Medicare Compliance & Reimbursement

Many nursing homes accidentally volunteer for a cut in their Medicare reimbursement.

Nursing home administrators often find their eyes glazing over when talk turns to Part B billing for ancillary supplies. But taking a fresh look at this area could be a great way to boost profits.

"A lot of providers simply let their suppliers bill Part B" for ancillary supplies, reveals Sue Worden, a consultant with Richter & Associates in Beachwood, OH. That's a costly mistake, she contends. With careful recordkeeping and cost-effective contracts with suppliers, nursing facilities can bring in revenue that they'd otherwise do without.

Good news: In many cases, providers can obtain separate payment for surgical dressings, ostomy supplies and prosthetics and orthotics that go way beyond what billers might expect, suggests Deborah Elsey, a principal in the Minneapolis, MN, office of LarsonAllen Health Care Group, an accounting and consulting firm.

How it works: Facilities negotiate a fair price on the supplies they know they will need based on case mix. When products are used in the course of patient care, the provider is in a position to realize a reasonable profit on the initial investment.

Take action: Why would a provider knowingly turn down reimbursement that helps cover care and improve revenue? Many providers don't know how to overcome the few obstacles in their path, but you don't have to be among them. Here's how to succeed:

Obstacle 1: Knowledge gap. Many providers aren't entirely clear on regulations that govern billing for Part B ancillary items, states Peggy Voitik of VP Circle of Quality Inc. in Minonk, IL. "Many bill conventional Medicare Part A, and not always well, and don't even deal with Part B [ancillaries]," she reports.

To get in the know, go first to the source: the online Medicare Claims Processing Manual, at www.cms.hhs.gov/manuals/104_claim/clm104index.asp. There you'll find basics, such as the rule that you can bill for Part B ancillaries only for residents who aren't in a Part A covered stay. This site also contains detailed information about which supplies you can bill, and instructions on how to bill them.

Payable supplies under inpatient Part B include:

Surgical dressings,

Prosthetic devices (other than dental),

Leg, arm, back, and neck braces.

Obstacle 2: Recordkeeping reluctance. The detailed recordkeeping and tracking required for effective Part B ancillaries billing will be new to many facilities, points out Worden, who cautions facilities that great record keeping is essential before stepping up to the Part B plate. Without necessary detailed tracking systems - and a staff with knowledge and motivation to use them - providers billing for Part B items might raise the red flag of Medicare fraud and abuse.

Still, tracking systems needn't be too time intensive, says Worden. "The treatment log will suffice for billing [...]