When federal investigators visited Tampa (FL) General Hospital to look into how two patients were able to kill themselves within three days, they found other problems. At least five patients had to sleep in the hallway of the psychiatric unit so they all could be watched by one staffer, regulators said. Doing so failed in "providing for privacy and dignity," regulators for the Centers for Medicare and Medicaid Services said in a report. The report threatens to stop Medicare funding in September unless problems are fixed.
Franklin, TN-based Healthways Inc.'s stock fell nearly 22% after the company said it expects to earn much less in its fiscal first quarter than Wall Street analysts had forecast. The outlook comes as some outsiders warn that Healthways' services may be considered too high-priced in an era of rising medical costs in which corporate executives scrutinize expenses more closely and cut discretionary spending. Healthways provides medical support and health advice to members of health insurance plans who are at risk from chronic diseases such as diabetes.
Despite being plagued by a variety of ailments in recent years, healthcare stocks are emerging as one of the stock market's few bright spots. Over the past three months, healthcare companies in the Standard & Poor's 500 are up 4.4% on average, compared with a drop of 7.9% for the overall index. The strength in healthcare follows several years of underperformance.
The Chicago 2016 bid team is turning to the city's hospitals for help in attracting the Olympic Games. The sheer number of people at any summer Olympics requires a large pool of medical personnel, perhaps thousands. So Chicago's hospitals are being asked to submit proposals to fill this need of volunteers by becoming official medical-care providers if the city were to host the 2016 Summer Games. This request has brought some big names to the table, including Northwestern Memorial Hospital, Rush University Medical Center, and University of Chicago Medical Center. These and other hospitals are considering whether to submit a joint proposal or go at it alone, according to hospital sources.
A judge is considering the legality of a $200 million fund transfer made to help balance the Wisconsin budget. The Wisconsin Medical Society sued after the Legislature approved the transfer, arguing that taking money out of the fund used to pay medical malpractice claims was an illegal raid that puts patients and doctors at risk. The transfer is similar to others made over the years to help balance the state budget, state attorneys said. But the Medical Society said the large transfer makes the fund unstable and will result in an increase in charges to doctors and hospitals.
Some 650 of the 8,000 Iraqi physicians who fled the country since 2003 due to violence have returned to their jobs in the past two months, a Health Ministry official announced. The doctors have gone back to hospitals across Iraq due to the improved security, said Health Ministry Inspector General Adel Muhsin. Iraq's medical system is understaffed because of workers fleeing, and several weeks ago the government appealed to doctors to come home.
Patient-centered care, chronic disease management, self-care, and medical homes are all buzzwords in health policy circles due to the national dialogue about quality and systemic reform. But countless doctors are moving ahead on their own, reinventing their clinical practices and finding more-effective and more-fulfilling ways of practicing medicine. One such trend is the micro-practice: a low-overhead, high-tech office that gives physicians more control over how they treat patients and more time to spend with them.
Health plans have warned the brokers who sell their products to stop efforts to save employers money by combining two different types of insurance products. Those that do could be kicked out of the sales network. The health plans are also asking employers to sign statements saying they will not combine some high-deductible plans with certain types of self-insurance. If they combine such plans or refuse to sign, they could lose coverage.
Inking deals with International Hospital Corp. and India's Wockhardt Hospitals Group allows Companion's clients a wider choice for procedures at JCI-accredited hospitals. +
In 2004, the Centers for Medicare and Medicaid Services instituted a "one-way edit protocol" for transfer diagnosis-related groups. While CMS identifies and recovers any overpayments, it does not identify underpayments. CMS says "hospitals are responsible for researching their own claims, identifying underpayments, and correcting claims accordingly." Since 2004, PPS hospitals may still be underpaid for transfer DRGs—and may not know it.
On Oct. 1, 1998, 10 DRGs were identified as "likely to result in a transfer to a post-acute provider that might require a PPS payment adjustment through DRG pro-ration." Under MS-DRGs, transfer DRGs increased to 263 and now could be as much as 50% of total Medicare discharges.
Current CMS policy states that full payment will be made to the final discharging hospital, but the transferring hospital will be paid a graduated (pro-rated) rate for each day of the patient's stay, not to exceed the full DRG payment.
Hospital inpatients qualify as a "transfer" when a patient is discharged to:
A hospital or hospital unit that was excluded from PPS
A skilled nursing facility
The patient's home, where there was a written care plan for home health and the services began in a timely manner
When CMS added edits to detect discharges paid at full DRG rate that should have been pro-rated (paid at per-diem), CMS identified over-payments and made recoupment. Unfortunately, no edits were included for underpayments. Thus, hospitals may not know that an underpayment occurred.
Impact on PPS hospitals
As much as 20% of pro-rated transfer DRGs should have been paid at full DRG rate. With no assistance from CMS or their financial intermediary, PPS hospitals must research, review, and recover underpayments on their own—or risk being underpaid.
With the growth of transfer DRGs from 30 to 263 under MS-DRGs, the underpayment universe has quadrupled in just four years—from $600 million in FY 2004 to $4 billion in FY 2007. According to IMA Consulting, underpayment can be 10% to 20% of total of transfer DRG payments.
Recovering Underpayments
As transfer DRG recovery can be significant, PPS hospitals should consider the following:
Review all paid Medicare (acute inpatient) claims with one of the respective transfer DRGs (190 for FY 2007 and 263 for FY 2008).
Confirm post-discharge care actually provided and timeliness.
Compute applicable underpayment.
Correct claims to recover underpayments.
Deadlines for FFY 2007
For FFY 2007 (Oct. 1, 2006, through Sept. 30, 2007), corrected claims must be completed by Dec. 31, 2008. As it can take four months or longer to confirm, compute, and collect transfer DRG underpayments, PPS hospitals should start no later than by Sept. 1, 2008, to ensure FFY 2007 completion by Dec. 31, 2008.
Tony Scarcelli at IMA Consulting advises: "The medical record confirms what happened in the hospital, but transfer DRG research must identify what happened after the patient was discharged." Such research, review, and recovery can involve thousands of Medicare claims. When PPS hospitals have a short time frame (less than six months), they may elect to outsource this task in order to insure timely recovery. For Evaluation Criteria, see Fact Box 1.
Open Opportunity
All FFY 2007 recovery tasks should be completed by Dec 1, 2008, to ensure full recovery. One financial intermediary paid skilled nursing facility underpayments, but denied HHA underpayments that were filed at the same time for the same hospital for the same fiscal year.
Still a strong recovery opportunity, transfer DRG underpayments reaffirm that PPS hospitals should be diligent to insure proper Medicare reimbursement.
Fact Box 1: Evaluation Criteria
States with the largest number of dollars at risk:
California: $177 million (97% increase)
New York: $155 million (89% increase)
Florida: $129 million (79% increase)
Ohio: $109 million (67% increase)
Pennsylvania: $106 million (91% increase)
Illinois: $104 million (79% increase)
Texas: $103 million (76% increase)
Fact Box 2
States with the largest number of claims at risk:
Florida: 58,000
California: 55,000
Ohio: 45,000
New York: 44,000
Texas: 43,000
Pennsylvania: 42,000
Illinois: 41,000
Bill Phillips is adjunct professor of Healthcare Finance, Health Services Management & Leadership at The George Washington University and Vice President and Chief Revenue Officer for Revenue Strategies Inc. He may be reached at 786-371-6493 or billinfll@juno.com.
