Ben Hyman Minneapolis, MNVisionShare® Inc.

Medicare Contracting Reform Update: Pending Changes Affecting Home Health and Hospice Providers

Discussion Topics

• Medicare FFS environment (past, present and future)

• What Medicare Contracting Reform means

• Pending changes within Medicare landscape

• How these changes could affect your Medicare reimbursement process

• What connectivity vendors do and what questions to ask

VisionShare® overview

• High-speed Internet solutions for linking providers, Medicare contractors and other payers

• Provides opportunity to speed up the processing of administrative transactions

• Assures the privacy and security of healthcare information

– HIPAA-compliant

– CMS-approved

How Medicare Began

• Medicare started in 1965• 52 Fee For Service (FFS) contractors • Contracts were automatically renewed each year by CMS

Medicare Contracting Reform

• Official name - Medicare Prescription Drug, Improvement

and Modernization Act of 2003 (MMA)

• Biggest Medicare change in 40 years

• Replaces current claim payment contractors with new

Medicare Administrative Contractors (MACs)

• The Medicare Administrative Contractor will be the payer for

Medicare A, B and RHHI in specific MAC Jurisdictions

• Reduces entities allowed to administrate Medicare

• Reviewed every 5 years (this could mean future transitions)

Goals of the Medicare Modernization Act

• Implement contractor reform

• Offer competition for all Medicare FFS contracts and regions

• Eliminate duplication in Medicare system

• Simplify processing of Medicare claims and FISS access

Past operational environment

• 26 Fiscal Intermediaries– Medicare contractors for Medicare Part A

• 18 Carriers– Medicare contractors for Medicare Part B

• 4 Regional Home Health Intermediaries– Medicare contractors for Medicare RHHI

• 4 Durable Medical Equipment carriers– Medicare contractors for Medicare DME

Once MAC Reform is CompletedBefore After

Specialty Medicare Jurisdictions for DME

Noridian NHIC

Noridian

Specialty Medicare RHHI Jurisdictions

Jurisdiction D Includes New

Jersey

For RHHI Providers – new payer workload changes

• MAC for Jurisdiction 14 will be the payer for Medicare RHHI Jurisdiction A - NHIC will be the new payer

• MAC for Jurisdiction 15 will be the payer for Medicare RHHI Jurisdiction B – Highmark will be new payer

• MAC for Jurisdiction 11 will be the payer for Medicare RHHI Jurisdiction C - under protest

• MAC for Jurisdiction 6 will be payer for Medicare RHHI Jurisdiction D – Noridian won Jurisdiction 6 and is under protest

Here is how Medicare will be handled in Home Health Region D

RHHI Region D will be handled by the MAC for Jurisdiction 6

Note: awarded to Noridian and still under protest

Jurisdiction 6Will handle the workload of

Region D

MAC transitions - startup cycle

A/B MAC Jurisdictions - 2006

3

Noridian took over J 3 in 2006

MAC Transitions - cycle one

Cycle one, phase II = J1, J2, J7, J13

A/B MAC Jurisdictions – 2007-8

Cycle one, phase I = J4, J5, J12

4

5

12

Cycle one, phase I = J4, J5, J12

7

1

1

2

2

13

Cycle one, phase II = J1, J2, J7, J13

MAC transitions - cycle two

11

15

8

6

14

10

9

A/B MAC Jurisdictions – 2008-9

MAC Transitions – Current Status of all Jurisdictions

Procurement process for payers

• CMS creates Request for Proposal (RFP) for each Jurisdiction

• Payers submit their response to the RFP, if they choose to bid on

the Jurisdiction

• If accepted, will be awarded MAC Jurisdiction; if not, they will be

eliminated

• If the current Fiscal Intermediary opts out of the bidding process,

they may leave early (examples: BCBS of AZ, CareFirst, Premera,

others)

Some of the MAC awards have been protested

• Bidders can protest award to Government Accounting Office (GAO)

• GAO will review protest over 100 day period

• GAO makes final decision

• Most awards are not overturned

• Review process has pushed out dates of final MAC migrations

• These delays WILL affect Home Health and Hospice providers in Jurisdiction D

FISS data center changes

• Used to be 15 mainframe data centers

• CMS consolidated workload to 3 Enterprise Data Centers (EDC’s)– EDS in Tulsa, OK– IBM in Southbury, CT– Companion Data Services in Columbia, SC

• Most providers already using assigned EDC

15 primary Medicare data centers – “pre MAC”

Regence BCBS OR

EDS Chico

EDS (2)

Mutual of Omaha

Arkansas BCBS

NGS

BCBS Alabama

BCBS Florida

Verizon

PalmettoGBA

Highmark

IBM

Empire

CIGNA

Post MAC migration – 3 enterprise data centers

CDS – Columbia SC

EDS – Tulsa OK

IBM – Southbury CT

In addition to the pending MAC transition

• New Medicare Data Network

• Migration called The WAN Modernization Act

Official CMS notification – 2/20/09

“In order to provide a more scalable and secure Wide Area Network (WAN) to support current and future CMS business needs, CMS is phasing out the current Medicare Data Communications Network (MDCN). The MDCN is a legacy Frame Relay network that does not scale easily and does not meet current security requirements.”

Effective Date: July 31, 2009Implementation Date: July 31, 2009

Medicare connectivity today Medicare Products

MAC (Claims & Remits)

EDC (FISS)

AT&T Frame Relay Network

(AGNS/MDNS)

HETSEligibility

Med A Provider

Med B Provider

Billing Services

Clearing House

Connectivity Vendor

WAN Modernization changes

CMSnetAT&T MPLS

Network

CMSnetAT&T MPLS

Network

EDCs FISS/DDEMACs

Claims/Remits

HETS Medicare eligibility

EXTRAnet AT&T MPLS

Network(EVPN)

EXTRAnet AT&T MPLS

Network(EVPN)

“POTS” for bulletin board claims/remits

Provider

Connectivity vendor or telephony provider

Clearinghouse

Bridge built by CMS between the CMSnet and

EXTRAnet

More reliable Greater Security

More security requirements for providers and vendors

Region D providers will be asked to select a vendor to send and receive claims and remits

What may change after this is completed

Provider

Medicare Products

MAC (Claims & Remits)

EDC (FISS)

AT&T Frame Relay Network

(AGNS/MDNS)

HETSEligibility

AT&T Passport

3270 Emulator

Some legacy connectivity components not supported as part of WAN Modernization

What if

You needed new emulation software for each workstation?

$

You had to replace your modem or other connection support hardware to access the new Medicare Network?

$$

Maintain two connections as you transition from the old to the new network?

$$$

These changes caused delays in your Medicare reimbursements?

$$$$

All of the above? $$$$$

What MAC reform means for all Medicare providers

• RFPs went out through September 2008

• Bidders for the new MAC contracts are currently under review for Jurisdiction 6

• MAC award announcement is imminent for RHHI providers in Jurisdiction D

• Notice will be sent out to all providers within 60-90 days after announcement is made

• You will change where you send your claims and remits

• An approved connectivity vendor will be required

• WAN Changes later this year could also cause disruptions

Provider

InternetSecureData

Facility

VisionShare® approach to Medicare access today

AT&T Frame Relay Network

(AGNS/MDNS)

Leverage your existing Internet connection

Supports all interactive and batch submissions to Medicare

Less expensive than standard lease line

EDC

MAC

HETS

Provider

InternetSecureData

Facility

VisionShare® approach after WAN Modernization

CMSnetAT&T MPLS

Network

CMSnetAT&T MPLS

Network

EDCs FISS/DDE

MACs Claims/Remits

HETS Medicare eligibility

EXTRAnet AT&T MPLS

Network(EVPN)

EXTRAnet AT&T MPLS

Network(EVPN)

VisionShare® already connected to new EXTRANet

Required encryption provided by VisionShare® connection

VisionShare® will migrate providers to EXTRANet when required

Questions to ask your IT Department

• How do we access FISS today? (Modem? Frame Relay Circuit?)

• What are the current costs to access FISS?

• How do we send our claims and get our remits? (Direct via a bulletin board? Clearinghouse? Other vendor?)

• How efficient has the connection been for billing staff?

• Are there plans to add users? Medicare services?

Questions to ask a potential vendor

• What do you know about the pending MAC transition that will effect me?

• Are you prepared for the pending CMS network upgrade?

• Will I need to make any changes if I stay with you?

• What other delivery methods do you offer?

• How is it priced (per minute? per workstation?)

• How do you enable expansion in either users or services?

• Can you provide a live demonstration of your current access methods?

What we have learned

• Discussed current and pending changes of Medicare

• Examined how these changes affect your facilities

• Identified the steps you must take to prepare for the transition when it occurs in New Jersey

• Developed questions to ask your IT Department and/or potential vendor

Thank you!

• Questions?

Ben Hymanben.hyman@visionshareinc.comVisionShare, Inc. 612-460-4328