University of Miami Hospital overbilled Medicare $3.7 million, audit says

BY DANIEL CHANG
dchang@MiamiHerald.com

CARL JUSTE / MIAMI HERALD FILE

University of Miami Hospital.

The University of Miami Hospital will have to refund $3.7 million to Medicare after a federal audit of the hospital’s billing practices found the hospital overbilled in 2009 and 2010, according to a report released Tuesday by the U.S. Department of Health and Human Services Office of Inspector General.UM issued a statement Tuesday saying the university is working “with the relevant federal agencies to determine the correct amount owed for billing inaccuracies.”
In July, UMH Chief Financial Officer Darryl Caulton filed a letter contesting the inspector general’s method for calculating the refund to Medicare, saying the hospital “disagrees” with the way the figure was determined.
The federal audit covered $22.8 million in Medicare payments to the hospital for 2,194 claims that HHS officials considered “at risk’’ for billing errors. From that pool of claims, investigators randomly selected for review a sample of 200 inpatient claims for services between April 2009 and December 2010 that totaled $2.9 million in payments.
Investigators found that although the hospital complied with Medicare billing requirements for the majority of the 200 claims reviewed, 68 claims — representing $524,009 in overpayments — did not comply with agency rules.
Based on those findings, investigators extrapolated the total amount of overpayments to be approximately $3.7 million.
“Overpayments occurred primarily because the hospital did not have adequate controls to prevent incorrect billing of Medicare claims within the selected risk areas that contained errors,’’ according to the inspector general’s report.
Investigators identified the questionable claims using computer matching, data mining and analysis of inpatient claims.
According to the report, the hospital overbilled Medicare in five ways:
First, hospital administrators incorrectly billed Medicare for patient stays that should have been billed either as outpatient or outpatient with observation services.
“These errors occurred because of weaknesses in the hospital’s review process and turnover in case management leadership,” according to the report. Investigators estimated the errors caused Medicare to overpay about $448,000.
In addition, investigators found that in three cases the hospital billed Medicare separately for a patient’s discharge and readmission on the same day — even though those charges are supposed to be combined into a single claim. The three cases, between April 2009 and December 2010, caused overpayment of about $33,645, the report found.
The third type of overbilling came through use of incorrect diagnostic codes, the report said, which occurred in five of the 200 cases reviewed, and led to overpayments of $17,475.
UM hospital administrators also erred by billing Medicare for three patient discharges that should have been coded as transfers because the patients were readmitted to other hospitals the same day they were released from UM Hospital. That led to another $16,407 in overpayments, according to the report.
Lastly, HHS investigators said UM overbilled Medicare by about $8,500 for one claim because the hospital didn’t get an available credit for a replaced medical device.
According to the report, the hospital may be able to re-bill Medicare for some of the claims that were found to be overpaid.
In a six-page letter addressed to HHS auditors, Caulton, the hospital’s CFO, said the institution accepts the findings and will tighten internal controls by using an electronic quality review process. Caulton also said the hospital will improve billing controls, conduct quarterly audits of short stay accounts and place an automatic hold on Medicare claims for patients staying less than three days until the claims are released by a case manager.
But Caulton took issue with the methodology used to calculate the refund amount, and requested that HHS reconsider the sum.
He said that some of the questionable claims may be eligible for re-billing and that federal officials should not have used a sample of cases to estimate the refund amount without first resolving the re-billing question.
In the letter, Caulton noted that other audits by the inspector general “almost without exception” recommended repayment solely of the audited cases — not estimates based on a sample of claims.
“There is no reasoned basis for treating UMH differently,’’ Caulton wrote.
Donald White, a spokesman for the HHS inspector general, said extrapolation is an “extremely common” practice in determining Medicare overpayments. But he added that the refund amount is a recommendation.
The next step, White said, is for UM administrators to negotiate a repayment amount with the Center for Medicare and Medicaid Services, which administers the programs. The process usually takes 60 to 90 days, he said, but “given the government shutdown, it could be longer.”
The university bought the 560-bed former Cedars Medical Center in 2007 for $275 million. The purchase was one of several high-profile steps in the expansion of the Miller School of Medicine that included hiring more than 100 renowned researchers and creating a biotech research park to boost the school’s national profile.
The ambitious moves elevated UM’s medical school to the national stage, but they also may have seriously hampered it. In spring 2012, after suffering a $24 million loss for the first six months of that fiscal year, the medical school laid off more than 900 full- and part-time employees.
In August, UM and Jackson ratified their annual operating agreement for $102.5 million, the lowest-budgeted agreement in seven years. In the agreement, a binding letter of intent commits both institutions to multi-year exclusivity provisions for transplant, trauma, pediatrics and obstetrics services.

http://www.miamiherald.com/2013/10/08/3678166/university-of-miami-hospital-overbilled.html

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Harvard Pilgrim Brings Medicare Advantage to Central Mass.

MICHAEL NOVINSON

Following a three-year hiatus, Harvard Pilgrim will once again offer Medicare Advantage in Worcester County.

The Wellesley-based health plan will reintroduce its Medicare plan to Worcester and three other Massachusetts counties at the start of 2014, the company announced Tuesday.

"It's best for the seniors," said Deb Rittenour, vice president for senior programs. "We're giving them options and we're giving them choice."

Senior citizens can begin signing up for Harvard's Medicare Advantage plan Oct. 15. The company is looking to expand its Medicare coverage to additional Bay State counties in 2015, Rittenour said.

Harvard Pilgrim discounted its fee-for-service Medicare offerings for Worcester County and elsewhere in 2010 after the federal government made the incentives for such plans less favorable, Rittenour said. Medicare Advantage is offered by commercial insurance companies, who in turn, are compensated by the federal government.

http://www.wbjournal.com/article/20131008/NEWS01/131009955/1002

Embedding shared decision making in primary care

Sharing decision making with the patient benefits individuals and the NHS as a whole

Making shared decision making a reality can be acheived if it is streamlined into routine NHS processes. Photograph: 3M

Overview

"No decision about me, without me" is the fundamental principle underpinning many of the current changes in NHS healthcare. Healthcare professionals may fail to recognise how knowledgeable patients are, or to understand the beliefs of individuals and groups. By engaging in balanced discourse, clinicians not only help a person come to terms with their needs and the potential gains and losses from different treatment approaches, but also broaden their own understanding of what is important to people.

The principle of engaged patients being well informed and taking a central role in all decisions made in their care is neither new nor revolutionary, but some patients may be passive receivers of care and many medical professionals, inadvertently or otherwise, are paternalistic in their delivery. Sharing decision making with the patient, referenced to understandable evidence and timely support when selecting investigation and treatment options, benefits not only individuals but the system as a whole.

Project Aims and Methods

Making shared decision making (SDM) a reality for patients can only be achieved if it is systematically streamlined into routine NHS processes, steering clear of lengthy bureaucracy. Nationally, a number of tools have been produced which now need to be rolled out locally and regionally. In order to support this work in the south of England, a 'community of interest' has been established to enable interested clinicians, who want to know more, to access training, ideas and peer support to try things out in their own clinical context.

Activities in the community of interest include a focus on integrating shared decision making so it becomes an integral part of the patient pathway and clinical behaviours. As well as embedding shared decision making from the provider perspective, SDM needs integrating into policies, commissioning systems and consent procedures. A particular focus therefore for the community of interest is to provide information, insight and advice about how clinical commissioning groups (CCGs) can deliver on their statutory duties, including practical tools and processes, and indicators of what "good commissioning of shared decision making would look like" at CCG level. A range of different activities have been delivered since the community was established, utilising new technologies to spread the word through different channels.

Findings

Twenty-two clinical commissioning groups across the south of England responded to an initial survey. Ninety-five per cent of respondents asked for more information or support on shared decision making. Fifty-six per cent of respondents definitely understood what SDM is trying to achieve and 63% indicated that SDM featured in their CCG plan. In relation to CCG plans, 45% included SDM in planned care (specifically MSK) and 35% in relation to long-term conditions. Fieldwork indicates that, in reality, CCGs are at very varied stages in their development which can be categorised as:

• Interested in SDM and currently developing an understanding of how to implement in practice
• Interested and with some engagement to introducing SDM in an identified clinical area
• Have a full SDM plan with internal accountability for delivery

The implications for the community of interest are to develop a wider suite of options to address the variability in practice. Regular WebEx updates from practitioners, tailored visits and expert mentorship to support specific initiatives, and the development of materials for patients and clinicians, are all part of the range of offerings needed to move individual CCGs on from their various starting points.

Recommendations

The wider implication for policy from the work carried out in the South of England is that more time and resource needs to be given to supporting the CCG community with practical help for implementation.

This includes developing an evidence base of the impact on patients of the use of patient decision aids and option grids, as well as assessing the impact on patient satisfaction of commissioning changes. Peer learning and clinical engagement are critical to embedding deep change in relation to shared decision making.

Working with Thames Valley HIEC

This project was carried out by the knowledge team, with project support from Pfizer Ltd and funding from NHS South of England and Pfizer Ltd. Pfizer are supporting the project as part of their commitment to work together for Britain's national health through partnership.

We can help you by:

• Involving you in the Community of Interest for shared decision making in the south of England
• Advising you on the appropriate level of support to help you meet your current CCG aims for SDM
• Signposting you to the national tools and approaches.

Thames Valley Health Knowledge Team

Contact: Email: knowledgeteam@tvhiec.org.uk

http://www.theguardian.com/healthcare-network/healthcare-innovation-partner-zone/shared-decision-making-primary-care

It’s Time for Episode-Based Health Care Spending

by Adi Kumar, Thomas Latkovic, and Daniel Tsai  |   1:00 PM October 8, 2013

There is widespread agreement that if the United States is to achieve sustainable levels of health care spending, it must make greater use of payment mechanisms that reward physicians, hospitals, and health systems for the results achieved. The vexing question is how best to make this transition.

Today, payers and providers are using a range of strategies to accomplish this goal, including patient-centered medical homes, value-based contracting, and accountable care organizations (ACOs). We applaud this trend. However, our research and experience have convinced us that the transition to outcomes-based payment will occur more easily if both payers and providers take an intermediate step and make greater use of retrospective episode-based payment (REBP).

REBP focuses on “episodes of care” (any clinical situations that have relatively predictable start and end points such as procedures, hospitalizations, acute outpatient care, and some treatments for cancer and behavioral health conditions). REBP identifies which provider is in the best position to affect the clinical outcomes and total costs associated with an episode of care; it then assesses (through retrospective analysis of claims data) the outcomes achieved and costs incurred during each episode over a specific period of time (e.g., quarterly). The identified providers are then rewarded or penalized based on their average performance across all the episodes.

The desire to jump straight to outcomes-based payment models focused on the total cost of care for an entire population has led many payers and providers to overlook, or give up on, episode-based payment. We believe it is worth reconsidering.

The Advantages

REBP offers a number of advantages. For example, because it uses the current fee-for-services claims system as its administrative platform, it does not require providers to make significant investments in new infrastructure or establish new contractual arrangements with other providers. And because it focuses on acute episodes, REBP acts as a necessary complement to payment and care-delivery models designed to improve prevention and chronic-care management. Furthermore, administering and/or participating in an REBP model can help both payers and providers develop many of the capabilities they will need for total-cost-of-care management. In short, REBP can serve as a bridge to more comprehensive total-cost-of-care approaches.

How Does REPB Work?

In the U.S. health system today, a dozen or more providers may be involved in an episode of care, and each provider typically bills separately. None of these providers is rewarded financially for helping ensure that the desired clinical outcome is delivered with the highest quality at lowest cost across the entire episode.

REBP is designed to change that. It is somewhat similar to and shares many of the same goals as the “prospective bundled payment” approach, which calls for making a single payment (or budget) to the accountable provider for all the services used to treat each specific episode for each specific patient. But key differences in design and administration make REBP more scalable in the current U.S. health system.

The six core steps required to implement REBP are listed in the exhibit “Steps Required to Implement REPB.”

Why Should Payers Pursue REBP?

Our analysis of data from private insurers, Medicaid, and Medicare suggests that 50% to 70% of all health care spending could be included within episodes of care. REBP establishes end-to-end accountability for more than half that spending.

REBP also gives payers a direct way to incentivize providers to reduce health care waste. We have consistently observed that some providers deliver the same or better clinical outcomes at dramatically lower costs than other providers in the same market. The exhibit “Average Cost Per Episode Varies Significantly Across Providers” illustrates variations in average, total per-patient costs for three different episodes in three different states. Even after we excluded patients with certain complicated conditions and adjusted for patient severity, the average cost per episode in each market still varied from 60% to over 300%. Further analysis showed that much of this variation could be explained by differences in practice patterns (e.g., decisions about device selection, diagnostics use, discharge planning, hospital admission).

REBP also offers a quick path forward, because it requires only modest additional infrastructure. We have seen multiple payers define and implement the necessary infrastructure within six months of when they agreed on an episode’s definition. Turnkey analytic vendors are also beginning to emerge.

In addition, REBP gives payers considerable strategic flexibility. Many REBP parameters can be adapted to address local conditions, align with network and member-engagement approaches, and strengthen competitive advantage. Among these parameters are cost thresholds, stop-loss provisions, the degree of gain- and risk-sharing, whether and how to normalize unit prices, and whether to steer members to certain providers.

Finally, REBP gives payers a way to prepare for the future, when episode-based performance management is likely to be a required capability. Most providers do not have access to sufficient claims data to assess performance on their own. If providers are to accept partial or total cost-of-care accountability, payers will need to offer them a performance-management infrastructure to understand clinical outcomes and costs.

Why Should Providers Pursue REBP?

If contractual terms are fair, REBP can deliver meaningful value to acute-care providers in particular. For example, it has the potential to give them a net increase in margin, because many of the sources of savings are either variable costs to these providers (e.g., implantable devices, extra care required for surgical complications) or are associated with upstream or downstream providers (e.g., pharmaceuticals, physical therapy, skilled nursing facility care). REBP can also help acute-care providers reinforce and accelerate existing strategic priorities, such as improving how hospitals influence and partner with physicians, increase adoption of clinical pathways, and reduce input costs.

REBP empowers all accountable providers by reducing the need for payers to monitor clinical decision making (e.g., through preauthorization). It also positions them to assume a stronger role in influencing the performance of upstream and downstream providers.

Strong episode performance has the potential to strengthen a provider’s value proposition to patients, employers, and payers. It may also be grounds for negotiating a stronger network position.

Furthermore, REBP requires providers to make only small, if any, investments in new infrastructure — at least initially. And it will enable them to strengthen their ability to understand end-to-end performance, a capability any providers considering more holistic total-cost-of-care payment models will need.

What Changes Must Payers Make?

To implement REBP at scale, most payers will have to shift their focus from prospective to retrospective models in most markets. Doing so will enable payers to simplify their infrastructure and focus on analytic processes that are separate from claims adjudication. This infrastructure is less invasive, requires less investment, and offers faster time-to-market than do solutions that necessitate material changes to claims-adjudication processes.

Second, payers will need to develop greater technical sophistication to ensure fairness (e.g., through episode-specific risk adjustments) and provider acceptance. They will also have to develop or adopt new standards as they emerge. The Center for Medicare and Medicaid Innovation’s efforts to create standard episode definitions, including through the Bundled Payments for Care Improvement Initiative, are a promising starting point.)

Finally, if REBP is to succeed, payers will have to implement it at scale by promoting REBP, whenever possible, across all books of business and all network providers. Most payers should also strongly consider participating in multi-payer efforts to set standards to help overcome common barriers to implementation.

Follow the Leading Health Care Innovation insight center on Twitter @HBRhealth. E-mail us at healtheditors@hbr.org, and sign up to receive updates here. 

http://blogs.hbr.org/2013/10/its-time-for-episode-based-health-care-spending/