Injured By a Spacecraft? There’s a Diagnostic Code for That

July 15, 2008 @ 6:09 pm
By Jacob Goldstein | The Wall Street Journal Health Blog

So we’ve got this patient here who was injured in this spaceship accident. You know, just a routine, uh, orbital mishap. But how do we account for that? Oh, right, it’s ICD-9 code E845 — “Accident involving spacecraft.”

Apropos of nothing in particular, this billing code popped up on a couple of medical blogs last week (KevinMD and Dr. Secretwave101). Intrigued, we did a little reporting.

This extended definition notes that the code includes “launching pad accident,” but excludes “effects of weightlessness in spacecraft,” which has its own code (E928.0).

ICD (International Classification of Diseases) codes are the basic international health codes that exist for just about everything (as this spaceship thing suggests). They’re used both for billing purposes and for tracking trends in public health.

A spokesman for the Centers for Medicare and Medicaid, one of the key agencies that deals with the codes in this country, told us that E845 was in the current version of U.S. ICD-9 code when it was first published in 1979. The code was created by the World Health Organization as part of ICD-9, the spokesman said. Other places in the world use ICD-10, we’ve stuck with ICD-9-CM.

A little creative Googling turned up a citation of the same code all the way back in 1966.

Just because a code exists, it doesn’t mean anybody’s ever used it. “Whether someone was injured [by a spacecraft] or not was immaterial because somebody thought, ‘What If?’ ” Sheri Poe Bernard, a VP at the American Academy of Professional Coders told us.

It didn’t take much to get Poe talking about all the strange things that have their own codes. Bite of a non-venomous arthropod. Dog bite. Rat bite. Scorpion sting. “A centipede has its own code — E905.4,” she said. “Accident caused by paintball gun, E922.5 Accident by fireworks, explosion, E923.0″

If you can think of a way to be killed or injured, there’s a code for it. “Terrorism has all kinds of codes associated, involving marine weapons, aircraft, explosions, conflagration,” she said. “Terrorism involving nuclear weapons, E979.5; biological weapons E979.6; chemical weapons E979.7.”

Uh, thanks Sheri. If you need us, we’ll be huddling under our desk, fearing for our lives. What’s the ICD code for that?

 

Acute Cost and Growth Pressures to Drive Large-Scale BPO and ITO Outsourcing/Offshoring in Healthcare Sector over Next Three to Five Years

July 08, 2008 09:30 AM EDT | BUSINESS WIRE

HOUSTON — The slumping economy may be slowing deal flow in some sectors, but it is accelerating adoption of outsourcing in the healthcare industry as it struggles to streamline its back-office and ramp up to meet increased demand for services as the U.S. population ages, according to EquaTerra, a leading business advisory firm. In its newly released poll of leading outsourcing service providers on the state of the healthcare outsourcing market, EquaTerra expects these competing macro economic trends to drive large-scale outsourcing and offshoring deals over the next three to five years, especially in business process and information technology outsourcing (BPO and ITO).

Half of the respondents to EquaTerra’s 2Q08 Healthcare BPO/ITO Service Provider Pulse Survey* report demand is up quarter over quarter and 70 percent expect an increase next quarter. The scope of healthcare outsourcing is expanding too as healthcare organizations attempt to gain efficiencies through greater automation, self-service capabilities and improved IT infrastructure and functionality.

Typically, healthcare companies that are currently outsourcing have already reduced labor costs. Now, they want to achieve business process improvements via technology, business process reengineering and implementation of Six Sigma methodologies. As a result, they are prioritizing their outsourcing goals and focusing on functions and processes core to healthcare front and back-office operations. Seventy percent of healthcare services providers polled cited vertical healthcare business service areas, like claims administration and revenue cycle management (RCM) as the top areas of outsourcing demand in the market today.

Outsourcing buying patterns also appear to be changing. There is an emerging trend toward consolidating work sourced to several providers (e.g. claims imaging, data entry and claims processing) to a single, large vendor that can handle the entire claims function. In addition to standard BPO services, the clear expectation from this single-source solution is overall business transformation plus value-added knowledge services, including claims analytics, collections and reserve forecasting.

The survey also indicates more healthcare industry work is moving offshore to both India-based and multinational service providers. IT infrastructure monitoring and support along with RCM were identified as the two functions using the highest levels of offshore talent. Cost reduction continues to be a major impetus, but there’s also a significant shift to more strategic activities, according to 65 percent of the survey participants. As a result, outsourcing buyers are migrating from a contract labor model to longer-term, project-based work and multi-year outsourcing efforts that require greater control over functions and processes. Service providers cited the top two drivers for the increased use of offshore resources as immediate access to expertise and talent (50 percent) and knowledge services (42 percent).

To compete for this upscale work, outsourcing providers are developing more compelling offerings, according to Mark Voytek, healthcare industry practice lead for EquaTerra. “Healthcare companies need tools that support effective fiscal management and IT applications that can automate clinical processes and assist in improving quality, especially reducing medical errors. The low upfront costs associated with outsourcing versus a total-cost-of-ownership model is especially attractive in the current economy.”

Voytek’s thoughts are echoed by an executive from a leading healthcare service provider who says escalating costs and cuts in Medicare and Medicaid payments coupled with the increased demand of an aging population threaten the solvency of many U.S. hospitals. “Sixty percent of U.S. hospitals are already unprofitable and rely on charity and donations for supplemental funding. Cuts in claims payouts will further shrink revenues just as more Americans will utilize health services. The number of hospitals that are highly unprofitable will grow unless they adopt large-scale outsourcing and offshoring to reduce overall cost levels.”

Top-line finds from the 2Q08 Healthcare Service Provider Pulse Survey:

• Outsourcing service providers (82 percent) said the healthcare payer industry exhibits the greatest demand for BPO and ITO services. The healthcare provider market ranked second (73 percent.)
• Costs savings are still paramount, but 75 percent of the service providers polled report buyers are putting greater emphasis on process improvement, innovation and transformation.
• EquaTerra estimates approximately 75 IT and BPO deals were initiated from 2004 through 2007 with a total contract value (TCV) of $50 million. Of these, 75 percent were ITO deals and 25 percent were BPO. To date, healthcare represents less than five percent of total outsourcing deals in the market, highlighting the relative immaturity of the healthcare outsourcing market as compared to other industries like banking, financial services and manufacturing. But the healthcare outsourcing market is expected to grow at close to 10 percent over the next five to seven years, faster than overall market growth of seven to eight percent.

“The use of offshore and global resources in healthcare outsourcing is accelerating,” said Stan Lepeak, managing director of research for EquaTerra. “In fact, deteriorating economic conditions will likely drive more outsourcing in the healthcare market over the next several quarters.”

*About the 2Q08 Healthcare Industry Pulse Survey

EquaTerra recently polled top outsourcing service providers in the healthcare market. Based on these findings and its own direct market experience, the company mapped the level of buyer demand across several sets of emerging BPO and ITO functions and processes specific to the healthcare space. The demand-level ranking is based on a 1 to 10 scale, with 1 equating to low buyer demand, 5.5 to moderate demand and 10 to high levels of demand. Service providers were asked to comment on current demand and projected levels for the balance of 2008. For more details or to obtain a copy of this survey, please contact Stan Lepeak.

About EquaTerra

EquaTerra sourcing advisors help clients achieve sustainable value in their IT and business processes. Our advisors average more than 20 years of industry experience and have supported over 2000 transformation and outsourcing projects across more than 60 countries. Supporting clients throughout the Americas, Europe, Middle East, Africa and Asia Pacific, we have deep functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes. EquaTerra helps clients achieve significant cost savings and process improvement with internal transformation, shared services and outsourcing solutions. For more information, please contact Lee Ann Moore at +1 713.669.9292; leeann.moore@equaterra.com; www.equaterra.com.

 

Billings Used Dead Doctors’ Names

By Christopher Lee, Washington Post Staff Writer
washingtonpost.com | Wednesday, July 9, 2008

Medicare has paid as much as $92 million since 2000 to medical suppliers who billed the government for wheelchairs and other home equipment purportedly prescribed by physicians who, according to records, were dead at the time, congressional investigators said yesterday.

The Centers for Medicare and Medicaid Services (CMS) honored about 500,000 such claims despite pledging six years ago to correct the problem, which was identified by the Health and Human Services Department‘s inspector general in 2001.

In more than half the cases studied, the doctor listed as having ordered the equipment had died more than five years earlier, said a report by the Senate Homeland Security and Governmental Affairs Committee’s permanent subcommittee on investigations.

“We discovered that some medical equipment suppliers have scammed the Medicare system — and the American taxpayers — out of massive amounts of money,” Sen. Norm Coleman (Minn.), the panel’s top Republican, said in a statement. “Using the ID numbers of dead doctors, these scam artists have treated Medicare like an ATM machine, drawing money out of the government’s account with little fear of getting caught.”

The report is part of the committee’s ongoing investigations into waste, fraud and abuse in the fast-growing federal health program, which serves more than 43 million elderly and disabled Americans. Medicare pays annually more than $400 billion in benefits and is a fixture on the Government Accountability Office‘s “high-risk” list of troubled programs.

Last year, the government established a Medicare Fraud Strike Force to crack down on a problem that officials estimate costs taxpayers tens of billions of dollars annually. The program’s durable medical equipment component, in particular, has been a frequent target of companies seeking to bilk the government. The subcommittee has scheduled a hearing on the problem today. When the system works properly, a physician writes a prescription for home medical equipment for a Medicare beneficiary. He takes the order to a supplier, who sells or rents the equipment to him. The supplier, in turn, submits a claim for payment to a Medicare contractor for processing. The claim includes a number issued by Medicare that identifies the prescribing physician.

Senate investigators obtained from the American Medical Association a computer file of physicians who had died between 1992 and 2002. They selected 1,500 at random and asked Medicare officials to turn over medical-equipment claims filed with those doctors’ Medicare ID numbers between 2000 and 2007.

During that time, the review said, ID numbers for 734 deceased doctors were used to file 21,458 claims that totaled $3.4 million. Investigators counted the claims only if the equipment was bought more than a year after the doctor’s death.

Extrapolating from the sample, investigators estimate that 384,730 to 572,238 such fraudulent claims were submitted during that period, and Medicare paid an estimated $60 million to $92 million. There are still active ID numbers in Medicare’s system for as many as 2,895 dead physicians, investigators said.

They examined separate data for Florida, home to many retirees and a perennial leader in Medicare fraud. They found that more than a quarter of deceased Medicare doctors there still have active ID numbers in Medicare’s system.

The ID for one doctor, who died in 1999, appeared on 83 claims submitted by Professional Gluco Services Inc., a Miami company, between November 2005 and September 2006. A federal grand jury indicted two of the company’s owners last year on charges of defrauding the government of $1.3 million for equipment that had never been ordered or delivered. Both men pleaded guilty.

Medicare officials had promised to do a better job screening claims after the 2001 inspector general’s report found that the agency had paid $91 million for medical supply claims with invalid or inactive physician ID numbers in 1999.

Medicare officials said several new steps should help, including a plan to match monthly Social Security Administration data about U.S. deaths against a revamped Medicare provider-identification system. They also pointed to new accreditation requirements for suppliers under a new program, opposed by the industry, that sets some equipment prices through competitive bidding.

“Fraud and abuse in the context of Medicare-covered durable medical equipment has been a focal point of ours in recent years,” said CMS spokesman Jeff Nelligan. “Before this program, anyone could become a supplier, but now they must be fully accredited based on strict financial and quality standards.”

 

Muscling in on Medicare

Legislative fight in Washington puts patients in midst of doc-insurer struggle

July 8, 2008 | Newsday.com

A Medicare tweak on the table in Washington is pitting doctors against insurers – with patients in the middle. Doctors are facing a steep cut in Medicare payments, and many say that if that happens, they’ll reduce or end their participation in the program. And that will make it harder for elderly patients to get care.

The alternative is to trim what Washington pays private, Medicare Advantage plans. Insurers, some of whom underwrite those plans, are airing television commercials warning that will mean patients losing coverage or paying more.

For patients, this all sounds like heads you lose, tails you lose. But things aren’t that bleak. Not if Medicare Advantage plans take the hit, as they should.

The problem is that doctor reimbursements will be slashed 10.6 percent unless Congress acts to stop it. A cut that deep is unrealistic. The House voted June 24 to increase payments to physicians by 1.1 percent. But the bill is stalled in the Senate and, should it pass, President George W. Bush has threatened a veto. The sticking point is cost.

The bill would take the money from those private plans – which is where it should come from. Medicare Advantage plans were pushed by private marketers who said they would save taxpayer dollars. But Washington pays the plans 13 percent more per beneficiary than it would cost to cover that same person under government-run Medicare.

Pitting private plans against traditional Medicare is a sound idea. Competition should make each better. But a fair contest requires a level playing field, and right now it isn’t. Not with private plans being paid more per patient.

The pending legislation wouldn’t end that disparity. But it would reduce it and free up money to pay doctors. That would be a win for most Medicare patients and taxpayers.

 

AMA launches campaign to cut waste from chaotic insurance claims process, unveils new health insurer report card

Delayed and inaccurate insurance payments add cost, inefficiency to health care system

June 16, 2008

CHICAGO — To help reduce the substantial administrative burden of ensuring accurate insurance payments for physician services, the American Medical Association (AMA) today launched the Cure for Claims campaign to help heal the ailing system of processing medical claims with health insurers, and unveiled the first AMA National Health Insurer Report Card on claims processing.

“The goal of the AMA campaign is to hold health insurance companies accountable for making claims processing more cost-effective and transparent, and to educate and empower physicians so they are no longer at the mercy of a chaotic payment system that take countless hours away from patient care,” said AMA Board Member William A. Dolan, MD.

The inefficient and unpredictable system of processing medical claims adds unnecessary cost to the health care system, estimated as much as $210 billion annually, without creating value. Physicians divert substantial resources, as much as 14 percent of their total revenue, to ensure accurate insurance payments for their services.

“Eliminating the inefficiencies of the billing and collection process would produce significant savings that could be better used to enhance patient care and help reduce overall health care costs,” said Dr. Dolan. “To diagnose the areas of greatest concern within the claims processing system, the AMA has developed its first online rating of health insurers.”

The AMA’s new National Health Insurer Report Card provides physicians and the public with an objective and reliable source of information on the timeliness, transparency and accuracy of claims processing by health insurance companies. Based on a random-sample pulled from more than 5 million electronically billed services, the report card provides an in-depth look at the claims processing performance of Medicare and seven national commercial health insurers: Aetna, Anthem Blue Cross Blue Shield, CIGNA, Coventry Health Care, Health Net, Humana and United Healthcare.

Key findings include:

• Denials. There is wide variation in how often health insurers pay nothing in response to a physician claim (from less than 3 percent to nearly 7 percent), and in how they explain the reason for the denial. There was no consistency in the application of codes used to explain the denials, making it extremely expensive for physician practices to determine how to respond.
• Contracted payment rate adherence. Health insurers reported to physicians the correct contracted payment rate only 62 to 87 percent of the time. Additional analysis will be necessary to determine how often these errors were tied to inaccurate payment. When health insurers report an amount that does not adhere to the contracted rate, it adds additional, unnecessary costs to the physician practice to evaluate the inconsistency.
• Transparency of fees and payment policies. More than half of the health insurers do not provide physicians with the transparency necessary for an efficient claims processing system.
• Compliance with generally accepted pricing rules. There is extremely wide variation among payers as to how often they apply computer generated edits to reduce payments (from a low of less than .5 percent to a high of over 9 percent). Payers also varied on how often they use proprietary rather than public edits to reduce payments (ranging from zero to as high as nearly 72 percent). The use of undisclosed proprietary edits inhibits the flow of transparent information to physicians, adding additional administrative costs to reconcile claims.
• Payment timeliness. Prompt pay laws appear to have been effective in ensuring a relatively quick response to physician’s electronic claim. Further analysis will be necessary to determine the extent to which this response is accompanied by accurate payment if the claim.

The report card will be available for the first time today on the AMA Web site.

“Physicians want to focus on caring for their patients, not fighting health insurance red tape that may delay, deny or shortchanged payments for their services,” said Dr. Dolan. “The report card provides a useful snapshot of how each of the nation’s biggest health insurers can improve the process they use to pay their bills.”

The report card demonstrates the inconsistency and confusion that results from each health insurer using different rules for processing and paying medical claims. This variability requires physicians to maintain a costly claims management system for each health insurer.

The report card also suggests that both physicians and health insurers can help reduce unnecessary administrative costs if electronic transactions and full transparency are widely adopted. The costs of re-submitting claims can also be reduced if health insurers make better use of voluntary fields and reason and remark codes in electronic transactions to communicate crucial information to physicians about their claims.

The AMA Cure for Claims campaign will empower physicians to create a systematic approach to claims management so they spend less time and resources on payment hassles with health insurers. To help physicians submit timely and accurate claims, the AMA has created the Practice Management Center, an easy-to-use online resource offering physicians and their staff members tools for preparing claims, following their progress and appealing them when necessary.

The Practice Management Center’s library of education materials and practical tools are available online.

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For additional information, please contact:

Robert Mills,
AMA Media Relations
(312) 239-4991 or (312) 464-5970

Last updated: Jun 16, 2008
Content provided by: Media Relations

 

Medical Fraud a Growing Problem

Medicare Pays Most Claims Without Review

By Carrie Johnson
Washington Post Staff Writer
Friday, June 13, 2008; A01

MIAMI — All it took to bilk the federal government out of $105 million was a laptop computer.

From her Mediterranean-style townhouse, a high school dropout named Rita Campos Ramirez orchestrated what prosecutors call the largest health-care fraud by one person. Over nearly four years, she electronically submitted more than 140,000 Medicare claims for unnecessary equipment and services. She used the proceeds to finance big-ticket purchases, including two condominiums and a Mercedes-Benz.

Health-care experts say the simplicity of Campos Ramirez’s scheme underscores the scope of the growing fraud problem and the need to devote more resources to theft prevention. Law enforcement authorities estimate that health-care fraud costs taxpayers more than $60 billion each year.

A critical aspect of the problem is that Medicare, the health program for the elderly and the disabled, automatically pays the vast majority of the bills it receives from companies that possess federally issued supplier numbers. Computer and audit systems now in place to detect problems generally focus on overbilling and unorthodox medical treatment rather than fraud, scholars say.

“You should be able to spot emerging problems quickly and address them before they do much harm,” said Malcolm Sparrow, a Harvard professor and author of “License to Steal,” a book about health-care fraud that advocates for greater federal vigilance. “It’s a miserable pattern, a cycle of neglect followed by a painful and dramatic intervention.”

Fallout from the Campos Ramirez case continues. After pleading guilty to filing false claims, she has helped authorities win indictments against more than half a dozen doctors and patients who allegedly accepted kickbacks for pretending to receive costly HIV drug therapy. With cooperation from Campos Ramirez, FBI agents this week arrested three Miami-area men who, the government alleges, financed sham clinics that billed the government more than $100 million.

Daniel R. Levinson, the inspector general of the Department of Health and Human Services, has warned repeatedly that the Medicare program is “highly vulnerable” to fraud, particularly in South Florida, where schemes center on expensive, infusion-based HIV medications and on equipment such as wheelchairs, walkers, canes and hospital beds.

Officials from the Centers for Medicare and Medicaid Services (CMS), which oversees federally funded health programs, say they have stepped up their efforts to combat fraud over the past year by working closely with investigators, removing the requisite billing numbers of nearly 900 companies and imposing new standards in high-fraud areas that would prevent people convicted of felonies from ever receiving a Medicare number.

“There’s always more fraud than we have resources to combat,” said Kimberly L. Brandt, director of program integrity at CMS. “We have done a much better job of realigning our resources to attack this problem.”

Investigators and prosecutors trained their focus on Miami after noticing two troubling patterns:

· HHS investigators discovered that nearly half of 1,581 medical equipment companies they visited in the Miami area did not comply with basic Medicare requirements to be open during scheduled hours and to have a telephone number. The inspector general and the Government Accountability Office have flagged weak oversight of these kinds of suppliers for a dozen years, according to congressional testimony.

· The South Florida region bills Medicare more than $2 billion each year for injectable HIV medications. That figure is 22 times as high as the amount of similar claims in the rest of the country, and is far out of line with demographic data in a population of 2 million people in Miami-Dade County, HHS statistics show.

Justice Department officials moved to freeze money in suspicious bank accounts controlled by medical equipment company owners and they created a Washington-based strike force to handle the issue. The strike force, in concert with a small group of U.S. attorney’s offices, has in the past year opened nearly 900 criminal investigations and convicted 560 defendants in health-care fraud offenses throughout the country.

Authorities say the strategy is working. They point to a $1.75 billion drop in Medicare claims in Miami since the operation began a year ago. But even government officials hope for a more comprehensive solution.

Christopher Dennis, the special agent in charge of the HHS inspector general’s office in Miami, said fraudulent medical equipment companies appear to have shifted gears since the strike force arrived. After a crackdown in South Florida, at least some corporate owners moved to the north, he said. Investigators dubbed one initiative “Operation Whack-a-Mole,” after the carnival game in which a creature pops up in different places after being hit with a hammer.

“The sheer number of zeroes following the dollar sign is irresistible to crooks and con men,” Attorney General Michael B. Mukasey said last month during a Miami visit. “For every crooked company we bust, there is another one to replace it before the ink on the indictment is dry. . . . The money and the temptation are simply too big.”

The strike force recently established a base in Los Angeles, another area rife with fraud. Prosecutors announced criminal charges last month against two medical equipment company owners who are accused of falsely billing Medicare more than $2 million. Plans call for a similar rollout this fall in Houston, another potential fraud hot spot.

“You can see how these frauds spread through communities,” said Kirk Ogrosky, who is deputy chief in the Justice Department’s fraud section and helps lead the strike force. “Family members and friends just get sucked into it. It’s really rags to riches on the backs of the American taxpayer.”

Officials who oversee the Medicare program say they are vigilant despite time pressure and limited resources. Employees review fewer than 5 percent of the nearly 1 billion claims filed each year. The vast majority of claims shuttle through computer systems that are tweaked when authorities notice fraud patterns. This year, CMS is working to finalize a rule that would prevent convicted felons from obtaining Medicare billing numbers. At present, that regulation applies only in a few high-fraud regions.

“It’s a big volume,” Brandt said. “No matter how hard we try to get people trained, there’s always going to be a margin of error.”

Sentenced to 10 years, Campos Ramirez, 60, may yet reduce her prison term by helping authorities unwind “the large web of medical clinics, doctors, nurses, money laundering companies and HIV clinic financiers who participated in this massive fraud,” prosecutors wrote earlier this year in court papers. Her lawyer did not return calls seeking comment.

By many accounts, Campos Ramirez was unusually successful. Prosecutors say that corrupt medical clinic owners anticipate that Medicare will cover a quarter of their phony claims. But Campos Ramirez persuaded authorities to cover 60 percent of all the bills she submitted on behalf of 75 HIV clinics in South Florida, according to court filings.

As the owner of R and I Medical Billing, Campos Ramirez advised clinic owners how to justify the costly HIV treatments and manipulated Medicare claims to make sham clinics appear to be legitimate health-care facilities, prosecutors said. She personally collected more than $5 million with which she bought property and luxury items. Over the past year, however, Campos Ramirez has met repeatedly with law enforcement agents to unravel the scheme, which ran from 2002 to 2006.

At the time of her sentencing in March, Campos Ramirez had amassed a net worth of $1.5 million, including one of the condominiums where her son, an employee of her billing company, had lived.

 

State proposes ban on HMO billing practice

June 1, 2008 | By LORA HINES | The Press-Enterprise

State officials, hospitals and doctors are locked in a dispute over whether some patients can be charged if they are taken to an emergency room outside of their health care network. For some, that bill can be a couple of hundred dollars, but for others it can reach into the thousands.

The ban proposed by the California Department of Managed Health Care would affect members of HMOs, such as Kaiser Permanente, not members of other kinds of insurance plans. The department only regulates HMOs. Administrators and hospital-based doctors say the state should be targeting insurance companies.

Statewide, thousands of people get pressed for payment by doctors and hospitals, typically after they are taken to an emergency room outside their insurance plan. Doctors and hospitals that think health care plans and insurance companies have shortchanged them on payment for treatment then try to make up the difference by going after patients who already paid their share. It’s called balance billing.

Karla and William Gledhill, of Chino Hills, understand the practice well.

The couple got hit with a $53,000 bill from Arrowhead Regional Medical Center in Colton after their insurance company, Anthem Blue Cross, paid about $25,000. Their 16-year-old son, Ryan, was flown to the hospital after a serious dirt bike crash in Lucerne Valley.

Karla Gledhill said she racked up late-payment fees and bill-collection threats as she repeatedly wrote letters and made telephone calls to the hospital and insurance company. Last week, the insurance company agreed to pay the bill.

Gledhill said she thought she would have to hire an attorney, which sometimes is a patient’s only recourse, hospital officials say.

The hospital and insurance company said privacy laws prevented them from commenting on the family’s claim.

“You don’t know anything about balance billing until you’re stuck in the middle, trying to hammer out what’s right,” Gledhill said.

Balance Billing

More than 1.75 million insured Californians who visited emergency rooms in the past two years were asked to pay more, even after their co-payments and deductibles, according to the California Association of Health Plans. The professional organization represents 40 health care plans that cover an estimated 21 million Californians.

The average balance bill was $300, which added up to about $528 million that patients spent in addition to their co-payments and deductibles, the association said. More than half of the patients who were balance billed paid.

“The practice needs to be banned, period,” said association spokeswoman Nicole Kasabian Evans. “The patient shouldn’t be placed in the middle. That’s what the insurance companies and health care providers are doing.”

In July 2006, Gov. Schwarzenegger ordered an end to balance billing after he realized many residents were being charged for medical expenses they didn’t owe, said Cindy Ehnes, director of the state Managed Health Care Department. But the department couldn’t come up with a suitable solution to HMOs and providers, she said. So, the department decided to merely ban the practice.

“We have tried many other approaches to solve this problem,” Ehnes said. “We have decided to go back to our first job, which is to protect consumers.”

Ehnes said she had hoped lawmakers would have passed legislation regulating balance billing. At least seven states have balance billing laws, including Colorado and Florida. Meanwhile, state Sens. Don Perata, D-Oakland, and Leland Yee, D-San Francisco, have introduced balance billing legislation.

HMO Vs. Hospital

The ban comes as Kaiser, the state’s largest HMO, got a temporary restraining order earlier this month from Los Angeles County Superior Court against Prime Healthcare Services Inc., of Victorville, to stop it from collecting money from thousands of Kaiser patients or reporting them to credit agencies. A hearing is set for Thursday.

“This has been an ongoing dispute for a year or year and a half,” said Dr. Ben Chu, president of Kaiser’s Southern California region. “… They threatened to trash their credit ratings if they didn’t pay.”

Earlier this year, Prime Healthcare sued Kaiser, claiming that Kaiser owes $25 million for its patients who were treated at eight of Prime Healthcare’s hospitals, including Desert Valley Hospital in Victorville, Chino Valley Medical Center and Montclair Medical Center.

Prime Healthcare attorney Michael Sarrao couldn’t be reached for comment.

Prime Healthcare has accused Kaiser of delaying payments by repeatedly demanding patient medical records, claiming that care provided was unnecessary and requiring transfer of members to Kaiser hospitals.

Chu disputed the claims.

“It’s not about delaying payment,” he said. “It’s about substantiating claims.”

Calculating Health Cost

Dr. Richard Frankenstein, president of the California Medical Association, said the organization, which represents 35,000 doctors, will fight the state Managed Health Care Department’s ban.

“They ought to be regulating the insurance companies, not the doctors, which it does not have the authority to do,” he said. “We see this as a $500 million transfer from patients to insurance companies, and the insurance companies aren’t paying the bill.”

On average, Frankenstein said, insurance companies pay all but about $30 of a doctor’s bill.

“If that doctor sees 50 to 60 patients, that $30 does add up,” he said.

Some specialists may not work on-call emergencies if insurance companies refuse to pay and they can’t bill patients, Frankenstein said.

Frank Arambula, Arrowhead Regional Medical Center’s chief financial officer, said the hospital compares its costs to those of other facilities, which are reported to the California Office of Statewide Health Planning and Development. The data are posted on the agency’s Web site.

“We set our rates based on market-driven prices,” he said. “We think it’s a fair assignment and the payer is going to pay those charges.”

Conversely, insurance companies rarely show patients and health care providers how they determine what to pay for service, Arambula said.

In a written statement, Anthem Blue Cross spokeswoman Peggy Hinz said the company reimburses out-of-network hospitals for what it considers reasonable and customary costs. It is changing its reimbursement policy to protect members who require emergency care, she wrote.

“It was not the intent of our reimbursement policy to increase out of pocket expenses for our members, who do not have a choice in selecting the place where health care services are performed, such as in the case of an emergency,” Hinz wrote.

Anthem Blue Cross bases its reimbursement rates on factors including submitted charges for payment, comparisons of charges for services offered at other hospitals, and service costs that are reported to the state, Hinz wrote.

Fighting the Bill

The Gledhills didn’t care whether Arrowhead Regional Medical Center was in their Anthem Blue Cross preferred provider organization network. Their son needed surgery on his pancreas.

“Worst case, we thought we would owe $6,000,” said Karla Gledhill, whose husband owns a small Anaheim business.

Anthem Blue Cross first determined the Gledhills owed the hospital $53,273.17 after it paid $25,121.28, according to a claim recap. It paid another $12,606.15 after Karla Gledhill complained to the California Department of Insurance.

The Gledhills still faced a $40,667.12 bill and no explanation of how Anthem Blue Cross determined what it would pay.

“How could I fight a fair fight if I didn’t have all the information?” Karla Gledhill asked. “I didn’t think Arrowhead’s charges were exorbitant for the care my son received.”

On May 21, Anthem agreed to pay the rest of Ryan Gledhill’s hospital bill after the company “made a one time administrative decision to remit payment,” according to the letter the Gledhills received.

The letter did not include further explanation, and Hinz said privacy laws prevented her from offering one.

Reach Lora Hines at 951-368-9444 or lhines@PE.com

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Online Help

California Office of Statewide Health Planning and Development: www.oshpd.ca.gov

California Department for Managed Health Care: www.hmohelp.ca.gov

California Department of Insurance: www.insurance.ca.gov

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Why Does Your Practice Employ You? – For Physician Assistants

By Abby Jacobson, MS, PA-C

Why does your practice employ you? Can you answer this question? Employing PAs has many benefits, but of course, patient access to care always should be the primary objective when a practice or a hospital decides to start utilizing PAs. Improved physician quality of life is another reason. Nevertheless, the financial benefits of employing PAs cannot be overlooked. Besides offering high-quality patient care, you are a financial asset to the practice.

But how much of an asset are you? The easiest way answer this is to know how much money you bring into the practice. Here are tips to remember when determining how much of a financial benefit you are to your employer.

Ask for Your Data

You need to know how much you bill each month and how much is collected from those charges each month. I strongly recommend your physician assistant employment contract state that you will receive monthly (or at least quarterly) reports of your billings and collections. Ask for this data now. Don’t wait until it’s time for contract negotiations.

Be careful to not appear greedy or selfish when asking for this information. If you say you want the data to see how much you are making for the practice, implying that you will use the data during your next contract negotiation, you are already creating an adversarial situation and setting the stage to be denied access to the data.

Instead, explain that you want this information to review for consistency, to ensure that the practice is getting paid fairly from insurance companies, to review for compliance with reimbursement rules, to evaluate worthwhile contracts with particular insurance companies and to see whether your productivity for the practice is comparable with your colleagues.

Have you asked for this data in the past and been denied? You have a few options. A number of formulas are available to help you try to track collections, or you can calculate some average per-patient charges. Or you could use information collected from other PA colleagues who practice in a setting similar to yours. It’s more difficult, but it can be done. But consider that if a practice is keeping this data from you, what else are they hiding? If your practice won’t share this information, I think you need to ask whether this is the right practice to stay in.

Ask for Colleagues’ Data

It’s very helpful to know what other providers in your office are billing and collecting. This includes the physicians, PAs or nurse practitioners in your practice. Some professional societies, such as the Society of Dermatology Physician Assistants and the Medical Group Management Association, track average billing and collections as part of their salary surveys. If you are under-producing compared with your colleagues, you need to fix the problem. Are you not seeing enough patients? Do you need more support staff? Are you undercoding or overcoding? Do you need to start offering more procedure-based services?

Code and Bill Properly

The most important step in being a financial benefit to your practice is proper coding. As boring and difficult as it seems, you have to know when and how to use the proper codes to bill for the services you provide. You need to know everything from the appropriate level of evaluation and management visits (what makes a 99213 different from a 99212?) to when and how to use a modifier. Unfortunately, this stuff changes regularly, and you need to make it a priority to review it at least yearly.

The second step is to communicate with your billing department staff. Make sure they know how to submit claims properly, that they do it in a timely manner and that current information is collected on your patients. Ask them how rejected or bundled services are handled, and what is done for outstanding patient balances.

For example, one of my PA clients just found out her practice has been writing off charges when a patient’s insurance has a deductible, regardless of whether the patient can pay or not. Her billing staff never even asks the patients for their portion! So the practice is losing hundred of thousands of dollars each year, and the PA is providing free care 25% of the time to a population that could pay at least a portion of their deductibles. You must be involved in the office coding, billing and collections from A to Z.

Know Your Billing-to-Collection Ratio

I recently was working with a client on her contract negotiations and we figured out that her accounts receivable (AR) rate was 48%, meaning that of everything she billed, less than half was ever collected! That’s far below the average benchmarks for a strong practice with a good billing department.

To calculate your practice’s AR rate, divide your collections by your billings and then multiply by 100 to get a percentage. So, for example, if you billed $300,000 and collected $215,000, your AR rate is 71.67%. Compare your rate to the other providers in your office and to other similar practices.

Are Charges and Collections Tracked?

With today’s computers and electronic medical billing, there’s no excuse for a practice not to keep track of your charges and collections. Even if services are billed out under your physician, you can put an internal code on them to track them. If your billing department or office manager doesn’t know how to do that, offer to call the computer software company yourself to find a solution.

It does become more complex if you never see patients directly or if you spend at least part of your time doing things that won’t result in a charge, such a pre-rounding, taking call or assisting during procedures. In this situation, you need to attempt to calculate whether these duties enable your supervising physician to bill more. For example, if you help the physician pre-round, does this save him an hour a day? And if he uses that hour to see patients, how much more has he collected? Or if he can perform two more surgeries a day because you speed the procedures, how much more money do those two surgeries a day bring in?

Start with a strong, ironclad contract, and pay attention to your gut-if you sense red flags, beware! Before accepting a position, find out about the practice’s reputation. Seek opinions from former employees (especially PAs) and from referring clinicians in the community. Research the salaries of other PAs in similar settings. If you’re being abused, look elsewhere. Change can be scary, but sometimes it’s necessary.

By becoming involved with the billing and coding in your office, you can help your physician navigate the confusing and complicated work of running a medical practice. Doing this will give you an advantage in contract negotiations, and you’ll also help your physician in yet another way that PAs can benefit their physician partners in medicine.

Abby Jacobson practice dermatology in Lancaster, Pa. She has held numerous leadership positions in the American Academy of Physician Assistants, the Pennsylvania Society of Physician Assistants and the Society of Dermatology Physician Assistants. She is owner of Strategic Medical Consulting LLC.

Copyright ©2008 Merion Publications

 

Who Benefits From Billing In Healthcare?

Posted in The Huffington Post on May 29, 2008
By Dr Deane Waldman

Have you ever been a patient? If so, you know how incredibly complex, user-unfriendly and inefficient the whole billing/insurance system is. Do you know a doctor, nurse or hospital administrator? Ask them and they will say the same thing, louder and angrier: billing is exceedingly cumbersome, under-paying, always late, and inefficient. If the doctors don’t benefit from this mess and the patients certainly do not, then who does benefit? Good question, and is it really “inefficient?”

Pictured above is one of last year’s medical billing code books, containing 8805 five-digit or longer codes – more than the number of identified human diseases. Typically, it is “updated” (expanded) at least once a year. This book gives information required for just one of the 57 (!) different steps used to submit a medical bill.

Efficiency is usually defined as the least resources used for the most money gained. In health care billing, who gets the gain? The people who make profit are not the doctors or hospitals: the profit-makers are the insurance companies.

How do insurance companies make money? The formula is simple: collect lots of premiums and avoid spending the money. That means the more they delay payments; the more they reduce the amount paid; the more they deny payment altogether, the more profit they make. In other words, delaying, paying less or not paying at all for your medical care…generates profit.

And before you blame the big bad heartless insurance companies, remember that they are behaving just the way their stockholders – which probably includes YOU – want them to act. Your pension plan does not hold stock in HCA, United Health, or Blue Cross because they lose money. Your insurance company is not the culprit. The dastardly villain smirking while twirling his handlebar moustaches is the system.

PS. If – a big if – so-called universal health care saves money, it will do so by simplification. This means three things: 1) The middleman profit will go away; 2) Reducing the bureaucracy and red tape will put thousands out of work; and 3) The value of your insurance stocks will end up in the toilet.

 

Dublin Doctor Defrauds Medicare, Medicaid, Gets Four Years Probation For Health Care Fraud

Source: rockbridgeweekly.com

Acting United States Attorney Julia C. Dudley announced today that Dr. Linda Sue Cheek, age 59, of Dublin, Virginia, was sentenced yesterday in United States District Court for the Western District of Virginia in Roanoke for defrauding Medicaid and Medicare.

“These taxpayer-funded health care programs are designed to allow our friends and neighbors who are in need of medical care, the opportunity to obtain it,” Acting United States Attorney Julia C. Dudley said today. “When physicians like Dr. Cheek take advantage of these programs in order to get rich, it is our job to hold them responsible for their actions.”

Cheek was sentenced to serve four years of probation for her role in a scheme to knowingly and willfully defraud the Medicaid and Medicare health care programs for her own personal, financial gain. In February Cheek pled guilty to one count of health care fraud, admitting that she had been stealing from the two programs from January 2002 to March 2006.

In addition, Cheek was ordered to pay a total of $24,210.37 in restitution to Medicare and Medicaid and will be required to serve 600 hours of community service in a non-medical field. As part of her sentencing, her license to practice medicine was also revoked.

The defendant, who was a licensed physician by the Commonwealth of Virginia, operated New River Medical Associates, Inc. located in Dublin, Virginia. The facility operated primarily as a pain management and alternative medicine practice.

Cheek previously admitted that between January 2002 and March 2006 she submitted a series of false Medicare and Medicaid claims relating to her medical practice, including the practice of billing Medicaid and Medicare for services she had not performed.

In addition, Cheek admitted to billing Medicaid for services she claimed to perform herself that were, in fact, performed by one or both of the two nurse practitioners employed by New River Medical Associates. Cheek admitted that during many of these procedures she was out of the office and, at times, out of the country.

Finally, Cheek admitted to billing Medicaid and Anthem Blue Cross Beneficiaries for individual treatments called “cleansing sessions,” an investigational service. These “cleansing sessions” were performed and billed as regular, individual office visits but were carried out in a group setting. Medicaid, Medicare and other insurance providers do not allow medical professionals to bill for group sessions.

This case was investigated for the United States Attorney’s Office, Western District of Virginia by the Virginia Attorney General’s Medicaid Fraud Control Unit, the Internal Revenue Service, the U.S. Department of Health and Human Services, Office of Inspector General, the Virginia State Police Drug Diversion Unit and the Financial Investigation Unit of Anthem Blue Cross Blue Shield.

Assistant United States Attorneys Patrick Hogeboom and Charlene Day prosecuted the case for the United States.