Effective with April 1, 2010, dates of service, Missouri Medicaid will change its method of payment related to claims for Medicare Part A coinsurance in skilled nursing facilities (SNFs). Historically, the Missouri Medicaid program fully paid Medicare Part A coinsurance for dual-eligible beneficiaries, i.e., those eligible for both Medicare and Medicaid. With budget shortfalls looming, Missouri has chosen to reduce payments for Part A coinsurance by making payment only in rare cases. As a practical matter, most Part A coinsurance claims on dual-eligible patients will not be paid by the state for dates of service after April 1.

Unpaid Medicare Part A coinsurance may be reimbursed as a Medicare bad debt on the provider’s year-end Medicare cost report if specific criteria are met. Currently, Medicare fully reimburses providers for unpaid coinsurance for dual-eligible beneficiaries if appropriate billing and record keeping supports the claim for a reimbursable bad debt. It will be even more important for Missouri SNF providers to ensure they have effective billing, tracking and documentation systems in place related to Medicare bad debts going forward.

It is important to note that bad debts related to unpaid coinsurance on Medicare Advantage and similar plans are not reimbursable as a Medicare bad debt on the year-end cost report.

Providers are encouraged to examine the historical amount of Medicare Part A coinsurance paid by Missouri Medicaid to determine the potential cash flow impact of this regulatory change. Wisconsin Physician Services, the Medicare Administrative Contractor for Missouri, has indicated it will allow Missouri SNF providers to apply for advanced level payment of anticipated reimbursable bad debts due to the change in Missouri Medicaid policy.

For more information, please contact your BKD advisor.