Understanding Nursing Homes

This guide is for dispatchers who wish to understand why nursing homes behave as they do.

Nursing homes must constantly balance their operating budget against the requirements of the patients, of the families, and of the various insurance policies in force. EMS dispatchers must understand this balance in order to protect the nursing home -- and thus to protect your business relationship.

Nurse at her station


Stretcher Rates

A typical nursing-home transportation contract specifies a stretcher rate at or near the Medicare rates. This rate will apply to all stretcher calls that aren't covered by insurance.

Assuming the nursing home has Medicare and Medicaid patients (most do, a few do not), it is illegal under the Anti-Kickback Statute for EMS to offer the nursing home stretcher rates that are significantly below the Medicare rate. Likewise it is illegal for EMS to throw in free mileage or free wheelchair services. Therefore this law imposes a floor on how low the stretcher rates can go.

A typical 100-bed skilled nursing facility [SNF] will have about 4 stretcher transports per day, or 120 per month. Typically one quarter of these will be ineligible for insurance coverage, yielding a monthly stretcher bill of $6,000 to $10,000... but occasionally as high as $20,000.

Considering that every patient in the nursing home is covered by insurance, it raises the question: why does the nursing home ever get a stretcher bill? Why do they send patients to non-covered destinations?

Yet they do... and most nursing-home administrators simply consider their stretcher bill to be a cost of doing business. The need to minimize this stretcher bill then dominates the nursing home's relationship with EMS.

EMS does not benefit from non-covered calls

When a stretcher trip is uninsurable, or is denied coverage, EMS does not benefit. Remember, the contract stretcher rate is very close to the Medicare rate, which is already the lowest stretcher rate going. EMS would've made more money if the call was covered by insurance... potentially a lot more.

And obviously the nursing home does not benefit, because the cost of the stretcher trip goes right onto their invoice. That cost reduces the nursing home's total budget, which therefore slightly reduces the quality of everyone's care.

The only party that wins in this situation is the insurance carrier, who didn't have to pay for the trip.

Zero is possible


Body-Snatching

Medicare does not reimburse for stretcher transports to and from a doctor's office; remember the nursing home is supposed to have its own physician who attends the patients; also, Medicare Part A has declared that the cost of occasional stretcher transports is already factored-in to the daily per-bed benefit amount paid to the nursing home. The only trips reimbursed by Medicare are those going to a hospital for problems that are simultaneously serious and urgent.

Trips to hospitals, on the other hand, are readily covered by Medicare and other carriers, and when it's emergent you don't even need a PCS form.

The hospital's ER can handle anything urgent, and then either admit the patient for further treatment or else discharge the patient back home. Sounds reasonable, yes?

Unfortunately there is more to it than meets the eye.

If the hospital has empty beds they need to fill, the ER doctors will find themselves under pressure to admit as many patients as possible... even if it means overstating the patient's problems. The hospital fills its beds up while emptying the nursing homes' beds out, allowing the hospital to capture the insurance revenue.

This is called body-snatching.

Body-snatching is the reason why nursing homes intentionally send patients to non-covered destinations -- such as a standalone clinics or diagnostic imaging centers -- rather than to covered destinations (meaning: hospitals) that will body-snatch them. It's a simple numbers game: one non-covered round trip costs $700, which is better than losing the patient for a week and the $1400 in revenue that comes with him.

Worse, a patient admitted to a hospital may not return to the nursing home at all! Hospital administrators often have relationships with specific nursing homes, and so the hospital may attempt to discharge the patient to that nursing home, rather than the nursing home they came from.


Transports to Distant Hospitals

When a patient must go out to the emergency room, family members frequently demand that EMS take the patient to a distant hospital. That hospital may be conveniently close to the family members' homes, or it may have recently had good press or positive reviews. Unfortunately these reasons do not qualify for insurance coverage.

In an emergency, insurance will cover transport to the nearest appropriate facility, with some leeway for choosing among all nearby hospitals even though only one of them is technically the nearest. Whereas a trip to a hospital all the way across town is not covered.

Family members are usually the ones making this demand, presumptiously assuming that the nursing home will eat the cost... but that is unfair, and is against nursing home policy. To help the family member understand the financial gravity of their demand, AngelTrack has a built-in signature form called the "Non-Covered Destination Form", aka the A.B.N. form. This form gives an estimated cost of the trip, and asks the family member to assume financial liability when the insurance claim is denied.

AngelTrack will prompt the crew to collect a signature on the NCD form if a call is booked for stretcher service with the ☐ Bill insurance box unchecked. And it's not just for overly demanding family members: it is also for use at nursing homes where EMS and the administrator are cooperating to minimize the stretcher bill (remember that a reduced stretcher bill does not reduce the EMS company's revenue), and consequently the administrator wishes to collect a signature from any staff member who orders a trip to a non-covered destination.

Doctors make these demands too, but for a different reason

Although it is usually the family members who insist on the long transports to distant hospitals, doctors sometimes do it too.

What most people do not realize is that doctors have business relationships with the region's hospitals. The doctor not only seeks to maintain his or her "admitting privileges" at the hospitals, but also seeks to receive favorable financial terms when using the hospital's facilities. In return, the doctor directs a number of patients to the hospital's ER.

...even if those patients are coming from far-away nursing homes, which will cost the nursing home and the patient a lot of money, because EMS can't file the transport against insurance without committing insurance fraud.

Many nursing homes are unaware that their physicians could have this conflict of interest... and it's a rare administrator who is willing to confront his physicians about their choice of hospital, even when that choice is purely venal, because administrators are often intimidated by their contracted doctors.

Emergent transport

Nevertheless, EMS can transport to any destination it deems appropriate

Keep in mind: once an EMS crew has accepted responsibility for the patient, they are required by law to take the patient to the closest facility that they judge is appropriate.

Of course EMS should take the family's wishes into account (if the family's presence will be a factor in the patient's care), but the choice of destination must be made according to the needs of the patient, not necessarily the demands of the family members.

Once the patient is on the stretcher, their fate is solely the responsibility of the attending crew member. With every decision the attending makes, or fails to make, their patch is at stake.

By the way, "the needs of the patient" includes the patient's financial well-being. Once the patient's medical needs are planned, EMS should then seek to protect the patient from a financially calamitous stretcher bill, which might result from a long transport to a distant hospital that will not be covered by insurance.

In any case, a long bumpy trip in an ambulance is an unnecessary risk, so even if it was free, it should be avoided unless there is a compelling medical reason.

Billing implications

If an EMS company's biller files an insurance claim for "medically necessary" transportation to a distant hospital, even though there was an equivalent and appropriate hospital closer by, they have committed insurance fraud.

The proper way to handle this insurance claim is to declare some of the mileage to be "medically unnecessary", which is billing code A0888. If the nearby hospital was 2 miles away, but the patient was sent to a hospital 20 miles away, then 2 miles should be claimed and 18 miles disclaimed.

The problem is, it is difficult for the biller to know when to disclaim some of the mileage. Billers are usually not privy to any of:

  1. The phone conversation between the nursing home and the dispatch office;
  2. The negotiations that took place on scene with the patient, family, D.O.N., and physician; and
  3. The phone calls from the crew to various ERs as they searched for an available bed. Remember, hospitals can go on and off drive-by status several times a day, and there isn't any way for the biller to retroactively check the drive-by status of the nearest hospital.

Consequently it is hard for the biller to know for sure whether a closer appropriate destination was available, or how much closer it was.

A conscientious dispatcher will add billing notes to the call, to help the biller solve this problem. Likewise the attending should mention the choice of destination in their narrative and in the followup information. AngelTrack makes it easy to pass these messages, but it nevertheless requires the dispatchers and crews to make the effort, day in and day out... and sometimes we are just too worn down to care.


Prior Authorizations

Generally, EMS is not permitted to file for prior authorizations. When a nursing home books stretcher transports, it is their responsibility to obtain the necessary prior authorizations... lest the trips are denied coverage, and the costs end up on the nursing home's invoice.

And the Medicare Prior Authorization program is coming. It may already be active in your state. That means there will be even more prior authorization paperwork.

AngelTrack has systems for tracking prior authorizations, including a specific billing queue showing all upcoming and recent calls that need a prior authorization number [PAN] on file. The Customer Portal is part of that system, displaying to the customer a chart of upcoming outgoing transports, and indicating which ones are still awaiting prior authorization.

PANs are the social worker's responsibility

A well-run nursing home designates a specific employee with the task of filing prior authorizations... usually a social worker, or the discharge planner.

Unfortunately, the information flow from nurses (who are booking the transports) to the social worker (who files the PANs) is unreliable. AngelTrack's very handy Customer Portal bridges that gap, but only if the social worker knows the portal exists. If a social worker quits abruptly, then who is going to tell their replacement about the portal? Perhaps this should be a regular topic of conversation when the EMS salesperson visits.

Once the PANs are filed, the social worker should call EMS and relay the authorization numbers. Call-takers in AngelTrack have authority to record these numbers as PAN documents -- it is not necessary to attach a page scan -- using the Prior Auths On File page available under Dispatch Home.

Failing that, EMS can use to the web portals offered by your MAC (i.e. your Medicare carrier) and by your state Medicaid carrier. These web portals usually offer a quick way to check whether prior authorization numbers have been issued. You can then copy them into AngelTrack, so that they will automatically appear while the biller is coding the insurance claim.


Invoices

For all the reasons given above, the nursing home's invoice can become disturbingly high.

The following rates are typical for a busy 100-bed skilled nursing facility:

Nursing Home's Attitude Towards Insurance Requirements Typical Monthly Stretcher Bill
Strict:
  • All nurses are trained in insurance limitations and documentation requirements
  • Social workers punctually file all necessary prior authorizations
  • Patients are carefully assessed to see if they can travel by wheelchair instead of stretcher
  • Any non-covered destination requires explicit approval from D.O.N. or administrator
Sometimes $0 but usually about $1000
Typical:
  • Most of the nurses understand most of the insurance requirements
  • Responsibility for filing the necessary prior authorizations is diffused among many staff members
  • Nurses will sometimes respond positively to insurance advice from EMS
  • Indulgences are often -- but not always -- granted for patients wishing to travel to non-covered destinations
$4,000 to $8,000
Chaotic:
  • Most nurses are not aware of, or not concerned about, insurance requirements
  • No specific person is responsible for (and accountable for) filing the necessary prior authorizations
  • No policy is in place for indulging patient and family requests for non-covered destinations
  • Nurses are unwilling to deny a wheelchair patient's request for the more comfortable stretcher service
As high as $20,000

Yes, you read that right: a busy SNF can have a zero stretcher bill, month over month, with sufficient training and discipline. But it requires constant vigilance; most cannot do it for long.

Consider for a moment what could be accomplished with the $20,000 being spent on stretcher transports. For that money, the nursing home could hire five more full-time LVNs! Imagine the improvement in patient care and in employee morale.

Worse, that wasted money did not even benefit EMS. EMS could've been paid by insurance just the same as by the nursing home. The wasted money goes straight into the insurance carriers' pockets.

Conscientious administrators will challenge their stretcher bill

Administrators understand this and so will challenge their stretcher bill from time to time. However, administrators differ in how large a stretcher bill they consider to be reasonable. If they have foolishly been paying $15,000 monthly stretcher bills for years and years, then they may have concluded that this is normal and appropriate. Thus, their bill would need to hit $18,000 or $20,000 to get on the administrator's radar.

But however large or small the bill, a conscientious nursing home administrator will often challenge specific items on it. They will demand an explanation for why insurance did not cover certain trips, because remember, the administrator is forced to trust that EMS filed the claim properly. On seeing a denial for a reasonable-looking stretcher trip, the administrator may doubt whether EMS exhausted all avenues for getting it covered.

Reviewing an invoice

Using AngelTrack to create bulletproof invoices

AngelTrack's invoices are designed to defend themselves, using information gathered during dispatch and billing. Every line-item in an invoice is accompanied by all of the following:

  1. The name of the person who booked the transport.
  2. The date and time the nursing home was reminded that prior authorization is necessary.
  3. Name and date of the staff member at the nursing home who answered the confirmation call on the day before.
  4. !Bang comments from dispatchers, containing authorizations received over the phone, and other explanations.
  5. An indication of whether the "Non-Covered Destination" form was signed, and by whom.
  6. !Bang comments added by billers while filing (or declining to file) the insurance claim.
  7. All responses from insurance carriers, including detailed explanations of all adjustment codes and denial reasons.

This powerful feature needs dispatchers and billers to studiously record !bang comments whenever the customer authorizes, agrees to, or has been warned about, potential insurance issues with a transport.


Family Members

Why are the patients' family members so easily angered? What makes them so quick to fly off the handle?

To understand this, you must understand the surge of conflicting emotions that family members experience when visiting their loved one in a nursing home. Let's suppose the patient is an ailing father; the visiting children will feel all these emotions:

These conflicting emotions are called cognitive dissonance. People who are experiencing cognitive dissonance are likely to lash out, especially at those who are causing them to experience the conflicting emotions. You are surely familiar with the old adage of "shooting the messenger".

Family members usually vent their emotions onto the nursing staff, but EMS is also a convenient target.

Family members are the nursing home's customers

Always remember that family members are the nursing home's customers, because family members can file complaints or even move patients to different nursing homes.

Therefore the nursing home always seeks to satisfy the family members, and EMS is expected to help.

To this end, the job of EMS is: blame absorption.

Nurses and social workers are perpetually overloaded and so will occasionally forget to book transport, or will book it incorrectly, or will forget that it is booked and thus fail to have the patient ready to go in time for the appointment. Family members, observing this, become irate.

To defuse the family's irritation, nurses will sometimes blame EMS. Your job, as an EMS dispatcher or crew member, is to agree and apologize. Promise to do better next time. Volunteer to call the destination and arrange a late arrival, or reschedule the appointment altogether. Be apologetic and helpful even if you know it's not your fault.

Remember, you work for the nursing home as much as you work for the patient and for the family. This is your chance to satisfy all three of them.

Patient and family member arguing with nurse

AngelTrack's data will back you up

As you fulfill your role as blame absorber, the nursing home's administrator may hear EMS getting blamed a bit too often. The administrator may call for a meeting with EMS to demand an explanation.

If you are the one in the hot seat, there may not be a tactful way to remind the administrator that you have simply been fulfilling your role as scapegoat for booking mistakes. In that case you will need AngelTrack's data to prove that your performance has been satisfactory. These reports will help:

Above all else, use the incident system!

AngelTrack's incident system is a critical piece of your customer relations approach.

Whenever anything goes wrong, or whenever anyone gets upset, the crew members and dispatchers involved should create an incident record. They should jot down what happened as they saw it. They should not speculate about motives or blame: they should simply record the facts of the situation.

This is important, because customer incidents have a way of circling back to bite you long after everyone's memories have faded. You might be called to the carpet to answer for "a pattern of customer incidents", some of which are six months old and nobody can recall exactly what happened. The incident records will then protect you. This works even if your company is at fault, because it shows that your organization takes its mistakes seriously.

Crew members have a link right in their Run Call page to create an incident and attach it to their current dispatch. Once they fill out the incident record, they can simply leave it in triage. Alternatively, a dispatcher can create the incident record, write down what happened as he or she saw it, then assign the incident record directly to one of the crew members for further commentary. The crew member can then add their side of the story and then either close the incident or forward it to their supervisor.


Being Late to the Pickup

As you review the reports listed above, you may be struck by the realization that your EMS company does not have a 100% on-time record. You probably run about 85% on-time.

Is it possible to achieve 100% on-time pickups? Sure. But it requires so many additional crews that nobody will pay for it.

To deliver 100% on-time service, an EMS company must field about two-thirds more crews, in two-thirds more vehicles. This is enormously expensive.

If you visit a nursing home and ask "Would you pay an additional 67% more for ambulance service, if it would improve our on-time rate from 85% to 100%?", the answer would be "No thanks!" It's just not worth that much extra cost.

This is called diminishing returns. Every step closer to perfection costs an escalating amount, and so it is not cost-effective to actually achieve perfection.

Of course your customers will ask for 100% on-time performance anyway, and they will complain when they don't get it, and they will forget that they declined the opportunity to pay for that service when it was offered. So, your job as an EMS dispatcher or crew member is to apologize, agree you should do a better job in the future, smile, and continue to march.

Gain finding is a balancing act

The job of the dispatcher is to balance the need to be on-time most of the time with the need to keep crews busy transporting patients. The higher the crews' utilization, the fewer of them are available to cover for unforseen delays and last-minute bookings, and thus the lower their on-time performance.

AngelTrack's Dispatcher Efficiency Report shows this balancing act, comparing the rates of late pickups against the efficient utilization of crews. For example, a dispatcher could shave off 10 slack miles by using a nearby unit instead of sending a different unit all the way across town to handle it, however the nearby unit is busy and so will be twenty-five minutes late to the call. This is a reasonable trade-off which benefits everyone in the long term.

Guidance from management is required here. The manager should set utilization goals for the dispatch office, like this:

The "8 miles between singles" figure is not a general guideline, because the achievable distance depends on the size and density of your service area, and the geometry of your contracted facilities. Every EMS company must decide for itself what distance between singles is appropriate. To learn more about the Dispatcher Efficiency Report and the topic of gain finding, read the Dispatcher Efficiency Guide.

Setting customer expectations

Once the performance goals are in place, the manager and salespeople must set the expectations of the nursing home administrators.

Some administrators may be too petulent or self-aggrandizing to hear this message, insisting that they deserve 100% on-time service even though they aren't willing to pay for it. In other words they will demand that all other customers should experience degraded service, in order to free up additional crews to over-serve them.

Fortunately, most administrators are willing to see the big picture, and acknowledge that they are not paying what it would cost for 100% on-time service. Once that question is settled, set expectations for what on-time rate is reasonable. We suggest an on-time pickup rate goal of 6 in 7 (86%) crews arriving on-scene within 20 minutes of the scheduled time.


Poachers

A nursing home contracts with EMS to handle their outgoing transportation work, and of course the round trips. However, other EMS companies will visit in order to drop patients off... typically hospital discharges.

When the other EMS company visits, they may leave behind a stack of marketing collateral, and transfer envelopes, sometimes even overt bribes (e.g. gift cards). They will leave these items at the nurses' station and -- if they can gain access -- in the administrator's or D.O.N.'s office.

This is called poaching.

The goal, of course, is to lure away the transportation contract.

When your salesperson visits, if they see these inappropriate materials stacked at the nurses' station, they should (with the administrator's or D.O.N.'s blessing) collect the materials and take them back to the station, for return to the poacher.

Keep the nursing home stocked with branded transfer envelopes

As noted, poachers will drop off their company-branded transfer envelopes at nurses' stations, seeking to establish brand familiarity. Consequently your field supervisors -- serving onboard your ambulances and wheelchair vans -- should carry a box of your company-branded transfer envelopes. After dropping off a patient and completing the transfer of care, the field supervisor should check that each nurses' station has enough spare transfer envelopes, and is not using a poacher's envelopes.

Occasionally, nurses calling to arrange transportation will mention that they need more transfer envelopes. On receiving this request, the dispatcher should use AngelTrack's Facility Service Request feature to log the request in the system, so that a salesperson or supervisor can schedule a delivery of more envelopes. Nursing homes use these transfer envelopes to hold the many documents sent out and back with each patient trip.

If your salespeople or crews plan to drop off any free swag other than transfer envelopes, ask your legal team to review the swag first. It is easy to run afoul of the Anti-Kickback Statute, even with non-monetary gifts like catered lunches for the nursing staff.


So Why Doesn't Medicare Pay for Trips to Doctors Offices?

You may be wondering: why doesn't Medicare pay for stretcher trips to a doctor's office? Wouldn't that be more cost-effective than a trip to a hospital, since the hospital will gleefully bill Medicare for a zillion procedures?

Yes, that would be a more efficient outcome, overall.

In fact Medicare does pay for those trips, but not in the usual way.

Medicare Part A, also known as "Consolidated Billing", pays the nursing home a flat dollar amount per day for care of the patient. That flat rate includes the cost of occasional stretcher trips to physicians' offices, imaging centers, and similar destinations. That is to say: intermittent costs like wheelchair and stretcher trips are already factored in to Medicare's daily reimbursement. Thus, transportation costs are not specifically reimbursed... hence the term "consolidated billing".

But that is not how the nursing home sees it. The nursing home reckons a stretcher trip to a doctor's office as an unreimbursed cost, because they can't bill Medicare Part A or Part B for it. Medicare's daily flat rate is the only revenue they get, and the amount does not increase no matter how much the nursing home spends on the patient, so the nursing home will inevitably try not to spend it on things like non-reimbursable stretcher trips.

This is why they say that Medicare Part A does not cover ambulance trips

Once you've digested the above, you'll see why people say that Medicare Part A does not cover ambulance trips. Officially it does cover them, but it does not pay for them specifically, because they are already factored in to Part A's daily benefit paid to the nursing home.

The nursing home wishes to keep -- not spend -- that daily Part A benefit payment, so the nursing home will try very hard to not incur any stretcher transports for its Part A patients.



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