EMR 101: An Overview of Key Benefits

It’s no secret the Internet is everywhere, so it is a contradiction that millions of Americans feel secure enough to do their banking online, but the U.S. healthcare system is still wary of transitioning health and medical records into an electronic format.

As I sat with Ron Pelletier, vice president of market strategy, at a SourceMedical conference in Las Vegas, he stated, healthcare in general, grossly underutilizes the internet. We discussed one of the main reasons outpatient centers have been slow to change. “On the ASC side, things may not have been broken. Reimbursements were good, now that is changing. These centers are under pressure with reimbursements shrinking and costs going up. Many are saying, ‘In order to stay competitive and keep my business afloat, I need to find better ways of doing this.’ The necessity now is driving them.” states Pelletier.

This series of articles will cover some of the key points that need to be addressed when considering the implementation of an EMR in your ASC, including key benefits of EMRs, what to look for in a provider, how to get your staff ready for this impending transition.

To begin, we should consider the many definitions of an EMR. “There have been so many people out there that have said ‘I am selling an EMR’ and all it is is scanning in your paper and saving it to a computer,” says Craig Veach, senior vice president of operations for Amkai. “Then there are others who have a forms-based system. In the PIIM study, of the original 50 that were considered, none of those were even the forms-based systems because PIIM thought they were not commercially viable. You want something that is a true work-flow manager. Our EMR handles communications within the organization using an internal email and instant message (IM) that allows people to pass info and stay HIPAA compliant. It’s customizable on how it is set up to manage an individual organization’s workflow,” Veach adds. The Parsons Institute for Information Mapping (PIIM) study Veach refers to recently reviewed the top six EMR systems available on the market today.

This brings us to some of the key benefits a facility can gain through implementing an EMR. Michael Nolte, vice president and general manager of marketing for GE Healthcare IT, is aware that there are many questions and concerns from administrators and staff, but says that the long-term benefits will by far surpass the short-term apprehension. “In particular, for a smaller business, it’s a pretty big transition. There are three key benefits. First is the quality of care that you can deliver as a provider; when an EMR is used effectively it’s a really powerful tool. Both from a medical and a legal perspective, you have ensured that you have the right documentation in place that you are making good care decisions and that you have the ability to deliver the best quality of care for your patients. Second, is when our providers get really good at using a piece of software, and are transitioning from something that is usually more paper-based, it makes them more efficient. The ability to use their time more effectively, spending more time in the operating room and less time in the office is definitely enhanced by use of the software. And third is accuracy from a billing and reimbursement standpoint. In terms of getting a clear, well documented perspective on activity so that clinicians are getting paid for what they do everyday.”

On a more fundamental level, there are cost benefits in paper saving. “A lot of these centers are drowning in paper,” affirms Sean Benson, co-founder of ProVation Medical, part of Wolters Kluwer Health. “They are documenting everything on paper and with that come a lot of cost and inefficiencies. That includes the cost of paper, storage of charts, doing a chart pull, and assembling charts. All of those costs are really taken out of the system when you move to an electronic medical record. You are taking a lot of the redundancies out of the system.”

Oftentimes, hearing the benefits from peers can be most beneficial. Daren Smith, BSN, administrator at Fremont Surgical Center in Fremont, Neb., also shares his thoughts about the benefits. “It has so much capability to increase the level of quality of care that you are able to give to your patients. The EHR system capabilities to cross-check medications and make sure that the required information is there. Also, the ability for that information to be shared widely makes it very important. We have also found that it lends some credibility to your organization; that you are ahead of the game, ahead of the curve.”

What should an ASC look for in a provider? Administrators may want to consider what type of ASC in which they are working. If the ASC is a brand-new facility, it makes sense to start with an EMR. “For new ASCs, it’s almost a no brainer in terms of EMR and full-automation. We find that it is a straight forward conversation when you ask a new ASC, ‘why would you start by duplicating the old paper-based workflow when you have a chance to start fresh?’ The question is usually positively viewed since it just makes sense to go electronic from the outset. Existing ASCs are also interested, but have a little more adaptation to existing processes that they might see necessary. Actually, it’s an opportunity to look at current workflow and adapt it a little to realize the benefits from the software,” Don Fallati, senior vice president of marketing, Amkai states.

The existing ASC wanting to convert to an EMR has various items to address. While a new staff in a new ASC can face the implementation of an EMR with ease, staff members in current less technology-based facilities may be quick to decline the idea of learning anything new. The biggest part of getting ready for an EMR system is to realize there will be change. “If the staff, especially the internal champions or the leaders of the organization are resistant to change then they are going to be real problems. If you can identify key leaders within the organization, who understand that change is an important part of the process, and the short term challenges are worth the longer term benefits moving to an electronic system then you are really on the right track.”, states Benson.

Joe Macies, CEO of Amkai adds, “These systems today are modular. You don’t have to swallow the entire package and it doesn’t have to change every single facet of workflow. My two words of advice would be: get started. The EMR benefits are so great over such a long term, and eventually so necessary, I think, in any healthcare provider organization that you can get started and have a fairly graceful migration of your people at a reasonable pace over time when you’ve got modular software that fits users needs. It’s helpful not to approach EMR as having to find the perfect solution.”

Stay tuned to the second part of this series, EMR 202: How to Get Ready for Implementation where SurgiStrategies speaks to some ASCs that are in the process of EMR implementation or have an EMR in place where they discuss concerns challenges and advice.

11 Things to Know About the False Claims Act

1. Initial development of the False Claims Act. The False Claims Act, also known as the “Lincoln Law” after its primary proponent, President Abraham Lincoln, was initially developed during the Civil War. The Act was a response to war profiteering by military contractors who attempted to defraud the government, for example, by sending boxes of sawdust instead of guns or selling the same cavalry horse to the armed forces multiple times. The Act remained in its original form from its initial passage in 1863 until 1943, at which point various amendments de-incentivizing qui tam actions made the statute nearly obsolete. In 1986, the Act was amended again with greater incentives for private citizens to report fraud on the government. The Act has become an increasingly active mechanism to combat fraud and false claims submitted to the federal government ever since. For additional background information, see http://www.all-about-qui-tam.org/fca_history.shtml.

2. Overview of Qui Tam concepts. Qui Tam means “in the name of the king”. The concept of a Qui Tam action is similar to a whistleblower action and allows a private person, referred to as a “relator,” to file suit on behalf of the United States against those who have falsely or fraudulently claimed federal funds. Incentives are built in so that the qui tam relator is able to receive a part of the proceeds of a victory on behalf of the government. Further, the portion of an award amount that the relator retains is greater if the government does not join in the suit and therefore he or she does not receive the help of the government. Alternatively, if the government joins or “intervenes” in the lawsuit, the relator retains a lesser portion of any judgment or settlement obtained.

False Claims Act qui tam actions run the gamut of federally funded programs, from Medicare and Medicaid to defense and other government procurement contracts, federally insured mortgage and other federal housing programs, disaster assistance loans, agricultural subsidies and more. Persons who knowingly make false claims for federal funds are liable for three times the government’s loss plus a civil penalty of $5,500 to $11,000 for each claim. Relators recover 15 to 25 percent of the proceeds of a successful suit if the United States intervenes in the qui tam action, and up to 30 percent if the United States declines to intervene and the relator pursues the action alone. During fiscal year 2009 alone, relators were awarded $255 million. (This figure does not include relator shares awarded after Sept. 30, 2009.)

3. Top hospital recoveries. To see a list of the top 20 False Claims recoveries to date, go to www.taf.org/top20. Several hospitals and hospital companies have paid massive settlements to resolve false claims actions against them, including St. Barnabas Hospitals, a non-profit hospital chain in New Jersey, which paid $265 million in 2006 to settle allegations related to improperly claiming “outlier” Medicare payments (additional payments for particularly difficult or complex procedures). Also in 2006, Tenet Healthcare, a national hospital system, agreed to pay the federal government $900 million for billing violations also involving manipulation of outlier payments, as well as kickbacks, upcoding and bill padding. Similarly, in 2000, Columbia HCA, the largest for-profit hospital chain in the country paid more than $731 million to settle False Claims Act allegations against it. Currently, Toumey Healthcare System in South Carolina is involved in a False Claims litigation based on physician self-referral law violations that resulted in the submission of false claims, a legal theory that proved successful against a medical practice management company in the 2008 case U.S. v. Rogan in the Seventh Circuit Court of Appeals.

4. 2009 recoveries. In 2009, the U.S. government recovered $2.4 billion dollars under the False Claims Act. This was the second highest annual collection amount recorded in history, thanks in large part to an enormous settlement between the government and Pfizer Inc. The Department of Justice made the following statement regarding the Pfizer settlement in Sept. 2009:

American pharmaceutical giant Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. hereinafter together “Pfizer”) have agreed to pay $2.3 billion, the largest health care fraud settlement in the history of the Department of Justice, to resolve criminal and civil liability arising from the illegal promotion of certain pharmaceutical products, the Justice Department announced today.

Pharmacia & Upjohn Company has agreed to plead guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead. Bextra is an anti-inflammatory drug that Pfizer pulled from the market in 2005. Under the provisions of the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – i.e., any use not specified in an application and approved by FDA. Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns. The company will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter. Pharmacia & Upjohn will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

In addition, Pfizer has agreed to pay $1 billion to resolve allegations under the civil False Claims Act that the company illegally promoted four drugs – Bextra; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug – and caused false claims to be submitted to government health care programs for uses that were not medically accepted indications and therefore not covered by those programs.

5. Healthcare fraud — Top industry for False Claims recovery. Healthcare fraud represents the largest and most profitable industry for Qui Tam false claims collections. Healthcare fraud recoveries accounted for approximately $1.6 billion, more than two-thirds of the $2.4 billion dollars collected under the False Claims Act in total during 2009. Numerous federal agencies shared in these recoveries, including the Department of Health and Human Services, in connection with its Medicare and Medicaid programs; the Office of Personnel Management, which administers the Federal Employees Health Benefits Program; the Department of Defense for its TRICARE insurance program; and the Department of Veterans Affairs.

6. Pharmaceutical and medical device companies – Main targets. The largest qui tam settlements in 2009 came from pharmaceutical and medical device companies, including Pfizer, Sanofi-Aventis, Bayer HealthCare, Quest Diagnostics and Eli Lilly, amongst others. The DOJ reported that pharmaceutical and device companies accounted for $866.7 million in settlements for federal recoveries, in addition to $402 million being returned to state Medicaid programs.

7. Retention of overpayments now can be considered a False Claims Act violation. In 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 which implemented significant changes to the False Claims Act, including the expansion of prohibited conduct under the False Claims Act to include not just the improper filing to collect monies, but also the known retention of overpayments by hospitals or other health care providers. The 2009 amendments also make clear that false claims submission to a state Medicaid program, although not directly submitted to the federal government, does constitute a violation of the False Claims Act.

8. Hospital sample False Claims policy. All health care providers and businesses submitting claims to the government for payment should have health care regulatory and false claims policies in place to educate its employees and agents and minimize the submission of false claims and the potential liability attached thereto. A good sample policy is available online at www.centralcommunityhospital.com. This sample policy is particularly designed to address a community hospital’s approach to false claims and other policies, and may need to be modified depending on the size of the entity, breadth of practice, or type of industry or provider submitting the claims.

9. Plaintiff’s law firms focus on Qui Tam. Over the past several years, there has been a dramatic increase in the number of Qui Tam suits. As a result, there are now law firms that focus exclusively on qui tam actions. One such firm, Warren Benson Law Group, states on its website, www.warrenbensonlaw.com/medicare-fraud.com:

In recent years, Medicare fraud and Medicaid fraud have been the two most active areas of qui tam litigation, outnumbering qui tam cases involving defense contractor fraud. It is estimated that Medicare fraud and other fraud cost the federal government billions of dollars each year.

There are numerous frauds Medicare and other healthcare providers and companies have devised to cheat the Government…[such as:]

- Services not rendered
- Upcoding schemes and Unbundling
- Kickbacks and Self Referrals
- Falsely Certifying and Giving False Information
- Lack of Medical Necessity
- Fraudulent Cost Reports
- Grant or Research Fraud

These firms generally take qui tam cases on a contingency fee basis, making it enticing for potential relators to come forward and initiate litigation against the alleged wrong-doers.

10. Broad provider responsibility – Scope of liability. In the face of the increasing scrutiny of claims and the relatively new era of Recovery Audit Contractors, parties should understand the broad scope of what can be considered a false claim and their obligations to properly bill for services. A good discussion of the breadth of the provider’s responsibility is set forth in an article by Charlie Artz, a well-regarded healthcare attorney. See False Claims Act Implications in Physician’s News Digest www.physiciansnews.com/law/805artz.html. A few of the key concepts discussed by Mr. Artz are excerpted below:

In Re: Cardiac Devices Qui Tam Litigation, the U.S. District Court in Connecticut refused to dismiss a whistleblower’s case against health care providers who submitted claims for services that were not covered by Medicare, held that the health care providers had a duty to familiarize themselves with all requirements for reimbursement, and allowed the False Claims Act case to proceed exposing the health care providers to millions of dollars in refunds and civil fines.

Although the opinion was close to 100 pages in length, the key facts can be summarized as follows. Then-HCFA published a manual over 1,000 pages in length containing literally hundreds of reimbursement rules and requirements. These billing guidelines were not statutes passed by Congress after the people had an opportunity to debate them. These were not regulations published with notice and comment by the general public or the health care community to make improvements or to object to certain clauses. These were purely interpretive guidelines published by the federal government. One of those several hundred billing guidelines contained a provision prohibiting reimbursement for any non-FDA approved device or service. The 40 hospital defendants in this massive federal court litigation submitted claims to Medicare and received payment for services provided to patients who participated in clinical trials involving several different investigational cardiac devices that had not been approved for marketing by the FDA.
One clause in the hospital payment manual stated that medical devices not approved for marketing by FDA are considered investigational by Medicare and are not reasonable and necessary for the diagnosis and treatment of illness or injury under the Medicare statutory definition of medical necessity. Apparently, the hospitals billed these services by mistake, believing that since the clinical trial was approved, the provider was allowed to bill Medicare for the device and related services.

A whistleblower realized many hospitals were billing Medicare for non-FDA approved cardiac devices and filed a civil false claims case in federal court. The federal government intervened and is now prosecuting the False Claims Act case against hospitals. The hospitals asked the federal court to dismiss the case for several reasons. One of the key defenses is that a simple violation of a statute or regulation does not, by itself, trigger False Claims Act liability. The federal court rejected that analysis and made the following key points that should guide your compliance efforts.
11. Heightened regulatory and enforcement environment – False Claims Act and Anti-kickback Statute. The government has looked to regulatory mechanisms like the False Claims Act to recover money spent improperly as a politically palatable way to attack healthcare providers and healthcare costs. Given the demonstrated success of this strategy, we expect more, not less, recovery of claims of this sort. As William Corr, Deputy Secretary of the U.S. Department of Health and Human Services, stated on October 28, 2009:
As a result of the priority given to combating health care fraud by President Obama, the government has been able to achieve a more rapid response to fraudulent schemes and increase its recovery of more funds lost to fraud than in previous years. For example, HHS Office of Inspector General investigations have resulted in $4.0 billion in receivables for FY 2009, increase from $3.2 billion in DIG investigative receivables in FY2008. Strike force cases typically are indicted and litigated faster than traditional criminal health care fraud cases.

Since March 2007 strike force cases that included HHS agents have obtained 189 convictions, 443 indictments, and total an estimated $227 million in expected recoveries. During this time, the Department of Justice also secured the largest health care fraud settlement in history against a pharmaceutical company for Medicare and Medicaid fraud and for violating the Food, Drug and Cosmetic Act. I refer to the $2.3 billion settlement with Pfizer to resolve criminal and civil liability arising from the illegal promotion of certain pharmaceutical products.

Tuberculosis treatment requires medication and monitoring

Tuberculosis (TB) continues to be a problem in the United States, particularly among at-risk populations. The groups at highest risk for TB include people living with someone who has active disease, and those with a lowered immune response, such as HIV patients.

“Every medical center in our region has tuberculosis on its risk assessment list, that is, its list of potential issues to monitor on a continuing basis,” says Stephen Parodi, MD, chief of infectious disease for Kaiser Permanente, Northern California. “We make it a priority to ensure that patients at risk for infection with TB are screened for latent infections.”

The region includes 20 medical centers serving 3.1 million members. Dr. Parodi says the plan encourages screening for those who have been incarcerated or have a history of IV drug use and has educated primary care physicians and pediatricians to screen for TB.

“We saw a significant surge in TB cases when the HIV epidemic first hit; since then we’ve seen a leveling off,” he says. “In terms of epidemiology, it’s interesting to note that many cases we’re now seeing are in foreign-born individuals. We live in a global world, and we need to be aware that constant vigilance and aggressive, early recognition of latent and active disease will prevent further spread.”

Most people infected with tuberculosis don’t have any symptoms. When a patient is positive for latent TB, the clinician looks at the risk factors and determines (based on criteria from the Centers for Disease Control) whether the person is a candidate for preventive medicine.

“Preventive medicine is a lot easier than treating the active form of the disease,” Dr. Parodi says. “With latent disease we can treat with one drug, as opposed to active disease, where we typically have to use a minimum of four drugs initially.”

Patients who develop active TB experience symptoms such as weight loss, fever, night sweats, cough, chest pain and bloody sputum.

“Until susceptibility results are available, empiric initial treatment for active TB should include four drugs: isoniazid, rifampin, pyrazinamide and ethambutol,” says Mark Abramowicz, MD, editor-in-chief of The Medical Letter on Drugs and Therapeutics, a non-profit newsletter that critically appraises drugs. “When susceptibility to isoniazid, rifampin and pyrazinamide has been documented, ethambutol can be omitted.”

DIRECT PATIENT OBSERVATION NEEDED

One of the greatest problems in TB treatment today is the emergence of drug-resistant strains of the bacteria.

“Poor adherence to TB therapy is the most common cause of treatment failure, and can lead to drug resistance,” says Dr. Abramowicz. “Medical Letter consultants recommend that most patients, including those with disease due to drug-susceptible strains, take drugs for active TB under direct observation.”

At Kaiser, patients with active TB are monitored closely, typically with a monthly office visit. Kaiser physicians sign the orders for directly observed therapy, which is provided by the county public health department.

“We provide medications, lab testing to monitor potential side effects, symptom assessments, and imaging, x-rays or CT scans as needed,” Dr. Parodi says. “Protocols differ from jurisdiction to jurisdiction in terms of exactly who gets directly observed therapy, but in our experience, most counties are aggressive. If there is an identified case of active, potentially contagious TB, that person is receiving directly observed therapy.”

Extensively drug-resistant TB is a form of the disease caused by strains that are resistant to all the most effective anti-TB drugs. The World Health Organization reports that 41 countries have cases of extensively drug-resistant TB, including the United States.

“Confirmed multidrug-resistant tuberculosis and extensively drug-resistant tuberculosis should be treated with directly observed therapy in collaboration with a clinician familiar with management of these conditions,” says Dr. Abramowicz. “Regimens for these conditions must include at least four drugs to which the organism is susceptible; the duration of therapy usually should be 18 to 24 months.”

In recent years, researchers have made considerable progress toward developing new medications that could treat tuberculosis more effectively. Eleven new medications from seven different drug classes are currently in clinical trials for tuberculosis.

“The medications that are farthest along are antibiotics called fluoroquinolones, which have the potential to shorten the duration of therapy,” says Eric Nuermberger, MD, associate professor of medicine and international health at Johns Hopkins School of Medicine, who is on the faculty of Hopkins’ Center for Tuberculosis Research. “Current medications require six to nine months; we hope fluoroquinolones will reduce that to four months. Four phase II studies of fluoroquinolones are currently underway, and we should have an answer in about two years.”

Fluoroquinolone drugs are already on the market in the United States for acute conditions such as community-acquired respiratory tract infections and urinary tract infections.

Of the medications that are being developed solely for tuberculosis, the one that’s furthest along is TMC207, developed by Tibotec.

According to a recent study in The New England Journal of Medicine, when researchers added TMC207 to a standard regimen for multidrug-resistant tuberculosis, a significantly higher proportion of patients had negative sputum cultures at two months.

Elaine Zablocki has been reporting on healthcare for more than 20 years. She is based in Oregon.

This article is based on information supplied by The Medical Letter (www.medicalletter.org), a non-profit organization that publishes newsletters offering critical appraisals of new drugs and comparative reviews of older drugs. The Medical Letter is independent of the pharmaceutical industry and supported entirely by subscription sales. Institutional site license inquiries can be sent to info@medicalletter.org [info@medicalletter.org]

Extended COBRA subsidy could be extended again

The COBRA subsidy for laid off workers has been extended and expanded. On Dec. 19, 2009, President Obama signed the Department of Defense Appropriations Act for Fiscal Year 2010, which includes an extension of the government-funded COBRA premium subsidy provided in the American Recovery and Reinvestment Act of 2009 (ARRA).

The original subsidy program under ARRA provided a nine-month 65% premium subsidy for COBRA coverage to eligible individuals who were involuntarily terminated from their job and who also lost coverage as a result of the termination on or after Sept. 1, 2008 through Dec. 31, 2009.

The new legislation preserves the amount of the subsidy at 65%, but it alters the original subsidy in several ways, including: extending the period during which an eligible individual may qualify to receive the subsidy; extending the length of time eligible individuals may receive the subsidy; and providing new notice requirements.

The legislation extends the period of eligibility by replacing the original Dec. 31, 2009, cutoff date with a Feb. 28, 2010, cutoff. The subsidy is, therefore, now available to eligible individuals who are involuntarily terminated on or before Feb. 28, 2010. The new legislation also provides that the involuntary termination must occur on or before the cutoff, which differs from the previous version of the subsidy that required both the termination and the loss of coverage to occur on or before the cutoff date.

For example, an eligible individual who is terminated as of Feb. 1, 2010, and has coverage through the end of February is eligible for the subsidy under the new legislation even though the loss of coverage would occur after Feb. 28, 2010.

The new legislation also increases the maximum period to receive the subsidy from nine to fifteen months. Because that increase is also retroactive, employees involuntarily terminated between Sept. 1, 2008 and Dec. 31, 2009, who exhausted their entitlement will now have an additional six-month period. Eligible individuals whose maximum subsidized period already expired will be permitted to reinstate their coverage by paying the retroactive subsidized premiums.

Further, depending on the particular circumstances, an eligible individual may also be entitled under the new legislation to receive a refund (or credit) for any overpaid premiums that were made after exhausting the nine-month premium subsidy.

MUST GIVE NOTICE

There are also a number of new notice requirements provided in the recent legislation. For example, the recent legislation requires plan administrators to provide notice regarding these changes to individuals who were eligible for the subsidy on or after Oct. 31, 2009, or who experience a qualifying event (consisting of termination of employment) relating to COBRA coverage on or after this date. The notice must be given no later than Feb. 17, 2010; however, for individuals eligible for the subsidy on or after Dec. 19, 2009, the notice must comply with the COBRA general notification requirements.

One final point: The COBRA subsidy may be extended again. An extension to June 30, 2010, has been proposed in legislation known as the Jobs for Main Street Act, which is currently before Congress.

This column is written for informational purposes only and should not be construed as legal advice.

Barry Senterfitt is a managing shareholder at Greenberg Traurig, LLP, Austin, Texas.

Janet Farrer is an associate at Greenberg Traurig LLP, Austin, Texas.

Barry Senterfitt
Janet Farrer

Kaiser questions complexity of drug-safety programs

Kaiser Permanente is concerned that too many diverse drug safety programs will impose a burden on the healthcare system and on patients, and that this will drive up costs and limit access to therapies.

The integrated health plan wants a greater say in how the Food and Drug Administration (FDA) and drug companies design and implement these programs to ensure they don’t discriminate against certain healthcare providers and pharmacies.

In 2007, Congress expanded FDA’s authority to require drug makers to establish Risk Evaluation and Mitigation Strategies (REMS) to enhance the safe and appropriate use of marketed medicines. Most of the 80 or more approved REMS are fairly modest, only providing patients with printed medication guides that describe proper drug use.

But a growing number of these programs also include more extensive Elements to Assure Safe Use (ETASU), which tightly manage prescribing and dispensing of high-risk medicines. ETASU can involve limited distribution of the drug and certification of prescribers and pharmacists to ensure appropriate prescribing and dispensing; in some cases patients have to be tested to ensure they’re not pregnant, for example, or that the drug is not causing harmful reactions.

COST AND ACCESS QUESTIONED

Kaiser is concerned that its physicians and pharmacies will be cut out of such certification and distribution programs, and that its patients will have difficulty gaining access to needed therapies. Such requirements could increase costs for health plans and for consumers, limiting access to needed drugs and the overall benefits of the REMS safety program.

The problem has not been that noticeable so far because most REMS with ETASU have involved drugs for relatively small patient populations. However, FDA is considering a more involved REMS for the broad class of extended-use opioids, and might weigh such an approach for erythropoietin-stimulating agents (for red blood cell production), drugs that are expensive and widely used.

Consequently, Kaiser has formally petitioned FDA to open up its process for designing and approving REMS with ETASU. Kaiser proposes that FDA’s public advisory committees review such processes to make the proposals more transparent and to allow plans and providers to have a say. That would give Kaiser an opportunity to have its own specialty pharmacy operation included in a REMS network.

The health plan also wants to ensure that REMS programs protect the privacy of patient health information.

13 Reimbursement and Business Concepts You Should Know About GI in ASCs

GI and endoscopy continue to be profitable specialties for ASCs in spite of some declines in reimbursement. Here are 13 important reimbursement, business and physician concepts you should know for your ASC.

Reimbursement
1. Reimbursement for GI centers will continue to decrease. As has been the case for the last few years, reimbursements for GI procedures have decreased across the board. This has hit ASCs especially hard as surgery centers often receive reimbursement at a percentage of hospital outpatient departments.

“We anticipate that CMS will continue to pressure facility fees in a downward fashion,” says Barry Tanner, president and CEO of Physicians Endoscopy. “It is at least conceivable that freestanding ASCs could get rates at 50 percent of HOPD rates in the next four to five years.” 

With CMS setting lower rates, a problematic trend could be seen across private insurers and third-party payors as their rates are often set relative to what CMS pays for Medicare-covered procedures. As a result, gastroenterologists and GI-driven ASCs must continue to run their centers efficiently and economically.

“Unfortunately, reimbursements are likely to steadily decline over the next few years,” says Stephen Sears, MD, a gastroenterologist in Loveland, Colo. “This effect will cause ASCs to become more efficient or to stop operating. This may also drive more cases into the hospital setting. By doing so the procedural cost will double and in the end healthcare costs will increase. To remain profitable, the GI physician must focus on delivering quality care in the most efficient manner. That can be done with better bowel preps, training, state of the art technology and assessing quality measures.”

One consequence of decreasing GI reimbursements may be a reduction in the number of Medicare patients a GI ASC sees in a year, according to Fernando Bermudez, MD, medical director, and Beth Miller, administrator, of Eastside Endoscopy Center in Saint Clair Shores, Mich.

“Unless Congress changes the existing rules, Medicare will reduce the professional fees for procedures by 20 percent in 2010,” Dr. Bermudez says. “This won’t directly affect ASCs, but it may affect the willingness of gastroenterologists to perform endoscopies on Medicare patients and to do procedures on Medicare patients in the ASC setting.” 

Irving Pike, MD, president of Gastroenterology Consultants in Virginia Beach, Va., has seen some ways in which physicians at ASCs have tried to combat declines in reimbursement. “Several ambulatory endoscopy centers have reported to me that they have recently negotiated an increased fee schedule from non-government insurance companies. In the past when Medicare payments to facilities were decreased, insurance companies did not follow with similar cuts, but ASC fee schedules remain substantially below HOPD fee schedules. In my opinion, insurance companies do not want to discourage physicians performing endoscopy in ASCs. I think at some point it may be plausible for ASCs to move more CMS cases to the hospital and fill the slots opened at the ASC with patients covered by non-government insured patients,” he says.

2. Gaining access to HOPD rates alone is not reason enough to partner with a hospital. Although partnering with a hospital in order to gain access to outpatient department reimbursement rates can be a potentially attractive strategy, GI-driven ASCs should be aware that they may not receive access to full HOPD rates, although they may be better than current reimbursements. Since many hospitals want to own 100 percent of the GI center, physicians may be asked to give up your ownership and access to future distributions.

“HOPD rates can increase GI center facility revenue 35-40 percent for non-Medicare patients,” says Jon Vick, president of ASCs Inc.. 

“If the GI physicians are going to be owners, then the expectation of getting HOPD rates is misplaced,” Mr. Tanner says. “Better rates may be possible, but HOPD rates are highly unlikely.”

In some cases the hospital and an ASC management development company may form a joint venture that then purchases a 51 percent interest in the center, according to Mr. Vick. “I suggest partnering with a management company first and letting the company negotiate with the hospital as the hospital partner will want to control the deal,” he says. “The management company would then work on the side of the physicians and ensure that the hospital doesn’t ’steamroll’ the physicians into accepting less than the center is worth. Additionally, with the ASC management company managing the center it will retain it efficiencies and economies.” 

It is important to remember when considering this arrangement that even if a physician-owned ASC partners with a hospital, it is still a freestanding ASC and it does not become an HOPD nor does it share in the HOPD reimbursement rates, according to Rick Jacques, president and CEO of Covenant Surgical Partners. “Sometimes, however, a hospital may have such good contracts with third-party payors that a partnership with the hospital would increase the reimbursement rates with payors other than Medicare,” he says.

3. Declining pay may force GI physicians to seek new revenue opportunities. The proposed 21.5 percent cut in the physician fee schedule for specialists, including gastroenterologists, coupled with decreasing reimbursements for GI procedures, may encourage GI physicians to consider additional revenue streams.

“We believe that professional fees will continue to be pressured downward, and GI physicians will be forced to resign themselves to reduced income or to capture a portion of the technical fees,” Mr. Tanner says. “Those GI physicians that have not yet captured a portion of the technical fees through ASC ownership are increasingly under pressure to do so by forming coalitions, mergers with larger groups, etc.” 

General business concerns
1. Good case volume depends on the market. While there is no definitive average number of cases GI centers should see to remain profitable, most GI ASCs have a good referral base from which they can pull patients. However, there are some figures to keep in mind to help you determine if your center is on target.

“The key is to maximize utilization of each available procedure room,” Mr. Tanner says. “There is an average of 251 operating days per year, and full utilization for a GI procedure room operating eight hours each day would be approximately 16 cases per day (30 minute time slots per case) or roughly 4,016 annual cases. Sixteen cases per day is rarely achieved due to cancellations, no shows, etc. However aiming for 80 percent utilization is certainly reasonable (around 3,200 cases annually). Achieving that sort of utilization per room, and assuming that the ASC is not overbuilt, should result in a successful GI ASC.” 

Dr. Sears notes that physicians at the ASC where he practices average 12 procedures per day, or one every 30 minutes.

Mr. Jacques agrees that around 3,000 annual cases can lead to a successful center. “Most physicians [who use GI ASCs] have well-established practices, and it is very unlikely that those cases will go away. The key is keeping your relationships within the community strong,” he says.

2. Some GI centers have benefited from providing anesthesia. In the past, most GI procedures were performed under conscious sedation, which the gastroenterologist administered prior to the procedure, according to Mr. Jacques. Since the patient was not fully sedated, monitoring by an anesthesiologist was not necessary. However, over the past decade, the trend with GI procedures has moved toward monitored anesthesia, using drugs such as propofol, which must be administered by an anesthesiologist or CRNA. 

“I believe that monitored anesthesia care is fast becoming the standard of care,” Mr. Jacques says. “Patients who are under monitored anesthesia often allow physicians to provide a more successful colonoscopy, because they are more comfortable. Under conscious sedation, although the patient may not remember the procedure, they are still awake and uncomfortable, which may cause them to react and compromise how well the colonoscopy is performed.”

Mr. Jacques notes that centers have three options to keep them in compliance with what states mandate regarding anesthesia administration: 1) the physicians who own the ASC arrange to ‘employ’ an anesthesiologist or anesthetist who provides anesthesia through their private practice, 2) the ASC employs its own anesthesiologist or 3) the ASC contracts with an independent anesthesiology practice. 

However, anesthesia is not covered for many GI procedures, so some gastroenterologists have benefited by directing the administration by propofol. Mr. Tanner cautions that if physicians choose to do this, they must be aware of the regulations in their area regarding anesthesia administration.

Dr. Pike also notes a trend towards anesthesia in GI procedures but cautions that colonoscopies performed while the patient is under propofol have not been indicated for use by many gastroenterology societies. 

“It is true some ASCs have turned to various models of anesthesia as an additional source of revenue,” he says. “I have seen information estimating that currently 40 percent of GI endoscopy is performed with deep sedation involving propofol. One concern I have about this practice is that as the total cost of GI endoscopy increases due to the additional cost of providing anesthesia [and] the payment for both the professional fee for the endoscopy and anesthesia will be cut to control overall cost to insurers. It should be noted that the three GI societies have jointly written a letter indicating the opinion deep sedation with propofol administered by anesthesiologists or CRNAs is not warranted for standard GI endoscopic procedures.”

3. Beware of potential kickback scenarios with contract anesthesia companies. As more GI centers consider providing anesthesia services, they may look to an outside company to assist them with the process. Mr. Jacques warns that some companies may enter into joint ventures with GI centers in ways that “push the envelope” with regard to the law.

“Some companies have been extremely aggressive when approaching gastroenterologists about these joint ventures,” he says. “We’ve seen gastroenterologists approached at a much higher rate over the past 1.5 years. Some scenarios have the company essentially providing kickbacks to the gastroenterologists for the contract to provide anesthesiology services to the center. The government is now looking very hard at these ‘pay for play’ arrangements.” 

Procedures and gastroenterologist issues
1. The number of procedures performed per endoscopy case can lead to lower reimbursements for secondary procedures. According to Mr. Tanner, the typical number of procedures per endoscopy case is 1.10-1.20. Many payors, including Medicare, often reimburse any secondary procedures at a much lower rate, which can affect revenue and efficiency in the ASC.

“The number of procedures per case impacts upon revenue per case because for many payors, the second and third procedures are reimbursed at half and then 25 percent of the first procedure,” Mr. Tanner says. “Therefore, valuable procedure room time is being utilized at an ever decreasing rate. If the facility is essentially fully utilized, the impact is not as strong; however, if an ASC is struggling with utilization, then it may not be profitable to perform these secondary procedures at one time.” 

2. Payment data for some of the most common procedures in GI ASCs. Here are 2008 CMS payment data for some of the most commonly performed GI procedures in ASCs.

Upper stomach-intestine scope for biopsy (CPT 43239)

• average submitted charge: $1,451
• average allowed charge $408
• average payment: $321

Scope of colon for diagnosis (CPT 45378)

• average submitted charge: $1,502
• average allowed charge: $422
• average payment: $330

Scope of colon with biopsy (CPT 45380)

• average submitted charge: $1,549
• average allowed charge: $406
• average payment: $318

3. With the number of certified gastroenterologists decreasing, it is important to focus on recruiting. As with many medical professionals, the number of practicing gastroenterologists is decreasing as physicians retire or leave practice, and the number of GI physicians coming out of medical school is not enough to sustain the rate of departing physicians. A recent New York Times report indicated an additional 1,050 GI physicians is needed by 2020 to meet the demand, with current employment around 10,390 as reported in the Times. According to Mr. Tanner, around 20 percent (2,000-2,500) of practicing GI physicians are at or close to retirement, and only 300 GI fellows graduate each year. Thus, competition for new, talented GI physicians is high.

“Recruiting new physicians is difficult especially because there is such a demand for their services,” Mr. Tanner says. “They can literally pick a place on the map where they want to work and go there with near certainty of getting a good job. This makes it more difficult for smaller, more out of the mainstream communities to find and recruit GI physicians. Many physicians graduating today are seeking a better quality of life, and, for them, the employment model is a better option.”

Although the outlook for recruiting new physicians may seem grim, Mr. Tanner notes some new physicians may be looking for options outside of the employment model. “There are still many entrepreneurial physicians not seeking employment, but they are looking for ownership in an ASC knowing that the ASC will be responsible for a significant portion of their total medical practice income,” he says.

4. Single-specialty GI ASCs have a lot to offer gastroenterologists. Although some concern has been raised by the trend of many specialists and practices seeking employment with local hospitals, single-specialty GI ASCs offer gastroenterologists an additional source of income and autonomy that may not be available through the hospital. As a result, ASCs should demonstrate the potential benefits of ASC ownership to physicians looking to partner with the center.

“Many GI physicians who have ownership in a single-specialty ASC earn a substantial amount of ancillary income from their ASC ownership, sometimes as much as they earn from their professional fees,” Mr. Jacques says. “A single-specialty ASC is an excellent recruiting tool for practices, because it gives the practice the ability to offer new physicians ownership in the center. A hospital trying to recruit physicians to their [facility] might not be able to offer the new physician the same ancillary income potential an independently-owned, single-specialty ASC can. Typically, once a hospital buys a physician practice and ASC, the physician income decreases substantially.” 

Dr. Sears notes that some GI specialists may turn to the hospital to avoid feeling the financial hit of reduced reimbursements, but that reason alone is not enough for all GI physicians to turn away from private practice and ASCs. “I feel that remaining as a private practitioner, I have more to offer than as a salaried hospital employee,” he says. “In order to keep the edge on the hospitals, we will need to focus on an equivalent or better product for the same cost. Patients will be able to see what procedures cost at different facilities and in the future may refuse to be treated in the hospital setting due to the additional charges.”

5. Although GI physicians aren’t running to the hospitals, primary care physicians are. Primary care physicians, who refer cases to gastroenterologists, are increasingly employed by hospitals. As a result, GI centers and their physicians should develop a positive relationship with hospitals.

“We have seen a significant number of PCPs employed by the hospitals,” says Dr. Bermudez. “This gives the hospitals significant leverage in the referral pattern to specialists, and it is very important that specialists, including gastroenterologists, maintain a good relationship with the hospital and work more like a partner than a competitor.”

6. Surgery centers should look to grow their referral base. When it comes to recruiting new physicians to your surgery center, looking within the local community still remains one of the best tactics. According to Mr. Jacques, there are probably unaffiliated physicians nearby who would jump at the opportunity to invest and perform cases at a single-specialty center, if approached properly and given a fair proposal.

“In order to grow, you also need to expand your referral base,” Mr. Jacques says. “Look into the areas of the community that are not getting screened for colon cancer. The same tried and true techniques that have worked in building a physician’s practice are still successful. Make sure you are consistently making call backs and follow-ups to local referring physicians.”

7. Salary information for gastroenterologists. In respect to other surgical and medical specialties, salaries for gastroenterologists have increased at an average rate. For example, the median salary in 2008 was $389,385, up 3.93 percent from 2007, compared with a 6.58 percent increase for ophthalmologists and a 5.80 percent for orthopedic surgeons over the same period, according to data from the American Medical Group Association’s 2009 Medical Group Compensation and Financial Survey. The average starting salary for GI physicians was $275,000, according to the same report.

Here are regional median salaries for gastroenterologists, according to the AMGA:

• East — $401,615
• West — $385,611
• South — $385,542
• North — $394,417

Clinical consequences drive the need for pharmacy integration

THE INTEGRATION OF pharmacy and medical data has gone a step further into the coordination of services. A whitepaper published in March 2009 by several pharmacy organizations attributes a new focus on collaboration to an uptick in clinical consequences and costs of medication misuse and non-adherence; a shift from acute to chronic care; the increasing role of pharmacists; and the growing number and complexity of medications.

“Coordinating pharmacy and medical benefits paints a total picture of compliance without a gap in data, and thus, impacts outcomes,” says Nita Stella, senior vice president, ActiveHealth Management, a care management company headquartered in New York City. “In addition, sharing information can increase medication safety and effectiveness by triggering alerts to flag drug-to-drug interactions, contraindicated drugs and non-compliance.”

Integration is an effective vehicle for identifying high-risk members and putting value-based benefit design into place. For example, an integrated system could identify high-risk members and lower copayments for those individuals or for an entire class of drugs, such as stains, to encourage compliance.

David Dross, leader of the managed pharmacy practice for Mercer Inc. in Houston, says that integration is easier if one vendor is managing both sides of the equation. While he believes that a carve-out pharmacy is willing to share its data, he says the medical vendor could be the “fly in the ointment” because there may be a fee attached to the provision of data.

The Clinical Pharmacy Cardiac Risk Service (CPCRS) at Kaiser Permanente Colorado combines KP HealthConnect, an electronic health record (EHR), with an electronic care registry, proactive patient outreach, wellness and medication management.

After high-risk patients for coronary artery disease are identified, they are referred to CPCRS. The program has served 21.000 patients since 1998.

“We are able to determine who has a cardiovascular event and deliver continuity of care cost-efficiently by integrating pharmacy and nursing teams with patients and their doctors and using technology and other tools to address problems,” says Jon Rasmussen, chief of clinical pharmacy, cardiovascular services. “Primary care physicians and cardiologists spend an inordinate amount of time with chronic care patients, so we’re looking for ways that pharmacists and nurses can relieve some of the burden. If these cardiac patients are managed consistently through collaboration, that frees up physicians to address acute issues.”

Results show the number of those meeting their LDL cholesterol goals increased from 26% to 73%, and screening for cholesterol rose from 55% to 97% during an average length of participation in the program of 2.3 years.

In addition, participants in the CPCRS program had an 88% reduced risk of dying from a cardiac-related cause when enrolled in the program within 90 days of a heart attack.

When members are close to release from the program, Kaiser Permanente rehabilitation nurses set up phone calls to discuss diet, exercise, depression, smoking cessation and medications. In a seamless process, Rasmussen says, after discharge, participants work closely with clinical pharmacists for long-term medication management.

Although the program has been successful by saving lives, reducing hospitalizations and recouping investment, it hasn’t been without its challenges. Among them have been getting clinicians to communicate via the EHR, developing multifunctional teams and making sure that “we target the right person with the right treatment at the right time,” he says.

THE FOUNDATION OF INTEGRATION

CIGNA is another insurer that relies on pharmacy to reduce medical costs through evidence-based medicine.

“Data sharing between the pharmacy benefit manager and the insurer is the foundation of integration,” says Claire Marie Burchill, vice president of strategy, product and marketing for CIGNA Pharmacy Management based in Bloomfield, Conn.

Many of CIGNA’s pharmacy programs demonstrate integration with the medical side with an emphasis on adherence. Although they are pharmacy-related, they have a large impact on medical cost reductions, such as emergency room visits and hospitalizations.

CIGNA’s Outcome Improvement Programs, which combine the use of prescriptions drugs, disease management and behavioral coaching, saw results in 2008:

• a 74% medication adherence rate led to 50% of those in the cholesterol program reaching their goals;
• a 78% decrease in LDL and the avoidance of 262 heart attacks annually saved $6.6 million;
• a 34% increase in use of drugs for treating asthma led to fewer emergency room visits and hospitalizations, cutting costs for participants by 50%;
• an adherence rate of 84% for diabetes drugs resulted in 13% fewer emergency room visits and 18% fewer hospitalizations; and
• a 35% increase in completion of depression treatment plans realized an 18% reduction in medical and behavioral healthcare costs.

Dovetailing with the program is CIGNA’s new CoachRx, an interactive Web site to enhance medication adherence with home delivery. A self-assessment helps members identify barriers to adherence and allows them to request daily reminders for self-care.

Those who need additional assistance can call toll-free for medication coaching sessions with a clinical pharmacist, who works with case managers. The coaching team will help find the most appropriate and cost-effective medications for a member, discuss possible side effects and reinforce the importance of taking prescribed medications as directed.

“In this way, we have used one intermediary to maximize health,” Burchill says.

To address high-cost drugs with the potential for side effects and infections, CIGNA offers TheraCare, a medication therapy management program targeting individuals using specialty injectable medications for 16 chronic conditions, such as multiple sclerosis.

“We still have a way to go in integrating pharmacy and medical benefits because the Rx benefit is administered in silos,” says Steve Mullenix, senior vice president of communications and industry relations for the National Council for Prescription Drug Programs (NCPDP). “Medicare Part D’s Medication Therapy Management Program is a step in the right direction, but we are still trying to buy drugs as inexpensively as possible without knowing the impact of the full picture. The right hand doesn’t know what the left hand is doing.”

For example, if a pharmacist dispenses a drug but it’s not refilled, that requires communication so that some action can be taken to encourage compliance.

Mullenix, whose organization focuses on developing consistent standards is concerned that without standardization, it will be difficult to create interoperability between proprietary systems.

“We are a proponent of a team approach to healthcare, including patients and pharmacists, who have become medication experts and need to be reimbursed for their guidance,” he says.

How the Cleveland Clinic uses IT to Help Anesthesiologists Improve Patient Safety

One example of the Cleveland Clinic’s increasing use of digital technology is the electronic reminders it sends to anesthesiologists to carry out a patient safety task, according to Marc Harrison, MD, chief medical operations officer at the clinic.

Research has shown that an antibiotic administered to a surgery patient within one hour before the operation can prevent surgical site infections. These infections lengthen hospital stays, cause readmissions and increase patient mortality. But Dr. Harrison says busy anesthesiologists can sometimes forget to carry out the task.

So a few years ago, patient safety personnel decided to set up the clinic’s IT system to monitor this task and send reminders those anesthesiologists not carrying it out.

Anesthesiologists at the clinic are regularly at a computer screen doing a variety of tasks, such as recording their tasks in the patient’s medical record. They tell the computer when they have administered antibiotics and the information goes into the clinic’s electronic database, Dr. Harrison says. A monitoring system queries the database in real time to determine if the antibiotic was administered and at what time, because poor timing affects potency of the dose. If the task is not carried out in a timely manner, a reminder automatically appears on the anesthesiologist’s computer screen.

For the alerts to work, Dr. Harrison says department heads have to meet with physicians, tell them about the system and explain why it’s important. “The physicians can self-manage because they want to do the right thing,” he says. “This works because physicians are data-driven, they are goal-oriented and competitive.

Since the reminder system was installed about two or three years ago, compliance with the safety directive has risen from 75-80 percent to 100 percent, Dr. Harrison says.

Last fall, the clinic introduced a similar electronic alert reminding caregivers to stop giving antibiotics within 24 hours after surgery, which is another patient safety measure. Compliance for that measure has risen from 90 percent to 100 percent.

Paying now and chasing later the worst way to counteract fraud

AS SHOWN BY several significant industry studies, fraud and abuse take an enormous bite out of national healthcare. According to a Thomson Reuters’ October 2009 report, fraud costs $125 billion to $175 billion a year, accounting for nearly one-fifth of all healthcare dollars wasted—about 7% of healthcare spending overall. Other experts put the figure as high as 10%.

Preventing funds from leaving the organization, rather than retroactively prosecuting those who took it, is critical, according to James Quiggle, director of communications for the Coalition Against Insurance Fraud, based in Washington, D.C.

“Once the money is out the door, it’s very difficult to recover,” he says. “And while an insurer is chasing money that’s already gone, new schemes spring up to take more. Health fraud is easy to get into and highly lucrative. An illiterate immigrant with minimal education could latch onto an organized gang’s scheme and be a multimillionaire a year later.”

On the bright side, efforts to prevent fraud and abuse typically provide an excellent return on investment. For every dollar a payer invests, there usually is a return of six or seven dollars, according to Louis Saccoccio, executive director of the National Health Care Anti-Fraud Assn. (NHCAA).

“Most importantly, all of the healthcare stakeholders need to share information about their fraud investigations,” he says. “Without the relevant information, technology can only do so much.”

Although everyone agrees the problem is rampant, the industry’s outlook on fraud frequently is different from that of the general public. While many in the general population focus on punishing the perpetrators, most health plans simply want to keep from paying out more money than they need to.

“The word ‘fraud’ generates a lot of excitement, because it’s easy to understand and generates a lot of interest from a public relations standpoint,” says Dean Farley, vice president with Eden Prairie, Minn.-based Ingenix Consulting.

In his role, Farley oversees the company’s prospective payment and payment accuracy consulting services. He says in many cases, the intent behind the transaction is difficult to determine, and ultimately irrelevant. From a payer’s perspective, the focus is on any type of incorrect payment or overpayment.

“The goal is to identify all types of overpayment and stop them before money leaves the organization,” he says. “And they’re less concerned with putting the bad guys in jail than they are ensuring that the bad guys don’t get the money in the first place.”

One of the greatest challenges payers have when battling fraud involves provider relations. The more aggressive a plan is when investigating suspicious claims, the more payments will be delayed.

Additionally, there are legal issues regarding prompt payment, at the state level and under ERISA. Many of the laws have exceptions for claims that a payer decides to investigate as potentially fraudulent. Still, unless the evidence is overwhelming, plans usually opt to simply pay it rather than risk worsening provider relations or legal issues.

PAYERS GIVE CHASE

Unfortunately, Quiggle says, paying now and chasing it later isn’t a very effective strategy.

“Once the money leaves the plan, it’s often gone for good,” he says. “These organized gangs are very smart in terms of covering their tracks, and steal with production-line precision and volume. They can steal tens of millions of dollars in a very short time and move much of the money overseas, making it virtually impossible to find. Even the money that stays here in the United States might have already been converted into a Ferrari or a villa by the time a health plan tracks it down.”

Anti-fraud technologies such as predictive analysis seek to identify potentially fraudulent behavior and can do it in near real-time, Quiggle says. Complex schemes that used to take investigators weeks or months of sifting through manila folders to discover, can be uncovered with predictive analysis overnight.

Because not every plan has the resources to invest in prevention, NHCAA has developed a fraud database, available to member companies and all government agencies.

“If someone is defrauding one payer, they’re almost certainly defrauding others, and government agencies as well,” Saccoccio says.

If Payer A (or a government agency) opened an investigation into potential fraud by a certain provider in a certain geographic area, they load the information into the system. Later, if Payer B has suspicions about that provider, they could see that Payer A already opened an investigation.

“The two could then compare notes and get a much better picture of what’s going on,” he says. “Much of the data we need to fight fraud already exists; we just need to share it and use it better.”

Quiggle says without collaboration, every insurance company is like the blind man touching an elephant: He can only get his arms around a small part of the problem and will never see the whole picture.

Overpayments that result from simple misunderstandings, however, might not be fraudulent, even though they cost billions of dollars each year. Part of the problem is the distance and time lapsed between the delivery of the service and the reimbursement for the service. The bill is the only real medium between the two, and payers have little insight into how providers create them.

“The bill is supposed to be a reflection of the medical record, but payers don’t have access to those unless they specifically ask for them,” Farley says. “If payers had more insight into what services are actually being delivered and the clinical condition of the patients when those services were delivered, overpayment would be a much smaller problem.”

And while health plans can’t communicate individually with every one of the thousands of providers in their network, they most certainly can communicate with them en masse. Transparency should be the first goal, Farley says.

“Health plans can use their Web portals to spell out, very clearly, exactly what their expectations are in terms of bill preparation,” Farley says. “They also need to make sure that their claims adjudication systems enforce those payment rules exactly as they are spelled out.”

Another step insurers can take is to design their processes to be similar to those of other health plans—or even the government. There’s a lot of talk about administrative simplification, but there isn’t much of it happening, Farley says.

“There’s no reason that a plan couldn’t align its methodologies with those of other payers, and there’s no reason they couldn’t use Medicare principles and Medicare billing requirements to drive their contracting,” he says. “Most providers are already familiar with those and it would help them understand what a payer’s requirements and expectations are.”

Farley also recommends that plans get serious about audits.

“You can’t check every claim, but you can convey to your network that you’re serious about identifying overpayments,” he says. “That delivers a message to the network, and prevention of overpayment is the number one goal.”

Michael T. McCue is a Virginia-based freelance writer.

President’s Budget Would Allocate $900B to HHS, Extend Higher Federal Medicaid Payments for Six Months

President Obama’s proposed $3.8 trillion budget for 2011, would allocate $900 billion for HHS, including a six-month extension of enhanced federal Medicaid payments to states.

In addition to $818 billion in mandatory spending, almost all for Medicare and Medicaid, the departments’ discretionary budget would increase by $1.7 billion, to $82.8 billion.

Here are some major features:

Six-month extension of enhanced Medicaid match. Allocates $2.5 billion for a six-month extension, through June 2011, of the stimulus bill’s temporary enhancement of the federal Medicaid match. The money would be part of $290 billion in federal funds allocated for Medicaid.

Medicare and Medicaid fraud and abuse. Adds a $2 million increase for the Office of the Inspector General to $52 million. However, the office is expected to recoup $722 million in waste, fraud and abuse. The budget “places a renewed emphasis on preventing, detecting and recouping fraudulent, abusive and wasteful payments,” the White House stated.

Comparative effectiveness research. Allocates $286 million for the Agency for Health Research and Quality “to compare the effectiveness of different options, building on the expansion of this research” under the stimulus bill, the White House stated. “The dissemination of this research is expected to led to higher quality evidence based medicine, arming patients and physicians with the best available information to allow them to choose the medical option that will work best for them,” the White House added.

Health IT adoption. Invests $110 million to build momentum on healthcare IT adoption.

Rural healthcare. Allocates $79 million for rural healthcare. The money would be used “to strengthen regional and local partnerships among rural healthcare providers,” the White House stated.

NIH research budget. Increases the National Institutes of Health’s health research budget by $1 billion. However, this proposed increase actually falls short of the $36 billion allocated to NIH in fiscal 2010, which was enriched by the stimulus bill.

Community health centers. Earmarks $290 million for community health centers.

Providers for underserved areas. Allocates $169 million for the National Health Service Corps to support 8,500 healthcare professionals in underserved areas.

ASCs were not specifically mentioned in the president’s proposed budget for fiscal year 2011, which begins on Oct. 1.

Read the White House’s release on its proposed federal budget.

President Obama’s proposed $3.8 trillion budget for 2011, released Monday, would allocate $900 billion for HHS, including a six-month extension of enhanced federal Medicaid payments to states.

In addition to $818 billion in mandatory spending, almost all for Medicare and Medicaid, the departments’ discretionary budget would increase by $1.7 billion, to $82.8 billion.

Here are some major features:

Six-month extension of enhanced Medicaid match. Allocates $2.5 billion for a six-month extension, through June 2011, of the stimulus bill’s temporary enhancement of the federal Medicaid match. The money would be part of $290 billion in federal funds allocated for Medicaid.

Medicare and Medicaid fraud and abuse. Adds a $2 million increase for the Office of the Inspector General to $52 million. However, the office is expected to recoup $722 million in waste, fraud and abuse. The budget “places a renewed emphasis on preventing, detecting and recouping fraudulent, abusive and wasteful payments,” the White House stated.

Comparative effectiveness research. Allocates $286 million for the Agency for Health Research and Quality “to compare the effectiveness of different options, building on the expansion of this research” under the stimulus bill, the White House stated. “The dissemination of this research is expected to led to higher quality evidence based medicine, arming patients and physicians with the best available information to allow them to choose the medical option that will work best for them,” the White House added.

Health IT adoption. Invests $110 million to build momentum on healthcare IT adoption.

Rural healthcare. Allocates $79 million for rural healthcare. The money would be used “to strengthen regional and local partnerships among rural healthcare providers,” the White House stated.

NIH research budget. Increases the National Institutes of Health’s health research budget by $1 billion. However, this proposed increase actually falls short of the $36 billion allocated to NIH in fiscal 2010, which was enriched by the stimulus bill.

Community health centers. Earmarks $290 million for community health centers.

Providers for underserved areas. Allocates $169 million for the National Health Service Corps to support 8,500 healthcare professionals in underserved areas.

ASCs were not specifically mentioned in the president’s proposed budget for fiscal year 2011, which begins on Oct. 1.

Read the White House’s release on its proposed federal budget.

Next Page »