In this episode, we’re pleased to welcome back Olga Barone-Allan, Director of Revenue Integrity at BESLER, to give you a glimpse into an upcoming BESLER Webinar: IME / GME Revenue Recovery, which is live on Wednesday, February 22, 2023, at 1 PM EST.
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Learn how to listen to The Hospital Finance Podcast® on your mobile device.Highlights of this episode include:
- What are IME shadow bills?
- Why is it important?
- Medicare Advantage
- Specific condition codes
- Issues at registration
Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome back Olga Barone-Allan, director of revenue integrity here at BESLER. In this episode, we’re going to give you a glimpse into an upcoming BESLER webinar that Olga’s hosting, IME and GME Revenue Recovery. You can watch it live on Wednesday, February 22nd at 1:00 PM, Eastern Time. Thank you for joining us today, Olga.
Olga Barone-Allan: Thank you, Kelly, for reinviting me.
Kelly: Well, let’s jump in today, shall we?
Olga: Sure
Kelly: Would you tell us about what IME shadow bills are and why it’s important to submit them to Medicare?
Olga: Great question. A shadow bill is a separate bill submitted to Medicare for informational purposes, while the original claim is submitted to the primary Medicare advantage payer for payment. So, it’s done simultaneously. A shadow bill is also known as a no pay or informational only claim. The importance of reporting a shadow bill is so that Medicare can reimburse facilities two additional payments, one for Direct Graduate Medical Education, also known as DGME, and one for Indirect Medical Education, also known as IME. DGME covers the direct fixed cost of training physicians. Payments are received via cost report settlement to each hospital based on the number and specialties of the residents it trains. IME covers indirect costs at teaching hospitals incurred, given their broader range of services. So, with the balanced budget act of 1997, Medicare has included these additional payments to Medicare advantage patients who have opted out of traditional Medicare. This additional payment and process applies to IPPS teaching hospitals, non-IPPS hospitals such as long-term care, rehab and psych, and non-teaching hospitals.
Kelly: Great, thank you. And capturing IME shadow bills is a pretty well-established process, but many still get missed. That will likely become a bigger problem as Medicare advantage enrollment increases. Can you tell us more about that?
Olga: Absolutely. Not only are the number of available plans increasing but also increasing are the number of eligible beneficiaries. Now including these end-stage renal disease patients who can elect Part C plan. And they were not able to do this a few years ago. So, in 2022, more than 28 million people have enrolled in a Part C plan, accounting for half or 48% of all Medicare beneficiaries. And it looks as though this trend will continue to grow. We estimate on average 5 to 8 percent of shadow bills are missed, which with this growing number of patients enrolling in MA plans, this can result in a significant amount of missed IME revenue as well as affecting DGME reimbursement and cost report calculations. As more and more patients are opting into the Part C plan, this potential missed revenue continues to grow.
Kelly: Thank you for that. And even if you do drop a shadow bill, there are still requirements for specific condition codes to be on there, which could cause issues if they’re missed, correct?
Olga: Yes. So, each MAC has guidance on the appropriate submission of shadow claims for processing for teaching, nonteaching, and distinct units. We notice many are missing or have an incorrect condition code, which causes the claimed process incorrectly or fall into an RTP, Return To Provider category. We see this mostly with distinct unit psych and rehab claims, which is a requirement to submit, even though they are zero pay claims. Due to the zero pay, it is often not noticed that there was an error with the condition codes, resulting in the days not being captured for cost report calculations.
Kelly: Thank you. And many people assume that because their hospital uses Epic or a similar system that their shadow billing process is handled, but other errors can still cause problems, for instance, issues at registration, can you please tell us more about that?
Olga: Absolutely. Yes, every software program treats shadow billing differently. We noticed a trend with newer billing software implementations, specifically with Epic, that shadow bills are automatically dropped for Medicare advantage claims once the primary payer pays the claim. We recommend submitting the shadow claim to Medicare at the same time that the primary claim is submitted to the Medicare advantage payer. This would avoid a missing opportunity. Even hospitals with established best practices around the shadow billing process may find that system conversions and updates lead to missed shadow billing opportunities. Plan codes and billing triggers are complicated to set up and must be maintained. Processes, which previously operated well, are at risk of breaking down without the necessary attention during system conversions. System changes may involve a steep learning curve for hospital staff during implementation, and the opportunity for billing errors increase substantially.
We spend a significant amount of time determining the patient’s MBI, Medicare Beneficiary ID, because Medicare information was not included during registration. We recommend adding Medicare as a secondary payer, including the patient’s MBI, making it to the UB. This will allow the shadow bill to be submitted and recorded timely. Although teaching hospitals have the most at stake when it comes to immediate revenue impact, even nonteaching hospitals need to correctly report shadow bills for other reimbursement purposes. CMS requires that nonteaching hospital submit no pay bills so that the SSI percentage, which is part of the DSH calculation, can be properly determined. Hospitals that fail to submit these bills are out of compliance with Medicare billing regulations.
Kelly: That’s a lot of great information. Thank you.
Olga: You’re welcome.
Kelly: Olga, what is the benefit of an independent shadow billing review?
Olga: Missing shadow bills costs hospitals hundreds of millions every year, properly submitting shadow bills is a compliance mandate for all teaching and non-teaching facilities. An independent review of a hospital shadow billing process will identify opportunities for improvement, potentially provide an immediate revenue, infusion, and, most importantly, ensure that a hospital is well positioned as Medicare advantage enrollment continues to expand.
Kelly: Great. Thank you. And thank you so much for joining us today, Olga, and for sharing some of the information that people can expect to receive in our upcoming webinar, IME and GME Revenue Recovery that we’re hosting on February 22, 2023, at 1 PM, Eastern Time.
Olga: You’re welcome.
Kelly: And thank you all for joining us for this episode of The Hospital Finance Podcast, until next time.
[music] This concludes today’s episode of the Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit besler.com/podcasts. The Hospital Finance Podcast is a production of BESLER | SMART ABOUT REVENUE, TENACIOUS ABOUT RESULTS.
If you have a topic that you’d like us to discuss on the Hospital Finance podcast or if you’d like to be a guest, drop us a line at update@besler.com.
