BCBSM: 835 File to BST Nancy Drury, CPA Deborah Sieradzki, PhD Lubaway, Masten & Company Great Lakes HFMA Reimbursement Update September 26, 2014

AGENDA Blue Cross Cycle Blue Cross Payment Logs Interim Payment Review Monthly Contractual Model and/or Balance Sheet Test (BST) Interim and Final Settlement 2

Why Do We Care? Blue Cross Substantial Part of Hospital’s Business Due to administrative complexities, it is challenging to have a handle on the process HUGE Negative Impacts 3

4 File Cost Report Rebasing IP and OP Settlement Rates IP and OP Vouchered Rates BIP Review Final Settlement Initial Settlement Vouchered Claims Blue Cross Cycle Periodic Balance Sheet Test Monthly Contractual Model

BLUE CROSS LOGS

Blue Cross Payment Logs 6 Maintaining accurate record of cleared claims is ESSENTIAL for: Accurate settlement calculations for Financial Statements Reasonableness of interim payments Accuracy of interim and final settlements Easier said than done!!!!!

Blue Cross Logs 7 Logs are compilations of cleared charges and other information summarized from Electronic Remittance Advices (835). Data file “loops” so it’s impossible to interpret volume of data without converting data into readable format

Sample 835 File 8 The 835 file contains payment, charge and statistical data for each claim accepted. It contains rejection codes for claims not paid. This data is posted to the hospital’s A/R. Much of the data on the 835 is echoed back from the 837 billing files submitted by the provider.

Once the 835 file has been parsed, save it in a human readable file with titles. Detail is tied to Control Totals The data is then “Tweaked” Parse 835 File to Make Data Readable 9

Blue Cross 835 Files Tricks No Treats. 10

LOGGING ISSUE #1: KNOW WHAT’S IN YOUR BIP 11 Receive MANY 835 files from Blue Cross Not all are included in BIP and settlement calculation Includes both Professional and Hospital Includes BCBSM, FEP, MOS, NASCO, Medicare Advantage, BCN, Blue Cross Complete, Medicaid, Domestic Claims Knowing distribution schedule can help ID

Logging Issue #2: SIZE OF FILES 12 Volume of 835 files are substantial – pick and choose data elements to log Method of managing data – payer type, software, claims cut-off date, etc.

Logging Issue #3: What you see is NOT what you get 13 What is clearing on the voucher as payment may not be a good representation of your settlement. DRG > Charge reimbursement Vouchered Rate ≠ Settlement Rate Differences can be substantial Need to determine how you will build into model

Vouchered Rates DO NOT EQUAL Settlement Rates IP Settlement Rates 14 Operating Cost per Case +Capital +GME +Bad Debt and Charity Care +Other +P4P =Inpatient Settlement Rate +Vouchering Differential +Trend Factor +Lesser Of Charge or DRG Adjustment =Vouchered Rate

15 Fee Screen or Percent of Charges for Cost Based +OP Passthrough Factor +P4P =OP Fee Screen or Cost Based Settlement +Trend Factor +Adjustment to Passthrough Factor =OP Vouchered Fee Screen or Cost Settlement Difference can be substantial! Vouchered Rates DO NOT EQUAL Settlement Rates OP Settlement Rates

Logging Issue #4: Know What Is Clearing 16 Remove rejected claims and other excluded from settlement (ie: domestic claims) if applicable Understand zero pays Know your specific issues and decide how to address – examples: Babies for Blue Care Network Claim Status 22 No DRG Assignment

Logging Issue #5: Manual Adjustments Are Required files are not always complete Blue Care Network files lack data essential to get clearings in the proper buckets for settlement – this needs to be input manually DRG # is included – weight is not. Need to pull same period into logs from a separate source document Take-backs are counted as a discharge

Logging Issue #6: So Many Codes! 18 Properly categorizing patient data is essential for properly calculating settlement Companion documents: 4010: : /835-companion-document.pdf

Claim Status Codes 19 Over 15 different status codes Examples: Claim Status #1 – Primary Claim Claim Status #2 – Secondary Claim Claim Status #4 – Denied Claim Status #22 – Reversal of Previous Payment

Type of Payment Indicator Code 20 Determines what bucket the claims goes into for settlement purposes 5 positions within the code that define the claim Not every position is populated Currently know of 140+ combinations See companion guide for complete list

Type of Payment Indicator Code 21 Position 1 – Voucher Codes 1=Inpatient Regular 3=Outpatient Regular 5=BC Complementary IP 6=BC Complementary OP Position 2 – Accommodation Codes 0=BC-65 OP Complementary 1=Regular IP Hospital Admission 2=BC-65 IP Hospital Admission 3=Regular OP

Type of Payment Indicator Code 22 Position 3 – Method of Reimbursement B = Blue Care Network C = PHA Controlled Cost P = PPO Trust R = PHA Per Diem Position 4 – Provider Contract Indicator Blank = PHA B = Blue Care Network T = Trust/PPO Position 5 – Special Use Indicator % = Percent of PHA

Type of Payment Indicator Code Example 23 Code: 11 Voucher Code = 1 Accommodation Code = 1 Method of Reimbursement = Blank Provider Contract Indicator = Blank Special Use Indicator = Blank Patient = Inpatient Regular/RegIP Admission/PHA Include in IP Traditional Settled

Type of Payment Indicator Code Example 24 Code 33 T Voucher Code =3 Accommodation Code = 3 Method of Reimbursement = Blank Provider Contract Indicator = T Special Use Indicator = Blank Patient = OP Regular/Regular OP/Trust Patient Include in OP PPO Settled

Type of Payment Indicator Code Example 25 Code 60LT% Voucher Code =6 Accommodation Code = 0 Method of Reimbursement = L Provider Contract Indicator = T Special Use Indicator = % Patient = BC Complementary OP/BC-65/PHA Lower of Cost or Charge/Trust_PPO/Percent of PHA Include in Non-Settled

INTERIM PAYMENTS (BIP) 26 Receive a weekly estimated payment (BIP) instead of payment that is specific to an 835 file Periodic BIP reviews are done to determine reasonableness of weekly payments based on cleared claims Logs are a key component to determining whether BIP reviews are accurate

BALANCE SHEET TEST

Balance Sheet Test 28 Know what is in your AR so you can reserve appropriately Blues products not included in BIP are reserved differently than those in BIP Calculate estimate on copays & deductibles if still in primary payer code

SETTLEMENT

Settlement 30 SETTLEMENT BALANCE = EXPECTED PAYMENT less BIP Don’t operate in a vacuum! Make sure your contractual model / BST are reasonable compared to BIP reviews and other correspondence from Blues Remember to include claims after cut-off that occur in the following year

Settlement 31 In a perfect world, 835 logs would tie exactly to settlement detail – they won’t Some data elements used for settlement are not evident in the 835 file – hard to get in proper bucket Transfer cases not always identified with discharge fraction Count on take-backs can cause an issue

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