We’d like to wish all of our readers a safe and prosperous HAPPY NEW YEAR. Several changes have already taken place that will impact the cost of doing business in Florida this year. Florida businesses will see lower workers’ compensation insurance rates. Regulators approved an overall 13.8 percent decrease in workers’ compensation rates for 2019. Also for 2019, Florida minimum-wage workers began earning $8.46 an hour as of January 1, 2019, up from $8.25 an hour in 2018 and more than a dollar above the $7.25 federal minimum wage. Although this “increase” should not pose any problems financially, providers in low-wage areas should take note for compliance purposes. Employers are required to pay their employees the hourly state minimum wage for all hours worked in Florida.
For those of you that travel on the road in your personal vehicle for business purposes, the IRS boosted the auto mileage rate for 2019 to 58 cents per mile, up from 54.5 cents for 2018. Finally, the Florida Reemployment Tax (aka Unemployment Tax) rate for 2019 will remain at the 2018 level. The minimum reemployment tax rate for experience-based employers is .10%, or $7.00 per employee based on the maximum taxable wage base of $7,000.
Medicare Premiums and Deductibles for 2019
Medicare premiums and deductibles for calendar year 2019 have risen slightly from 2018. The CMS notices indicate the daily coinsurance for days 21-100 in a skilled nursing facility will increase to $170.50 from $167.50 in 2018. CMS announced the standard Medicare Part B monthly premium will increase from $134.00 in 2018 to $135.50. The MMA requires beneficiaries with higher incomes to pay a higher percentage of costs for Medicare Part B, so, depending on their income level and tax status, these beneficiaries will see monthly premiums ranging from $189.60 to $460.50, a significant increase over the 2018 range of $134.00 to $428.60. Annual deductibles for most people will increase to $185 from the 2018 rate of $183.00.
Medicare Bundle Payment Initiatives Update
Although the Bundled Payments for Care Initiative (BPCI) has been around for several years, a new BPCI Advance (BPCI-A) Model has been released that could impact long-term care providers in Florida. There are currently 15 total providers participating in Florida and 6 of those are acute care hospitals based on the most recent list available from CMS. In addition there are several nation level “conveners’ who are working with local health care facilities to operate a BPCI-A model. The new model began October 1, 2018 and the Model Performance Period (MPP) runs through December 31, 2023. The new model is very similar to previous models but has now expanded to 29 Inpatient Clinical Episodes and 3 Outpatient Clinical Episodes. Beneficiaries enrolled in Medicare Advantage Plans are excluded from the model.
The advanced model provides for a single payment and risk track for Clinical Episodes, which begin on the first day of the triggering inpatient stay or outpatient procedure and extend through the 90-day period starting on the day of discharge from the inpatient stay or the completion of the outpatient procedure. Twenty-nine Clinical Episodes are triggered by the submission of a claim to Medicare Fee for Service (FFS) by the inpatient hospital based on the Medicare Severity-Diagnosis Related Group (MS-DRG). Three Clinical Episodes are triggered by the submission of a claim to Medicare FFS by an outpatient procedure -Percutaneous Coronary Intervention (PCI), Cardiac Defibrillator, or Back & Neck except Spinal Fusion -identified by a Healthcare Common Procedure Coding System (HCPCS) code.
Skilled Nursing facilities (SNFs) can fulfill the same role of “Convener Participants” under the new model just as in the past. In this role, SNFs are downstream providers that share the risk of reducing the cost of care for each episode with the goal of reducing the Medicare Spending per Beneficiary (MSPB) to create a positive Net Payment Reconciliation Amount (NPRA) for each episode. The hospital or a convener (similar to a managed care organization) is the holder of the bundle. SNF’s are being directed on rug rate to bill and length of stay.
Now is the time to consider the impact to your operations and financial bottom line that could result from this new model. Management must adopt strategies for success. Providers should perform an assessment of their facility to determine their current reputation, census, referral relationships, and financial status. Providers should compare actual results against quality ratings and develop a plan to feasibly meet the new 5-star quality measures, the Florida Gold Seal Award, and the AHCA National Quality Award Program.
We encourage providers to consider plans to address the risks of a reduction in the Medicare census in order to maintain a financially healthy census and mix. High quality facilities and those that offer multiple levels of post-acute care will be in higher demand. Facilities should be actively engaged to solidify referral relationships and to provide value to referral partners (e.g., shared data that makes it clear how your organization benefits the referral partner). Finally, facilities need to monitor the costs of providing services to avoid accepting high risk referrals where reimbursement is inadequate to cover costs.