Hospitals have a month to fix Medicare addresses or go unpaid

Most people don't put much thought into whether to spell out "Street" or use the abbreviated "St." in an address.

Come July, though, hospitals that choose the wrong one won't get paid by Medicare, at least temporarily, for certain outpatient services. That's when the CMS will start enforcing its exact match program. It requires that the addresses hospitals use on their claims for services provided at off-campus, outpatient departments exactly match those entered for its Medicare enrollment of those locations.

And when CMS says exactly, they mean exactly. In a test run last summer, the agency found a number of discrepancies—mainly minor things like writing out "suite" or "road" versus abbreviating them to "Ste." or "Rd." But even those would be enough to have claims returned.

"That's how detailed this exact match is going to be," said Monica Hon, vice president with the healthcare consultancy Advis Group, which has helped hospitals prepare. "You wouldn't think they would be a big deal, but they are."

If Christus Health Shreveport-Bossier hadn't cleaned up its claim addresses to match its Medicare enrollment addresses, the Louisiana system likely could have had millions of dollars in claims returned under the upcoming policy, CEO Isaac Palmer said. That's not counting the thousands of dollars it could have spent assigning someone to work on getting those claims paid.

"It's a big deal," he said. "That's hard for hospitals to keep up with. We spend so much time on operations and quality and everything else. Keeping up with the intricate rules of CMS is tough."

If the addresses don't match, hospitals will receive a return-to-provider notice. They will then have to work with their Medicare administrative contractor to resubmit the claims. The process could take some time, which may result in a temporary cash flow problem for some health systems, attorneys said.

Worst-case scenario: It could prevent hospitals from filing the claims within one year from the date of service, as is required for payment under the Affordable Care Act, Hon said.

The change supports the CMS' site-neutral payment policy, which is designed to pay providers the same regardless of where they're located. It holds that services provided at non-grandfathered hospitals' off-campus, outpatient departments are reimbursed the same in aggregate as physician's office payments and not under the higher hospital rates. It's being challenged in the form of a bill before the U.S. House of Representatives and in lawsuits.

Off-campus outpatient departments that hospitals operated before Nov. 2, 2015, are grandfathered under the new law, meaning they still receive the higher hospital rates.

Exact match is intended to ensure the CMS is paying departments at the correct rates. The agency is concerned, for example, that hospitals might have a grandfathered outpatient location on one floor of an office building, and then start practicing out of another floor in the same building, the latter of which would not receive the higher rate, said Timothy Fry, a healthcare associate with McGuireWoods in Chicago. Under the new rule, hospital outpatient departments are paid 40% of their grandfathered peers, he said.

Fry said he doesn't think hospitals with discrepancies are trying to game the system; it's mostly accidental. The CMS has put implementation of the new rule on hold until July to ensure hospitals have had time to make the changes, he said.

"But do I expect that a lot of our hospitals across the country are behind on this? Absolutely," Fry said. "And do I think a lot of hospitals will be scrambling in a few weeks if this rolls out? You bet."

Once hospitals know which addresses need to be fixed, it takes 30 to 45 days to have Medicare administrative contractors approve changes to a providers' enrollment information, Hon said. Corrections are a lot easier and faster to make to a provider's own claims submission system, Fry said.

The changes will be more difficult for larger health systems with many hospitals and outpatient locations than it will be for smaller systems, Hon said.

"I think you're going to see more of these things falling through the cracks in the larger systems than you would with the smaller systems that don't have many off-campus locations," she said.

Staff at Christus Health Shreveport-Bossier began preparing for the change last year, and Palmer said he doesn't foresee running into problems in July.

"I'm hoping this is going to be like Y2K," he said.