What is a Provider Agreement with Medicaid?
Under the Social Security Act, States participating in the Medicaid program must enter into a provider agreement; such an agreement, as required under 42 U.S.C. § 1396a(a)(27), includes written agreements with providers, requiring that the services (1) be provided "in accordance with the provisions of the . . . State plan," (2) be provided only to those individuals who are eligible for Medicaid and (3) are "in accordance with such requirements as the Secretary may find necessary to ensure that payment will be made only for services which are included in the [State plan], which are provided in accordance with standards established by the Secretary which are consistent with quality requirements for health care providers, and which are medically necessary." 42 U.S.C. § 1396a(a)(27). The basic purpose of Medicaid provider agreements is to ensure that providers agree to and comply with all terms and conditions of participation . Such agreements spell out both the provider’s obligations and the potential consequences of noncompliance, ranging from civil monetary penalties to exclusion from participation in the Medicaid program. Although a provider’s participation may be involuntarily terminated in some manner other than the expiration or termination of an existing provider agreement (e.g., by re-enrollment or enrollment moratorium), to continue to participate in the Medicaid program after his/her Medicaid provider agreement expires, then-current law requires that the provider must apply for re-enrollment. See 42 C.F.R. §§ 431.153 / 431.154. Failure to comply with an active provider agreement may lead to a range of administrative sanctions, such as the imposition of monetary penalties, Medicaid payment suspensions, and even exclusion from further participation in the Medicaid programs.
Key Elements of a Medicaid Provider Agreement
A Medicaid contract typically includes a variety of provisions that detail what is expected of the provider. It will generally address service requirements, compliance obligations, reimbursement terms and other important matters. Under the Social Security Act, Medicaid is a joint state-federal program administered by each state. To participate in the program, health care providers must apply for and be accepted into their state’s Medicaid program. Regarding nursing facilities, there are several areas that will be addressed in the contract, such as specific services to be provided, reporting requirements, and Medicaid audit and Program Integrity requirements.
Service Requirements: Medicaid will specify in the contract what services must be made available to persons enrolled in its state programs. For hospitals, for example, this may include providing weekend emergency department coverage, nurse practitioners/certified nurse specialists and psychological services. Each of these requirements may have their own specific parameters regarding hours of service and more detailed reporting and documentation requirements.
Compliance: A Medicaid provider will also be required to comply with certain conditions that ensure the protection of those involved with the provision of services. These conditions include, but are not limited to, training of personnel, record keeping, prohibitions against discrimination, and maintaining confidentiality. In some cases, the Medicaid contract will have specific requirements to comply with state regulations regarding standards of quality for health care services, requirements for medical records, and staff licensure and certification.
Reimbursement: Usually the Medicaid provider will have already negotiated its rates of reimbursement when it accepted the contract. However, the terms of how the reimbursement will be paid for the services rendered will be specifically addressed in the contract. This addresses when the payments will be made (monthly, on date of service, etc.), how contract records will be kept, the general scope of Medicaid’s ability to audit, and its impact on rate calculation and payment, and the steps that will be taken if overpayments are identified.
Qualifying and Applying for a Medicaid Provider Agreement
Applicant Disclosure: All applicants and/or businesses and related affiliates will submit, and make available, a disclosure of ownership, control and affiliations. The Healthcare Common Procedure Coding System, known as HCPCS, will be utilized in addition to any state specific billing identifiers. The nature of the relationship with any other business or individual must also be disclosed. This will include, but will not be limited to, medications, office space, equipment, and accounting services.
Disclosure of Experience and History: Applicants for a Medicaid provider agreement seeking to participate must submit a disclosure of the experience and history of business and their owners. Owners and related entities who have been disciplined for fraud, previous business associations with entities that have been disciplined, and the number of disciplinary actions must be disclosed. Any current business associations included in these or related entities occupational history and experience must be disclosed. Disclosures must also be made of any disciplinary action based on criminal convictions related to health care violations. Applicant must indicate whether any principals have been involved in any action with respect to federal health care programs where the principal has been excluded from participation.
Criminal Background Check: Applicants and all owners and affiliates must undergo a criminal history record check including fingerprints. Any false information, including failure to disclose, shall be cause to reject or terminate any provider agreement.
Affidavits: Upon request applicant shall supply an affidavit that states the business’ capacity to perform the services for which it is applying and that the applicant will abide by the requirements as a provider. The applicant must attach to the affidavit copies of the license or licenses required by the state to provide the services. Additional affidavits from individuals providing information on behalf of the applicant shall be provided attesting to the truth and completeness of the information. Owner’s criminal background affidavits shall include a report of any criminal activity related to the business.
Bank Account Information: Medicaid provider agreements shall not be entered into with anyone who has not disclosed its bank account information. It is required that applicants provide this information when they apply. They must also agree to notify as soon as possible any changes to their financial institution information. This includes if the account name, number or financial institution changes.
Frequently Encountered Issues with Medicaid Provider Agreements
Though Medicaid provider agreements are an essential part of the Medicaid process, they are not without their difficulties. After struggle for reimbursement is only one of the possible drawbacks that a healthcare provider might run into. Reimbursement can be delayed or denied in full because of a wrongful request, a failure to provide the necessary documentation, or due to other failures. Among one of these failures a healthcare provider can run into is a lack of compliance with Medicaid rules and regulations. Failure to comply with the Medicaid rules and regulations can have adverse effects on a healthcare providers supply of equipment and other resources from the state , or even lead to termination. It goes without saying that having to terminate an essential source of income, and being forced to close ones doors is a challenge that no healthcare provider wants to face. For this reason, it is important that healthcare providers are aware of all obligations and requirements they must adhere to when within the scope of their Medicaid provider agreement.
The Advantages of Participation in the Medicaid Program
Medicaid Provider Agreements can be a boon for healthcare providers, whether institutional healthcare providers, such as Medicare-certified hospitals, or non-institutional healthcare providers, including physicians, nurse practitioners, dentists, and others. While certain provider agreements are mandatory to participate in the Medicaid program (e.g., the provider agreement for institutional providers), non-institutional providers must execute a Medicaid provider agreement in order to provide services for which Medicaid payment is sought. Participation in the Medicaid program will afford healthcare providers the following benefits:
Access to the Medicaid Recipient Population. The Medicaid population is a significant portion of any healthcare providers patient base. For institutional providers, 19% of the American population are Medicaid recipients. In Maryland, 26.6% of the population is enrolled in Medicaid, with about 800,000 people in Maryland. Currently 116 hospitals in Maryland participate in the Medicaid program. For non-institutional providers, enrollment in the Medicaid program will expand the provider’s patient base. Medicaid serves 8.9% of South Carolina’s population, 4.1 million people. Most physicians who participated in our recent Medicaid enrollment survey reported that Medicaid patients composed an average of about 15% of their practice’s patient population. Yet, in Alabama one doctor of optometry roughly 56% of his practice’s patients were Medicaid recipients. In Connecticut, approximately 35% of a neurologist’s practice are Medicaid recipients and, in Massachusetts, 44% of one physician’s practice’s patients were Medicaid recipients. Guaranteed Payments for Covered Services. The Medicaid program is designed to guarantee payment for covered services provided to covered individuals. In fact, providers are not permitted to bill recipients in excess of the amount paid by the Medicaid program for the services rendered. Medicaid providers are permitted to bill recipients for items that are not covered, but providers must not bill those amounts to Medicaid. Public Health Benefits. The Medicaid program was designed to improve the health of Medicaid recipients. By participating in the Medicaid program, providers are assured that the health care provided to Medicaid recipients is comprehensive and covers a broad range of medical care, and that those who cannot afford medical care will be provided with free or low-cost medical care.
Ensuring Continuity with Medicaid Provider Requirements
Ongoing compliance with the terms of the Medicaid Provider Agreement is the responsibility of the provider, and auditors will investigate whether the provider has kept its information current. In addition, whenever there is a significant change in the Medicaid services that the provider offers, it is the responsibility of the provider to communicate with the State to determine whether the Agreement is still in effect. For example, whenever a covered service is added to or eliminated from the Medicaid Services Manual, providers of those services are responsible for contacting the State to determine whether their Medicaid Provider Agreement remains in effect.
With regard to timely response to audit documentation requests and workload directions, if a provider fails to respond promptly to a Division request for documentation, such as in an audit or other compliance review, the Division may initiate a review of the provider’s services and reimbursement , and/or withhold the provider’s reimbursement until a full review can be undertaken. Like the timely communication requirements, timely response to audit documentation requests is necessary to fulfill the goal of oversight of the use of public funds in the provision of Medicaid health care.
Another issue to be aware of is the Medicaid Services Manual – or MSM – requirement that providers must maintain service records with sufficient detail to substantiate the accuracy and appropriateness of all billable services rendered. The term "adequate documentation" means sufficient and detailed information in the service record so that an auditor can determine what services were provided to particular beneficiaries. Proper recordkeeping is timely, complete, and specific to the course of treatment, and includes all required documentation. The more documentation completed and appropriately filed along the way, the better off the provider will be when that documentation is needed for an audit.