Three Ways to Buy a Medicare Facility
May 27, 2009
Prior to buying an agency, one of the most important decisions to make is how the Medicare Provider number will be transferred or even if it will be transferred. There are three ways of transferring Medicare facilities that CMS recognizes and each of them has advantages and disadvantages to the buyer. No final decision should be made until you have sought counsel from an attorney experienced in Medicare Change of Ownership work.
The first way is the simplest. It involves a ‘stock’ transfer. Organizations that are comprised of ‘units’ are also considered in this group. Basically, a corporation or an LLC merely changes out the principals in the legal documents. For instance, I am the sole member of Haydel Consulting Services, LLC. If I sell my membership to you, you are the sole member. You not only get my name and provider number but any debt or IRS liability associated with my Tax ID Number. In fact, Medicare does not consider this sort of transaction to be a change of ownership. All that is required is that appropriate authorities are notified of changes in the Directors, officers and managing individuals. The advantages of this transaction are obvious. There is no delay in billing or waiting on Medicare to recognize your Change of Ownership. But, the risk of such a transaction is hardly insignificant. We do not recommend this change of ownership often unless a client is buying a brand new entity with a clean, transparent history. Due Diligence must be thorough and ruthless.
The second type of transaction that we deal with regularly is when a buyer assumes the provider number of the agency or facility it wishes to buy. A new entity is formed and this entity will be one to be licensed and to assume the seller’s provider number. In this case, all that is at risk is Medicare debt. However, due diligence is still critical because Medicare is often slow to react to billing issues and potential fraud and abuse issues. Billing may or may not be interrupted in this type of transaction. Upon recognition of the change of ownership by Medicare, the new owner will be able to bill effective the date listed on the bill of sale. However, a good attorney can prepare a remittance agreement that allows for billing to continue using the seller’s information until CMS recognizes the change in ownership. This can be messy from an accounting standpoint but is preferable to operating without cash. From start to finish, this kind of change of ownership may take six to nine months.
The final type of transaction is when the seller assumes neither the provider number nor the entity. In this case, the buyer is purchasing assets only. Without the assumption of the Medicare Provider Number, the buyer is unable to bill until after the new provider has been certified. In order to accomplish this, the buyer should be able to float the new facility for six months or more after the date of sale. In addition, since new providers are not being surveyed, and Medicare will look upon the buyer as a new provider in these transactions, the new facility must undergo accreditation from an accrediting body.
A good lawyer should always be consulted to assist with legal work and there are many good consultants who can assist in the navigation of regulatory paperwork. However, there are some decisions only the buyer can make. And how much liability a seller is comfortable with is a personal decision nobody else should make for the buyer.
For questions or comments about this, please feel free to contact us at haydelconsulting@bellsouth.net or leave a comment below. Should you be interested in buying or selling a facility, please feel free to contact us to meet your regulatory needs.
ARRA and Health Care
May 19, 2009
Yesterday I attended a meeting sponsored by Louisiana Health Care Review and heard a lot about how the federal government would influence the healthcare environment of the future. The American Recovery and Reinvestment Act of 2009 (ARRA) has earmarked 19B dollars to invest in health care Information Technology.
The aim of the Obama administration is to promote the electronic interchange of health care data between providers. In order to promote this information exchange, hospitals and physicians will be awarded a portion of the 19 billion dollars based upon meaningful use of certified IT systems. This kind of investment has the potential to greatly reduce errors and improve outcomes in health care – particularly in chronic diseases. And this is a reality – not a proposed bill or an idea being bantered about in Washington. The money is there and its purpose is determined.
The problem is that many of the definitions are not determined as yet. ‘Meaningful use’, for instance, sounds good but it is too vague to use in designing polices. Also, the certification standards have not been determined as yet so while it is assumed that most health care IT vendors will meet certification standards, nothing is guaranteed. And what will it mean for vendors to be ‘certified’? Will they then be subject to all the Stark laws and Medicare provisions that health care providers are? Will the physician who owns a software company be prohibited from using his own product?
The good news is that at this point in time, none of this will affect post acute care providers except in a tangential way. Changes to the HIPAA Privacy Rule are expected and universal code changes may affect our computer vendors.
In listening to the information yesterday, it was the universal opinion of all the speakers that the healthcare system would be an entirely different animal within the next ten years. While we all recognize that major changes are needed, it is understandable that the unanswered questions are anxiety provoking in many providers. One thing is for certain, providers, whether they are covered under ARRA or not, will be sliding towards obsolete in the coming years if they do not embrace technology as a tool to further patient care.
For questions about this information, keep checking back. As more detailed information becomes available, we will be posting for your information and digestion.
PPS – More than ICD-9 Coding
May 11, 2009
Clinical record review in the past several weeks has revealed that my clients have greatly improved their ICD-9 coding. It’s really no surprise. Coding classes are offered regularly and there are many great services out there to assist agencies with coding. And coding is critical to home health PPS. No one can deny that.
But what I have been seeing repeatedly is clinical records reflecting very high clinical scores and almost non-existent functional scores. It’s as though once the diagnosis coding is correct, nothing further in the OASIS data set is examined. This morning, for instance, I reviewed a report of a patient who has severe visual impairment, is short of breath with minimal exertion and has diabetic neuropathy. But, as it turns out, this patient is safe to dress by herself, including retrieving her own clothes. And by divine intervention, it is safe for her to bathe and toilet independently.
I have not looked at this patient. Nor would I mention this patient if this wasn’t so very typical of what I have been seeing in charts. And this is costing agencies!
Many nurses think that because a patient is forced by circumstance to perform these activities of daily living that they are able to do so safely and independently. And yet, OASIS instructions are very clear in that safety should always be considered in responding to the OASIS functional domain questions.
For more on making PPS work for you, check out the link to the right of the page. If you have any questions, please feel free to contact us at haydelconsulting@bellsouth.net or leave a comment below.
Home Health and Hospice Response to H1N1 Flu
May 3, 2009
As Louisiana has its first cases of H1N1 flu confirmed, the toll that this virus is taking has long begun. It seems as though not one but two diagnoses need to be addressed with urgency. The first is the H1N1 flu and the second is the swine flu anxiety.
Last Sunday I turned on the news to listen to the updates and it was overwhelming. Although there were only a handful of cases confirmed or suspected in the United States, the constant repetitious news coverage made it seem like so many more. Make no mistake. This flu is not to be ignored and overlooked but the reality is that it is expressing itself as not much more than an inconvenience at this time.
Consider that the CDC is only able to process 100 samples a day. That means that the number of people who are actually infected by swine flu is far greater than the number of confirmed cases. And yet, thus far, nobody outside of Mexico has died except for the one tragic death of a toddler who lived in Mexico and came to the US shortly before his death. Our hospitals are not being overrun with suspected cases.
But our patients are afraid. Our own red flags have been alerted. Nobody in our profession has actually practiced during a pandemic before. The H1N1 flu situation warrants close monitoring to be sure. But at the end of the day, we already know how to take care of sick people. And that’s what this virus will require of us.
And it will require our nursing skills and experience to alleviate the fears of our staff and our patients. Lives do not have to be interrupted. On admission, every home health and hospice patient is taught about infection control. These precautions protect our patients from myriad diseases. And now is a good time to reinforce these teachings while at the same time, explaining to patients that he risk is low – especially for home bound patients!
Visitors and family members who have recently travelled to Mexico and children from schools that are closed because of an outbreak should generally stay away from patients. Explain that there is medication that can be used to treat this flu. In some hospice cases, the benefit of sequestering family members versus the pain it may cause must be considered taught and the family should make that decision. But at the end of the day, the same advice applies to all patients and staff. Eat well, get enough rest, practice hand washing and do not risk unnecessary exposure.
Many of us have been curious about the origins of this virus. I think the answer may be provided in the picture below of Blake Theriot Knoll of Delray Beach, Fl and his first love.
