Harmony Healthcare Blog

Medicare Advantage Organization HIPPS Codes Update

Posted by Kris Mastrangelo, OTR/L, LNHA, MBA on Mon, Jul 07, 2014

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Edited by Kris Mastrangelo

Clarification is in order. Originally, when billing for all Medicare Advantage Organizations (MAO), PACE Organizations, Cost Plans, and certain demonstration projects, providers were originally told by CMS that they must provide Health Insurance Prospective Payment System (HIPPS) Codes for Skilled Nursing Facility (SNF) claims submitted effective July 1, 2014. This left Skilled Nursing Facility providers concerned that they would then be required to follow the traditional Medicare PPS schedule in order to accurately provide HIPPS codes for billing.  On May 23, 2014, CMS released a memo regarding Submission of Health Insurance Prospective Payment System (HIPPS) Codes to the Encounter Data System to all MAO providers clarifying the requirements.

CMS clarified that for dates of services (DOS) beginning on or after July 1st, MAO’s are required to submit a HIPPS code on a SNF claim but may use non-PPS MDS Assessments to generate a HIPPS Code. Given the recent CMS clarification, Harmony (HHI) recommends the following should be considered while implementing the recent changes to all MAO claims:

  • CMS is clarifying that for 2014 DOS beginning on or after July 1st, MAOs claims must include a HIPPS code or claims will be rejected.
  • The SNF may use the RUG from the OBRA-required Comprehensive Assessment (Admission Assessment) for reporting purposes for all claims in the encounter.
  • CMS will NOT require completion of any scheduled or unscheduled SNF Prospective Payment System (PPS) assessments for the purpose of submission of HIPPS codes. However, CMS encourages HIPPS codes from non-transmitted scheduled or unscheduled SNF Prospective Payment System (PPS) assessments when these assessments are completed for MAO patients. The MAO/HMO may require the completion of scheduled or unscheduled SNF Prospective Payment System (PPS) assessments.
  • If an Admission Assessment is not required due to a stay less than 14 days, the HIPPS code may be based on the Discharge Assessment. Although a Discharge Assessment does not generate a Medicare RUG, Z0300 (Insurance Billing) can be set up in the MDS software system to generate a RUG for billing.

Often times we remind facilities that PPS MDS assessments completed for Medicare Advantage Organizations (MAO) and Health Maintenance Organizations (HMO) reimbursement, whether required by the Managed Care Organization or not, are not allowed to be transmitted through the QIES system. For example, the OBRA Admission Assessment must be completed separately from the 5 day MDS completed for Managed Care billing purposes.  This will ensure that the Admission Assessment is transmitted and the 5 day Managed Care Assessment is not transmitted.

Given all of the recent interpretations of the latest CMS memos related to Medicare Advantage Organizations (MAO) and HIPPS requirements, many Medicare Advantage Organizations (MAO) and Health Maintenance Organizations (HMO)s have changed policies and contracts to require Medicare PPS assessments for payment. It is extremely important that Skilled Nursing Providers clarify the requirements with each Medicare Advantage Organization (MAO) and Health Maintenance Organization (HMO) prior to deciding not to follow the Medicare PPS Schedule.

Additionally, you should also:

  • Work with your software system vendors to ensure that their systems be revised to include HIPPS codes on the claims.
  • Contact each facility contracted Medicare Advantage plan or HMO to determine what specifically is required related to including the HIPPS code on claims.

Harmony (HHI) recommends that facilities follow the traditional Medicare PPS schedule unless otherwise notified in writing by the Managed Care Organization. Facilities should also develop a system for review of current managed care contracts to ensure that the facility is accurately reimbursed for the services rendered to each of the MCO's beneficiaries.  Contract review should occur on an annual basis and whenever changes are made to the contract.

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Tags: CMS, Managed Care, MDS Coding

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