Loading...
HomeMy WebLinkAboutMINUTES - 05131997 - C53 To: BOARD OF SUPERVISORS ��//� �`:......�.-...•� Contra L :. . FROM: William B. Walker, M.D., Health Services Director, J� ;� ,s Costa April 24, 19974 y' �u / DATE: SUBJECT. Subject: United States v. Merrithew Memorial Hospital: Department of Justice Settlement Agreement Regarding Medicare Three Day Window Violations SPECIFIC REOUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION Recommended Action: Accept report and ratify the Health Department's action to settle disputed Medicare claims. Background Information: Under the Medicare Prospective Payment System, hospitals are required to include as an inpatient service certain non-physician outpatient services that are rendered by the hospital within three days (72 hours) immediately prior to the date of the patient's admission. These outpatient services which are provided in conjunction with inpatient admissions are reimbursed as part of the DRG. For a variety of reasons, many hospitals have not complied in full with this rule and have billed and subsequently received Medicare payments to which it was not entitled. The Department of Health and Human Services has identified 4,660 hospitals nationwide that they believe have submitted improper Medicare billings. Audits by the HHS inspector genera's office indicated that Medicare may have overpaid these hospitals by as much as $141.6 million from 1983 through 1993. The Department of Justice (DOJ) has concluded that these improper billings are subject to adjudication under the False Claims Act which has both criminal and civil sanctions.. The criminal sanctions can reach the level of a felony, and the civil sanctions require payment of the overcharges, treble damages, and a minimum $5,000 fine per claim. Investigations have been conducted by the United States Department of Justice as a means to recoup funds paid to hospitals in violation of this rule. Over the past year, the DOJ has been conducting such an investigation in California. The focus of the investigation was on claims filed between 1987 and 1991. During March, 470 California hospitals received demand letters and settlement agreements. Account specific information was also included in this correspondence. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER t SIGNATURE(S): ACTION OF BOARD ON May 13, 1997 APPROVED AS RECOMMENDED X OTHER s r VOTE OF SUPERVISORS _ 1 HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS(ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. CCONTACT: Patrick Godley - 370-5005 May 13, 1997 riiTESYEL) Health Services Director PHIL BATCHELOR,CLERK OF THE BOARD OF George Washnak, Controller SUPERVISORS AND COUNTY ADMINISTRATOR 20 .Allen St. M382 (10/88) BY ,DEPUTY U.S. V. MMH � 3 Page 2 Settlement Offer: On March 13, 1997, the DOJ advised Merrithew Memorial Hospital that the Office of Inspector General's audit has concluded that we had improperly billed three claims totaling $195.28 between November 1, 1990 and December 31, 1991. In addition, there were 20 duplicate claims totaling $8,334.88 between December 1, 1987 and October 31, 1990. Under terms of the settlement agreement, the United States will accept $6,333.68 as the total amount due. For its part, the hospital agrees to implement a series of measures designed to demonstrate its good faith efforts to comply with Medicare billing rules for outpatient services rendered in connection with an inpatient stay. The parties acknowledge that because of the volume of Medicare claims submitted, and the variety of clinical circumstances to which the rule for billing outpatient services may be applicable. In all likelihood, claims will be submitted by the hospital subsequent to the effective date of this agreement. If the hospital implements these measures, the United States will deem "any claim(s) submitted subsequent to the effective date hereof to have been inadvertent and not submitted with a deliberate ignorance nor with a reckless disregard for a claim's accuracy or correctness". Merrithew Hospital Good Faith Compliance: The hospital is already in compliance with measures deemed appropriate to demonstrate good faith efforts which the Medicare billing rules. Specifically, the hospital's Keane PATCOM Patient Accounting system meets the condition that the hospital install and maintain computer software that will permit it to identify occasions of non-physician outpatient services rendered within the applicable time period of an inpatient admission. The PATCOM system automatically generates reports listing any inpatients admitted the current day who also have outpatient or emergency room visits within 72 hours of the admit date. These reports are used to initiate the research necessary to determine whether or not the outpatient visits are related to the inpatient visit. In addition, the Patient Accounting inpatient billers routinely conduct manual reviews to determine whether any outpatient visits exist within three days prior to billing any inpatient Medicare claim. This manual check, in and of itself, would also serve to meet the conditions of compliance. Finally, Medicare claims are electronically transmitted to the fiscal intermediary via a Blue Cross Direct Data Entry system. This system is designed to automatically disallow transmission of any claim which violates the Medicare 72 hour rule. The settlement agreement also requires the hospital to conduct an annual instruction program for any personnel involved in preparing or submitting Medicare bills relating to outpatient services rendered in connection with inpatient admissions. This training program "shall address the submission of accurate bills for services rendered to Medicare patients, responsibilities of each individual involved in the billing process, the legal sanctions for improper billings, and an identification of examples of misbilling and improper billing to Medicare". The Patient Accounting Department routinely conducts in-service training with staff members. In addition, members of the billing department routinely attend Medicare billing seminars conducted by our fiscal intermediaries. Such training programs will continue to remain part of the department protocol. US V. MMH Page 3 Summary: We are satisfied that the small account volume and dollar sanctions confirm that the proper mechanisms for compliance are already in place. As the terms of the settlement acknowledge, due to the large volume of Medicare claims submitted, and the variety of clinical circumstances to which the rule for billing outpatient services may be applicable, in all likelihood, erroneous claims will be submitted by the hospital subsequent to the effective date of this agreement. We have conducted an audit of the 23 claims in question. Each claim, did in fact, represent a duplicate bill for which we did receive payment over and above the DRG payment. These claims fell into three categories: 1. Outpatient services received within three days of an admission (16 claims). 2. Services received during an inpatient stay which were erroneously assigned an outpatient account number(3 claims). The computer software designed to flag outpatient visits within 72 hours of the admit date is not designed to flag outpatient visits registered during an inpatient stay. These accounts must be manually flagged by the billers. 3. Mental Health services received either during an admission or within three days prior to an admission (4 claims), Mental Health services are not billed by the PATCOM billing system and therefore cannot be screened by the PATCOM computer software. These accounts must also be manually flagged by the billers. It should be noted that during the 49 month time frame of this audit, there was an estimated 1,000 to 1,100 Medicare discharges billed per year. There was also an estimated 18 - 20,000 outpatient medical visits and 14 - 16,000 outpatient mental health visits billed to Medicare per year. The total of 23 inpatient claim duplicate billing errors during this time computes to approximately one- half of one percent (0055).