Slow but steady: Industry convinces other payers to delay cuts

‘As soon as the Medicare fee schedule is updated, it will be easier’
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Friday, March 3, 2017

WASHINGTON – The industry’s attempts to get other payers to honor a retroactive delay to Medicare reimbursement cuts are starting to pay off.

Health Net Federal Services, the contractor for the Tricare North region, has indicated to AAHomecare that it believes the delay also applies to its reimbursement, but it needs a directive from the Defense Health Agency to reprocess claims.

“It’s not a done deal, but we’re heading in the right direction,” said Laura Williard, senior director of payer relations for the association.

The 21st Century Cures Act directed Medicare to delay a reimbursement cut in non-competitive bidding areas from July 1, 2016, to Jan. 1, 2017. Because Tricare and other payers often peg their reimbursement off of Medicare’s, the industry has made the case that they, too, should honor the delay, paving the way for providers to recoup six months of reimbursement.

While trying to make inroads at the Defense Health Agency has been slow, Williard believes that once Medicare issues a new fee schedule for that timeframe—the agency says it will do that on May 1—that will help to speed up the process.

“As soon as that fee schedule is updated, it will be easier,” she said. “Right now, we can tell them what we think will happen, but they want to see it.”

Although there are two other Tricare contractors for the South and West regions, Wiliard says Palmetto GBA processes claims for all three regions. That should make it easy for Tricare to extend the delay across regions, and for Palmetto to reprocess claims instead of having providers resubmit them.

“I feel positive about it,” she said.

Outside of Tricare, however, the battles will be largely state-by-state. That’s why AAHomecare is arming stakeholders in each state with a packet of information that includes an attorney’s opinion on how to interpret the delay and a recent study that shows Medicare reimbursement covers, on average, only 88% of a provider’s overall costs.

“We can’t go in and negotiate, but we can educate,” she said. “They don’t realize how drastic these cuts are. They just think, If Medicare made this cut, we can, too. They don’t understand the true impact of how much these rates have gone down.”

Provider Robert Brown has been hard at work educating a large private payer in his state not to apply the cuts that went into effect Jan. 1 and July 1, 2016, in non-bid areas. That payer has agreed to a retroactive delay, but only going back to Sept. 1, 2016, he says.

“We told them, ‘Sorry, we can’t do this anymore; we can’t afford to service your customers,’ and when they realized that, they came back to the table,” said Brown, vice president of operations for Andrew Brown’s in Scranton, Pa. “But what about the rest of 2016? That’s thousands, if not tens of thousands, in reimbursement that we didn’t get.”

It’s slow but steady progress, Williard acknowledges.

“We’ve started to see people be more open to these discussions,” she said. “But as part of those discussions, we now have data, so we hope to have more of an impact.”