Securing a process for management and communication of contractual obligations for managed care residents is essential in today’s climate. Some questions to ask yourself:

1. What is your facility process when you admit a resident that has private insurance or a Medicare replacement plan?
2. Do you have a preadmission process in place?
3. How do you communicate the contractual obligations to your staff?

These are important question that all long-term post-acute care (LTPAC) providers need to answer. The preadmission/ intake process for LTPAC providers has made a recent shift to include a much more proactive approach. We are seeing an increase in the use of preadmission case managers. This position allows the facility to have a comprehensive process in place to accept or reject potential residents based on eligibility verification, as well as the facility’s ability to care for the resident.

At Richter Healthcare Consultants, we recommend a 3-step preadmission process. Timing or specific steps may vary for your organization based on your specific parameters and situation; yet we believe these three steps are a solid foundation for a thorough process.

Step 1:

When your facility receives a referral, the first thing you need to look at is whether or not your facility has a contract with the potential resident’s insurance. If you have a contract with the insurance provider, you will go directly to Step 2. If you do not have a contract with the provider, you will need to contact the insurance provider to find out if the potential resident has out-of-network benefits that would cover their skilled stay.

If coverage exists, or if you are able to negotiate a one-time contract for coverage, then you will want to negotiate a reimbursement rate that is mutually beneficial to the facility and the insurer. Make sure to cover all eventualities in the delivery of care (e.g., pharmaceuticals, specialty service needs) and make a case as to why your facility is the best for this resident in terms of placement and outcomes. You won’t get what you don’t ask for.

Step 2:

Preauthorization is the next step. Obtaining preauthorization should always be completed prior to the resident entering your facility. If the resident comes in the facility before the preauthorization is completed and the insurance company denies the stay, your facility may be liable for services provided until appropriate discharge plans can be made. Make sure that all members of the interdisciplinary team (IDT) understand the reporting necessary for ongoing authorization/ recertification of services.

Step 3:

Now you need to share the contractual obligations with your staff. Having a standardized platform in which such information will be conveyed will be your best solution. Staff can be notified verbally, or in writing (hard copy or electronically). The electronic version is my preference because it can be put into a saved template, easily disseminated, and a read receipt can be included. When notifying staff, it is important to communicate the diagnosis for skilled services, as well as what the contract requirement is for nursing and skilled therapy services. The claim can ultimately be denied if the facility fails to meet the stated contractual obligations.

In relation to therapy delivery, it is crucial to notify therapy what level of therapy is needed, as well as the number of days per week. If the facility uses a contracted therapy company, it is important that you have in writing the terms of the therapy contract regarding under-treating and over-treating of managed care residents. The facility should not have to pay for therapy in excess of contract requirements, and the therapy company should be required to indemnify the facility if contractual obligations are not met.

Taking a proactive approach to managed care is the best way to avoid denial of claims. Institute a preadmission process that encompasses all three steps of the preadmission requirements. Make sure your staff understands the contractual requirements for all insurances that your facility accepts. These steps will put you well on your way to successfully managing your managed care—instead of your managed care managing you!

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Contact Richter Healthcare Consultants

Do you have questions about Additional Development Requests (ADR) or have managed care audit defense challenges? Call Richter's clinical healthcare consultants at 866-806-0799 to schedule a free consultation.