Volume VIII Number 2

May 2002

The Newsletter of

D E K A Y E  Consulting, Inc.

231 Oakview Avenue
Oceanside, New York 11572
Phone / Fax: (516) 678-2754
E-Mail: Adkcmpa@aol.com
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URL: http://www.dekaye.com


Vital Signs

Assessing Risk and Maintaining Awareness ó Developing a Data Defense

by Allan DeKaye, MBA, FHFMA, President and CEO, DEKAYE Consulting, Inc.

Many hospitals and healthcare providers have made crisis readiness their top priority since the September 11th attacks. This change in focus is indicative that healthcare fraud is no longer the number two national priority. However, risk management must remain a priority. Therefore, the development of a data defense program is a way to sustain proper risk management and augment a corporate compliance program.

What is data defense? Data defense is a strategic program for addressing the potential problems associated with risk. The result of implementing a data defense program is that it identifies the probabilities of occurrence of certain conditions. Data collection is an important aspect of a data defense program because it directly impacts whether a healthcare provider is prone to a particular condition. In the corporate compliance setting, a data defense program can be implemented by conducting systematic audits. Thus, operations remain safeguarded. This approach is highly recommended to address areas targeted by the Office of Inspector General (OIG) workplan.

OIG Workplan targets. A compliance plan is analogous to personal insurance in that it protects the healthcare provider from the consequences of particular risks. However, a compliance plan is effective if it is effective at efficiently identifying and eliminating those risks.

Risks are determined by the OIG workplan, which details the subjects specifically targeted by the OIG in 2002. Healthcare departments that govern the revenue cycles are advised to give priority to the following areas:

Medicare payment error prevention programs;

One-day hospital stays;

Hospital discharges and subsequent readmissions;

Consecutive inpatient stays;

Prospective payment system transfers during hospital mergers; and

Uncollected beneficiary deductibles and coinsurance.

Both quantitative and qualitative analyses of these areas should identify the specific areas applicable to a healthcare facility. Corporate officers charged with maintaining compliance should not hastily decide that a particular area of the workplan is irrelevant to their facility. Corporate compliance officers must understand that the facility carries the burden of proof as to whether a workplan area is applicable. Determining the extent of this burden will quickly identify a facilityís resource limitations and help narrow the focus of where resources should be devoted.

Assessing risk. The following approaches should be considered in detecting potential risks and exposures for each targeted area of the workplan.

Medicare payment error prevention program

Many revenue cycle departments may be preventing false claims by following standard operating procedures that detect and correct problems before such a claim is made. Quantifying the number of potential false claims is as important as the number of correctly coded claims submitted. Therefore, the use of code-editor software as well as tracking Medicare Additional Documentation Requests are vehicles for establishing compliance by different departments with standard operating procedures.

Many code-editor software programs actually prevent erroneous claims from being generated. However, some programs only warn the user of potential problems with a particular claim. Therefore, compliance officers are advised to carefully review those programs that specifically reveal the problems of the healthcare provider.

Tracking Medicare debit/credit adjustments can also efficiently identify weaknesses in a healthcare providerís claims processing system. When an error is identified, canceling and subsequent resubmission of the claim is the proscribed remedy. Quantitatively tracking the number of times the appropriate remedy must be implemented will reveal weaknesses in code-editor programs or operations.

One-day hospital stays

This is a topic often left to the expertise of administrators. However, due to the complexity of the reimbursement regulatory scheme as well as the various billing formats, compliance officers should consider including this in their audit programs. Specifically, such audits should be focused on dates of admission and discharge. Note that while most ambulatory services will have the same admission and discharge date, hospital admissions generally will not. Therefore, an efficient method of review is to produce periodic reports that include admission and discharge dates. Particular attention should be given to accounts with protracted emergency room stays, observation status, or specific clinical reasons. For each situation, prevalent patterns will emerge if the review considers the conditions under which the situation has occurred, the frequency of occurrence, and prevailing circumstances surrounding its occurrence. Therefore, the compliance officer can determine and correct exposure to these types of risk.

Hospital discharges and subsequent readmissions

Administrative staff involved with the admission/discharge of a patient are usually most aware of the risks in this area. Administrative alerts should be implemented to warn of readmissions that occur contemporaneously with the last date of discharge. Failure of such a system should prompt hospital information systems to inform appropriate individuals of these types of occurrences with proper programming and distribution of the software. Note that some readmissions are clinically justifiable, however, the occurrence of contemporaneous readmissions should be scrutinized, preferably in real-time.

Consecutive inpatient stays and prospective payment system transfers during hospital mergers

These two topics have been linked because the ability to track a patient before admission and after discharge is common to both conditions. While the patient admitting process should identify the source of admission, it usually does so with a one-digit code entered in order to complete a data field on a claim form. Similarly, a discharge disposition code is also entered to provide the location of a patient when care at one facility is complete.

While the primary purpose of these codes is to ensure the proper completion of claim forms, they hold the potential to give administrators more information about where patients came from and where they are going. Data input from the admitting staff, especially in non-emergent situations, and that of discharge planners, may be needed, especially with enterprise network providers.

As networks are formed and expanded, and as the level of sub-acute, and other levels of post-acute care services are offered, the likelihood of increased scrutiny becomes a real factor. While a provider may have addressed all of the regulatory concerns, the ability to use its data to determine the number of qualifying incidents can help it focus resources on the relevant segments of its operations.

Uncollected beneficiary deductibles and coinsurance

The concern with this topic is that providers will not waive or forego collection of these amounts to serve as an incentive or inducement to attract patients and, that patients will pay their responsible amounts. Where governmental programs are involved, there is a concern that other payors pay their contractual benefits. For most providers, simply examining their aged trial balances will unfortunately show that their efforts at collecting them isnít as effective as they would like.

However, by using patient trial balance reports, and reexamining their efforts to collect money at the time of service, providers will discover additional actions to consider. Clearly defined policy statements, especially those that create an expectation that payment is expected, can be most helpful.

Using electronic access to payor databases can provide additional information regarding coordination of benefits and co-payment information. Incorporating this technology, especially as part of the pre-admission process, can also help reduce problems in this area. By ensuring that system-controlled patient billing systems are generating easily understood self-pay bills at regular predetermined intervals will also help improve the collectibility of these amounts.

Building the data defense. Resources for providers are scarce. By determining if a targeted condition is a potential problem area, a provider can reduce its exposure. Using data, especially data that has already been captured, can provide an added depth and effectiveness to a corporate compliance structure. While providers continue to face many priorities, building an effective data defense can help them meet corporate compliance challenges.

2002 by CCH Incorporated.  All rights reserved.  Printed with permission from CCH Healthcare Compliance Newsletter.

Perspectives and Commentary

Relaxing MSPQ Time Frames: Good News or Bad?

By Allan P. DeKaye, MBA, FHFMA,  President and CEO, DEKAYE Consulting, Inc.

Effective March 31, 2002, the Centers for Medicare and Medicaid (CMS) will permit hospitals to complete the "Medicare Secondary Payer Questionnaire (MSPQ)" every ninety (90) days instead of requiring its completion for every admission and outpatient visit. For many, this will relieve a level of anxiety associated with the inability to attain compliance, and others will cheer the relief it will have on staff and patients. No longer will the "I answered this the other day," become a customer service concern that often pitted the obvious procedural redundancy against the "letter of the law" as stated in the regulations.

Be Careful What You Wish For

Although on the surface this level of administrative simplification will be well received, CMS will now be issuing regulations governing this 90 day requirement. Hopefully, this time frame change will not become an issue of "the devil you know, versus the one you don't."

The new requirements are more than likely to include documentation provisions similar to those that exist today. Keeping in mind that under the "old" provisions, an "always" condition existed. That is, for each inpatient or outpatient service, and MSPQ was required. Now that won't be the case. Here's a list (though not meant to be all-encompassing) that identifies some of the operational sequences that will probably require providers to revisit:

1. How compliant was the facility under the old requirements? If it was compliant, this change will have less negative potential than if it wasn't.

2. If the facility wasn't (fully) compliant before, will it be able to achieve the "90" day time frame now required by the regulations.

Here the discussion becomes interesting when you consider one patient (who hasnít been to your facility during the previous year) who now makes 4 visits (i.e., admissions, clinic or ER visits, ambulatory surgery, etc.) in a 30 day period, and one 90 days later.

Under the old rules, all five visits required an MSPQ. Under the new rules, the one occurring 90 days later (the 5th visit) definitely does. But which of the first four occurring in the same month will need one? One of them definitely will, but which one becomes difficult to determine, especially when the patient may be seen in disparate locations throughout the facility.

Suddenly, we have gone from an "always" to a "sometimes" situation (Editor's note: "I hate sometimes.") A scenario can be envisioned where at least one or more of the first four same month visit registrations will be faulted for not having completed the MSPQ. But it is not outside the realm of CMS seeking to find that each of the first four visit registrations were equally "at risk," since the facility should have known that the patient should have been subjected to the MSPQ process.

Using Technology

During a recent client site visit, I noticed a warning flash on a registration screen that "it had been XX days since the last patient registration update." This is a good thing. However, if the screen message is only a "warning edit," and the staff can bypass that alert, then the hospital's "first line of defense will be breached."

However, using technology to keep track of the last MSPQ date, and integrating this data with the registration update function can be a key ingredient to meeting the anticipated requirements of the new regulations. To the extent that such "warnings" can create "blocking edits" (i.e., required to complete before proceeding), then the hospital will gain in its ability to ensure compliance. [Note: Simply "tabbing" through the MSPQ screens is not a blocking edit. Answering each question is.]

Training and Awareness

I'm amazed how many people seem to still be unaware of this change. (Editorís Note: For many, this rule change was seen first on the PAMLIST). But the instant reaction still seems to be 100% relief. I would not go that far--at least not just yet.

Hopefully, the final administrative rules will relax some of the same redundancy that the new time frames appear to correct. However, departmental administrators will still be challenged by the need to conduct the survey, and properly document the answers to achieve an appropriate and accurate registration. They will also have to demonstrate the ability to retrieve the questionnaire (whether on paper or on-line as part of the registration record).

This time frame change will not be a substitute for good interviewing skills, nor will it fully relax the actual text of the MSPQ. For those that can boast an effective level of compliance, they will find these changes less arduous, and simpler to re-educate and train their staff. For those still vulnerable, this change may also serve to increase exposure and risk.

Compliance vs. Complacency

There is no substitute for getting it right. All too often, it is easy to feel that a relaxation of the rules means that the need for maintaining our awareness and vigilance is lessened. This change, in fact, should reduce some of the redundancy associated with asking the repetitive questions, notably in areas where recurring patients were seen. However, unless organizations are able to revise their operating procedures, while continuing to enhance interview skills, and improving their completion and retention capabilities, then these new time frames are likely to only provide a false sense of relief. The burden of proof will still be the hospitalsĖas will the exposure and risks of non-compliance.

: Ask The Expert

by Allan P. DeKaye, MBA, FHFMA

Q: We have experienced patients being unwilling to update financial and demographic information when they come to admitting.  They cite "no changes" from the prior year and do not want to fill out the required update forms.  Any suggestions?

A: No one likes to provide repetitive information. In the case of the physician's office setting, a once a year request (e.g., a patient only in for annual check-up) should not be a voluntary matter--it's required.

This probably goes under the category of "who's business is it anyway?" Yes, a physician's office is a business! And it needs to be run that way. The contributor cited "patients" (plural) not cooperating. I can understand one or a few recalcitrant patients, but not many. Front desk reception staff need to be able to politely (but firmly) explain why this is needed, so as to overcome the patient's objection to providing information.

By explaining that even though the patient (in front of you) may not have had an insurance denial, or missed a co-payment, the practice needs to assure that its information is up-to-date and accurate. This enables the practice to speed its billing processes. Of course, it the patient does have an outstanding deductible or insurance denial, you can more easily prove your point, as well as secure the needed information or payment.

Those in the hospital admitting and registration areas know that in order to satisfy the requirements of the Medicare Secondary Payer (MSP) Questionnaire, they must ask Medicare patients a series of questions on each and every visit (and admission). Why? It is the law; but it is intended to identify other insurances that are primary to Medicare. This helps keep the Medicare program from paying when others should have the responsibility.

However, physician offices, while not required to complete the MSP Questionnaire, are not prohibited from using it either. In fact, it is optional, and I would recommend using it, or adapting a version of it. Physician business office managers need only look at their trial balance, or EOB's and remittance vouchers to see if the types of denials or payment delays they are experiencing could have been avoided by obtaining better patient financial or demographic data up-front.

By providing at least one good reason to update data, you should be able to overcome most patient objections. Having staff do it in a professional and caring manner also helps. For more information on this topic, you can view my article, "Collection At Time of Service," (www.dekaye.com, On Target Newsletter, October 1998 issue) or reading Part II, "Knowing Who the Customer Is: The Registration of the Patient" (Chapters 5-8) in The Patient Accounts Management Handbook (DeKaye, Aspen).

Q: I have asked that our Financial Policy Statements be updated or reviewed.  What should we make sure is addressed?

A: Financial Policy Statements need to address more than just how long payment agreements should be in effect, and when an account should go to collection. Although the six month period is reasonable, it should only be used when the debt is greater than $1,000.00. When you start stretching out payments beyond three months, the hospital needs to consider both the cost of money, as well as the operational impact on the Patient Financial Services (PFS) department. Many hospitals have considered encouraging (or facilitating) bank loans for patients, especially when the amounts start exceeding $5,000.00. Amounts less than that might be handled through credit card payments, allowing the patient to follow the payment terms of the credit card company.

There needs to be consideration of how a patient's ability to pay will be determined. The hospital (and/or the State) may have a charity care program which patients can qualify for. The making of a "self-pay" (primary) determination should also be reviewed in the context of whether the patient is eligible or potentially eligible for Medicaid or other entitlement programs (e.g., Child Health programs, Handicapped programs, Disability, etc.). Given the cost of care, even secondary self-pay (balances after insurance) are now reaching significant levels. The hospital needs to avoid becoming a "bank." By having too many payment arrangements, the hospital will need to assign significant resources to keep on top of these agreements. The resource allocation would produce a better payback if assigned to open insurance follow-up.

For more information about this subject you can review Chapters 14 (The Self-Paying Patient) and 15 (Following Up on Patient Accounts and Employing New Technologies), as well as Chapter 28 (Changing Directions in Uncompensated Care) in The Patient Accounts Management Handbook (Aspen).

Q: .We are using outside vendors to work some of our accounts, but we are concerned about vendors charging fees for closed-out accounts.  Shouldn't they absorb this cost?

A:  This recent inquiry suggested that billing and collection vendors should absorb the costs of working accounts that have no payout because they often collect on accounts where the hospital may have done the work, and payment occurs just after referral.

Hospital business offices often refer "valueless" claims to their billing and collection vendors. Why? They're old, have small balances, and usually because the hospital didn't work them for any number of reasons.

So why should you expect the vendor to do it for nothing? In fact, the effort they expend will demonstrate that "a last ditch effort" was made, or it may result in obtaining the needed EOB that is needed to bill the next payer. It is not uncommon for vendors to accept this type of work, but in effect not work it. Because there is no return! Then they send it back uncollected, and maybe the hospital finally writes it off.

While these comments should not be construed as a "pro-vendor" response, it does raise what I call the basis for negotiating better agreements that spell out the scope of work, and expectations regarding performance and fees. When cases are perceived as having no value, or need the documentation afforded by the "zero" EOB, why not develop an administrative fee for those cases. If the vendor accepts the work (which I suspect many will do because they know it is an accommodation) at least they'll be able to recover the cost of postage or electronic mail, and perhaps a follow-up action and knowing in advance that an administrative decision is the likely outcome. These "close-out" accounts need to be differentiated from the legitimately referred account that doesn't get paid for a variety of substantiated reasons. That is the real risk the vendor should be asked to take by not collecting on a collectible account. It's almost like trying to write-off a bad debt to charity. You can't if you had the expectation was that the account should have been paid.

The importance of differentiating this type of work will help the provider negotiate better pricing to recognize when true backlog relief is needed as opposed to special clean-up projects.

4. In response to inquiries about "time of service" payments, consider the following:

While many providers say they "collect at time of service," in reality, they may have omitted several key elements. The following are "key elements" of any program:

1. Create patient expectation that payment is required (e.g., signage, literature, brochures and pamphlets, etc.). Establish a written policy, have it approved by the Board, and promote it through staff training and patient communication)

2. Be able to generate a demand bill (patients won't pay if you can't give them the price and a bill)

3. Provide convenient places to pay (cashiering stations nearby service areas)

4. Accept alternatives to cash (e.g., check, credit and debit cards, electronic payments, etc.)

5. Enforce payment of managed care deductibles and co-payments

6. Where appropriate, have a "deferral of service" protocol.

For more information on this topic, go to our web site to see the following references:

The Patient Accounts Management Handbook (Aspen) by Allan P. DeKaye, MBA, FHFMA has a several chapters on this topic, including "The Impact of the Admitting Process on the 'Cash Flow Cycle,' " and "The Self-Paying Patient." Our OnTarget newsletter also discusses this issue of Collection at the Time of Service in the October 1998 issue.


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