Medicare Like Rates

1. Medicare Like Rates Kris Locke American Indian Health Commission September 14, 2007

2. Overview • Legislation • Regulation • Partners • Implementation

3. Legislation Medicare Modernization Act of 2003 Section 506: Limitation on charges for inpatient hospital contract health services provided to Indians by Medicare participating hospitals DHHS Secretary “shall promulgate regulations to carry out” Section 506

4. Regulation • 42 CFR Part 136 and Part 489 published on June 4, 2007 • Adds new Subpart D as sections 136.30 – 136.32 (IHS) Payment to Medicare Participating Hospitals for Contract Health Services • Hospitals “must accept no more than (Medicare) rates…as payment in full for all items and services authorized by” I/T/U.

5. Regulation (cont’d) • I/T/U “payer of last resort” • I/T/U pay “the lesser of” negotiated amount or Medicare rate • No reconciliation of payments unless hospital submitted inaccurate information • Recovery of overpayment from cost based providers permitted if “actual costs fall significantly below the computed rate”

6. Regulation (cont’d) • Also adds new section 489.29 to Chapter IV Subpart B (CMS) Provider Agreements and Supplier Approval • Special requirements concerning beneficiaries served by the Indian Health Service, Tribal health programs and urban Indian organization health programs • Medicare inpatient hospitals “must accept…no more than” Medicare rates • Hospitals “may not refuse service”

7. Partners • Federal • DHHS – issue regulation • CMS – sets Medicare payment provisions • Region X, CMS and Native American Contact • IHS – works with CMS to implement policy • Portland Area Office • Area • State Hospital Associations – can help member hospitals with implementation • AIHC, NPAIHB – can help Tribes by coordinating information

8. Implementation • Each 638/Self-Governance Tribe decides which option to use for pricing hospital claims using Medicare rates • In house – using software and Medicare fee scheduled Tribe re-prices claims • Contract – have another entity re-price claims • Tribal consortium • IHS Fiscal Intermediary (BCBSNM) • Other contractor (e.g. Noridian, Other claims processing entity)

9. What is a Fiscal Intermediary? • Term used in slightly different ways • Medicare (CMS) contracts with FI to review, price and pay Part A claims • NW Medicare FI is Noridian • IHS contracts with Blue Cross Blue Shield of New Mexico as FI to review, price and pay all “direct service” CHS claims • A FI/contractor has the advantage of Medicare claims processing experience

10. Facilities & Services “Applies to all levels of care…inpatient, outpatient, skilled nursing facility care, other services of a department, subunit, distinct part, or other component of a hospital (including services furnished directly by the hospital or under arrangements)” and authorized through CHS (sec. 136.30(b))

11. Facilities & Services (cont’d)

12. Contact • American Indian Health Commission for Washington State www.aihc-wa.org klocke@aihc-wa.org • Northwest Portland Area Indian Health Board www.npaihb.org