DeKaye Consulting, Inc. Volume V Number 3

July 1999

The Newsletter of

DEKAYE Consulting, Inc.

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

On Target

The Heat Is On

Vital Signs

Forming Cash Assurance Teams [CATS]

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

Traditionally, the Patient Accounts (a.k.a., Business Office, Patient Financial Services, etc.) department had the primary responsibility for bringing in the money. Tradition aside, I have broadened the "responsibility" to include the departments that comprise the "cash flow cycle." Often when called upon to help a provider answer the age old question (no pun intended), "Where’s the money?" the logic suggests that it may be in more than one place.

These places can include: billing and collection. Or more appropriately (unbilled and under medical review). Hiding places are often camouflaged ("the system made me do it"), and sometimes hidden in plain sight (increasing uncollected deductibles and co-payments). Regardless of the whether it is one or more of these or other factors, getting these impediments flushed out into the open usually requires an multi-disciplined effort. Cash Assurance Teams (CATS for the Broadway aficionados) afford one alternative to the battle cry, "Show Me the Money" (with equal time for the Silver Screen).

What are CATS? Usually project management teams charged with identifying and resolving impediments to cash flow. All elements of the cash flow cycle: admitting/registration, charge collection and coding, billing, collection, follow-up, utilization management, systems etc., are all fair game. Why? Each element/component is necessary for a "clean claim" to be generated and effective follow-up and reporting to occur.

The project management format works well as it helps define problem, task(s) required, completion criteria, responsible staff, time frames, and reporting. Cash assurance teams provide the technical, as well as oversight reporting support that are essential to keeping intra- or inter-departmental groups on course to reach intermediary and final goals and objectives. The incremental approach underscores the importance of building on success in a critical path format to resolve both simple and complex tasks.

The project management process is guided by a workplan. The workplan is a document that catalogues tasks and the progress to completing them. A Project Leader chairs the group, arranges for meeting notes to be kept and maintains the workplan in a current state. Many times a facilitator or outside consultant is added to the team. In this way, technical and advisory assistance can be provided to the team. When necessary, the facilitator can mediate disputes and/or conduct the oversight functions previously described.

Another tool for these teams is using the meetings (usually weekly in early stages of the project) in order to recap status. Using team meetings to "solve" problems is a poor use of time. The team members should "brain-storm" issues prior to team meetings so that they can report what has or will be done.

Teams working with an agenda and formal issuance and adoption of minutes can create a working environment that efficiently tracks progress and problems, and promotes teamwork and effectiveness. Avoiding the never-ending project is also important. Tasks need to be completed, and new ones added. Once goals or milestones are reached, new objectives should be set and the team "charged" with its marching orders. When completed, teams should be disbanded or placed on hiatus. Since most organizations have an ongoing need for sustaining or increasing cash levels, these teams may go into maintenance phases periodically (i.e., maintaining levels) as new goals and team members are reconstituted.

[Editor’s Note: For related information see The Five Point Plan for A/R Management, A/R Management and Physician Practice Management sections of our web site. Also, The Patient Accounts Management Handbook (Aspen, 1997), Part IV, "Where Cash is King: The Collection Cycle," and Part V, " Telling the Whole Story: Managing the Process and Reporting," will provide added references to this topic. Both references are available on our web-site by "clicking" on the underlined wording in this paragraph.]

Perspectives And Commentary

Compliance: Keeping Resolutions

by Allan P. DeKaye, MBA, FHFMA

Having cris-crossed the country on a number of compliance awareness and training projects, it’s becoming evident, that the written words in compliance plans have tendencies to become "paper pyramids." Like the "house of cards," a sudden, unexpected movement can cause the house to collapse and fall down. With the rush to develop and implement compliance plans, most often to ensure adherence to settlement agreements, providers have drafted "codes of conduct," training programs, and computer edits and manual workflows to help them guard against fraud and abuse within their organizations. But there needs to be substance over form, and more than just paper compliance!

Even the government has not yet been able to ascertain if all of the compliance initiatives have resulted in a reduction in fraud and abuse, although their own audit shows that overall totals attributable to bad acts have been reduced. Since audits, by their very nature, are exception reports--and are not intended to tell you what you did well, most providers need to be actively assessing if their compliance programs are working. Providers should not run the risk of being surprised by a follow-up audit or new initiative. But given all the efforts (and there have been many), how would your organization fare on its next review? Here are some factors to consider in determining your compliance readiness.

Compliance Readiness Factors

  1. When was the last time a billing or registration staff raised a compliance question or concern to a supervisor? [Most compliance plans suggest that the chain of command be followed prior to hotline reporting.]

  2. Similarly, when was the last time a Billing or Registration Supervisor asked the staff if there were any compliance questions? [Since most compliance plans empower the "supervisor" to be the first echelon of inquiry.]

  3. Whether performing "pre- or post-bill" edits and reviews as part of the Medicare Three-Day (72 Hour) Rule, has anyone counted and/or reviewed any (or all) Medicare "debit/credit adjustments" that have been processed? [Debit/Credit adjustments to Medicare often remedies the inappropriate payment of an outpatient service that should have been bundled with its related inpatient stay.]

  4. Has anybody checked yesterday’s completed Medicare Secondary Payer (MSP) Questionnaires (whether electronically or manually recorded)? [MSP Questionnaires are required for hospital inpatient and outpatient services, and is the subject of a current federal compliance initiative]

  5. Has either Medical Records, Utilization Management or Quality Assurance departments studied facility performance on DRG coding for such "trigger points" as: Pneumonia, Septicemia, Nutritional Cases, etc. [These and other DRG’s can be measured internally and compared to national and regional norms--as well as against internal clinical pathways.]

The list could go on to study discharges vs. transfers, medical necessity, duplicate billing, credit balances, etc. And while there are internal and/or external costs to conducting these reviews, each facility needs to consider whether it can afford not to conduct some oversight to ensure that its compliance plan is more than a paper pyramid. A compliance review program, much like an Internal Audit program or schedule, can be developed (and funded). While every area need not be reviewed, the organization should be candidly and carefully reviewing its own "exposure" issues in order to reduce its risk in these areas.

[Editor’s Note: For more information also see our new videotape training program, Compliance and Awareness: Safeguarding Healthcare’s Cash Flow Cycle from Fraud and Abuse. The Patient Accounts Management Handbook (Aspen, 1997), Chapter 12, "Audit-Proofing" also contains additional discussion of this topic. Both references are available on our web-site by "clicking" on the underlined wording in this paragraph.]

: Ask The Expert

by Allan P. DeKaye, MBA, FHFMA

Q: We are having difficulties reconciling our cash postings. What can we do to get this under control?

A: The inability to reconcile cash postings should be a warning signal. First, cash posting reconciliation is an essential element of internal controls. Not only is it necessary to guard against any internal employee theft, but also as a safeguard to ensure proper posting to individual patient accounts.

Certain large payers may support electronic remittance posting of advices. You should be encouraging payers with whom you have large volumes to support electronic payments and remittance transactions. Similarly, this is a functionality you should have in your own patient accounts/practice management system.

If you are faced with system/payer limitations, why not work with your internal audit or general accounting departments to develop interim procedures to minimize risk and assure accuracy and completeness in account posting transactions.

Q: Collecting patient responsibilities portions of the co-payment or deductible seems to be be a difficult task. We don’t want to intimidate patients, but we do need to be paid. Any suggestions?

A: Many providers have moved aggressively into collecting at the time of service (notwithstanding ER/ED where EMTALA regulations need to be adhered to) for inpatient, outpatient and physician office visits.

With the growth in managed care, practices/providers are faced with an increasing investment in uncollected self-pay amounts, notably deductibles and copayments. But while most of these contracts not only transfer this responsibility to the patient, it is, in fact, a condition of participation for the provider to collect it.

Providers need to face facts, and bite the bullet. Just recount the last time you went to the doctors, and if you had some patient payment amount due; when did you pay it? Probably at the visit. We remind patients about their next appointment, why not remind them that they owe last visit's co-payment, too.

Q: What are patient logs? I hear about them but don’t know what they are all about. Is there a chapter I can refer to in your book, The Patient Accounts Management Handbook?

A: The area most associated with patient logs has been for Medicare, notably for the recording of Medicare bad debts. These logs were maintained to provide supporting documentation to justify the claiming of Medicare bad debt on the institutional cost report.

Most patient accounts/practice management systems should have the functionality you require. Generally, these logs are adaptations of "referral to collection" prelists or actual account transfers. You can differentiate Medicare from other payor bad debt using financial class and/or insurance plan codes.

While "The Patient Accounts Management Handbook" does not contain an illustration of the form/format you require, it does address some related issues about MSP (Medicare as Secondary Payer) in Chapter 10 (Kivimaki); Bad Debt estimates in Chapter 20 (Hallowell) as well as a discussion of cash flow and self-pay issues and reporting in Chapter 13 (Shapiro), Chapter 14 (Lund) and Chapter (Friia).

Q: Our A/R is climbing and it appears that staff follow-up may be a contributing factor. How can we organize this better ?

A: The question of assigning staff to A/R follow-up should take into account more than the simple, "how to's" and "how many staff." In most situations, I find that the provider not only has to decide how to organize the effort, but also formulate a strategy to managing receivables.

For example, the growth in A/R may be attributable to migration of young (aged) accounts into the older aging categories, not necessarily, an inability to work on the aged accounts. In fact, most providers concentrate considerable effort battling the aged A/R. However, there needs to be as much preventive action precluding accounts from aging in the first place. It is only with this pre-emptive action that working on the aged will produce any lasting and meaningful results.

Consider producing selected aged trial balances by financial class (and/or insurance plan) and patient type (inpatient, ambulatory surgery, ER, OPD, etc.), but sort the reports from "high" to "low" dollar balanced amounts. It is most effective to have dedicated follow-up staff working open accounts in this high to low sequence.

For most effective results, select a "high $" threshold for inpatient and all types of outpatient accounts, and slice the trial balance across patient types starting at the highest $ level, while choosing the insurance carriers with the greatest propensity to pay. Of course, staff must effectively "work" each open account--that is securing payment, promise to pay, taking the appropriate allowance, and/or transferring the account to collection.

To maximize the follow-up effort, you should be allocating only the minimum staff necessary to the billing function. Too many "billers;" then not enough electronic billing, cumbersome secondary procedures, and other tasks that should be re-worked. Trying to split the day between billing and follow-up usually short-changes the follow-up effort. Also, too much effort on billing tasks is usually an indicator that a provider is not easily generating "clean claims."

The Contributor's Corner

Outsourcing: Legal Considerations

by Mark L. Sussman, Esq., Jackson, Lewis, Schnitzler & Krupman, 1000 Woodbury Road, Woodbury, NY 11797, Tel: (516) 364-0404

Editor’s Note: On February 3, 1999, I had the pleasure of sharing the podium with Mr. Sussman at the Metropolitan New York HFMA Chapter’s Annual Institute’s panel discussion on "Outsourcing." While my portion of the program focused on operational and financial considerations and decision-making, Mr. Sussman addressed a number federal and state regulations that pertain to "Outsourcing" agreements.

Mr. Sussman’s remarks were very informative, and I suggested the "Q & A" format that follows would be of interest to our readership. Mr. Sussman’s firm specializes in workplace law. Readers are reminded that the material presented is informational in nature, and not legal advice. The advice of competent legal counsel should be sought where indicated. (Allan P. DeKaye)

Q: In a non-union environment, can the provider assume that outsourcing is permitted?

A: Generally, yes. Employment is presumed to be at-will in New York, meaning it is terminable at any time by either party. Thus, the decision to outsource and utilize different employees or another organization to perform the work is relatively unfettered. Liability may exist, however, if the employer has made verbal or written guarantees of employment to the individuals laid off by virtue of the outsourcing.

Q: What should the provider look for in a union agreement in determining if outsourcing is allowed or prohibited?

A: Often the parties anticipate outsourcing or subcontracting as an issue resulting in its incorporation in a separate article in the contract. Other areas for review are the management’s rights clause (which often seeks to preserve an employer’s right to subcontract/outsource), layoff provisions and clauses regarding work hours which may guarantee work for bargaining unit employees. If the contract is silent on the issue of outsourcing, most arbitrators consider a variety of factors in determining whether outsourcing is permitted. Those factors include, past practice, justification, (for example, emergencies,) the effect on the union bargaining unit, the effect on employees and a variety of other factors.

Q: Can you specify the federal and/or state laws/regulations that also need to be considered?

A: If employees are represented by a union, certainly the National Labor Relations Act will govern an employer’s duty to bargain over both the decision and the effects of outsourcing. With or without a collective bargaining agreement, the Workers’ Adjustment and Retraining Act ("WARN") may place notice requirements upon an employer if a company has 100 or more employees and the outsourcing results in either a "plant closing" or mass layoff as those terms are defined by WARN. Generally, a plant closing requires a permanent or temporary shutdown of a single site of employment resulting in an employment loss at the single site during any thirty-day period for 50 or more employees. A mass layoff is basically defined as an employment loss at a single site of employment or operating unit thereof during any thirty-day period for at least 50 employees (if they comprise at least one-third of the workforce at the single site) or an employment loss for at least 500 employees. This is a federal law. Many states have adopted their own "plant closing" laws. To date, New York has not.

Q: Some outsourcing agreements will result in a loss of jobs. How does this impact the outsourcing decision?

A: Any decision which will result in job loss may cause the now former employees to seek recovery under a multitude of local, state and federal discrimination laws. The provider may wish to review its decision to outsource and its impact to guard against a disproportionate effect on employees who fall within protected categories under these laws. Unless justified by bonafide business reasons, decisions with such impact could create an avenue for allegations of unlawful discrimination.

To protect against post-layoff allegations, providers should consider acquiring separation agreements which pay laid-off employees good and sufficient consideration in exchange for a waiver of discrimination claims and other potential claims under any federal, state or local law.

Q: What other advice would you recommend to a provider considering an outsourcing decision?

A: Outsourcing is not merely a financial decision requiring comparison between the cost of continuing to perform the work versus sending it to another company. As mentioned above, there are many considerations via collective bargaining agreements and the potential for litigation which must be reviewed. Moreover, a provider must consider the employee relations aspect of such a move. Job security is a major employee concern. Outsourcing may cause remaining employees to become less confident about their own job security and pursue avenues (including unionization) which they perceive may better protect them from subsequent outsourcing decisions. Outsourcing may also cause turnover as remaining employees seek employment where they perceive layoffs are less likely. This issue cannot be ignored as part of the decision process.

Home Health Care Update

by Andrew B. Shulman, Holtz Rubenstein & Co., LLP, (formerly Carpenter & Onorato, PC)

0319004b.gif (1033 bytes) Oasis Update

After at least three weeks of confusion caused by HCFA’s issuance of prior notices giving conflicting information, HCFA has suspended all Oasis requirements. However, certified agencies are still welcome to transmit test data to the Oasis system, even thought HHA’s are not required to encode and transmit data. Essentially the delay gives the home care industry the opportunity to have meaningful input into exactly how the data collection effort should be effected. In addition, any threat to privacy and quality patient care posed by Oasis needs to be immediately addressed.

0319004b.gif (1033 bytes) IPS Update (for first half of 1999 certified operations)

Data compiled by Medicare intermediaries indicates a strong continued push to lower utilization and per beneficiary expenditures. Average visits per patient have dropped almost 50% from 72 to 37, while per beneficiary spending went from over $4,600 (average) nationwide to approximately $2,500 (average). In addition, Medicare has spent about $26 billion less in the first half of FY ‘99 than it did in the first half of FY ‘98.

Once again, reduced payment rates and restrained update factors mandated by the Balanced Budget Act of 1999, along with increased compliance efforts with Medicare payment rules related to preventing fraud and abuse, have contributed to the slowdown.

0319004b.gif (1033 bytes) IPS Relief

HCFA has recently rescinded sequential billing requirements which caused a significant increase in the processing time for Medicare claims. In addition, regional home health intermediaries will automatically approve of a minimum 12-month extended repayment schedule for excess IPS payments.

However, effective for services on or after July 1, 1999, home health agencies must report all home visits in 15-minute increments on the home health claim form. At a time when home health agencies are in the process of implementing Y2K compliance plans, it would appear that the timing of this requirement is most inopportune.

For more information about our services, or Strategic Alliance Partners, please write to us at: Adkcmpa@aol.com or DKConsult1@aol.com

Copyright 2011 DEKAYE Consulting, Inc.. All Rights Reserved.
No part of this web site, or the contents, and images contained herein may be used or reproduced
in any manner whatsoever without the prior written permission of DEKAYE Consulting, Inc.

D E K A Y E Consulting, Inc.
231 Oakview Avenue, Oceanside, NY 11572  Phone: (516) 678-2754   Fax: (516) 825-4458
URL: http://www.dekaye.com E-Mail: Adkcmpa@aol.com or DKConsult1@aol.com