Reg's Blog

Senior and Post-Acute Healthcare News and Topics

Medicare Advantage Plans and HIPPS (SNF PPS) Codes

A topic that I receive queries about from time to time concerns the payment practices of Medicare Advantage (MA) plans as the same relates to traditional Med A coverage under the PPS system.  Recently (earlier this year and then again in October, CMS issued some fairly vague guidance to the MA world regarding a requirement to include the HIPPS codes (PPS codes) for any SNF stays utilized by enrollees.  The same communication was scare to SNFs.  Initially, CMS targeted implementation for July of this year, then backed-off in October to December implementation.  This week, CMS postponed this requirement until July 2014.

The take-away and caution for SNFs with MA contracts is this.  Regardless of how the contract is structured for payment between the SNF and the MA (groups, levels, per diem, etc.), the CMS requirement for MA plans to report HIPPS will alter the SNF’s billing cycle, now encompassing an assessment schedule (MDS) identical to the cycle for traditional Part A covered residents.  My firm has many SNF clients with MA patients that presently aren’t required via their contracts to follow the traditional PPS/RUG and assessment schedule for this payer type.

On the same theme, this impact is separate from how the MA plan pays the SNF.  It will clearly be less onerous for MA contracts that are paying the SNF per diem rates, though this type is less typical than the group or level payment schedule.  My advice to SNFs is as follows;

  • Open dialogue ASAP with your MA contracts, letting them know you are aware of this upcoming requirement.  You have time as the requirement is now delayed to July of next year.  December implementation was clearly unrealistic.
  • If possible, I recommend working with your MA contract to negotiate a different payment methodology.  My firm has had success in re-negotiating these agreements.  The desire methodology is per diem and going forward, per diem following the RUGs determined via the MDS.  SNFs will have to report this data to the MA plan regardless come July.  It is to the MA’s advantage and the SNF to align payment systems accordingly.
  • For SNFs with therapy contracts (outsourced), make sure your therapy provider is aware of this forthcoming change.  Such a change, especially if the SNF seeks to modify its payment agreement with the MA, will alter how therapy is billed to the SNF.  Further, your therapy contractor will need to know that MA patients must soon be included in your reporting to the MA plan (EOTs, COTs, etc.).

While we know July 2014 seems distant, don’t expect much guidance or heads-up from your MA contractors or CMS.


November 8, 2013 - Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , ,


  1. Locally, we are seeing fewer MA plans in our market (Roanoke, VA). For 2014 consumers will have 2 companies and about 6 plans to choose from. Last night I heard a speaker, a physician who is based in PA but is associated with a national company and his take on MA’s is that they are growing in popularity. It has not been long since 40% of our local seniors were covered by an MA plan.

    My sense has been that the threats from ACA to reduce or level the funding of MA has caused insurers to become wary of investing / growing their MA book of business.

    Is there a national trend that you are sensing or is it the “all health care is local” rule coming into play?

    Comment by Lucas Snipes | November 13, 2013 | Reply

    • Mr. Snipes;

      A little of both is at play. Health care remains very local but the trends are influenced nationally – the behavior is viewed locally. I personally believe that MA plans have lost significant vulnerability “going forward” given the ACA trend presently operative. In short, I think increased penetration is more likely than reduction, certainly over the next three to five years (this is about ten lifetimes in health policy). I do know that the MA industry has been cautious over the last 24 to 18 months given ACA implementation uncertainty. There also has been rapid consolidation within the insurance industry due to the ACA and the overall number of participants scaled enough to offer MA plans has reduced – some by merger, some by planned reduction and others by strategic decisions to reduce exposure in certain products and certain markets. The latter is the “local” element you reference.

      Always appreciate your comments and insights!


      Comment by Reg Hislop III | November 13, 2013 | Reply

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