Solving a Medicaid Claim Mystery

Gregg Phillips

Believe it or not there are some things about the Medicaid program that are simple.  For example, while there seems to be a great mystery surrounding what makes a Medicaid claim payable, it is it is really not a mystery at all.

Three simple fact items must be present to pay a Medicaid claim.  A claim must be submitted:

1. by an Eligible Provider: A provider submitting a claim for Medicaid reimbursement must be properly enrolled as an official Medicaid provider.   Each state conducts separate provider enrollment providers must enroll in every state where they provide services.

2. on behalf of an Eligible Recipient: To become eligible for Medicaid, a person must be determined eligible by the state in which he or she lives.  A Medicaid application must be completed and a variety of documents must be submitted. Generally, there are five specific components of the determination. The applicant must prove their identity.  They must be a citizen of the U.S. and a resident of the state in which they are applying for assistance. Finally, the applicant must meet certain maximum dollar amounts for assets and income. Once eligibility is determined, the individual will remain eligible until a change in circumstances renders them ineligible. Redeterminations are conducted on a regular basis, generally annually.

3. for an Eligible Service: Medicaid program services that are available to recipients vary from state to state. Providers have some flexibility but must render services in accordance with approved services.  Many rules and regulations govern the provision and frequency of these services.  For example, many states require high cost or unusual services to undergo a process called prior authorization before the service can be rendered and payment remitted.  

With each of these three items properly documented, Medicaid claims should sail through a state’s Medicaid payment system.

SNF Medicare Reimbursements

Rose Hayden

Doug Walker from Caring Forward offers a very helpful perspective to the Nursing Home Industry regarding SNF Medicare reimbursements.  A must read for our clients.  Visit his site at

When 11.1% isn't really 11.1%: What will Medicare cuts actually cost SNFs?

Many smart folks in the SNF industry have spent a lot of time analyzing and discussing the pending Medicare SNF reimbursement cuts, including some dire predictions about pushing SNF operators to the "economic brink."

We have talked to many SNF providers that are putting projects on hold and deferring strategic decisions while they sort out the impact of the cuts. These cuts present yet another challenge for providers trying to provide exceptional care in a competitive environment with already thin margins.

But I just ran across a sharp analysis by Luke Fannon on the LTL Magazine blog that SNF providers should consider. The key point here: This is not a uniform 11.1% cut in Medicare reimbursements. With the "panic number" of 11.1% continuously kicked around, folks seem to overlook this important fact.

Fannon's analysis points out that, although the reimbursements for rehab RUGs will take a big hit (north of 18% in some cases), the non-rehab RUGs will actually reimburse at an average of 2.6% higher than before. Because of the way the cuts are distributed, your mileage will vary as to how it affects your facilities. It will depend on current and future case mix.

It seems doubtful, though, that any facility would take an overall reimbursement hit of 11.1%—it would represent a disproportionate existing level of rehab patient and reimbursements. For many facilities, because of the distribution of the case mix, overall Medicare reimbursements actually stand to increase under the new rules.

We also agree completely with Fannon's recommendations for SNFs seeking to offset the Medicare rate cuts:

  • Stay focused on increasing your Medicare census--even with the cuts in the rehab RUGs, boosting Medicare census will significantly increase the revenue for your SNFs. (We would add to that: If your payer mix is OK, but your overall ADC is in the 80s or low 90s, then you also need to focus on marketing and increasing your overall admissions.)
Even with the cuts in rehab RUGs, keep focusing your efforts on bringing in those high-therapy, high rehab patients--those RUGs still reimburse at the highest rates. Especially you historically haven't been admitting a lot of those types of patients, you'll still increase overall revenue even with the new reimbursement rates.

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