Eight Characteristics of an Efficient Finance Department
Assessing the finance department’s strengths and weaknesses can help achieve solvency.
Nancy Levitin, Jeffrey Neuman, and Katie Barbieri
6/1/2017
In the days of the Roman Empire, all roads radiated from the capital city of Rome. In the skilled nursing care center world, all paths to getting paid emanate from the finance department. Long term and post-acute care (LT/PAC) providers face innumerable challenges in what has become a perpetual quest for reimbursement. In myriad ways, a finance department can facilitate or impede that quest. This article will focus on eight critically important features of an efficient finance department.
1. The Dream Admission Packet
The linchpin of most admission packets is the admission agreement. A fully signed and dated admission agreement that unambiguously outlines each party’s responsibilities, and has no unfilled-in blanks, is an adequate admission agreement.
But an efficient finance department’s admission packet is more than adequate. Its admission agreement is carefully drafted so the signer can face potential liability without either creating an impermissible third-party guarantee or requiring access as a precondition to a lawsuit. The best admission packet also includes an ironclad set of authorizations, so the days of depending on a recalcitrant son or unresponsive daughter to produce bank statements or turn over pension checks are over.
2. Timely Representative Payee Applications
Good finance departments apply to become representative payees for every unmarried long term resident who receives Social Security benefits and needs assistance managing his or her funds. As representative payee, the nursing center administrator is able to receive the resident’s benefit checks and apply those funds to the resident’s cost of care. The resident need not be incapacitated, and the facility need not get the consent of the resident’s next of kin.
A quick look at the Social Security Administration’s website makes clear that the facility administrator is an appropriate representative payee for residents with compromised capacity who receive retirement or disability benefits.
3. Precautionary Medicaid Applications
Responsible finance departments do not let their accounts get more than three months out without securing Medicaid as a potential payment source on the account. Precautionary Medicaid applications should be submitted on behalf of such delinquent residents even if the facility suspects the resident is ineligible, or the family objects, or financial documentation is missing.
Nursing centers have the legal authority to file applications for their residents, and there are Medicaid regulations that can make excess resources unavailable for eligibility purposes, exempt penalized transfers in cases of undue hardship, eliminate the need for spousal documentation, and bestow coverage on illegal aliens.
4. Getting Control
While less successful finance departments let account balances grow while waiting for a child to bring in bank statements, a sibling to arrange a discharge, or a private attorney to apply for Medicaid, successful finance departments are proactive. If a resident has no payment source and the family is unresponsive, the facility can and should petition for guardianship or initiate a discharge for non-payment depending on the resident’s capacity.
Where a private attorney refuses to prove the status of an allegedly pending Medicaid application, the facility can and should file a precautionary application.
5. Good Record Keeping
Medicaid appeals are won and lost depending on how well the finance department can document its efforts to secure the resident’s financial records, request assistance from the Department of Social Services, and meet Medicaid’s strict deadlines.
6. Arresting Growing Net Available Monthly Income (NAMI) Debts
Every finance department knows the challenges of collecting NAMI far too well. While collecting back NAMI is important, responsible finance departments also take aggressive steps to stop NAMI debts from growing. Often using information from a resident’s Medicaid file, judges can issue orders redirecting pensions and/or freezing accounts into which NAMI is deposited. A Temporary Restraining Order can prevent misappropriation of the resident’s income during the pendency of a collection action.
7. Zero NAMIs
Effective finance departments collect the full amount of medical assistance rightfully due and owing to every Medicaid recipient who resides in their facility. Securing every available zero NAMI budget is key to achieving this goal. Whether the budget adjustment is based on a viable bill, a pending guardianship, a court-ordered fee award, necessary medical expenses, or impermissible retroactive rebudgeting, pursuing these funds from Medicaid can help reduce a facility’s receivables.
8. Dealing with Decedents’ Accounts
While new debt is always easier to collect than old debt, collecting on a decedent’s account is particularly challenging. Given the nature of the services rendered by skilled nursing centers, the resident population has a higher-than-average risk of mortality. Finance departments therefore have no choice but to recognize the possibility that a resident will pass before his or her account is brought current.
In light of this reality, when finance departments refer cases for guardianship they should seek orders that include post-death powers. When they request Medicaid authorizations that generally lose effectiveness at death, they should simultaneously collect genealogical information to facilitate potential estate proceedings. A dedicated finance department will try to reduce NAMI debts owed by incapacitated residents to judgments in order to trump Medicaid’s post-death preferred creditor status.
Admission Procedures Can Help or Hurt
Skilled nursing centers with stellar finance departments can still face intractable receivables due to shortcomings in their admission procedures. A frame-worthy admission agreement is of little value if on admission the resident’s representative is presented with the signature page without being afforded the opportunity to read the entire agreement and ask questions.
Likewise, even a consummate finance department will have a hard time securing payment on the account of a competent but uncooperative resident who is admitted with no financial information, no signed paperwork, and no involved community contacts.
Finally, an admission department that puts incoming residents into a short- or long-term box does a disservice to its finance department. Short-term residents frequently become long-term due to changes in their medical condition and/or family situation.
An expectation on the center’s part that the resident will voluntarily leave after a brief stay is not a permissible basis for an involuntary discharge. Whenever possible, new admissions should be treated as potential permanent placements.
More often than not, LT/PAC centers face different obstacles when it comes to getting paid. The problems could start with residents or patients who cannot assist in resolving their own payment problems.
Additional issues arise when the resident’s community contacts have no interest in helping the center get paid. The trouble can then reach crisis proportions when family members, who may be motivated by conflicting interests, obstruct the center’s efforts to secure reimbursement on a resident’s account.
To the extent skilled nursing centers need a helping hand to achieve solvency, an effective finance department is an invaluable support. But the admission department also has a significant, tactical role to play in the operation.
Nancy Levitin, Esq., partner, and Jeffrey Neuman and Katie Barbieri, associates at Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Wolf, authored this article. They can be reached at nlevitin@abramslaw.com, jneuman@abramslaw.com, and kbarbieri@abramslaw.com.