Provider Bills: The Wild World of Hospital Chargemasters

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

2. Learning Objectives • Understand how to assess provider bills for unbundled charges, inflated charges, billing errors, level of care issues, and coding errors. • 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.

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

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

5. 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

6. 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

7. Provider Bills: Infants

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

9. 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

10. 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%

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

12. Provider Bills: Inflated Charges

13. Provider Bills: Inflated Charges

14. Provider Bills: Inflated Charges

15. Provider Bills: Inflated Charges

16. Provider Bills: Inflated Charges

17. Provider Bills: Inflated Charges • Potential Charge Issues: • Implants/Devices greater than 50% of total billed charges • Daily Room Rates-ICU Bed Rate >$2,000/day, Med-Surg Bed Rate >$1,000/day • 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

18. 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

19. 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 Hospital Charge Comparison(http://www.hospitalvictims.com)

20. 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.

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

22. Provider Bills: Billing Errors

23. Provider Bills: Billing Errors

24. Provider Bills: Billing Errors

25. Provider Bills: Billing Errors

26. 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."

27. 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

28. Provider Bills: Unbundled Charges

29. Provider Bills: Unbundled Charges

30. Provider Bills: Multiple Issues

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

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

33. 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

34. 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

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

36. 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

37. 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 R&C and May not Yield Significant Savings • No Opportunity to Review the Medical Record and Medical Necessity

38. 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

39. Questions/Comments Thank you for attending!