1. 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 brian.roers@andersonroers.com West Virginia HFMA

2. Anderson & Roers CPAs, LLC 2 Focus Today 1. Encapsulating process 2. Issues related to each class of bad debt 3.Assuring a smooth audit Today’s Outline

3. Anderson & Roers CPAs, LLC 3 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

4. Anderson & Roers CPAs, LLC 4 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

5. Anderson & Roers CPAs, LLC 5 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

6. Anderson & Roers CPAs, LLC 6 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?

7. Anderson & Roers CPAs, LLC 7 Classes of Bad Debt Bankruptcy Accounts A.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 Accounts A.Maintain policy and follow it B.File claim with the estate or confirm no estate C.Document confirmation

8. Anderson & Roers CPAs, LLC 8 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

9. Anderson & Roers CPAs, LLC 9 Regular Bad Debt (Continued) B. Reasonable Collection Efforts  120 days from date of first bill or last payment  Consistency of efforts  Must be able to provide documentation of all attempted calls, conversations, statements, bills, etc.. internally and at collection agency Best practice is for hospital to maintain documentation of collection efforts in house for closed accounts Classes of Bad Debt

10. Anderson & Roers CPAs, LLC 10 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

11. Anderson & Roers CPAs, LLC 11 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

12. Anderson & Roers CPAs, LLC 12 Final Packet 1.Cover Letter Hospital general information Explain contents Disclose expected audit adjustments 2.Original sample request with self-audit findings noted 3.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 Assure A Smooth Audit

13. Anderson & Roers CPAs, LLC 13 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 Assure A Smooth Audit

14. Anderson & Roers CPAs, LLC 14 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) Assure A Smooth Audit

15. Anderson & Roers CPAs, LLC 15 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

16. Anderson & Roers CPAs, LLC 16 Brian Roers Anderson & Roers CPAs, LLC 11316 86 th Ave North Maple Grove, MN 55369 Phone: (612) 235 – 4400 www.andersonroers.com Contact Information