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Provider Bills: The Wild World of Hospital Chargemasters Stacy M. Borans, MD Chief Medical Officer Advanced Medical Strategies.

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Presentation on theme: "Provider Bills: The Wild World of Hospital Chargemasters Stacy M. Borans, MD Chief Medical Officer Advanced Medical Strategies."— Presentation transcript:

1 Provider Bills: The Wild World of Hospital Chargemasters Stacy M. Borans, MD Chief Medical Officer Advanced Medical Strategies

2 Learning Objectives Understand how to assess provider bills for unbundled charges, inflated charges, billing errors, level of care issues, and coding errors. Understand how to assess provider bills for unbundled charges, inflated charges, billing errors, level of care issues, and coding errors. Be aware of the bill adjudication options. Be aware of the bill adjudication options. Know when to refer a bill for an audit. Know when to refer a bill for an audit. Know the differences among the various audits available. Know the differences among the various audits available. Understand the role of the Stop Loss Policy/Plan Document in a Provider Bill Audit. Understand the role of the Stop Loss Policy/Plan Document in a Provider Bill Audit.

3 Provider Bills: Golden Rule If you’ve seen one claim, you’ve seen one claim.

4 Provider Bills: The Basics Required Elements for Evaluating Claims: UB 92 or HCFA 1500 UB 92 or HCFA 1500 Itemized Claim Itemized Claim Stop Loss Policy/Plan Document Language Stop Loss Policy/Plan Document Language Operative Report if Procedure Completed Operative Report if Procedure Completed Spinal Fusion—Implants Spinal Fusion—Implants Gastric Bypass Gastric Bypass Cochlear Implants Cochlear Implants

5 Provider Bills: Medical Necessity Critical Care Levels easiest to assess Critical Care Levels easiest to assess Ventilator without tracheostomy Ventilator without tracheostomy Blood Pressure support drugs-Dopamine, epinephrine, etc. Blood Pressure support drugs-Dopamine, epinephrine, etc. Invasive lines-Swan Ganz, arterial lines Invasive lines-Swan Ganz, arterial lines Other levels of care are more difficult to assess Other levels of care are more difficult to assess Telemetry-Monitored Setting Telemetry-Monitored Setting Acute: Medical, Surgical or Rehab Acute: Medical, Surgical or Rehab Subacute: Medical or Rehab Subacute: Medical or Rehab Skilled Skilled

6 Provider Bills: Medical Necessity Be aware of potential experimental/investigational issues Be aware of potential experimental/investigational issues Gamma Globulin Gamma Globulin Avastin, Erbitux, Rituxan-Other Chemotherapeutic Agents Avastin, Erbitux, Rituxan-Other Chemotherapeutic Agents CellCept-primarily used to prevent rejection in transplant patients CellCept-primarily used to prevent rejection in transplant patients Epogen, Neupogen, Remicade and Growth Hormone Epogen, Neupogen, Remicade and Growth Hormone Always helpful to have a clinical opinion before reimbursing or denying the claim Always helpful to have a clinical opinion before reimbursing or denying the claim

7 Provider Bills: Infants

8 Indications for Nitric Oxide Use: Indications for Nitric Oxide Use: Infants >34 weeks gestation Infants >34 weeks gestation Hypoxic respiratory failure with pulmonary hypertension Hypoxic respiratory failure with pulmonary hypertension Conventional treatments have failed Conventional treatments have failed Should be performed in centers with ECMO capability Should be performed in centers with ECMO capability

9 Provider Bills: Infants NICU has multiple Levels of Care: NICU has multiple Levels of Care: Level 4 Cardiac ICU/ECMO Level 4 Cardiac ICU/ECMO Level 3 Neonatal ICU Level 3 Neonatal ICU Level 2 Transitional Nursery/Step Down Level 2 Transitional Nursery/Step Down Level 1 Well Baby Nursery Level 1 Well Baby Nursery

10 Provider Bills: Inflated Charges Case Study: Case Study: 53 year old female with past medical history significant for multilevel degenerative disc disease. Admitted to hospital for anterior discectomy and fusion. LOS 6 days LOS 6 days Total Billed Charges $235,000 Total Billed Charges $235,000 PPO discount 20% PPO discount 20%

11 Provider Bills: Inflated Charges Quant.Supply/ImplantsPrice Quant.Supply/ImplantsPrice 4 BONE DWL FZ 18X23 4012$66,000.00 2 BONE GRAFTON PUTTY 10C$12,962.50 2 TSRH3D PC CON ROD 6.35$3,430.00 1 TSRH3D CONN MED 837913$4,968.00 2 SCREW TSRH3D 637-635$4,344.00 2 SCREW TSRH3D 637-640$4,344.00 2 SCREW TSRH3D 837-735$4,344.00 2 BONE OSTEOPHIL RT 10CC$14,220.00 5 TSRH3D CONNECTR 6.35-S$24,840.00 6 TSRH3D LOCK SCRW 82812$3,963.00 2 INFUSE-MED 7510400$52,600.00 SUBTOTAL: $196,265.50 SUBTOTAL: $196,265.50

12 Provider Bills: Inflated Charges

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17 Potential Charge Issues: Potential Charge Issues: Implants/Devices greater than 50% of total billed charges Implants/Devices greater than 50% of total billed charges Daily Room Rates-ICU Bed Rate >$2,000/day, Med- Surg Bed Rate >$1,000/day Daily Room Rates-ICU Bed Rate >$2,000/day, Med- Surg Bed Rate >$1,000/day Dialysis-Monthly Charges greater than $7,000 or individual Dialysis Charges greater than $2,000 Dialysis-Monthly Charges greater than $7,000 or individual Dialysis Charges greater than $2,000 Erythropoietin (EPO)-Charges greater than $1,000 Erythropoietin (EPO)-Charges greater than $1,000 Individual Chemotherapy/Radiation Therapy Claims greater than $15,000 Individual Chemotherapy/Radiation Therapy Claims greater than $15,000

18 Provider Bills: Inflated Charges Hospital of The University of Pennsylvania Hospital of The University of Pennsylvania Philadelphia, Pennsylvania, 19104 Philadelphia, Pennsylvania, 19104 Hospital type: Voluntary Nonprofit Other Hospital type: Voluntary Nonprofit Other Data for the period ending: 6/30/2006 Data for the period ending: 6/30/2006

19 Hospital Charge Comparison ( http://www.hospitalvictims.com ) UPenn: UPenn: Hospital Mark-Up: 473% Hospital Mark-Up: 473% Cost to Charge Ratio: 0.21 Cost to Charge Ratio: 0.21 Total Costs to Hospital: $845,781,104 Total Costs to Hospital: $845,781,104 Total Charges to Patient: $3,997,318,578 Total Charges to Patient: $3,997,318,578 Johns Hopkins: Johns Hopkins: Hospital Mark-Up: 122% Hospital Mark-Up: 122% Cost to Charge Ratio: 0.82 Cost to Charge Ratio: 0.82 Total Costs to Hospital: $1,088,071,198 Total Costs to Hospital: $1,088,071,198 Total Charges to Patient: $1,327,547,538 Total Charges to Patient: $1,327,547,538

20 Provider Bills: Inflated Charges Mathematics 101: Inpatient Bills Mathematics 101: Inpatient Bills General rule of thumb to assess charges: Divide the total billed charges by the length of stay. This will give you the average billed charges/day. This will give you the average billed charges/day. Assess excessive charges in the context of level of care provided. Assess excessive charges in the context of level of care provided.

21 Provider Bills: Billing Errors Billing errors come in a variety of forms: Billing errors come in a variety of forms: Duplicate Charges Duplicate Charges Incorrect Quantities: Cochlear Implants Incorrect Quantities: Cochlear Implants Incorrect Pricing Incorrect Pricing Surgical Misadventures: unused and/or incorrectly billed hardware Surgical Misadventures: unused and/or incorrectly billed hardware 28 hour days for ventilator or respiratory care 28 hour days for ventilator or respiratory care Equipment used for multiple patients Equipment used for multiple patients

22 Provider Bills: Billing Errors

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26 Provider Bills: Unbundled Charges Tests and other services that are automatically performed as a panel, group or set, should be billed as a single service. Tests and other services that are automatically performed as a panel, group or set, should be billed as a single service. When a provider breaks these services out of the bundled group and bills them individually, the provider is deemed to be "unbundling." When a provider breaks these services out of the bundled group and bills them individually, the provider is deemed to be "unbundling."

27 Provider Bills: Unbundled Charges Daily Nursing Charges or daily ventilator charges in addition to room and board Daily Nursing Charges or daily ventilator charges in addition to room and board Lab drawing fees for blood tests Lab drawing fees for blood tests Airway clearance and oxygen in addition to ventilator charges Airway clearance and oxygen in addition to ventilator charges Chemistry Panel Charges plus individual electrolyte charges Chemistry Panel Charges plus individual electrolyte charges Solutions and mixture charges for IV medications Solutions and mixture charges for IV medications

28 Provider Bills: Unbundled Charges

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30 Provider Bills: Multiple Issues

31 Provider Bills: Adjudication Options Adjudicate claim with the PPO discount Adjudicate claim with the PPO discount Attempt negotiation with hospital… even if PPO discount is in effect Attempt negotiation with hospital… even if PPO discount is in effect Clinical Review if Medical Necessity Issues identified. Clinical Review if Medical Necessity Issues identified. Provider Bill Audit if excess charges/ billing errors identified. Provider Bill Audit if excess charges/ billing errors identified.

32 Policy Language ( Both Stop Loss and Plan Document ) Detailed UCR Language is to your advantage. Detailed UCR Language is to your advantage. Carve out drugs: 200% of AWP Carve out drugs: 200% of AWP Carve out Implants: Invoice plus a percentage Carve out Implants: Invoice plus a percentage Percentile at which charges will be covered for a geographic region—75 th, 85 th, 90 th Percentile at which charges will be covered for a geographic region—75 th, 85 th, 90 th Cite sources: Ingenix, Red Book, etc. Cite sources: Ingenix, Red Book, etc.

33 Policy Language ( Both Stop Loss and Plan Document ) Specific and Detailed Definitions are most helpful: Specific and Detailed Definitions are most helpful: Experimental/Investigational Language Experimental/Investigational Language UCR Language UCR Language Medical Necessity/Custodial Care Medical Necessity/Custodial Care Proactive Language is also helpful: Proactive Language is also helpful: 50% notices 50% notices Premium discounts for aggressive claim management Premium discounts for aggressive claim management

34 Provider Bills: In Summary… All claims are NOT created equal. All claims are NOT created equal. If you think you have a billing issue, you probably do. If you think you have a billing issue, you probably do. Many billing issues can be identified internally by reviewing complete claim information. Many billing issues can be identified internally by reviewing complete claim information. Identify trusted resources for assistance. Identify trusted resources for assistance. Investigate all your options prior to adjudication Investigate all your options prior to adjudication Detailed Stop-Loss Language is helpful Detailed Stop-Loss Language is helpful

35 Audit Options: Reasonable & Customary Advantages: Advantages: Significant Savings Significant Savings Prompt Turnaround Prompt Turnaround Disadvantages: Disadvantages: No Opportunity to look at Medical Necessity No Opportunity to look at Medical Necessity Provider Appeals Provider Appeals Possible confliction with PPO contract Possible confliction with PPO contract

36 Audit Options: Billing Errors Purpose: Identify billing errors and discrepancies. Purpose: Identify billing errors and discrepancies. Resources: Resources: Coding Expertise Coding Expertise Clinical Expertise Clinical Expertise Process: Process: Review of Plan Document Review of Plan Document Line-by-line adjustments made to itemized charges Line-by-line adjustments made to itemized charges Removal of Inappropriate Charges Removal of Inappropriate Charges Duplicate Charges Duplicate Charges Unbundled Charges Unbundled Charges Coding Errors Coding Errors Adjustments to LOS, LOC and Utilization Adjustments to LOS, LOC and Utilization

37 Audit Options: Billing Errors Generate Report Generate Report Presentation to Provider Presentation to Provider Sign-off Sign-off Appeal Appeal Negotiation/Settlement/Sign-off Negotiation/Settlement/Sign-off Advantages: Advantages: Provider Less Likely to Appeal Provider Less Likely to Appeal Disadvantages: Disadvantages: Audit Does Not Address R&C and May not Yield Significant Savings Audit Does Not Address R&C and May not Yield Significant Savings No Opportunity to Review the Medical Record and Medical Necessity No Opportunity to Review the Medical Record and Medical Necessity

38 Audit Options in Summary Weigh the Advantages and Disadvantages Between Audit Types Weigh the Advantages and Disadvantages Between Audit Types If the Claim is In-Network Ensure the PPO Contract Supports the Audit Process. Avoid Accessing Contracts With Audit Restrictions. If the Claim is In-Network Ensure the PPO Contract Supports the Audit Process. Avoid Accessing Contracts With Audit Restrictions. Every Claim is Unique – Find the Most Appropriate Audit Solution Every Claim is Unique – Find the Most Appropriate Audit Solution Understand and Enhance Policy Language to Support the Audit Process Understand and Enhance Policy Language to Support the Audit Process

39 Questions/Comments Thank you for attending!


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