A Prospective Payment System (PPS) refers to several payment formulas when reimbursement depends on predetermined payment regardless of the intensity of services provided. Medicare bases payment on codes using the classification system for that service (such as diagnosis-related groups for hospital inpatient services and ambulatory payment classification for hospital outpatient claims).
This tool explains the inpatient hospitals, hospice, hospital outpatient, inpatient psychiatric facilities, inpatient rehabilitation facilities, long-term care hospitals, ambulatory surgical centers, durable medical equipment, prosthetics, orthotics, and supplies, home health, and skilled nursing facilities payment systems.
Recovering from illness or injury often involves care from multiple settings – like hospitals, skilled nursing facilities, and home health agencies This is referred to as the post acute care continuum With each care transition, new bills can arrive from various providers. For patients and families, sorting through post acute medical bills and payments can quickly become complex and confusing. This comprehensive guide breaks down common billing scenarios after post acute care and provides tips to streamline the process.
What is Post Acute Care?
Post acute care (PAC) refers to services provided after an inpatient hospitalization to support ongoing recovery and improve independence The four main types of Medicare-covered post acute care include
- Skilled Nursing Facilities (SNF): Provide rehabilitative services like nursing care, physical therapy, occupational therapy, and speech therapy. Average length of stay is 20-30 days.
- Inpatient Rehabilitation Facilities (IRF): Specialize in intensive rehabilitation therapies for conditions like stroke, brain injury, or spinal cord injury. Average length of stay is 10-15 days.
- Home Health Agencies: Offer intermittent skilled nursing, therapy and aide services to homebound patients. Average length of stay is 2-3 months.
- Long Term Care Hospitals (LTCH): Treat medically complex patients who require extended recovery time at the hospital level of care. Average length of stay is 25 days.
PAC services aim to help patients regain function, recover from illness/injury, and safely transition back home. Around 8% of total Medicare spending goes toward post acute care services.
What Will I Owe for Post Acute Care?
If you have Original Medicare (Part A and Part B), here is an overview of the out-of-pocket costs for different PAC services:
Skilled Nursing Facility
- Days 1-20: You pay $0 for covered services. Medicare covers 100%.
- Days 21-100: You pay a daily coinsurance around $194.50 per day in 2023.
- After 100 days: You pay the full cost unless you have secondary insurance.
Inpatient Rehabilitation Facility:
- Days 1-90: You pay a daily coinsurance around $203 per day in 2023.
- After 90 days: You pay the full cost unless you have secondary insurance.
Home Health:
- All visits: You pay $0 for covered services. Medicare covers 100%.
Long Term Care Hospital:
- Days 1-60: You pay a daily coinsurance around $203 per day in 2023.
- Days 61-90: You pay a daily coinsurance around $406 per day in 2023.
- After 90 days: You pay the full cost unless you have secondary insurance.
Keep in mind, if you have a Medicare Advantage plan instead of Original Medicare, your costs and coverage details may differ. Always check with your specific plan.
What Services Does Medicare Cover?
Medicare covers PAC services considered medically necessary for your condition, such as:
- Skilled nursing care
- Physical, occupational, and speech therapy
- Medical social services
- Medications and supplies during the stay
- Room and board
Some common exclusions from coverage include:
- Custodial or personal care
- Private rooms (unless medically necessary)
- Non-medical transportation
- Personal comfort items
How Does Billing and Payment Work?
Medicare pays PAC facilities set bundled rates per day or episode of care through Prospective Payment Systems (PPS). As the patient, you will not receive individual bills for every service during your stay. Here’s what to expect:
- A bill from the PAC provider for any daily copays or other out-of-pocket costs you owe
- A Medicare Summary Notice showing the total charges submitted and how much Medicare paid
- The PAC provider cannot charge more than the Medicare copay amounts
What If I Have Other Insurance?
If you have secondary insurance like a Medigap or retiree plan, provide this upfront to the PAC provider, as it may cover all or part of your out-of-pocket costs.
If you have a Medicare Advantage Plan, make sure to:
- Verify the PAC provider is in-network
- Ask about required authorizations
- Understand your copay amounts
- Get approval details in writing
Watch Out for These Common Billing Issues
Here are some potential billing problems to look out for with post acute care services:
- Being billed more than the Medicare copay amounts
- Receiving unpaid balance bills after Medicare makes payment
- Services not covered due to “lack of medical necessity”
- Unexpected discharge from home health before goals met
If any billing issues arise, address them promptly and know your rights to appeal.
Appealing Denied Claims or Bills
If you disagree with a coverage or payment decision from Medicare, you have the right to appeal. Follow instructions on any notification letters closely and take steps such as:
- Request an itemized bill from the provider
- Obtain medical records to support your case
- Submit a written appeal explaining why the services should be covered
You may need to go through both the Medicare process and an appeal to your supplemental insurer. Seek assistance from resources like your State Health Insurance Assistance Program (SHIP) if needed.
Create a System to Organize Medical Bills
With so many moving parts, organization is key when managing post acute care bills. Here are some tips:
- Note important appeal deadlines on a calendar
- Create filing systems for bills, notices, and documents
- Log billing discussions and next steps in a notebook
- Follow up on unclear or questionable bills right away
- Open and read all letters from Medicare and your insurer
- Seek help if paperwork becomes too overwhelming
Recovering from illness while navigating complex medical bills can be stressful. Patients and families should not hesitate to ask questions, advocate for themselves, and seek assistance to ensure billing issues are properly resolved. With some persistence and preparation, the billing process can be managed smoothly.
Concurrent & Group Therapy Limit
The PDPM combined limit for both concurrent (1 therapist with 2 patients doing different activities) and group therapy (1 therapist with 2â6 patients doing the same or similar activities) canât equal more than 25% of the therapy that SNF patients get for each therapy discipline.
The PPS Discharge Assessment checks therapy limit compliance and includes the number of minutes per mode, per discipline, for the entire PPS stay.
Intermittent Skilled Nursing Care
We define intermittent SN care as care that patients need less than 7 days each week or less than 8 hours each day for periods of 21 days or less (with extensions in exceptional circumstances requiring more limited and predictable care).
To meet intermittent SN care requirements, patients must need a medically predictable recurring SN service, which typically occurs when a patient needs an SN service at least once every 60 days. The exception to the intermittent requirement is daily SN services for diabetic patients unable to administer their insulin (when they donât have an able and willing caregiver).
We cover home health aide services if a patient qualifies for the home health benefit. These services can include:
- Personal care
- Help with activities that support SN services
- Simple dressing changes
- Assistance with medications that are ordinarily self-administered and donât require the skills of a licensed nurse
- Prosthetic or orthotic device personal care
To provide these services, a home health aide must meet all these criteria:
- Be certified with competency evaluation requirements
- Provide hands-on, personal care or services that help treat a patientâs illness or injury, or maintain a patientâs health
- Perform tasks allowed only under state law
Orders for home health aide services must show how often patients need these services. A registered nurse or other skilled professional must perform on-site supervision of the home health aide at least every 14 days if the patient gets SN, PT, OT, or SLP services. In rare instances outside the HHAâs control, we allow 1 virtual supervisory visit per 60-day episode of care, which HHAs must document in the patientâs medical record.
We cover medical social services when all these criteria are met:
- The patient is eligible for the home health benefit
- The plan of care explains why only a qualified medical social worker or social work assistant, under the supervision of a qualified medical social worker, can safely and effectively provide services the patient needs
- Services resolve social or emotional problems that complicate a patientâs medical condition or recovery rate
Services using telecommunications technology must be indicated on the plan of care and can include:
- Remote patient monitoring, defined as collecting physiologic data (for example, electrocardiogram, blood pressure, glucose monitoring) digitally stored or transmitted by the patient or caregivers, or both, and sent to the HHAs
- Teletypewriter (TTY)
- Real-time interaction between the patient and clinician via 2-way audio-video.
Services provided by telecommunications technology arenât separately billable and canât be counted as a visit for payment or eligibility requirements. Visits to a patientâs home solely to supply, connect, or train them on remote patient monitoring equipment, without providing another skilled service, arenât separately billable.
Physicians or allowed practitioners can include the use of telecommunications technologies for the provision of home health services in the home health plan of care. Payment conditions include:
- The physician or allowed practitioner must include remote patient monitoring in the plan of care or other services via telecommunications system or audio-only technology
- HHAs canât substitute telecommunications or audio-only technology for a home visit as part of the plan of care, patient eligibility, or payment
- Telecommunications or audio-only technologies must meet patient-specific needs identified in the comprehensive assessment
The Post Acute Care Perspective on Bundled Payments
FAQ
What happens under the post-acute payment reform?
Since the postacute prospective payment systems were put in place, hospitals and rehabilitation centers for people who need long-term care are paid on a per-discharge basis. This means that they get a fixed payment for each episode, no matter how long the patient stays.
What does Pam stand for in hospital?
What is the Medicare post-acute transfer rule?
When a Medicare recipient in an IPPS hospital stay is put into one of the MS-DRGs, this is called a “post-acute care transfer.” To comply with this policy, hospitals must assign the correct patient status code.
How are hospitals paid by Medicare?
Hospitals are reimbursed through Medicare Part A for Medicare-related capital costs (e. g. , depreciation, interest, rent, and property-related insurance and taxes costs). New hospitals are paid on a cost basis for their first 2 years of operation.
How to pay for care after hospitalization in an acute care hospital?
One thing that is being talked about right now is how to pay for care after being in an acute care hospital. This is known as post-acute care (PAC). “Bundling” post-acute care means that a patient gets a set amount of money for all the services they get after being in the hospital for a certain amount of time.
Does Medicare pay for acute inpatient care?
Hospitals make deals with Medicare to provide acute inpatient care, and they agree to accept set acute IPPS rates as full payment. 60-day lifetime reserve. Illness episodes in patients start when they are admitted and end 60 days after they leave the hospital or a skilled nursing facility (SNF).
How does Medicare adjust IPPs payments to acute inpatient hospitals?
Medicare changes some of its operating IPPS payments to acute inpatient hospitals based on how well they do on a set of quality measures. Hospitals that are eligible for value-based incentive payments see their payments change as well. Medicare reduces a portion of eligible hospitals’ operating IPPS payments for excess readmissions.
Do acute care hospitals qualify for Outlier payments?
Acute care hospitals can qualify for outlier payments for extremely costly cases. When hospitals train residents in approved Graduate Medical Education (GME) programs, they get extra money to cover the direct costs of training residents. This money is called direct GME.
How does a hospital bill a Medicare patient?
The hospital submits a bill to their Medicare Administrative Contractor (MAC) for each Medicare patient treated. Based on the billing information, the MAC categorizes the case into a DRG. The base payment rate, or standardized amount (a dollar figure), includes a labor-related and nonlabor-related share.
Can acute care hospitals Bill a discharge to Medicare Part B?
Acute care hospitals cannot separately bill these services to Medicare Part B. The Centers for Medicare & Medicaid Services (CMS) assigns discharges to diagnosis-related groups (DRGs). A diagnosis reference group (DRG) is a list of diagnoses and services that are similar and are provided during an inpatient hospital stay.
