Situation

Client owns, operates and manages several Medicare and Medicaid participating skilled nursing facilities and rehabilitation hospitals. Client endeavored to outsource its third party cost reporting function and to obtain third party reimbursement planning assistance.

Concerns

Client was concerned that its existing resources were not sufficient to adequately meet all of its third party reimbursement reporting requirements and to provide for necessary Medicaid rate setting planning.

Services

After an extensive request for proposal process, The Lancaster Group was engaged to perform the following services:

• Timely file all Medicare and Medicaid Cost Reports and Home Office Cost Statement.
• Upgrade Medicare bad debt reimbursement claiming practices.
• Assist with the appeal of prior years' cost report adjustments.
• Make all cost reporting year ends consistent.
• Resolve outstanding change of ownership and change of information issues.
• File amended Medicaid capital reports in support of requests for increased Medicaid capital reimbursement.

The Lancaster Group successfully completed all of the tasks requested by Client, including the timely filing of all cost reports, including an extensive pre-filing review of Medicare bad debt claims, the successful appeal of the Medicare adjustments to the rehabilitation hospitals' LIP percentages, changing the cost report year end of one of the Medicare providers, resolved the freestanding status of one of the skilled nursing facilities and obtained increased Medicaid capital reimbursement for the two Medicaid providers.

Business Planning

Situation

Client owns and operates several skilled nursing facilities. Client was considering the replacement of certain of its facilities and the addition of ancillary services to its current business lines.

Concerns

Client was concerned about the ability to finance the replacement facilities and whether sufficient resources existed to undertake the additional ancillary service business lines.

Services

The Lancaster Group was engaged to evaluate the financial projections of the replacement facilities and of the proposed ancillary service business lines.

Results

The Lancaster Group provided the requested services and met with the Client and its lender to present the financial projections for the replacement facilities. The Client was able to successfully finance the replacement facilities. Additionally, The Lancaster Group recommended that the Client's existing resources were not sufficient to undertake the proposed ancillary service business lines and offered recommendations regarding the changes that would need to be made in preparation for undertaking the new business lines.

Systems Implementation and Ongoing Performance

Situation

Client owns and operates several skilled nursing facilities and related ancillary businesses. Client experienced severe difficulties with regulatory filings, claims for business interruption insurance proceeds and compiling monthly financial statements. Client was operating without a Chief Financial Officer.

Concerns

Client was concerned that existing resources would not be sufficient to complete the necessary tasks required of a multi-site provider and that continued deficits would lead to a reduction in cash flow and ongoing operating performance.

Services

The Lancaster Group was engaged to perform an assessment of Client's finance department and its use of available computer systems.

Results

The Lancaster Group performed the requested assessment and identified deficits in existing skill sets, allocation of responsibilities, use of consistent policies and procedures and less-than-optimal use of computer software systems. The Lancaster Group was subsequently engaged to assist in the implementation of its recommendations, including fulfilling the role of interim Chief Financial Officer.

Financial, Operating and Regulatory Due Diligence

Situation

Client endeavored to purchase a skilled nursing facility, operating in one state, with significant neighboring state Medicaid utilization. Client wished to assume the Medicare provider number and to obtain new Medicaid provider numbers.

Concerns

Client was concerned about the target's medical documentation practices in support of its third party billing, neighboring state Medicaid rate setting on a post-transactional basis, quality of earnings for loan underwriting purposes and ongoing expense structure.

Services

The Lancaster Group was engaged to perform the following services to address Client's concerns.

• Medical record review for purposes of determining whether documentation was sufficient to support Medicare billing and Medicare and Medicaid minimum data set documentation and completion practices.
• Evaluation of the billing compliance policies, procedures and practices to identify areas in which improvement would be recommended.
• Evaluation of auditor work papers, aged accounts receivable and allowance for doubtful accounts to determine reasonableness of net realizable revenue projections, estimate of future Medicaid reimbursement rates and evaluation of the billing for medical ancillary services to identify areas in which additional revenue opportunities may exist.
• Analysis of staffing and other expenses to verify proper accounting and to identify areas in which expenses may be expected to vary from historical experience.

The Lancaster Group was able to assist Client in successfully acquiring the skilled nursing facility, by performing the requested services and by assisting with negotiation of the purchase and sale agreement, evaluating proposals for financing, identifying opportunities for improvement and assisting with the various required regulatory filings.

Accounts Receivable Collections/Clean-up

Situation

Client operates and manages several Medicare and Medicaid participating skilled nursing facilities. Client experienced difficulties in managing and performing the collections process.

Concerns

Client was concerned that its accounts receivable was growing considerably and would result in an increase in bad debt expense.

Services

The Lancaster Group was engaged to perform the following services:

• Supervise and assist in the current month end billing process.
• Research and assist in the correction and submission of claims.
• Identify AR balances that were not collectible and prepare documentation for write off.
• Implement a monthly review process to identify denied claims timely and assist in corrections.
• Implement a weekly process that identifies tasks to be completed in an accurate and timely manner.
• Educate the Administrator and key personnel to understand the issues causing collection problems.
• Provide continued oversight to ensure collections success.

The Lancaster Group was successful in assisting the client to:

• Increase cash flow.
• Reduce aged receivables.
• Implement policies and procedures to ensure the accurate and timely collection of A/R.
• Educate the Administrative team in the ongoing support of the Business Office’s collection activities.