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Policy, Accounting and Reimbursement: Past, Present and Future
Presented by: Tammy Brunetti, PrincipalAndrea Colfer, Senior ManagerAshley Tkowski, Manager
Policy, Accounting and Reimbursement PAST, PRESENT AND FUTURE
Tammy Brunetti, PrincipalAndrea Colfer, Senior ManagerAshley Tkowski, Manager
January 21, 2021
CLICK TO EDIT MASTER TEXT STYLESPOLICY, ACCOUNTING AND REIMBURSEMENT: PAST, PRESENT AND FUTURE
What a whirlwind!Information contained herein is current as of January 8, 2021. Any regulatory updates after that date will be discussed during Q&A.
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CLICK TO EDIT MASTER TEXT STYLESPOLICY, ACCOUNTING AND REIMBURSEMENT: PAST, PRESENT AND FUTURE
Presentation objectives
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Gain an understanding of available COVID-19 funding, related compliance requirements, and reimbursement implications.
Gain insight on Medicare and Medicaid regulatory, payment, and policy changes that may have financial impacts on your facility.
Gain perspective regarding industry financial, cost, and payment trends and understand how you “measure up”.
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Polling question #1
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CLICK TO EDIT MASTER TEXT STYLESPAYCHECK PROTECTION PROGRAM
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Paycheck Protection Program (PPP) FundsAdministered by the Small Business Administration (SBA)
Top questions received from clients
How do I account for these funds?
When should I apply for forgiveness, and what should I consider?
Do I report these funds on the Medicare cost report, and if so, how?
Do I report these funds on the Medicaid cost report, and if so, how?
CLICK TO EDIT MASTER TEXT STYLESPAYCHECK PROTECTION PROGRAM (PPP) FUNDS
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For-profitLoan model
Note payable
Debt forgiveness
Accounting for PPP Funds
Not-for-profitLoan model
Note payable
Debt forgiveness
Conditional contribution model
Refundable advance
Grant revenue
CLICK TO EDIT MASTER TEXT STYLESPAYCHECK PROTECTION PROGRAM
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Paycheck Protection Program (PPP) FundsAdministered by the Small Business Administration (SBA)
Top forgiveness application considerations
When to apply for forgiveness
Which form should be filled out
Full form - start with PPP Schedule A Worksheet. Keep in mind any alternative funding sources that may be used to offset salaries and wages prior to applying the $100,000 salary cap.
Concept of FTE vs. Employee Headcount, and there are multiple periods to view in the Full Form
Pretend you will be audited
CLICK TO EDIT MASTER TEXT STYLESPAYCHECK PROTECTION PROGRAM
Paycheck Protection Program (PPP) FundsAdministered by the Small Business Administration (SBA)
Cost Report Reporting
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Medicare
G Series
Follows financial statement presentation
Non-patient related revenue
No A-8 adjustment
Medicaid - MA, NH and other non cost settled states
Follow grant reporting regulations
No immediate payment/reimbursement impact
Medicaid – Maine – Cost Settled
Consider the “double dipping” limitation
Remove costs forgiven through the PPP program through a cost report adjustment in the year the PPP loan was granted when the PPP loan is forgiven
Timing
Cost report filing
Financial statement reporting
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Polling question #2
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CLICK TO EDIT MASTER TEXT STYLESPROVIDER RELIEF FUNDS
Coronavirus Aid, Relief and Economic Security (CARES) Act
General distributions
Phase 1 – Medicare providers
Phase 2 – Opened up to Medicaid and private pay providers
Phase 3 – Other – application based
Targeted distributions
Skilled Nursing Facilities
Nursing Home Infection Control Distribution
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CLICK TO EDIT MASTER TEXT STYLESPROVIDER RELIEF FUNDS
Coronavirus Aid, Relief and Economic Security (CARES) Act
Top questions received from providers
How do I account for Provider Relief Funds (PRF)?
What is Uniform Guidance? Do I qualify?
What are the reporting requirements of the PRF funds? How does the guidance impact accounting recognition?
Do I report these funds on the Medicaid or Medicare cost reports, and if so how?
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CLICK TO EDIT MASTER TEXT STYLESPROVIDER RELIEF FUNDS
HHS Funds Financial Reporting
Accounting recognition
For-profit
Refundable advance until earned
Other revenue when earned
Not-for-profit
Refundable advance until earned
Grant revenue when earned
Financial statement disclosure considerations
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CLICK TO EDIT MASTER TEXT STYLESPROVIDER RELIEF FUNDS
Uniform Guidance
A government-wide framework for grants management – an authoritative set of rules and requirements for Federal awards
Required if:Expenditures or “lost revenues” of $750,000 or more expended during fiscal year
What does this mean? Includes all CARES
Compliance Supplement not yet released
Provider Relief Fund General and Targeted Distribution payments (CFDA 93.498)
COVID Testing for the uninsured (CFDA 93.461)
Consider state pass through funding
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CLICK TO EDIT MASTER TEXT STYLESPROVIDER RELIEF FUNDS
HHS Funds – HHS Reporting Compliance
HHS ReportingInformation is accumulated and reported on a quarterly basis, butis currently settled on accumulated data through 12-31-2020 thenfrom 1-1-2021 to 6-30-2021
First reporting period Open 1-15-2021 to 2-15-2021 For revenues and expenses through 12-31-2020
Second reporting period Due by 7-31-2021 For revenues and expenses through 6-30-2021
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Discussion items:• What about September
or March year ends?• Will we get more
clarification?
CLICK TO EDIT MASTER TEXT STYLESPROVIDER RELIEF FUNDS
HHS Funds – HHS Reporting Compliance
Expenses
Compensation Incremental costs Executive Level II ($197,300) Reduced by amounts paid by other sources
Healthcare related expenses Incremental costs COVID related Reduced by amounts paid by other sources
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Discussion items:• Cost based
reimbursement• Capital expenditures and
related depreciation• PPE inventory• No double dipping• Concept of incremental
cost
CLICK TO EDIT MASTER TEXT STYLESPROVIDER RELIEF FUNDS
HHS Funds – HHS Reporting Compliance
Lost Revenues
Report by quarter
Settle by calendar year
Calculation guidance has shifted greatly
Newest guidance may delay portal reporting
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Discussion items:• Can I use my budget as a
basis? Yes!!!• Calendar vs quarter• NET of "other" relief
funding. This is the subject of much discussion.
• Net of prior year cost report settlements.
CLICK TO EDIT MASTER TEXT STYLESPROVIDER RELIEF FUNDS
HHS Funds – Cost ReportingMedicare Reported as grant revenue on G Series and expenses
reported on Worksheet A No A-8 or revenue adjustment – Provider Relief Funds should
NOT offset allowable expenses on the SNF Medicare cost report
Medicaid Follows grant reporting guidance
Maine – offset EXPENSES against allowable direct and routine costs up to the extent costs are above your limits
Other states may not specifically offset grants, but must consider “double dipping”
Base year considerations
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Discussion items:• Ordering the use of PRF
funds• Avoid “double dipping”
CLICK TO EDIT MASTER TEXT STYLESPOLICY, ACCOUNTING AND REIMBURSEMENT: PAST, PRESENT AND FUTURE
Presentation objective
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Gain insight on Medicare and Medicaid regulatory, payment, and policy changes that may have financial impacts on your facility.2
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Polling question #3
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CLICK TO EDIT MASTER TEXT STYLESMEDICARE REGULATORY, PAYMENT AND POLICY CHANGES
Patient Driven Payment Model (PDPM)
In summary• 9% Medicare reimbursement boost• Payment drivers – documentation of depression and restorative nursing• Concerns over clawbacks• No substantial changes to PDPM in 2021 payment rule
Impact of COVID-19• Reimbursement “boost” is a part of the revenue loss consideration – some consider unfair• Proper coding of isolation stays can yield highest paying case-mix group
In reflection• We (you) were ready• Continued MDS education is crucial• Some missed reimbursement opportunities• It is key to have the diagnosis supported by care plan• With a year in review, continue to evaluate therapy plans
Patient Driven Payment Model – A Year Later can be found here: https://bit.ly/39xKJSA20
https://bit.ly/39xKJSA
CLICK TO EDIT MASTER TEXT STYLESMEDICARE REGULATORY, PAYMENT AND POLICY CHANGES
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FY 2021 Prospective Payment System (PPS) Final Rule
Overall 2.2% market basket increase No multifactor productivity adjustment! Budget neutrality factor .9992 Increase in the labor-related weight from 70.9% for FY 20 to 71.3% for FY 21 Projected aggregate payments will increase $750 million Value Based Purchasing adjustment projected to be $199.5 million
Impact Overall impact to providers in urban and rural areas is an average increase of 2.2% and 2.4%, respectively Only 1% increase for urban New England providers
Other ICD-10 code mapping changes Core-Based Statistical Areas (CBSA) changes Changes to Value Based Purchasing program No COVID-19 related payment policy in the final rule
BerryDunn’s calculator can be found here: https://bit.ly/30QkT7w
https://bit.ly/30QkT7w
CLICK TO EDIT MASTER TEXT STYLESMEDICAID REGULATORY, PAYMENT AND POLICY CHANGES
Maine - DHHS Rate Evaluation
State contracted with Myers and Stauffer LC Selected out of 7 proposals Total fee $468,330 Not the lowest bid
Phase 1 Stakeholder meetings held in October Discussion guide No discussion of actual rate amounts entertained
Phase 1 Findings ReleasedPhase 2 Stakeholder meeting held in December Include benchmarks to other states Opportunity for providers to share comments regarding the adequacy of
MaineCare rate amounts
Interim Phase 2 findings will be released mid-January 2021, and the final report in February
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MaineCare’s goals:• Recommendations for
simplifying and streamlining rate methodologies, and for a process and structure for ongoing rate review and rebasing;
• A priority list and work plan for short- and longer-term rate reviews; and
• An estimate of the necessary investment to implement recommendations.
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Maine Reimbursement Policy Matters to Consider
Treatment of the following in the cost report: Temporary rate increase – NF and RCF Outbreak extraordinary circumstance allowance – NF and RCF Provider relief funds earned – NF and RCF PPP funds – if and when forgiven – NF and RCF Staff surveillance testing payments and cost – NF and RCF
Inflation adjustments and corrections – NF and RCF Change in Bed Hold payments – NF only Changes in treatment of software costs – RCF and NF Inclusion of reference to the Principles for each cost report adjustment Worked hours, wages, and payroll taxes and benefits adjustments
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Maine Rebasing Effective 7/1/2021
Rates released November 30, 2020 (letters dated 11-19-20), applicable retroactively to July 1, 2020 Used 2019 as filed cost reports Annual inflation rate applied 2.82% (from BLS CPI for Urban Wage Earners and Clerical
Workers) Adjusted estimated payment for High and Ultra High MaineCare Utilization payment Hold harmless calculation based on comparison to June 30, 2018 rate Supplemental wage allowance based on 10% of wage and benefits as well as contracted
labor, limited to budget of $10m available funds (50% haircut)
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Maine Nursing Facility Medicaid Shortfall
MEDICAID REGULATORY, PAYMENT AND POLICY CHANGES
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($20,368,940)
($25,779,875)
($33,287,999)
($27,130,018)
($20,340,068)
$(35,000,000)
$(30,000,000)
$(25,000,000)
$(20,000,000)
$(15,000,000)
$(10,000,000)
$(5,000,000)
$-
2015 2016 2017 2018 2019
REBASED 7/1/2016
REBASED 7/1/2018
Source: BerryDunn Medicaid Cost Report Database
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Maine Long Term Care Rebasing Trending of Median Limits by Base Year: Direct Care
PEER GROUP 1 - 60 BEDS
$78.49 $80.29
$88.96
$102.29
$60
$70
$80
$90
$100
$110
2011 2013 2016 2019
PEER GROUP 3 - HOSPITAL BASED
$86.32 $88.36 $103.75
$144.34
$60
$80
$100
$120
$140
$160
2011 2013 2016 2019
Amounts represent 110% of calculated medians
(used to set the limit) in the respective base years
MEDICAID REGULATORY, PAYMENT AND POLICY CHANGES
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PEER GROUP 1 - 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
Amounts represent 110% of calculated medians
(used to set the limit)in the respective base years
$73.48 $76.78 $80.82
$85.46
$60
$70
$80
$90
$100
$110
$120
2011 2013 2016 2019
$101.04 $94.46
$112.55 $123.45
$60 $70 $80 $90
$100 $110 $120 $130
2011 2013 2016 2019
$73.65 $75.41 $82.28
$88.81
$60
$70
$80
$90
$100
$110
$120
2011 2013 2016 2019
MEDICAID REGULATORY, PAYMENT AND POLICY CHANGES
Maine Long Term Care Rebasing Trending of Median Limits by Base Year: Routine
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Maine Residential Care Facility Medicaid Shortfall
MEDICAID REGULATORY, PAYMENT AND POLICY CHANGES
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($519,768)($1,241,390)
($2,105,159) ($2,362,345)
($4,981,596)
$5,689,384 $6,006,264 $5,504,507 $5,785,010$4,891,390
$(6,000,000)
$(4,000,000)
$(2,000,000)
$-
$2,000,000
$4,000,000
$6,000,000
2015 2016 2017 2018 2019
FreestandingNF Based
CLICK TO EDIT MASTER TEXT STYLESMEDICAID REGULATORY, PAYMENT AND POLICY CHANGES
Massachusetts Reimbursement Policy Matters to Consider
Amendments to Regulation 101 CMR 206.00 Standard Payments to Nursing FacilitiesImplementation of many regulations of the Nursing Facility Task Force
Effective services beginning October 1, 2020 Base Year 2018 Four tier operating cost standard eliminated, substituted with one standard payment Capital payment – regionalized median instead of 49th percentile, with 7.1% cost adjustment factor.
Hold harmless implemented. Changes eliminate many add-ons Implements other add-ons COVID-19 Support Payments, Isolations Spaces payments, Staff Testing Supplemental Payments
MassHealth Nursing Facility Bulletin 151 Room density planning Potential impact on COVID-19 relief payments
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New Hampshire Reimbursement Policy Matters to Consider
Governor's Office for Emergency Relief and Recovery (GOEFRR) Long Term Care Stabilization Program Healthcare System Relief Fund
Long Term Care Provider Program Round 1 Long Term Care Provider Program Round 2
Main Street Relief Fund (1 & 2)
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CLICK TO EDIT MASTER TEXT STYLESPOLICY, ACCOUNTING AND REIMBURSEMENT: PAST, PRESENT AND FUTURE
Presentation objective
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Gain perspective regarding industry financial, cost, and payment trends and understand how you “stack up”.3
CLICK TO EDIT MASTER TEXT STYLESINDUSTRY TRENDS
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Maintain Three Types of Databases Financial State Medicaid cost reports Medicare cost reports
Purpose Client Legislative / industry support
Financial Key financial indicators BerryDunn attestation clients only
MaineCare Cost Reports Key cost report information All nursing and facility-based residential
care facilities in Maine Separate worksheet for key RCF data
Medicare Cost Reports Key cost report information All skilled nursing facilities in the country
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Polling question #4
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Massachusetts Payor Mix Trend (State-wide)
STATUS OF THE INDUSTRY
34Source: HCRIS Database*Not all facilities reporting.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
2016 2017 2018 2019 2020*
Medicaid Medicare Private / Other
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New Hampshire Payor Mix Trend (State-wide)
STATUS OF THE INDUSTRY
35Source: HCRIS Database*Not all facilities reporting.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
2016 2017 2018 2019 2020*
Medicaid Medicare Private / Other
CLICK TO EDIT MASTER TEXT STYLESSTATUS OF THE INDUSTRY
36Source: BerryDunn Medicaid Cost Report Database
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
2015 2016 2017 2018 2019
MaineCare Medicare Private / Other
Maine Payor Mix Trend (State-wide)
CLICK TO EDIT MASTER TEXT STYLESSTATE OF THE INDUSTRY: NEW HAMPSHIRE AND MASSACHUSETTS
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Current Ratio
Source: HCRIS Database*Not all facilities reporting.
1.74
1.57 1.40
1.46
2.37
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2016 2017 2018 2019 2020*
CLICK TO EDIT MASTER TEXT STYLESSTATE OF THE INDUSTRY: MAINE BERRYDUNN CLIENTS
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Total Margin
Source: HCRIS Database*Not all facilities reporting.
-1.81%
-3.52%
-4.23%
-3.05%
-1.94%
-5.00%
-4.00%
-3.00%
-2.00%
-1.00%
0.00%
2016 2017 2018 2019 2020*
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Polling question #5
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Ashley Tkowski, [email protected]
Questions
Ashley Colfer, CPASenior [email protected]
Tammy Brunetti, [email protected]
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