Medicare’s change to PDPM effective October 1, 2019 has necessitated a change in how the Medicaid program calculates its liability, if any, for dual eligibles’ cost sharing under Medicare. Instead of a Medicare RUG to Medicaid RUG crosswalk, DMAS will use a single facility specific Medicaid per diem rate as the Medicaid comparison payment to the Medicare PDPM reimbursement.

The per diem rate used is your case mix neutral payment rate (your base rate with a RUG weight of 1.0).  These rates are posted on the DMAS website. 

VHCA-VCAL was told by DMAS that a Medicaid Bulletin with specific instruction was forthcoming; to date, we have only seen one bulletin dated October 7, 2019, that stated the general plan, but did not provide detailed instruction. However, we did communicate with DMAS on the detail and the following is our understanding of the process for Part A crossovers beginning with dates of service of October 1, 2019 forward:

If a Medicare Part A claim for a dual eligible indicates a coinsurance amount due, the process below will determine if additional payment must be made by the Medicaid program: 

1. Add together the Medicare payment amount and sequestration adjustment to determine the total Medicare payment for the entire service date span (not just the coinsurance days). Divide the total Medicare payment amount by the number of days on the claim (not just coinsurance days) to create a “per diem” Medicare payment amount for the claim.  Multiply this per diem amount by the number of coinsurance days on the claim—DMAS calls this result the “Medicare Allowed” amount.
2. Multiply your facility’s Case Mix Neutral Rate by the number of coinsurance days on the claim – DMAS calls this result the “Medicaid Allowed” amount.
3. Compare the Medicare Allowed amount to the Medicaid Allowed amount:

If the total Medicare Allowed is greater than the Medicaid Allowed, no Medicaid payment is due.  The payer will populate the appropriate bad debt denial code and other relevant variables to the Medicaid remittance advice (or the quarterly spreadsheets if not yet available on the remittance); or,

If the total Medicare Allowed is less than the Medicaid allowance, the difference is due from the Medicaid program.  Patient pay must be applied in part or in full if the entire DSS-calculated patient pay has not already been applied to a separate claim for the same month of service.  To the extent the full Medicare coinsurance is not paid by Medicaid under this approach, the payer will populate the appropriate bad debt denial code and other relevant variables to the Medicaid remittance advice (or the quarterly spreadsheets if not yet available on the remittance) for the remaining amount.

To the extent DMAS issues a Medicaid Bulletin that differs from this approach, we will communicate that as soon as we see it.  If you have questions, please contact Steve Ford.