March 2007
Greetings!
Thank you for all your involvement this year. The Greater St Louis Chapter is performing quite well this year based on metrics used by National. Outside of the fancy scorecards and metrics, I believe the Chapter is performing at an even higher level. A recent program on Charity Care and the Uninsured had great attendance and involvement. The panelists were very gracious with specific information that everyone could utilize at their organizations. A National Speaker is coming in for a late February program. The entire Chapter leadership is meeting in February to plan for next year. The Illinois incorporation was a unanimous approval with over 20% of the membership voting. Coding classes are running at maximum levels. As you can see, our Chapter is servicing all levels.
HFMA is about education and networking. We are delivering at a high level on both of these points.
As always, thank you to everyone who participates because without you we cease to exist. If you have not participated to date, please get involved. You will increase the value of your membership.
Sincerely,
Jim Hill
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FOLLMER AWARDS
Bronze: Dave Poteet, Marc Scher
Silver: Linda Costlow, Paul Doelling
Gold: Mark Melierre, Karen Everhardt, Lisa Haug
We also had 2 certifications: Rebeca Phillips and Tami Knobbe
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MEDICARE PAY-FOR-PERFORMANCE
LEADS TO MODEST IMPROVEMENTS
in care, according to a study published in the New England Journal of Medicine. The study runs counter to previously released studies that have shown that the Medicare pay-for-performance program does not predict quality of care. The latest research compared two years of results at 207 hospitals taking part in CMS's pilot program with those of 406 hospitals not receiving reimbursements for quality care. "Pay-for-performance hospitals showed greater improvement in all composite measures of quality, including measures of care for heart failure, acute myocardial infarction and pneumonia and a composite of 10 measures," write researchers. "After adjustments were made for differences in baseline performance and other hospital characteristics, pay for performance was associated with improvements ranging from 2.6 to 4.1 [percent] over the two-year period."
The results of the study indicate as compared with the control group, pay-for-performance hospitals showed greater improvement in all composite measures of quality, including measures of care for heart failure, acute myocardial infarction, and pneumonia and a composite of 10 measures. Baseline performance was inversely associated with improvement; in pay-for-performance hospitals, the improvement in the composite of all 10 measures was 16.1% for hospitals in the lowest quintile of baseline performance and 1.9% for those in the highest quintile (P<0.001). After adjustments were made for differences in baseline performance and other hospital characteristics, pay for performance was associated with improvements ranging from 2.6 to 4.1% over the 2-year period.
Conclusions Hospitals engaged in both public reporting and pay for performance achieved modestly greater improvements in quality than did hospitals engaged only in public reporting. Additional research is required to determine whether different incentives would stimulate more improvement and whether the benefits of these programs outweigh their costs.
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Bush's 2008 Budget Proposes
to Cut Medicare and Medicaid
President Bush's budget proposal for fiscal year 2008 released yesterday calls for $70 billion in cuts to Medicare and Medicaid over five years.
The $2.9 trillion proposal, which must be approved by Congress to take effect, aims to balance the budget by 2012 through reform to many entitlement programs, while increasing spending for the Iraq War and limiting tax cuts to the wealthy.
According to Department of Health and Human Services Secretary Michael Leavitt, the president's budget includes $700 billion for HHS spending and "reflects fiscally responsible steps to reform and modernize the Medicare program."
Leavitt said the budget includes legislative and administrative proposals to increase government efficiency in paying for services while fostering competition and promoting beneficiary involvement in healthcare decisions.
Rich Umbdenstock, president of the American Hospital Association, said AHA "strongly opposes" the president's provisions.
"[The] budget is devastating news for children, seniors and the disabled who depend on the Medicare and Medicaid programs. The proposed budget includes a tidal wave of cuts that will inflict real damage on hospitals' ability to care for these patients," Umbdenstock said. "America needs policies that shore up these programs, not damage them further."
Umbdenstock said Medicare and Medicaid payments to hospitals are currently "well below" the cost of providing care to patients. "Today's budget does nothing to address these underlying challenges," Umbdenstock said.
Cecil B. Wilson, MD, board chair for the American Medical Association, said physicians face a 20 percent increase in practice costs over the next eight years and the president's proposed 40 percent cuts to physician reimbursement could force some doctors to opt out of Medicare.
Wilson also said that the proposed cuts to the State Children's Health Insurance Program would "tie states' hands by narrowly focusing the program as they work on innovative ways to provide health care coverage for more of the uninsured."
Sen. Judd Gregg (R-NH), ranking member of the Senate Budget Committee, said "The only way that you're going to address this problem is if you look at the programs which are in place, and try to make them affordable for our children at the same time as we allow them to continue to be strong programs for those who are retired."
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The Top Concern of Hospital Chief Executives
was Financial Challenges
In the fifth annual survey by the American College of Health Care Executives, CEOs ranked their top three concerns:
| Financial challenges |
72% |
| Physician and Hospital Relations |
40% |
| Care for the Uninsured |
37% |
| Personnel Shortages |
30% |
| Quality |
29% |
| Patient Safety |
27% |
| Government Mandates |
23% |
| Patient Satisfaction |
16% |
| Capacity |
11% |
A new report finds that consumers who use credit cards for medical costs have higher levels of credit card debt than those who do not. The study from the nonpartisan public-policy research group Demos and The Access Project (affiliated with the Heller School at Brandeis University) found that 29 percent of low- and middle-income households with credit card debt cite medical expenses as a contributing factor to their debt. This group of consumers, which the authors refer to as the “medically indebted,” had an average credit card debt of $11,623 – significantly higher than the $7,964 average debt in households without medical costs on their credit cards. The problem was particularly acute among “medically indebted” low- and middle-income Americans aged 18-34 years, who had an average credit card debt of $13,303 – 79 percent higher than the average for the same age group without medical debt. The full report is available online – Borrowing to Stay Healthy; Demos/Access Project Press Release, January 16, 2007).
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HFMA'S Panel Discussion on Charity Care
The most recent HFMA educational seminar was the Panel Discussion on Charity Care, held on January 24, at the They Hyland Center at St. Anthony’s Medical Center. Bill Hamm, Finance Manager at St. Louis Children’s Hospital, moderated the panel consisting of:
| Vivian Boyd |
Director of Patient Financial Services at St. Louis Children’s Hospital |
| Alyce Lanxon |
Assistant Director of Reimbursement, Practice Management Operations at SLUCare |
| Betty Llewellyn |
Director of Customer Service and Self Pay Collections at SSM Healthcare |
| John McGuire |
Executive Vice President and Chief Financial Officer at St. Anthony’s Medical Center |
| Mike Marshall |
Vice President of Finance and Chief Financial Officer at Anderson Hospital in Maryville Illinois |
The panel discussion is a timely presentation since the growing uninsured population has boosted the levels of bad debt and charity care to the point of making a significant dent in revenues. Nearly 45 million Americans are without health insurance. Those lacking coverage are disproportionately low-income and thus more financially vulnerable to the high cost of care.
Each panel member presented a short description of their organization’s experience with the uninsured population. Questions from the audience were answered by the panel. Some of the questions were:
1. When accounts fall through the cracks and self pay accounts are transferred to bad debt, do your collection agencies provide patients with the option to apply for charity coverage?
2. What efforts are being made, or what policies and procedure support the upfront collections of copayments and deductibles at various points of entry into a facility?
3. If you do provide discounts to the uninsured, have you received any negative feedback / repercussions from insurance companies? Do you anticipate receiving any, and if so, how do you plan on responding?
4. Would you share your charity care sliding scale discount percentages based on the poverty levels?
5. Do you have a maximum cost limit that if exceeded, the uninsured patient would receive free care in excess of that amount? If so, how do you keep track of it?
6. Do you have a self pay fee schedule? If so, would you share how it was determined?
7. In the Provena Covenant case, it states that the Hospital Charity Care policy needs to be abided by all third-party providers that contract with the Hospital for other services. How successful have you been in getting your contractors, and physician groups, to accept your Charity Care policy?
8. The Provena Covenant case also states that Charity should be not only determined by income but also by the dollar amount of charges so that it is in line with the Hospital costs. If someone doesn’t receive 100% Charity discount, do any of you discount for charity care based on charges to be in line with cost? If so, what methodology is used?
9. The Illinois Attorney General has proposed to require Hospitals to hold all uninsured billing for 60 days after the later of date of treatment or date of discharge to give a patient an opportunity to apply for Charity Care. Is this being practiced at your facility?
10. What documentation do you require to determine indigency in regards to Charity Care and is it the same for all payors? My understanding from the OIG’s FAQ #11 is that “for indigent patients who are not Medicare patients, the Medicare program does not prescribe any specific rules for providers to make indigence determinations. Rather, the hospital is permitted to use its own business judgment in determining whether or not a non-Medicare patient is indigent and therefore entitled to a discount to its own indigency policy.
11. Over the years bad debt has been increasing for many reasons (i.e. increasing high deductibles). Are you requesting up front payment of deductibles now that the deductibles are as high as they are? Are you letting the insurance companies know that this has increased bad debt accounts?
12. Have you changed the information you require in order to make a decision about charity? More information, less information than 2 years ago?
13. What steps have you taken over the past year or two to try and decrease the amount of bad debt and charity they are seeing
14. Are you doing anything to make your congressman aware (either at a State or national level) about the growth of the uninsured at our local level? I believe that this growth has been occurring longer on the East and West coast than it has been in Missouri and Illinois.
15. How do you calculate charity care for your financial statements? Do your financial statements represent an estimate (in order to reflect timing differences associated with when the actual write-offs occur)? Or do they represent actual write-offs only?
16. National HFMA has recently come out with some guidelines on how charity is recognized and accounted for (see the following taken from a recent e-mail sent out by HFMA) — some of which are not “generally accepted accounting principles” as of yet. Do you intend on adopting them or what is your position on them?
HFMA’s Statement 15
This statement addresses the criteria for and scope of charity care policies, the valuation, recording, and disclosure of charity care and bad debt, and the classification of receipts relating to charity care. Important points of the guidance include:
• Charity care disclosures should be based on cost, not charges.
• Revenue for patient services should be recognized only when it meets GAAP criteria, which include the existence of a payment agreement between the provider and the patient and reasonably assured collectibility.
• Bad debt should not be reported as charity care or community benefit.
• Government shortfalls should not be included as a part of charity care.
• It is appropriate to report payment shortfalls in Medicaid or similar government programs for the indigent as a community benefit.
• Individual facilities must determine whether Medicare shortfalls are material to the facility's financial status and mission. If so, they should be separately reported, and may be included in the community benefits section.
• The patient's eligibility for charity care, including the timing of that eligibility, is based on the facility's charity care policy.
• Charity care eligibility decisions can be made at any time during the revenue cycle as pertinent information becomes available.
• Charity care policies should address how determinations should be made in the absence of financial information provided by the patient.
The urgency to report uncompensated care and to distinguish between charity care and bad debt in a clear and comparable way is of great importance as the amount of un-reimbursed care grows. The special circumstances surrounding healthcare services given by healthcare facilities in the business of caring, particularly for emergency care, makes it an even greater challenge. With current reporting practices having been inconsistent and contributing to the confusion about the amount of charity care provided and bad debt incurred, Statement 15 seeks to provide that much needed clarity.
Paul Doelling
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Some Providers Are Ensuring Payment
by Issuing Credit Cards to Patients
Providers in Texas and North Carolina are among those who have joined with financial services companies to issue credit cards to pay for medical expenses, such as Citibank’s Citi Health Card, reports The Boston Globe. Patients who agree to pay down the debt quickly aren’t charged interest, but those who can’t make the payments incur interest charges in excess of 20%. Tenet Healthcare Corporation is trying a different tack in offering employees with medical debt a line of credit to pay it off. Copayments are also automatically deducted from employees’ paychecks. Yet a recent survey by the Access Project and Demos found that many lower-income consumers who carry medical debt on credit cards fall even deeper into debt because of high interest rates. “The healthcare safety net is made of plastic--it’s called ‘credit cards’ for many people,” Mark Rukavina, director of Access Project, told the Globe. “It’s a pretty frightening prospect.”
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CMS Awards $8.7 Million in
Pay for Performance Bonuses
With the second year of a three-year Medicare pay-for-performance demonstration project completed, the Centers for Medicare and Medicaid Services will award bonuses of $8.7 million to 115 hospitals that received the highest scores on 30 quality measures, reports The New York Times. Although all 266 participating hospitals have improved their quality of care--reducing heart attack deaths by 1,300, for example--some of the hospitals questioned whether the bonuses were rewarding the correct behavior.
Some said the financial incentives should recognize superior patient outcomes rather than processes of care. Others worried that the designated quality measures lagged research showing that newer treatments were better for patients. Community Health Partners in Lorain, Ohio, said the bonus paid for the cost of making quality improvements but that public reporting of the hospital’s scores were more of an incentive to perform well than the hope of receiving a financial reward. Several gave credit for their stellar performance to the open exchange of information among the hospitals. CMS officials said they were encouraged by the hospitals’ results and were evaluating the precise type of financial bonuses and quality measures that would be used if Medicare eventually links payments to quality of performance.
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Legal Lines:
NEW REGULATIONS AND FORMS PROMULGATED BY
MISSOURI DIVISION OF WORKERS COMPENSATION
Gerald J. Bamberger, Attorney at Law
It had been the position of the Missouri Division of Workers Compensation to reject the filing of medical fee disputes by health care providers after the underlying claim of the injured worker had been concluded, either by adjudication, settlement or dismissal on the grounds that the Division no longer had jurisdiction over any outstanding medical bills incurred by the worker. This prompted Cox Health Systems of Springfield to file suit for mandamus against the Division claiming a right to file medical fee disputes after the conclusion of the workers claim. On March 9, 2006 the Missouri Court of Appeals, Western District, sustained Cox=s claim holding that the Division did have jurisdiction in such cases and ordered it to accept the filing of such medical fee disputes. Cox Health Systems v. Division of Workers Compensation of the Department of Labor and Industrial Relations, 190 S.W.3d 623.
This ruling prompted the Division of Workers Compensation to revise its regulations and procedural forms pertaining to medical fee disputes. The regulations, 8CSR 50-2.030 may be downloaded from www.sos.mo.gov/adrules/moreg/current/2006/v31n18.asp and the forms from www.dolir.mo.gov/wc/form/FormHealthCarProd.htm The new regulations and forms, in the writer=s opinion, give health care providers the necessary procedure to obtain payment of most charges for medical services incurred by persons injured in work related accidents where the employer is insured.
First, one must differentiate between the two types of medical fee disputes as defined in the regulations. The first type is designated an Application For Additional Reimbursement Of Medical Fees (formWC-MD-02). This is only applicable when the injury is admittedly work related but the employer/insurer disputes the amount of the charge for the services by the health care provider. The employer/insurer shall notify the health care provider in writing that the medical charge is being disputed and shall explain the basis for the dispute for the remaining balance. The employer/insurer may make a partial payment to the health care provider which may be accepted without prejudice to right of the health care provider to file the medical fee dispute. The regulations require the health care provider to contact the employer/insurer and attempt to resolve the dispute before it can file the medical fee dispute which is filed only against the employer/insurer. If the negotiation is unsuccessful and more than ninety (90) days have elapsed since the date of the first billing, the health care provider may file the Application For Payment of Additional Reimbursement of Medical Fees which must be filed by a licensed attorney on behalf of the health care provider. If not settled, an Administrative Law Judge will determine the proper amount of the charge by the health care provider and order payment directly to it of that amount.
The second type of medical fee dispute, which is the most common one, is an Application For Direct Payment (form WC-MD-01). This is where the employer/insurer has authorized treatment but no payment has been made or the employer/insurer disputes the claim of the worker, which may be on the grounds that the injury was not work related, the extent of the injury, the amount of the compensation claimed and the liability for the cost of treatment. In such cases the medical fee dispute is made a part of the underlying workers compensation claim where all parties, including the worker, are represented by attorneys. These medical fee disputes also cannot be filed until 90 days after the initial billing to the employer/insurer but no prior attempt to negotiate a settlement with the employer/insurer is required. If the matter is not settled, ultimately an Administrative Law Judge will determine if the injury was work related and the employer liable for the cost of medical services and if so will make an award to the worker and determine the proper amount of the charge by the health care provider. But Section 287.140.6, Revised Statutes of Missouri, states the Judge AMAY@ order payment of that sum directly to the health care provider, rather than ASHALL.@ But the writer has not encountered any case where a ruling by a Judge does not insure payment of the award to the health care provider.
It must also be noted that Section 287.140.13 RSMo. prohibits health care providers from billing the worker/patient for its charges where it has been notified of the pendency of a claim for compensation, except where the services were specifically requested by the worker. The penalties are actual damages, up to $1000 in additional damages and attorney=s fees. In almost all instances it is the workers position that the employer/insurer is responsible for payment of the charges and the writer finds it advisable to pursue collection only through the workers compensation process first. If it is determined that the injury was not compensable and the employer/insurer not liable for payment of the medical services, the five year statute of limitation on the health care providers claim against the worker for payment is tolled from the date the medical fee dispute is filed.
When a healthcare provider learns that its claim for payment is disputed after billing the insurer, it should immediately file with the Division a Request By A Health Care Provider For Case Status Information To File A Medical Fee Dispute Application (form WC-194). The Division will return the form to the health care provider with the necessary information on the injury number, insurance carrier and case status for proper filing of the medical fee dispute. Then the health care provider will be ready to file the medical fee dispute immediately after the required 90 waiting period.
The Application For Direct Payment form requests the healthcare provider to state Athe name and title of the person who authorized services@ and Athe date authorization was given.@ However, regulation 8CSR50-2-239(2)(B) 4 adds the words Aif known.@ But since authorization for treatment by the employer/insurer is an essential element of the healthcare providers claim, it is strongly recommended that at the time of admission or first treatment the worker be asked for the name and title of the person at his or her employer who knew of the injury and directed that the worker obtain treatment for the injury. At least the health care provider should obtain the name of the workers superior who knows of the injury and presumably directed treatment. This would probably enable the health care provider to successfully defend a Request Forward On Undisputed Facts (form WC-201) filed by the employer/insurer for dismissal of the medical fee dispute on the grounds that the services were not authorized.
Except for claims involving $1000 or less the medical fee dispute will be under the same rules and procedures in all workers compensation claims with settings for evidentiary hearing, mediation and trial. If under $1000 an Application For Administrative Ruling (form WC-214) can be filed and the Judge will rule on the documents presented without a formal hearing.ing.
What is important is that health care providers establish a procedure for promptly identifying admissions where the patient claims the injury was work related, obtaining information from the patient as to the date, time and place of the accident, the name and address of the employer, the person responsible for workers compensation claims at the employer, the name and title of the workers immediate superior, and the name of the insurer, if known. Then the health care provider should timely bill the employer/insurer and where payment is disputed, proceed to file the Request for Case Status and then forward the claim to its attorney for filing of the medical fee dispute.
Legal Line October 19, 20066
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