Can you boost reimbursement now?
Some providers will benefit from rebasing
While rehab providers await the Health Care Financing Administration’s (HCFA) decision on future reimbursement, some facilities may be able to increase their Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) reimbursement rate by $200 to $300 per discharge by taking advantage of the optional rebasing provision in the budget act.
In general, facilities who qualify for the rebasing are those whose cost was higher than their TEFRA limit for three of the five years from 1989 to 1995.
Using 1995 cost reporting tapes from HCFA, the American Rehabilitation Association in Reston, VA, has analyzed HCFA’s 1996 cost reporting tapes and has determined that about 300 rehabilitation facilities could benefit from optional TEFRA rebasing under the Balanced Budget Act of 1997.
The association will confirm whether a facility can benefit from rebasing at no charge and, for a fee, will do the application and get it to providers in time to file it with the HCFA fiscal intermediary.
However, if your facility’s 1998 cost reporting period begins between Oct. 1, 1997, and Jan. 1, 1998, you may have missed the boat.
Facilities whose 1998 cost reporting period begins between October 1 and January 1 must have filed by Nov. 1, 1998. Other facilities have until 60 days before their fiscal year 1998 begins.
In the past, there was no administrative direction on how to get rebased and no published criteria. The decision was left to the discretion of the HCFA intermediaries, who often denied the applications.
The new rebasing plan gives higher limits to providers who are chronically over their limit.
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At the same time, the balanced budget act provision takes away incentive payments to providers who are chronically under the limit.
Ironically, dropping the incentive payments may actually result in more care for Medicare patients because providers under their TEFRA limits will have no reason to cut costs.
In the past, rehab providers have been pressured to cut costs by administrators at medical centers so their facilities could get incentive payments.
Now that there are minimal incentive payments, no strong argument remains for cutting costs of a facility operating below its TEFRA limit. Instead, it may become more acceptable to let patients stay an extra day or to give them some extra therapy, says Sam Fleming, research analyst with Joe W. Fleming II PC, a Washington, DC, law firm specializing in rehabilitation reimbursement issues.
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