Provider Bills: The Wild World of Hospital Chargemasters

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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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Learning Objectives

• 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.
• Know when to refer a bill for an audit.
• Know the differences among the various audits
  available.
• Understand the role of the Stop Loss Policy/Plan
  Document in a Provider Bill Audit.

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Provider Bills Golden Rule

• If youve seen one claim, youve seen one claim.

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Provider Bills The Basics

• Required Elements for Evaluating Claims
• UB 92 or HCFA 1500
• Itemized Claim
• Stop Loss Policy/Plan Document Language
• Operative Report if Procedure Completed
• Spinal FusionImplants
• Gastric Bypass
• Cochlear Implants

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Provider Bills Medical Necessity

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

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Provider Bills Medical Necessity

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

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Provider Bills Infants
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Provider Bills Infants

• Indications for Nitric Oxide Use
• Infants gt34 weeks gestation
• Hypoxic respiratory failure with pulmonary
  hypertension
• Conventional treatments have failed
• Should be performed in centers with ECMO
  capability

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Provider Bills Infants

• NICU has multiple Levels of Care
• Level 4 Cardiac ICU/ECMO
• Level 3 Neonatal ICU
• Level 2 Transitional Nursery/Step Down
• Level 1 Well Baby Nursery

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Provider Bills Inflated Charges

• 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
• Total Billed Charges 235,000
• PPO discount 20

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Provider Bills Inflated Charges

• Quant. Supply/Implants Price
• 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

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Provider Bills Inflated Charges
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Provider Bills Inflated Charges
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Provider Bills Inflated Charges
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Provider Bills Inflated Charges
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Provider Bills Inflated Charges
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Provider Bills Inflated Charges

• Potential Charge Issues
• Implants/Devices greater than 50 of total billed
  charges
• Daily Room Rates-ICU Bed Rate gt2,000/day,
  Med-Surg Bed Rate gt1,000/day
• Dialysis-Monthly Charges greater than 7,000 or
  individual Dialysis Charges greater than 2,000
• Erythropoietin (EPO)-Charges greater than 1,000
• Individual Chemotherapy/Radiation Therapy Claims
  greater than 15,000

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Provider Bills Inflated Charges

• Hospital of The University of Pennsylvania
• Philadelphia, Pennsylvania, 19104
• Hospital type Voluntary Nonprofit Other
• Data for the period ending 6/30/2006

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Hospital Charge Comparison(http//www.hospitalvic
tims.com)

• UPenn
• Hospital Mark-Up 473
• Cost to Charge Ratio 0.21
• Total Costs to Hospital 845,781,104
• Total Charges to Patient 3,997,318,578

• Johns Hopkins
• Hospital Mark-Up 122
• Cost to Charge Ratio 0.82
• Total Costs to Hospital 1,088,071,198
• Total Charges to Patient 1,327,547,538

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Provider Bills Inflated Charges

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

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Provider Bills Billing Errors

• Billing errors come in a variety of forms
• Duplicate Charges
• Incorrect Quantities Cochlear Implants
• Incorrect Pricing
• Surgical Misadventuresunused and/or incorrectly
  billed hardware
• 28 hour days for ventilator or respiratory care
• Equipment used for multiple patients

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Provider Bills Billing Errors
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Provider Bills Billing Errors
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Provider Bills Billing Errors
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Provider Bills Billing Errors
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Provider Bills Unbundled Charges

• Tests and other services that are automatically
  performed as a panel,group or set, should be
  billed asa single service.
• When a provider breaks these servicesout of the
  bundled group and bills them individually, the
  provider is deemed to be "unbundling."

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Provider Bills Unbundled Charges

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

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Provider Bills Unbundled Charges
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Provider Bills Unbundled Charges
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Provider Bills Multiple Issues
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Provider Bills Adjudication Options

• Adjudicate claim with the PPO discount
• Attempt negotiation with hospitaleven if PPO
  discount is in effect
• Clinical Review if Medical Necessity Issues
  identified.
• Provider Bill Audit if excess charges/billing
  errors identified.

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Policy Language(Both Stop Loss and Plan Document)

• Detailed UCR Language is to your advantage.
• Carve out drugs 200 of AWP
• Carve out Implants Invoice plus a percentage
• Percentile at which charges will be covered for a
  geographic region75th, 85th, 90th
• Cite sources Ingenix, Red Book, etc.

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Policy Language(Both Stop Loss and Plan Document)

• Specific and Detailed Definitions are most
  helpful
• Experimental/Investigational Language
• UCR Language
• Medical Necessity/Custodial Care
• Proactive Language is also helpful
• 50 notices
• Premium discounts for aggressive claim management

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Provider Bills In Summary

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

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Audit Options Reasonable Customary

• Advantages
• Significant Savings
• Prompt Turnaround
• Disadvantages
• No Opportunity to look at Medical Necessity
• Provider Appeals
• Possible confliction with PPO contract

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Audit Options Billing Errors

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

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Audit Options Billing Errors

• Generate Report
• Presentation to Provider
• Sign-off
• Appeal
• Negotiation/Settlement/Sign-off
• Advantages
• Provider Less Likely to Appeal
• Disadvantages
• Audit Does Not Address RC and May not Yield
  Significant Savings
• No Opportunity to Review the Medical Record and
  Medical Necessity

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Audit Options in Summary

• 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.
• Every Claim is Unique Find the Most Appropriate
  Audit Solution
• Understand and Enhance Policy Language to Support
  the Audit Process

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Questions/Comments
Thank you for attending!