April 2007

Where To Turn Next?

If you have worked in the medical industry for more than a day or have been on the receiving end of health care, you probably know by now that hospitals have flunked their financial physical, and it’s not entirely their fault.

Who do hospitals turn to for their financial well being and care? History has shown they generally rely on insurance companies, patients and the government. Patients, for the most part, have limited resources and struggle to somehow find ways to pay all or at least a portion of their healthcare. Some patients are fortunate enough to have ready reserves to pay for healthcare. Sadly, many are forced into equity loans on their homes, on their cars and other assets once ear marked for retirement.

Vendors who provide equipment, supplies, and medicine are also caught in the crunch. Bids for services and products are ultra competitive and have suppliers tripping over each other to win the contract. But winning a multi year agreement, for example, does not mean you will retain the client or that the initially negotiated prices will last for the duration of the contract. Hospitals look for every dime they can save and have contract specialists on board for that very purpose. They often turn to the vendor mid-contract to re-negotiate lower prices, which in turn causes issues with manufacturers.

We know that close to two trillion dollars a year is spent on medical care. So who has all the money? The answer is much easier that one would think. Just look at the financial portfolio of some of the larger health insurance companies. Then look into many of the retirement fund investments and where the fund managers invest the retirement funds, insurance companies.

Making money isn’t a bad thing. However stock piling billions and billions of dollars just so dividends are attractive for investors is. Especially when done at the expense of others- such as providers. Plus paying out multi-million dollar year-end bonuses to several high executives is equally offensive to policy holders. Insurance companies have made a negative impact on our economy by not doing their job. Their customer, the patient (you know the one who often pays the premium) and their health care provider are being cheated more and more every year.

The majority of hospitals don’t have the resources to hire additional accounting staff to chase down underpayments of insurance companies, so for the most part they end up accepting what they are paid.

More and more hospitals are turning to outside auditing firms like Health Check to counter the insurance companies’ behavior. Our sole purpose is to recover underpayments of managed care payors. Please visit our website for additional information about our services as well as other articles of interest related to health care reimbursement.


Hospitals and Payors Hindered by Claim Inefficiencies

Even today, hospitals that have automated claims submissions usually have to submit them more than once, according to a nationwide survey of hospital and health plan executives. The PNC Health Care Industry Study was conducted by the independent research firm, Chadwick Martin Bailey, based in Boston, Massachusetts. The national telephone survey was conducted between December 2006 and February 2007 with 200 health care executives and 1,000 consumers. Paula Fryland, executive vice president and manager of PNC's national healthcare group, said that although 86 percent of hospitals reported submitting claims electronically, most have to be resubmitted at least once.

"Hospitals that do not submit claims electronically have to resubmit them 11 times or more on average, compared to three times or less for those that have adopted electronic methods," she said. When asked what the biggest barrier to IT adoption in claims processing might be, Fryland said, "For both hospital and insurance executives, the most often cited barrier identified was the rate of adoption on the insurer side. Additionally, sixty percent of insurance executives and thirty-eight percent of hospital executives said that the presence of outdated/inefficient technology for patient record- keeping was a barrier to adoption."

"While it is possible that consumers do not fully appreciate the cost and complexity of healthcare administration, hospital and health plan executives identified significant inefficiencies in the business office, describing a medical claims, billing, payment, and recovery process that is error prone, redundant and costly," Fryland said.

Additional survey results include:

• Hospital executives reported that one in five claims submitted, on average, is delayed, underpaid, or denied and 96 percent of all claims must be submitted more than once.
• Hospitals that do not use electronic billing or claims submission processes reported, on average, resubmitting a claim 11 times or more, or nearly four times more than those hospitals using electronic processes.
• Insurance executives surveyed said they go back to hospitals two times, on average, to get all the information needed to pay a claim.
• Nearly a quarter of consumers reported having had a legitimate claim
  denied or underpaid by their health plan; one in five ultimately paid out of their own pocket.
• When asked how much could be saved annually if they had a more efficient claims, billing, payment, and collection processes, one-third of hospital and health plan executives both said their organizations could save at least $1 million a year.
• When asked where the cost savings and would be applied, the area most often cited by hospital executives was "reinvested in improving patient care."
  
  Click here for more survey highlights.

Health Check Continues To Grow

During the past quarter, Health Check has added new clients in Virginia, Alabama, Texas, Nevada, Illinois, and New Jersey. We are proud of our clients and of the work that we do to assist them. To learn more about our services, our success, and where we are currently working to recover lost managed care revenue, please visit our website.


CMS Clarifies NPI Implementation

On April 2, the Acting Administrator of the Centers for Medicare & Medicaid Services (CMS) announced that "covered entities that have been making a good faith effort to comply with the NPI provisions may, for up to 12 months, implement contingency plans that could include accepting legacy provider numbers on HIPAA transactions in order to maintain operations and cash flows."

This announcement by Leslie Norwalk may be music to the ears of health plans that have failed to implement new standards replacing all "legacy" identifiers. "Good faith efforts" will be evaluated by CMS on an individual basis.

On the other hand, the impact to providers, most of which have obtained their new NPIs and plan to begin using them, may be significant. Hospitals and other providers will have to identify those payors that are not prepared to accept NPIs on the May 23, 2007 deadline and then determine how to continue submitting the legacy identifier to that payor, while beginning to submit their NPI to the compliant payors.
For more information on this issue, visit the CMS website at http://www.cms.gov.


Medicare Announces Rise in 2008 Medicare Advantage Payments

The Centers for Medicare & Medicaid Services (CMS) announced that payments to companies providing Medicare Advantage plans will rise approximately 3.5% in 2008. While this increase is greater than many had expected, it is lower than the estimated 2008 Medicare increase of 4.3%. Currently, approximately 8 million of the 43 million Medicare enrollees are members of Medicare Advantage Plans, or about 18.6%.


Universal Health Coverage: Easier Said Than Done

Of the 300 million people in the U.S., more than 15% don't have health insurance. For years, many peoples’ answer has been "universal health coverage". While giving everyone access to regular medical care seems like a no-brainer, figuring out how to pay for all that care, without taxes going through the roof, isn’t so easy.

What are lawmakers saying about universal health insurance? Starting in July 2007, all Massachusetts state residents will be required to purchase health insurance or face a penalty. In addition, in more than a dozen states around the U.S., legislators now are actively grappling with universal health coverage schemes.

The notion of universal health coverage seems to be garnering support from both sides of the aisle. Now even conservatives are giving universal health coverage some thought. Massachusetts passed its plan under a Republican governor. Earlier this year, Governor Schwarzenegger of California revealed his plan that proposed to cover even illegal immigrants. It's not just the coasts. States like Michigan, North Carolina and Ohio have commissioned outside specialists to crack the code on the dollars and cents.

What to do about the 45 million Americans without health insurance has bewildered both the Bush administration, whose proposal for "health savings accounts" seems to have fizzled, and Bill (Hillary) Clinton, whose broad plan for healthcare changes fell flat.

As effective as some of these ideas sound, such as the “buy insurance or else” approach, these proposals are complex and, in some cases, still unfinished. For instance, many of these plans have not yet identified who will define “affordable”. Perhaps a new government agency will serve as the liaison between the government, policyholders, and private insurance companies.

Bottom line on universal health coverage...easier said than done.


Defend your Facility against Refund Demands

Health Check doesn't just audit closed managed care accounts for underpayment- we also help our clients defend themselves against large refund demands from their payors. If your facility has received such a request, and you are not sure if you have been overpaid, the first thing you should do is contact the payor in writing and request that no take backs be performed to recover the requested amounts. After that, conduct a careful audit of the accounts in question, as the payor likely made at least some mistakes. Go back to the payor with your findings and you should be able to retain at least a portion of the money being requested.

For assistance handling a refund request, contact Health Check about performing an audit of the payor's request and the affected accounts. In our experience, a majority of the requested refunds are inaccurate and can be dismissed. In one case, we successfully reduced our client's refund by 97%!

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