exhausted but that a term date does not yet exist in the CWF. This typically begins a process of the agency or the patient working with the coordination of benefits contractor (COB) to get that term date added or updated. Many times agencies have been able to get the liability or no-fault policy to send a letter indicating that benefits are exhausted to get the COB to update the policy information in the CWF. This new directive specifically prohibits changes to policy information based solely on a letter alone. The letter must now be accompanied by an itemized statement of available benefits and all payment applications leading up to the exhaustion of benefits before Medicare will allow the records to be updated.

Healthcare Provider Solutions strongly suggests, in light of these changes, that agencies take this opportunity to re-examine their policies related to eligibility verifications. Reinforce the requirement that the Medicare Secondary Payer Questionnaire be completed on all patients to determine if there is another payer responsible for payment primary to Medicare. Run eligibility reports on all new patients and rerun eligibility reports on all active patient at least monthly and look for open policies in the common working file. Ask the patient or the patient’s family about any open policies that appear in the common working file. If you see an open policy in the CWF alarms should be triggered and there should be caution in proceeding with that admission. You must gather information about these policies and be prepared to bill these other payers first. What shows in the CWF is what goes! Medicare will not pay as the primary payer if there are other payers who should or would pay first.