We won’t trouble you with the old adage of “comparing apples to oranges,” but it is true that Medicare and Medicaid are two vastly different programs serving different needs of the patient population. Understanding the complexities of the two can make a difference in how you create both healthy patients and a healthy bottom line. Both Medicaid and Medicare add a layer of intricacy to the already complicated anesthesia billing process, and both require a high level of precision and attention to detail to jump through the hoops of reimbursement. These challenges in Medicare/Medicaid reimbursement aren’t going away, either. The average anesthesia practice serves about 25-30% of Medicare patients, and that number is going up by 1% per year. Additionally, Medicaid covers around 1 in 5 low-income Americans, following a jump in enrollments after the pandemic. So, understanding and processing Medicare and Medicaid reimbursements should be a core part of your revenue cycle. Let’s take a look at how to navigate the billing process in order to maximize your Medicare and Medicaid reimbursements.
The Billing Basics
To bill a payer (Medicare or otherwise) for an anesthesia procedure, you need the following information:
- CPT Codes - Determine the Current Procedural Terminology, or CPT code, for the procedure. These are published and maintained by the American Medical Association (AMA) and are updated annually. These CPT codes have a base unit value that represents the amount of work involved in administering anesthesia for that specific procedure. The base unit value is then multiplied by the Conversion Factor (CF), which is set by the Centers for Medicare and Medicaid Services (CMS) to adjust for geographic location, procedure complexity, etc., to determine the reimbursement rate.
- Anesthesia Modifiers - The type of anesthesia used, the patient’s health status, and other details of the procedure must also be taken into account. These are signified by Anesthesia Modifiers. Modifiers are required for Medicare reimbursements (eg, P1, P2), and there must be documentation to support the use of these codes.
- Anesthesia Time Units - ATUs account for the length of the procedure performed and are a way to standardize the billing process for anesthesia services across different healthcare facilities. In Medicare/Medicaid billing, the anesthesia time must be rounded to the nearest minute.
Medicare Reimbursements
Medicare is an insurance program offered by the federal government to individuals 65 years of age and older, some young people with disabilities, and people with end-stage renal disease. It is comprised of three parts, each covering a different kind of service:
- Medicare A - Hospital Insurance
- Inpatient hospital stays, nursing facility care, hospice care, and some home healthcare
- Medicare B - Medical Insurance
- Preventative services, medical supplies, outpatient care, and certain doctors’ visits
- Medicare D - Prescription Insurance
- Premium drugs, some shots, and vaccines
Medicare patients don’t usually don’t pay for part A, but they do pay a monthly premium for parts B and/or D, and pay for 20% coinsurance of services received. Inpatient anesthesia services are billed through Medicare A, while outpatient or ambulatory surgical center services are billed through Medicare B.
The Medicare Physician Fee Schedule (MPFS) details fee maximums for reimbursing physicians for specific services. Medicare Advantage plans are plans offered by private companies that work with Medicare. Their fee structures typically align with standard Medicare fees. Medicare reimbursement rates are typically ⅓ the amount of commercial payments, which, sadly, does not cover the cost of anesthesia care in most cases. The impact of this on anesthesia billing is that you can only count on 80% of allowable billing from Medicare intermediaries, leaving the uncertainty of covering the remaining 20% through billing patients or other coverage sources.
Medicaid Reimbursements
Expanded by the Affordable Care Act, Medicaid is a state-run insurance program designed to support people with limited income and assets. There are financial eligibility guidelines to qualify for coverage. If a person is above the eligibility guidelines but is medically needy, he can utilize the spend-down program to deduct medical services from his income in order to qualify. It is possible to be dually eligible for both Medicare and Medicaid. Services covered by Medicaid programs vary by state, and some states require copayments, deductibles, or premiums on the part of the patient. As an anesthesia provider, you are not required to accept Medicaid coverage.
Medicaid reimbursements work on either a fee-for-service (FFS) or a managed care billing model. With a managed care model, the state pays a fee based on the number of patients enrolled in the plan. With the FFS model, the state pays a fee for services provided, often at a much lower rate than commercial payers. The majority of Medicaid patients are enrolled in managed care plans.
State Medicaid programs receive some federal funds, but are responsible for the balance; this becomes a difficulty in states running a budget deficit. Thus, reimbursement structures vary significantly by program and by state. In general, Medicare and Medicaid reimbursements are much lower than private insurance companies, which leads to regional problems with access to anesthesia services and other medical care.
Strategies for Maximizing Payments
Medicare/Medicaid reimbursements depend on correctly and compliantly coding a claim in a timely manner. Correct coding of claims depends on detailed documentation. Contemporaneous documentation is the gold standard process as it ensures accuracy and avoids confusion. There is also the issue of coding compliance. Here are a few coding tips to remember when processing Medicare/Medicaid claims:
- Use the CPT code that describes the procedure with the greatest specificity possible.
- Report CPT code only if ALL services described by the code are performed.
- Do not unbundle services and report multiple CPT codes when a single code exists to describe the services.
- CPT codes include all services performed as part of a standard medical practice during the procedure.
- Time is always rounded up to the nearest minute.
Staying current on billing and coding regulations from Medicare and Medicaid can help you avoid denied claims and delayed reimbursement. In addition to education, technology can help you stay current. Software solutions help cut down on some of your billing problems by automating as much of the process as possible. This increases efficiency and decreases error. You can’t rely on technology only, though. Having an audit system to verify the claim is clean before it goes to Medicare/Medicaid should be a standard step in your revenue cycle. If keeping track of all of this sounds like a great deal of work to you, you’re in luck.
Partnering with experienced billing professionals like Medical Business Management sets you up with state-of-the-art technology, experience, and peace of mind in your revenue cycle.
Dealing with Denials
Medicare and Medicaid rules are hard and fast. If you do not comply with these rules when billing, you will not receive reimbursement for the claim. If you do comply, but you don’t provide adequate documentation, you will not receive reimbursement for the claim. Prevention is always the best cure, but there are also strategies for managing the denials, audits, and appeals related to Medicare and Medicaid reimbursements. If your claim is denied, it falls into one of four categories: contractual obligations (CO), other adjustments (OA), payer-initiated reductions (PI), and patient responsibility (PR). If you disagree with this finding, there are steps toward remediation.
- Seek redetermination from a MAC (Medicare Administrative Contractor)
- Submit a written appeal stating that you, the provider, disagree with the contractor’s findings and include any evidence that you think should be reconsidered.
- Reconsideration from a Qualified Independent Contractor (QIC)
- If your redetermination decision is unfavorable, you must, within 180 days, file for a reconsideration from a QIC.
- Appeal to an Administrative Law Judge (ALJ)
- If the reconsideration decision is unfavorable and the amount in contention is over $180, you can request a hearing before an ALJ. The ALJ conducts a de novo review, and no new evidence can be submitted.
- Appeal to the Medicare Appeals Council Departmental Appeals Board (DAB)
- If you receive a negative ALJ decision, you can seek review within 60 days of the ALJ’s decision. Oral arguments and written briefs are accepted under very limited circumstances.
- Appeal to a federal district court
- Should all else fail, you can request a judicial review in court if the amount in contention is at least $1,850. Judicial review is limited.
Hopefully, you will never have to deal with the claims denial process because you will be catching all the errors before your claims are submitted.
If you feel like you need help with your revenue cycle, Medical Business Management can help!
