Volume VI Number 1
|The Newsletter of
D E K A Y E consulting, inc.
231 Oakview Avenue
A New Century Begins!
Be Careful What You Wish For!
by Allan P. DeKaye, MBA, FHFMA, President & CEO, D E K A Y E consulting, inc.
Survive Y2K glitches. Increase cash collections by 15%. Lower A/R by 5 days. Reduce claim denials by 50%. Eliminate carve-outs and changes in levels of care. Increase productivity by 10%. Pass all audits with flying colors. Improve customer service. Meet all personal and departmental goals. Get a big raise. Wake up from dream. Face reality.
Okay, so maybe you won’t achieve everything on your list. But as we enter the New Millennium, replete with everything from "dreams.com" to "success.com," shouldn’t it be possible for us to achieve "ourgoals.com"!
When meeting with clients, survival always seems to be high on the priority list, and rightfully so. But surprisingly, "strategies," seems to be a distant listing. We do need to set aside the time to list our objectives and devise ways to reach them, even if we stumble because the list of impediments and obstacles seems so great. Perhaps facing that daunting challenge, we need to take a step back in order to determine, "What is achievable?" Sometimes of course, that alone may not be enough. However, using the planning process to create a game plan provides a road map that can lead to incremental successes. There is truth to the saying: "Success breeds success."
Whether it is individuals or departments, getting some victories under your belt can go a long way to motivating staff and increasing morale. Too often, we define our limits by stating "what we cannot do," instead of focusing our energies on what can be accomplished. While this may be a variation of the glass is half-full/half-empty, adopting a "nay-sayer" philosophy will likely lead to stagnation, and inability to move towards accepting challenges.
Goal setting should be realistic. And while a "perfect world" scenario may not always exist prior to implementing change, it is often necessary to evaluate and then accept the level of risk associated with the decision. Our ability to measure, contain and manage acceptable levels of risk can help us attain overall objectives.
For some of us, goal setting has already occurred, and for others, the task may begin in earnest during the opening days of 2000. For others, goal setting and plans to attain them will be little more than an afterthought. As a firm believer in this process, we also think there is a "self-fulfilling" prophecy philosophy at work. So we’ll end as we began: "Be careful what you wish for." It could all come true!
Perspectives and Commentary
What's In A Number?
by Allan P. DeKaye, MBA, FHFMA
Each of us has probably stared at the odometer as it passed through various milestones: 100, 1,000, 10,000--some I’m sure have watched it eclipse 100,000! But there is something special in watching the row of zeroes appear, only to disappear into a pattern of digits. Some numbers have special significance: they represent birthdays, anniversaries, addresses and favorite numbers, and everything from lottery numbers to the mileage at which maintenance or an overhaul is needed. Numbers with repeating digits hold a certain fascination, as do palindromes (numbers that read the same either from "right or left" or "left to right"). Let’s examine what the number 2000 holds for us.
I’m wondering how many times I’ll void a check because I started writing 1999 as the year. Or for that matter, will the payors be ready to pay claims that are due. While our cash collection totals will be rolled back to zero for the start of the year, what can we reasonably expect in terms of performance: both from ourselves and from others.
Internally, everyone hopes to start the new millennium on the right footing. The inevitable, "is everything working?" will be a question asked in over 5,000 hospitals’ admitting, registration and business offices. Although not immune, physician offices and practices across the country will want to awaken to find appointment scheduling and practice management systems fired up to 01/03/99 (optimistically starting Monday morning) raring to go. Payors, too, need to be concerned. Everything from paying providers to paying themselves, and everything in between will be a cause for concern. But as a question from the Johnny Maestro and the Brooklyn Bridge oldies hit asks, "...What’s the worst that could happen...?" (with apologies to the Maestro)!
Perhaps we could indulge ourselves by listing all of the possible ills and evils that could befall us. Maybe more important will be to see how well we did come the first working day of the new year. If all terminals are up, running and ready to go, will we be ready, too. The realistic expectation, I suppose, should be no worse than a normal system conversion. But given the hours of preparedness that has been reported and written about, if only a few minor glitches are sustained, then we’ll all be very pleased and proud of our effort.
But what does that say about the way we go about our daily efforts. Certainly for every problem we face, we don’t call out the National Guard. However, we will need to ask ourselves, if the cost of this preparedness paid off. In most cases, there should be a resounding yes. And if that is the case, what does it tell us about the way we go about solving the "same old problems" of data collection, processing, billing and collection, and denials and ...?
While we won’t or shouldn’t treat each problem as though it were Armageddon, it should help us pause for thought, and ask ourselves, "did I give it enough" when faced with everyday operational and procedural issues?
I think the lessons to be learned will be how well we move forward after 01/01/00. After all, we’ll only have about 1,000 years to worry before it affects us again. Happy New Year!
: Ask The Expert
by Allan P. DeKaye, MBA, FHFMA
Q: Is requesting a prompt pay discount for an already late insurance payment considered fraud and abuse?
A: Providers and payers may have negotiated prompt payment discounts. Difficulties often arise in the administration of the discounts, notably when payment "arrives" 1-2 days beyond the expiration of the discount. In the case of payments arriving 60-75 days after billing, it is really not a question of fraud and abuse to have asked for the discount, but more a matter of a contract violation.
Perhaps the more important question is was there more timely open account follow-up at, for example at 30 days? Prompt pay discounts should be considered forfeited when the payment is beyond the time frame specified in the contract. If the contract has specified and defined: "clean claims" "prompt pay requirements," it should also have stipulated when payment of a clean claim is expected. The key question should be why wasn't the clean claim paid timely. Collecting payment at say 45 days would certainly be better than 60-75 days, but at 45 days, the payor would not be entitled to a prompt pay discount if 30 days was the parameter.
Should the late payments be a persistent problem, then escalation of the problem to more senior managers or contracting agents may be in order. Contracts that call for prompt payment discounts should also have penalties for failure to pay clean claims in a timely manner.
Several states (e.g., NY and VA) have started to fine payers for untimely payments. NJ has set up required time frames for appealing adverse UR claim determinations. You can find more information about prompt payment discounts and insurance follow-up in "The Patient Accounts Management Handbook" (Aspen, 1997) Chapters 10 (Kivimaki) and 14 (Lund). More information about the book can be obtained at our web site.
Q: What is the 72-Hour or Three-Day rule?
A: The 72 Hour Rule regulations can be found in the Federal Register, Vol. 63, No. 28, Wednesday, February 11, 1998, Rules and Regulations. You will find it referenced under the more specific title: "Medicare Program; Payment for Preadmission Services."
The regulation provides that for Medicare Part A diagnostic services rendered on a outpatient basis "three days (or 72 hours)" before a diagnostically related inpatient hospitalization must be included in the inpatient bill, and not charged for separately. The requirement applies when the outpatient and inpatient providers are "related" organizations.
While this is a brief description of the regulation, there are many operational procedures and system editing and reporting subtleties that need to be considered to effect compliance. This subject area is still high on the OIG audit plan, and requires extensive analytic and operational effectiveness to ensure compliance, and avoid "civil monetary penalties" of three times the value of the error, plus fines of between $5,000-$10,000 per claim error. Educating staff and physicians about the complex requirements (e.g., What is diagnostically related? What are related entities? When does 72 hours not equal 3 days?) is an important aspect in order to maintain the vigilance required to attain continued compliance.
More information about this requirement and compliance education, including our video training program, "Safeguarding Healthcare's Cash Flow Cycle from Fraud and Abuse" can be found on our web site.
Q: What, if any, are the differences between billing companies and collection agencies?
A: There are definitely differences between "billing companies" and "collection agencies." First, in most states, collection agencies must be licensed. While many specialize in healthcare accounts, they may also have commercial collection businesses ranging from collecting for past due bills for utilities, parking (fines) bureaus, department stores, etc.
When operating in the healthcare market, collection agencies are governed by the Fair Debt Collection Practices Act (FDCPA). The FDCPA primarily provides certain protections for consumers, and spells out "rules" for agencies to follow in pursuit of past due healthcare accounts. Usually when accounts are referred to (or "written-off" ) to collection, the provider is said to have incurred a "bad debt."
As you might suspect, collection agencies often uncover insurances not disclosed by the patient, or uncovered by the provider. In many instances, the collection agency will bill the insurance carrier on behalf of the provider. Contractual terms between agency and provider govern the mechanics of such arrangements.
On the other hand, billing companies generally act as an extension of the Business Office. Accounts may be "outsourced," or special projects may be given to the billing company. While the billing company may perform billing and follow-up tasks, at the point that they are unable to adjudicate the claim, they may return it to the provider as "uncollectible." In some instances, a billing company may have arrangements (subcontracts) with collection attorneys or collection agencies. Based on contractual terms, they may refer this work to these collection groups. When operating as an extension of the Business Office, the accounts generally remain on the trial balance; however, when sent to an attorney/agency, they are usually deemed to be "written off to bad debt. Provider policies and contracts should conform to generally accepted accounting principles and Medicare guidelines for reporting of bad debts and charity care.
Remember, most collection agencies take on characteristics of a billing company. But not all billing companies are collection agencies. I will be conducting an upcoming "Teleseminar" for the American Collectors Association" on Agencies and Compliance, and this distinction will be discussed. Similarly, The Patient Accounts Management Handbook (Aspen Publishers) contains information about billing companies and agencies in the context of the self-pay patient and A/R management. You can find more detail about these references on our web site
Q: I've seen recent articles and such indicating that Medicare said...," or that "...the intermediary advised..." in response to various inquiries. How important is it to have actual written statements from these agencies?
A: While this may go a long way to alleviating operational impediments and allow you to take various courses of action, "the written word" is still something you should have.
When seeking a clarification of a policy statement, you should always request that the person providing the information commit their reply to writing. Then, it is incumbent on you to retain the correspondence in a permanent file to allow for retention and retrieval--especially for an audit or review. Compliance, billing, reimbursement matters clearly fall into this category of documentation requirements.
If the advising party is unable or unwilling to commit it to writing (that may be in and of itself--a warning), you have some options. You can issue a "confirmation letter" expressing your understanding of the conversation. By placing a "negative advisory" in the letter (i.e., "unless we hear from you to the contrary..."), you may prompt the verbal respondent to issue a written reply. Again, copies of all correspondence should be retained. Don't forget that E-mail is also correspondence, and either or both the hardcopy printout or retention to disk or hard drive should be considered. [Note: You'll want to follow your organization's guidelines for E-mail retention, transmission, etc.]
At a minimum, if none of the above remedies is available, you'll want to prepare your own "memo to the record," identifying the time and date of the conversation, the individual you spoke with, their position, organization, etc. Your notes should be signed and dated, and again distributed and retained.
In taking a page out of our medical coding audit guidelines: "if it isn't written...it wasn't done..." The same applies here.
Q: While we feel at our facility that education and training is extremely important, somehow our Admitting and Registration areas seem to be left out. How can we get our managers to see the importance of educating this department as well, especially in the compliance area?
A: The Admitting/Registration process has become much more than just a "meet and greet" function. While many of the data integrity errors I see center around problems in data capture and entry of patient demographic and financial information, they are often symptomatic of underlying procedural weaknesses and a fundamental lack of knowledge. Here are some examples and possible remedies:
1. Unable to ensure compliance with managed care utilization requirements [Need to share with staff all contracts--primarily which financial class and plan codes should be used, copies of insurance cards used by the plan(s), and lists of services requiring prior approval--if not all; matrices are a good start, but often can't reduce all of the detail on to easily distributed and maintained summary sheets; larger plan books require attentiveness to maintaining in a current state]
2. Registration staff doesn't ask interview questions properly [e.g., asking, "Do you still live at 123 Main Street?" instead of "Can you verify (or confirm) your present address?" or "Can you pay your (managed care) deductible?" instead of "How will you be paying your (managed care deductible?"]
3. Many staff need a re-familiarization with basic Medicare coverages (and Medicaid where the volume is significant). This is especially true where there has been a large penetration of managed care in government sponsored programs in an area. Rules and regulations do vary for managed Medicare and Medicaid.
4. Appointment and registration staff do not ask for enough patient demographic and financial data at the time appointments are made. They need to use this time to determine if Utilization Management controls will be in effect, and to best advise the patient of what is needed when the arrive for service. Effective pre-registration practices enables more (electronic) insurance verification which should lead to fewer claim rejections.
5. In today's environment, there are a number of compliance initiatives that should be addressed at the time of service. Notable among them is the Medicare Secondary Questionnaire, Medicare's 72Hour/3 Day Rule, Documentation--particularly as it relates to medical necessity (ABN's, confidentiality issues, etc.).
You'll find The Patient Accounts Management Handbook devotes an entire section to the issues you raised in Part II (Knowing Who the Customer Is: The Registration of the Patient). There are chapters devoted to ADT systems, productivity and improving physician/hospital data exchange. Our "Emphasis on Education" videotapes and "On Target" newsletter also offer alternative approaches to many of the topics you identified. All of these resources are described on our web site.
The Contributor's Corner
Home Health Care Update
by Andrew B. Shulman, Manager, Holtz Rubenstein & Co., LLP
In October 1999, HCFA announced the proposed rule for the Medicare Home Health Prospective Payment System. The proposed rule, in summation, reflects criteria previously outlined but is now contained in draft form. It includes:
It would appear your budget headache will be in deciding in which of the 80 case-mix categories or home health resource groups a patient belongs. Each category carries a separate weight to be applied to the reimbursement formula. Also, HCFA has proposed a number of variables to adjust for certain circumstances. They include:
Despite rapid and ongoing changes in the home health care industry, providers can still expect state and federal investigators to zero in on fraud and abuse in both Medicare and Medicaid. Agencies are involved with large amounts of government money, and it is definitely attractive to the consumer. Since the proposed rule was announced in October and some relief granted in November, the PPS Work Group, a coalition of state and national home health associations meet regularly. By far, the major drawbacks, according to group and industry consensus, is the proposed new system is new and untested and ensuring proper cash flow. Many feel the 50/50 split payment is not a cash flow relief, but further would strain cash flow as costs in the first half of the PPS episode would be higher than the second. Why? Because patients’ acuity is higher at the beginning, normally translating into a front-loading of visits and the goal of discharging the patient later in the episode would indicate fewer visits towards the end.
The entire proposed rule, which had comment period which expired on December 27, 1999, provided the overall framework for PPS as required by the Balanced Budget Act of 1997. The final regulations are expected to be published in July 2000.
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