A contract exclusion details the medications and treatments that are not included in the levels of a managed care contract. Are exclusions a good thing or bad thing? 

That depends on us, the provider. If we identify and capture these exclusions and bill the health plan for them, then exclusions are great. If we are unaware of the exclusions or are unable to identify them, then they’re not so great. 

On average, managed care companies are the payor source for half of Americans with Medicare (via Medicare Advantage, or MA, plans), and the way our post-acute care facilities get paid is now more complex. When most of a typical census was covered by traditional Medicare, fee for service norms made reimbursement relatively predictable and reliable. 

Most managed care patients are now covered by a health plan-specific contract with multiple reimbursement stipulations, such as contract exclusions, that require careful attention. Capturing every contract exclusion is an important step for getting full reimbursement. 

Contract exclusions and the pressure of leveled contracts

In recent years, most health plans have shifted to using Medicare Advantage contracts that define levels of care (usually four) that specify a per diem reimbursement rate for each level. The exclusions list details the medications and treatments that are not part of the contract levels. These leveled contracts, with exclusion lists, put pressure on providers to adapt their workflow to accommodate managed care reimbursement rules. 

No two contracts look the same, which adds insult to injury with an already overwhelming and complex new challenge for providers. Here are four steps to optimize your chances for full reimbursement. 

Step 1: Start with the contract terms

When the contract is being created, negotiate with the plan to make the exclusions list larger so your go-to meds and treatments can potentially be covered. Contracts can specify rules for what is covered or excluded and how to request coverage for excluded items. 

Know what the plan’s rules are for levels and for items on the exclusions list, and make sure your team knows them verbatim. These early steps set the stage for operationalizing your managed care contracts. 

Step 2: Capture and communicate 

This is where the action is. We like to use the term “operationalize” because working successfully with managed care payors is exactly that: a precision operation. 

Ideally, every member of a care team has access to the health plan contracts so when a patient’s condition requires a change in their care level or requires something on the exclusions list, staff alert each other, and the correct action occurs in real time. Staff note a change, communicate with each other, and then request authorization from the plan. Capturing exclusions requires this degree of teamwork, daily.   

Step 3: Have appropriate infrastructure to scale 

All the above sounds pretty simple when only a couple patients are covered by managed care contracts. For many, if not most of us, those days are fading into history. We now have substantial numbers in our managed care census and it’s a struggle to operationalize many different contracts every day. 

A best practice for scaling up is to have a dedicated case manager and appropriate technology that empowers the care teams with the right tools to never miss a beat. A case manager and tailored technology helps a team capture the exclusions, get authorizations for timely care, and set up the facility for proper reimbursement. 

Step 4: The unsung heroes complete the picture

The care teams do the heavy lifting. This is truer than ever with daily life in the hallways. But the final step in the operationalizing of managed care contracts is in the front office. All the work up to this point has to be converted into a claim for submission to the plan. Again, it sounds simpler than it really is.

It’s so easy to compile a UB-04 that looks complete, yet it misses level changes or includes medications on the exclusion list but will be denied because the authorization was not received. An all-star business office manager might be able to backtrack and clarify with staff, but what about when dozens of claims are needing to be processed and submitted? 

Step 4 is the non-clinical but no-less crucial final piece of full reimbursement. Whether this happens from consistently excellent analog best practices, or if it’s the final step of a case manager-led, software-supported operationalization, the result needs to be the same. This is the new reality for winning with managed care payors.  

Susie Mix, BS, MBA, NHA, is the founder and CEO of Mix Solutions Inc. She has more than 20 years of experience in the post-acute care industry. She has firsthand experience running facilities and holds the long-term care mission close to heart. Her experience working in the field, coupled with her time spent at a health plan provides a unique blend of knowledge that helps her provide solutions for each client. Mix has been doing managed-care consulting with facilities since 2009. She can be reached at susie@mixsolutionsinc.net.  

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

Have a column idea? See our submission guidelines here.

This is especially true in our post-acute world where only about 7% of RNs work. It can be a challenge to find and keep RNs, and there are also difficulties with LPNs, CNAs and other team members that patients need. 

Post-acute staff have been trading their low-paying yet vital roles for better-paying jobs in other industries that are less burdensome. It’s been projected that by 2026, there will be a shortage of 3.2 million people in the lower-wage ranks of the healthcare labor force. The staffing shortage is a long-term challenge. 

There are root causes of staff shortages that won’t be easily solved by business cycles or public policy. The healthcare staffing challenge can be framed as a fundamental shift that is part of our new reality. This sounds like a doom and gloom view, but I believe this shift is an opportunity to evolve and become stronger. 

Merge staff workflow and tailored software to become your fundamental answer

Collaborative teamwork becomes a resilient foundation that supersedes any individual. Team members use tailored software as the reliable footing that keeps everyone in sync and supported. Teamwork and software create efficiencies that help keep folks from wanting to find new work elsewhere. 

1. Collaborative teamwork: Many buildings are steadily seeing more patients covered by Medicare Advantage (MA) health plans. Traditional fee for service Medicare is not disappearing, but the great shift to managed care is well underway. This means our care teams need to continue implementing MDS protocols for Medicare patients while also being equally well versed in caring for MA patients. Two different workflows. 

As facilities have been slowly but steadily seeing the increase in patients covered by MA plans, a typical team naturally continues its normal MDS-centric protocols. This could pose a problem for the facility because managed care patients do not fit into the same review protocol that traditional Medicare follows. The result often is revenue slipping through the cracks.  

The best way forward is to train staff in a workflow that has managed care protocols top of mind. This workflow is more dynamic and requires daily routines that empowers staff to help the facility maximize its reimbursement for each MA patient. 

This MA-focused workflow has a bonus: It helps staff become a highly functioning interdisciplinary team. This leads to a strong team-based workflow that becomes a resilient foundation that can support the workflow when transitions occur. 

2. Tailored software: Tech that enhances people. It’s all too easy to think of workplace technology as a stand-in or replacement for people. In the context of staff shortages, I see technology as giving power to the people. A well-designed case management application serves as a never-sick, never-quits central hub that anchors the team so they’re on point, on message and always in communication with each other. This software is key when faced with higher Medicare Advantage volume and ongoing staff shortages.

Make your team more resilient to turnover AND maximize your managed care revenue

Meeting the moment in our business can feel like a hamster wheel because it seems like there’s always a moment. With staffing, I feel this is a genuine call to action moment.

Focusing on developing a resilient culture based around team workflow and investing in team-strengthening software creates a double win for two of the defining moments of our time. This solution builds resilience against staff turnover while also helping to maximize reimbursements for patients covered by managed care.   

Susie Mix, BS, MBA, NHA, is the founder and CEO of Mix Solutions Inc. She has more than 20 years of experience in the post-acute care industry. Mix has been doing managed-care consulting with facilities since 2009. She can be reached at susie@mixsolutionsinc.net.  

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

Have a column idea? See our submission guidelines here.

We are experiencing many challenges as our post-acute world transitions to having managed care payors covering the majority of patients. The ways this shift impacts providers are exasperating as large health plans have been changing their reimbursement methodology from PDPM to Leveled Contracts.

MA in the USA

To put the Medicare Advantage growth into perspective, there are more than 3,998 MA plans available in 2023, the largest amount offered since Kaiser the Family Foundation began keeping count in 2010. KFF reports that the average Medicare beneficiary in 2023 can choose from 43 Medicare Advantage plans.  

Twenty-one states are now at 50% or higher statewide MA penetration, with Alabama and Michigan leading the way at 57% each. Medicare Advantage penetration is projected to increase for years to come. 

The rise in MA enrollment and impact of levels-based contracts

As more post-acute care patients are covered by MA plans, insurers continue to experiment with payment models. Leveled contracts are intended to deliver the care a patient needs within carefully defined levels of treatment and costs. Care is often segmented into four levels. Each level has a per diem reimbursement rate and an accompanying list of acceptable treatments assigned to the level. The provider must get authorization before giving care that is at a higher level. 

There also may be a list of exclusions (additional charges that can be billed to the health plan) that are not covered in the contract’s care levels. The provider oftentimes must get authorization for providing care that is excluded. Minding this exclusions list is very important. 

So how does this process affect the provider, especially a skilled nursing facility? Critical steps must be put in place to operationalize the contract and prevent loss of reimbursement on each case. 

1. Contracts: Get it right from the start 

Spend time on the front end when negotiating a leveled contract. Review not only rates and level definitions, but also key terms and exclusions. If you are not familiar with leveled contracts or simply don’t have the time (those health plans can consume a significant amount of time), outsource this task to someone who does. Getting it right from the beginning is important.

2. Give access so key eyes are on a leveled contract 

Once the contract is complete, all team leaders should have easy access to it. The administrator, director of rehabilitation, director of nursing, admissions and case manager should be included. In managed care audits we’ve completed nationwide, lack of access to a leveled contract oftentimes is one of the missing pieces that undeniably has providers suffering significant financial losses. If we want to succeed with leveled contracts, that contract must be referenced daily as the team delivers care.

3. Find a rock star case manager 

Case managers (or care managers) are the one point of contact for managed care patients. These folks are responsible for understanding the leveled contracts and referencing them daily based on the patient’s needs. If there is a change of condition and the patient requires a higher level of care, the case manager would obtain an authorization and prevent lost revenue. 

This role is critical. It is likened to the role the MDS nurse plays in traditional Medicare patient reimbursement. Unlike MDS assessments, a managed care patient’s care level needs to be reviewed DAILY. It’s imperative if we want to be paid accurately for the services we provide.

This role is time-consuming, and that’s challenging when staffing is already a pain point. The good news: There is managed care software out there that can capture changes in levels and identify exclusions, easing the burden off the case manager and making it easier for them to help secure reimbursement.

4. Communication: Bringing it all together

The key to success with leveled managed care contracts is ensuring they are operationalized within your facility. Developing best practices, being efficient with time and resources, and having a clear workflow are paramount. All of the above requires exceptional communication. 

There are several departments and roles that touch the managed care patient experience. Daily communication is required. Whether it be through daily meetings or noted in a managed care software platform, the communication needs to be there. 

We are an industry of consistent change and movement. Some big, some small. We have adapted, bent, moved and stretched in many directions. The shift to leveled contracts is a significant change that affects our reimbursements as well as our daily management of a patient. As with any change, education, preparation and agility are keys to success.

Susie Mix, BS, MBA, NHA, is the founder and CEO of Mix Solutions, Inc. She has more than 20 years of experience in the post-acute care industry. She has firsthand experience running facilities and holds the long-term care mission close to heart. Her experience working in the field, coupled with her time spent at a health plan, provides a unique blend of knowledge that helps her provide solutions for each client. Mix has been a managed-care consultant for facilities since 2009.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

Have a column idea? See our submission guidelines here.