Posts Tagged medicaid
Trying to define the market value of someone’s professional services is difficult when those services are typically paid at vastly different rates, depending on the payer, especially when the party paying is usually not the direct recipient of the service. So when an emergency physician provides clinical services to a patient, how are those services valued by different payers, and what does that say about the reasonable market value of those services?
For example, let’s say that you come to the emergency department with an acute asthma attack: you can’t breath well, and your inhaler hasn’t helped to break the attack. A pretty straight-forward case, really: your ER doc does a history and physical exam, orders up some oxygen and a few respiratory therapy treatments, some steroids, perhaps an IV to rehydrate you and get access in case your condition worsens and you need IV meds, and returns to re-evaluate you every 15 minuets to make sure the treatments are working. Two hours later, you are able to go home with a script for three days of Prednisone and a refill for your Ventolin inhaler as the one you have is running low. You get instructions on how to care for yourself at home, when to see your primary care doctor, and what you should do if the wheezing comes on again despite the treatment. Chances are, you will likely get a charge for this service from the physician for 99284 level care for around $320, give or take, if you live, let’s say, in central California.
If you didn’t have insurance, you would be expected to pay the full charge. Unfortunately, many patients can’t afford to pay; or could afford to pay but are just irresponsible, and don’t pay anything. If the patient pays nothing, the emergency physician may be able to recover about $45 from California’s EMS Fund, a tobacco settlement funded program that pays on average about 15% of the emergency physician’s fee.
However, if you were uninsured with a family income at or below 350% of the federal poverty level; or you are insured and have incurred high medical costs (greater than 10% of family income over the prior 12 months) with a family income at or below 350% of federal poverty, and you submitted a request for a discount; you would (by virtue of California law) only have to pay 50% of median billed charges of a nationally recognized database of physician charges, probably around $150.
If you were covered by your County’s new Low Income Health Program (a family of 4 making less than $41,000/year), the county may pay the emergency physician about 30% of the Medicaid rate, or a whopping $21.
If you were covered by California’s Medi-Cal program, one of the lowest paying Medicaid programs in the country: $68.
If you were covered by Medicare: the federal program would pay about $125.
If you had HMO coverage, but had to go to a closer out-of-network ER, your HMO would pay the ER doc between $140 and $250.
If you had PPO coverage, the plan would pay between $175 and $240, minus any co-insurance payment, and you would have to pay the rest up to the $320 charge.
So, for a $320 emergency physician service, the emergency physician might receive anywhere from the full $320 down to $21, and about 10% of the time – nothing. The average emergency physician in California provides about $140,000 a year in unreimbursed care.
Of course, in order to provide these services, the emergency physician has to spend $10 to pay for malpractice insurance, $30 for billing services, and additional costs for other overhead amounting to a total of about $55 for every ED patient treated (even if the payment is $0)
So, what’s the real market value for an emergency physician’s services? I would argue that it is the full amount that the emergency physician charges, as long as these charges aren’t significantly higher than what other emergency physicians in the same area charge, but then I just paid a heating technician $175 for 10 minutes of maintenance on our furnace. Others would argue differently, but their estimate would be based on their particular agenda: protecting those living in poverty, reducing costs for the employer, dealing with government budget deficits, or making higher profits for the insurer. Unfortunately, none of these advocates actually provides emergency care to anyone.
By the way, if you were suffering from a heart attack or serious injury, and the emergency physician (and his team) actually saved your life (it happens hundreds of times every day), the emergency physician’s charge would be around $800 to (rarely) $2000. So, what’s the real market value of YOUR life?
This post also appears on the blog The Fickle Finger www.ficklefinger.net/blog/
Did you hear? “The ER physicians and hospitals have been abusing their privileges as providers of ER services for years,” according to the Chief Medical Officer for the Washington State Medicaid Program.
These are the statements that make involvement in organized medicine and participation in leadership at all levels critical. But where do we acquire the skills to combat these misperceptions and outlandish statements?
In May every year, there is a one of a kind event in Washington, DC called the ACEP Leadership and Advocacy Conference. It is an intimate conference with about 500 attendees, representing leaders in emergency medicine from across the country.
The conference focuses on principles of leadership, current issues in advocacy, media training, and practical everyday leadership challenges that will confront leaders in every state. It is also an excellent opportunity to network with colleagues from across the country.
When I first attended 5 years ago, I went as a member of the EMRA Chair’s Challenge and the incoming Legislative Advisor for EMRA – a neophyte to organized medicine by all accounts. It was an eye-opening experience to be talking with the leaders of our specialty. These were the people and faces that went with the legendary names I read about in Annals and ACEP News. Now I was talking with them, learning from their experiences and stories, and finding out how varied the opportunities were in emergency medicine.
From chairs of departments, leaders of advocacy groups such as the AARP, AMA delegates, speakers of the council, and so many others, I had the chance to see and live the history of our specialty. Then on the final day of the conference, we put it all together and walked up to Capitol Hill as hundreds of physicians representing our millions of patients to share our stories with elected officials and change the face of medicine.
This year it is my privilege to share with you my experience in Washington State, having put these skills into action on the local level. When I joined the Washington ACEP Board of Directors, I never imagined I would use so much of what I learned at LAC. From media training skills in doing press interviews and the gotcha journalism warnings, to relationships I have leaned on for statistical assistance in fighting misleading information, and the practice of speaking with legislators – these are all invaluable skills.
If you have the slightest of desire to join the leadership of emergency medicine in your hospital as a facility medical director, at the state level in an ACEP Chapter, nationally on a committee, or be involved in one of the hundreds of other ways possible, I encourage you to attend ACEP’s Leadership and Advocacy Conference in May. It is the conference that I walk away from every year re-invigorated and ready to take on the challenges of caring for our patients in the halls of our department, but also and more challenging often, the halls of the Legislature. You will not regret coming to DC, but you might just regret missing it!
In response to a suit by emergency physicians and hospitals in Washington State that led to a judicial injunction against the State’s plan to restrict Medicaid payment for ED visits, the State of Washington’s Health Care Authority has conspired with CMS to require emergency physicians to provide services to Medicaid enrollees for free. Emergency physicians are required by law (EMTALA) to provide medical screening services (and stabilizing care) to anyone who presents to an emergency department, and these physicians are subject to severe fines and penalties if they fail to provide these services.
CMS is well aware of this obligation, yet this agency has notified the State of Washington that the Medicaid program may ‘proceed under its existing authority to pay for only medically necessary Emergency Room visits’ based on a list of so-called ‘non-emergency diagnoses’ submitted on claims to the Medicaid program in that State (and presumably, other states that want to use the same process). Thus, the federal government is requiring emergency physicians to perform a medical screening evaluation (which can be as simple as a brief history and exam, or as complicated as a full and thorough evaluation to rule out subtle but potentially life threatening medical conditions), but is telling federally-funded state Medicaid programs that they need not pay the emergency physician for this service if it turns out the patient does not have a medical emergency, based on this list of final diagnoses. When a government mandates a service from private individuals, and refuses to pay for that service, this is tantamount an unconstitutional and illegal taking of services, and is surely a violation of the physician’s rights.
Curiously, CMS does not allow Medicaid Managed Care Plans in any state to use a list of final diagnoses to preclude payment to emergency physicians or hospitals for these screening and stabilization services. Many states explicitly require payment for medical screening services even when no medical emergency is detected. It is pretty clear that Washington State’s HCA is pushing back hard on emergency care providers for having the gall to use the courts to defy their authority. Resorting to this kind of abusive policy, knowing that it is likely to undermine the financial viability of the safety net and the ability of emergency care providers to meet the needs of all of Washington’s citizens, goes beyond the pale.
The list of so-called non-emergency diagnoses that WA HCA has come up with provides a clear indication of the extent to which this agency will go. This list includes such diagnoses as: hyposmolality (which can cause coma), hemopthalmos (hemorrhage in the eye), foreign body in the hand (often causes infection), multiple contusions (as in getting a beating), pregnancy, etc. Even if every single one of these diagnoses can be managed in a physician’s office, it is important to understand that to get to these diagnoses, it is often necessary to rule out other conditions that may look very similar, but are far more serious, even life-threatening. Performing a cursory medical screening exam in an ED is a prescription for a very expensive EMTALA violation, a hospital’s loss of the right to treat Medicare patients, and a malpractice suit that can end a career. Requiring emergency care providers to perform these evaluations on Medicaid enrollees, and then refusing to compensate them for the effort (and the risk), is just reprehensible.
This post was also published in The Fickle Finger (www.ficklefinger.net/blog/)
Recently, Anthem in Kentucky (and other states), Harvard Pilgrim, and other plans (so I hear), have established policies to reduce by half payment for Evaluation and Management (E&M) services when accompanied by a -25 modifier and billed in combination with some 150 specific (and commonly used) preventative and procedure codes. The -25 modifier is supposed to indicate that these services are ‘separately identifiable’, according to AMA CPT coding rules. The rationale for this 50% reduction is that the plan does not want to pay twice for ‘the overlap of overhead expenses in the RVUs of the code combinations’. Anthem KY also plans to ‘make improvements in (their) primary care fee schedule allowances for office E&M codes’, but it is not clear to me if these improvements are intended to compensate for some or all of these reductions (don’t count on it).
Initially, I was not sure whether this policy would apply to both office based and facility based providers, so I contacted Anthem in KY to see. Though there was some confusion about this at first, the latest response I got from Anthem KY was that “Emergency Room Physicians will NOT be affected by the 50% reduction in payment”. I do not know at this point whether or not this exception also applies to other facility based providers. When I initially saw the policy statement from Anthem, I replied to them that:
I do not believe that ANY portion of the RVUs assigned to the E&M service should be ignored, deleted, modified, or considered duplicative to the RVUs assigned to the additional procedure when separately identifiable services are coded on the same claim. This is what CPT means by ‘separately identifiable': it means ‘distinct from’. The overhead expenses associated with an E&M service are likely to be completely separate and independent of the practice or overhead expenses associated with the procedure: incremental rather than overlapping. For example, the major practice expense for an office-based practitioner associated with the performance of an ultrasound is the cost of the machine and the cost of the training to perform the service. Neither of these are necessarily duplicative of, or overlapping with, the practice expenses associated with the provider’s E&M service.
In the case of facility based providers, like emergency physicians, the practice expense component of the E&M services are likewise separate and distinct from the practice expenses associated with procedural services by these providers, AND IN ADDITION, the practice expense component of the emergency physician’s E&M services represent a very small component of the overall RVUs assigned to the E&M service – certainly far less than 50%.
I indicated that this policy was inappropriate whether or not it was applied to office based or facility based providers. It is my understanding that several plans have initiated or are planning to initiate this same sort of payment policy. The AMA has also responded to this development. The fact that Anthem in KY is apparently not going to apply this strategy to emergency physicians, and perhaps other facility based providers, and the argument above against this practice, is an opening that other providers can use to push back when faced with these payment reductions. The unilateral decision by health plans to re-invent or re-interpret CPT claims coding rules on the fly, using rationales that appear more like rationalizations, begs for adoption of standardized, universally applied coding/payment rules for all payers.
This post also published in The Fickle Finger
Health Care reform proposals to cover more of the uninsured by expanding the Medicaid program inevitably stumble over several potholes and obstructions: there aren’t enough providers to cover existing Medicaid enrollees, let alone millions more; Medicaid Managed Care doesn’t seem to save enough money; states can’t afford to pay for it; the feds can’t afford to subsidize it; and most importantly, the poor don’t vote or contribute to election campaigns. Not to worry: I say with all modesty that I believe I have a solution.
Let me tell you a true story about a successful Medicaid Managed Care plan that works. If you wanted a model for such a plan, this would be a good one. Partnership Health Plan (PHP) in Northern California is one of 5 fully capitated County Organized Health Systems (COHS) in the state, covering Sonoma, Lake, Mendocino, Marin, Solano, Napa, Yolo and Sonoma Counties. It has over 200,000 enrollees, of which 31% are seniors and persons with disabilities. PHP has 240 Employees and a $700 million annual budget, and a remarkable 95% Medical Loss Ratio (i.e. 95% of funds go to medical services). Administrative costs for the Medi-Cal product (Medicaid in California) are currently less than 3.5%. PHP actually believes in managing care, they take it seriously, and they generate serious cost-savings as a result, with a 380% ROI in complex case management, and a 220% ROI on a care transitions program to reduce or prevent hospital readmissions.
PHP pays their capitated PCPs very well, and it pays networked FFS specialists better than any other Medicaid Managed Care plan in California, at rates of 120-160% of the state’s MediCal fee schedule. The plan pays claims quickly (less than 10 days on clean claims), and without relying on the typical down-coding and bundling schemes to underpay EMTALA obligated providers. PHP is so well received by providers that its network participation with the primary care and specialist provider market in its assigned counties is remarkably broad and deep. Ninety-seven percent of PCPs and specialists contracted with PHP expressed satisfaction with the plan – you just do not see this kind of thing in most Medicaid Managed Care organizations. Recently, despite California’s scheduled 10% reduction in MediCal rates and capitation payments to MMC plans; PHP decided to maintain current provider rates in order to maintain patient access to these services. So how did PHP accomplish this? Partnership Health Plan is a not-for-profit Medicaid Managed Care Plan.
All over the country, health care policy wonks have been advocating for the expansion of Medicaid through a for-profit managed care structure, ignoring the fact that there just isn’t enough meat on the bone in Medicaid programs to support quality care for enrollees, case management for the chronically ill, reasonable payment to providers, sufficient access to specialty services, and generate profits to Wall Street or equity investors and excessive management fees to overpaid CEOs. The drive for profits, and limited financial support from strapped governments, leads these for-profit plans to adopt strategies that result in provider underpayment, lost claims, selective dis-enrollment, inappropriate denials of coverage, limited access, financial insolvency, and delays in necessary care. Why are so few advocating for a non-profit approach to Medicaid Managed Care? The presumption is that the profit motive should drive creativity and cost-effectiveness, but if policy-makers fail to accurately measure access to care and quality, and only look at the cost side of the equation: it’s easy to get fooled about the value and success of government sponsored for-profit health-care enterprises. The ability of PHP to succeed in the context of such a lean, nearly meatless, Medicaid program as exists in California should cause everyone, everywhere, to reconsider the not-for-profit approach to Medicaid expansion.
This post also published in The Fickle Finger
State governments have fallen into deep budget deficit holes, as we all know, and state legislators and policy makers are casting about for ways to dig themselves out. Many are climbing over the backs of those least able to fend for themselves in this troubled economy, since the poor have little clout and even less representation, now that the Supreme Court has given corporations and unions carte blanche to finance political campaigns up the political wazoo. Therefor, it should come as no surprise that the budgets of State Medicaid programs all across the nation are taking a big hit, and Medicaid policies intended to protect access to care for the indigent are being bent all out of shape, if not violated outright, in the process. Unfortunately, access to emergency care is getting the lion’s share of the attention in this cost-saving, budget slashing, attack on Medicaid, and this effort is rending holes in the emergency care safety net.
From the East Coast to California, State Medicaid Departments and policy makers have decided to target the ‘unnecessary use of the emergency department’ by Medicaid enrollees as the easiest way to eliminate waste and excessive costs in the Medicaid program, even though there are many far better opportunities to save money and reduce unnecessary expenditures in Medicaid and in health care in general. No doubt, ED care is relatively more expensive than UCCs and clinics and PCP offices for non-urgent medical services, and no doubt, many Medicaid patients could potentially receive this care in other, more appropriate venues, if these venues weren’t already failing miserably when it comes to providing adequate access for unscheduled non-emergency care to Medicaid enrollees. To many people, a cursory look at the efforts to get these non-emergency patients out of the ED might seem not only reasonable, but compelling, in the face of massive State budget shortfalls. Thus, you now see all sorts of policies aimed at limiting access to the ED, some designed to dissuade Medicaid patients from even considering a visit to the ED, others designed to retroactively deny coverage, or payment, for these services, despite the adverse consequences such policies will inevitably have on these patients, their families, and everyone else who might need emergency care. It seems to those of us who understand the implications of such policies the epitome of penny wise, pound stupidity.
California’s Medi-Cal program now intends to impose a $50 copay on ED visits in order to discourage ED use. Texas Medicaid will reduce payment on ER claims by 40% if the final diagnosis is not on their ‘emergency diagnoses list’, and Virginia likewise reduces payment for Level 3 visits using a similar approved list. In Illinois, a very rigid set of criteria are used to deny coverage under the prudent layperson standard, and in Oregon and other states, like Colorado, emergency physicians are paid a $10-20 ‘screening fee’ when the final diagnosis is not on the list of approved medical emergencies. Recently, In Washington State, Medicaid program directors have decided to implement what may be the epitome of bad medical policy by refusing to reimburse providers when the patient uses the ED more than three times in a year for non-emergency problems like hypoglycemic coma or pseudomonal pneumonia or sepsis. The process that WA used to derive this list of unapproved diagnoses, and meet their budget savings target, would be laughable if it weren’t so inane (see this blog )
These policies all have one thing in common; they entail little direct political risk for policy-makers. They rely on the EMTALA obligation of emergency care providers to ensure that patients who seek care from the ED, whether because they are seriously ill or injured or simply because there is no where else they can get any kind of care, will likely not be turned away. It won’t matter if the Medicaid enrollee can’t afford the $50 co-pay, or has to make a fourth visit to the ED in a year for another acute exacerbation of a chronic illness, or fails to pay the ED bill when the State declines to cover the visit, or is relying on the ED for psychiatric care because they can’t get into a treatment program, or makes an ‘imprudent’ decision to use the ED because they are concerned their chest pain might be an MI rather than esophagitis. Nearly all of these patients will be evaluated and treated for their medical emergency and even in most cases for their non-emergency condition, or at least be afforded a referral to an alternative venue once screened. This is not just because of EMTALA, but also because emergency physicians are, in almost every instance, compassionate providers who understand that they are the last, best, and often only hope for many of these patients – the safety net for the safety net.
The States that have adopted these budget-saving strategies also rely on another political reality to justify what otherwise might seem to be a fairly callous approach to the economically disadvantaged: all of these policies effectively dump the financial responsibility for caring for these patients on to the backs of hospitals and emergency care providers. The bet is that voters and taxpayers won’t care if the Medicaid programs in their state take advantage of EMTALA obligated providers in order to ease the burden on state budgets. Despite increasing hospital and ED closures, shortages of emergency physicians, and disappearing ED on-call specialists; the assumption seems to be that emergency care will always be there when needed even if these providers have to work for free. Somehow, EMTALA has suspended the laws of supply and demand.
Medicaid policies designed to reduce payment for ED care also have in common the decision to sidestep the prudent layperson standard that CMS imposed on Medicaid Managed Care organizations under section 1932(b)(2)(B)(ii) of the Social Security Act. Though many states have adopted this standard for Medicaid Fee-for-Service programs, others argue that prudent layperson does not apply to their Medicaid FFS program, and that they are not required to pay for medical screening exams when the final diagnosis does not substantiate an emergency medical condition, even though many of these same states have their own version of an EMTALA mandate on the books. Ultimately, this debate may need to be resolved in courts, where emergency care providers will hopefully be protected from abusive payment practices that effectively result in theft of their services.
The oddest aspect of these state payment policies is that they seem to be founded on the principle that the best way to punish Medicaid patients for using the ED inappropriately for health care services, and change this behavior, is to refuse to pay hospitals and emergency physicians for providing these services. The fact that these policies will adversely impact access to emergency care for everyone, rich and poor, seems to escape just about everyone.
The folks who run Medicaid Managed Care Plans often gripe about their enrollees using emergency departments for non-emergency care. And of course, they do, and probably more so than commercially insured enrollees. Most state and federal government regulators and legislators believe that capitation and managed care models for Medicaid can reduce the inappropriate use of ED services by Medicaid patients by incentives that encourage primary care providers in managed care organizations to increase access for their enrollees to extended office hours or next-day appointments for urgently needed, non-emergency care. Recently, the Obama administration decided to kill a proposed plan to use ‘secret shoppers’ to determine whether, in fact, enrollees can get such appointments when they need them, in the face of considerable opposition from these very medical-home advocates. In the ED, we constantly hear from Medicaid Managed Care enrollees who come to the ED because they could not get a timely appointment from their PCP or clinic, but anecdote is not the best evidence, and there is not a lot of recent research about timely access for Medicaid patients (I think because no one in government or health care policy really wants to know). Therefor, we must look to indirect evidence of this phenomenon.
Recently, I had the chance to review claims data from 138,129 Medicaid Managed Care (MCMC) enrollees and 107,125 Medicaid Fee for Service (MFFS) patients seen consecutively in about 65 EDs in 6 states states over the first 4 months of 2010. Using ED physician charges (all under the same fee schedule) as a surrogate for ‘acuity’, all of these claims were stratified into 20th percentiles, from highest charges to lowest, for the MCMC and FFS patients. If you think about things like ‘deferral of ED care’, the patients who might be the least likely to require emergency care would fall into the bottom 20th percentile of ED physician charges, the least ‘acute’ patients using the least amount of ED physician services. These 20th percentile groupings offered an interesting comparison between MCMC and MFFS.
Here is how the comparison looked:
Medicaid Managed Care: 41.55% of all ED visits for these MC enrollees were in the lowest 20th percentile of charges (representing 26.57% of total ED MD charges for all MCMC enrollees)
Medicaid Fee-for Service: 36.72% of all ED visits for these FFS enrollees were in the lowest 20th percentile of charges (representing 21.14% of total ED MD charges for all MFFS enrollees)
Some of this discrepancy may be accounted for by the fact that the average charge for the MCMC patients was slightly (8%) higher than the average charge for the MFFS patients, but at best what this data suggests is that MCMC plans and capitated medical groups do not provide any better access to enrollees for urgently needed, non-emergency office or clinic appointments than their counterparts providing services to Medicaid patients on a FFS plan. If this were not the case, the numbers would be very different. So much for incentives. I guess as long as these MCMC organizations and plans can continue to underpay ED providers for after-hours urgent care to under-served Medicaid enrollees and not worry about ‘adequate access’ oversight, this isn’t likely to change.
The following is a very long blog directed at those responsible for reimbursement issues for your ED group or site. Though a bit complicated, is pretty interesting, both from a revenue standpoint for Emergency Physicians, not only in California, but throughout the nation, and from the standpoint of maintenance of our reputation with patients. The basic gist of this issue is that state Medicaid programs have been employing private agencies to recoup payments made to providers through the Medicaid fee-for-service programs in instances where the enrollee MAY have also been covered by a commercial carrier on the date of service. This process, which in California bypassed the providers entirely, allowed the commercial carriers to escape with millions in unearned profits, and denied providers the opportunity to receive the revenues they were rightfully due. If this is happening in your state (it probably is), you may find that you have an opportunity to reassert your right to participate in this process, and reclaim these revenues. I believe that as other health departments in other States become aware of the inadvertent consequences on providers from this program, they may, as the DHCS has in California, willingly consider revisions to the recoupment program.
My ED group first became aware of this Medicaid (Medi-Cal) recoupment program in California somewhat by accident, aided by careful attention to claims management. More than a year ago, CEP America (CEPA) received a number of notices from Blue Cross requesting additional information to make an eligibility and benefits determination on claims that (we subsequently discovered) were sent to Blue Cross by Health Management Systems (HMS) on behalf of the Department of Health Care Services (DHCS), using CEPA’s group name and our providers’ identification numbers, to try to recoup payments made to CEPA by the MediCal program. HMS had been contracted by the DHCS to manage this recoupment process (as it has in other States).
What appears to have happened here is that HMS was using Medi-Cal claims data, provided by the DHCS, to try to identify patients who may possibly have simultaneous coverage under the Medi-Cal program and under an indemnity plan like Blue Cross on the date of the provider’s service. HMS compared the Medi-Cal claims to plan enrollment data provided by several plans, including Blue Cross, obtained under a data sharing agreement with these plans. HMS then sent claims to these plans in the hope that the patients might have also been covered by the plans, using the CEPA’s provider name and identification number on the CMS 1500 claim form, but using a different PO Box payment address so that any payment is sent to the HMS and the DHCS, and not to CEP America. These claims were supposed to have been processed in a unique manner by these plans, but due to an inadvertent mix-up, BC processed some of these claims as if they came from CEPA. Since many of these enrollees turned out not to have dual coverage on the date of service; BC inadvertently sent notices to CEPA requesting additional information on the claim hoping to resolve the eligibility question. HMS indicated that CEPA should never have received these notices, but nonetheless, these notices alerted CEPA to the fact that BC was being billed under CEPA’s provider name and number by HMS.
Furthermore, in a couple of cases, HMS identified patients who appeared to have BC coverage, sent the claim to BC, and it turned out the patient had the same name as the actual BC enrollee, but a different birth date. One such claim listed both the CEPA provider’s charge of $306 and the payment by Medi-Cal to CEPA of $68.35. BC then sent their enrollee an EOB indicating that the patient had not yet met their deductible level for the year, and thus the patient owed $186.91 (based on the BC allowable payment). Had this enrollee met their deductible for the year, BC could easily have sent this $186.91 to the DHCS/HMS PO Box directly. However, when the patient received the EOB, they contacted BC to say that they had not been treated in the ER on 8/11/2007, and furthermore had not been pregnant at the time (as alluded to in the EOB). BC then sent CEPA a patient grievance notice asking CEPA to respond to the patient’s grievance. This is but one of several examples which demonstrated that:
1) The cross-referencing of Medi-Cal claims and commercial plan eligibility logs relied on incomplete data, and misidentified some patients
2) Some of the claims sent to the plans were misleading and inaccurate, and could easily result in incorrect payments by the plan or the patient to DHCS, and damage to the provider (and we were never able to determine how many such claims were previously miss-paid by the plan or the patient)
3) The recoupment process (at least for this program) inappropriately bypassed the provider, thus denying the provider the opportunity to obtain reimbursement at the higher commercial indemnity rate
4) The process made it difficult if not impossible for the provider to subsequently recover proper payment from the health plan if the provider were later to discover that the enrollee had commercial coverage, as the provider’s claim to the plan would be rejected as a duplicate to the claim from HMS.
HMS indicated that it had the right to try to recover these payments directly from the health plan using the provider’s name and ID number, based on existing subrogation rights statutes. Furthermore, even when the claims screening process actually identified a patient who did have indemnity coverage at the time of CEPA’s service, the claim sent by HMS to the insurance plan might result in payment at the contracted commercial rate referenced under CEPA’s provider number, rather than a payment that rebates DHCS the exact amount of the payment made by DHCS to CEP.
Once we had identified these issues, we asked the DHCS to consider allowing CEPA to participate directly in the claims submission / recovery process, using the list identified by the HMS cross-reference process. The DHCS was quite willing to consider establishing a pilot program to test this concept, in light of the problems we had identified, and recruited HMS’s participation in the pilot. Although it took HMS a full year to set up the pilot program, they eventually submitted 3369 CEPA claims paid by Medi-Cal where the enrollees were thought to have simultaneous commercial plan coverage. HMS requested a total of $248,098 in Medi-Cal payment refunds to the DHCS on these claims.
Of these 3369 claims, 1897 claims have thus far been successfully closed. These 1897 claims represented $138,626 in potential refunds to DHCS. We determined that of this amount, only $34,327 was actually due to DHCS in refunds (which will be retracted by the department directly).
No refund was due for 1432 claims representing $104,299 in potential recoupments: 762 claims representing $58,000 related to lack of coverage eligibility under the carrier on the date of service; 361 claims representing $21,000 had originally been billed to and paid appropriately by MediCal as the secondary payer (these claims should probably not have been submitted to HMS in the first place); and 309 claims representing $25,000 were not eligible for recoupment for other various other reasons, which were documented and sent to HMS).
CEPA collected $91,357 from primary carriers from the remaining 465 claims that were actually found to have primary commercial coverage on the date of service. Thus, CEPA retained $104,299 in appropriate Medi-Cal payments (some of which might otherwise have been inappropriately recouped) and received an additional $57,030 after collecting from the plans and making rebates to the Medi-Cal program.
At this time, we still have 1472 unresolved claims due to the following issues:
1) Carrier denied payment due to untimely filing even though supporting documentation was submitted with the original billing to justify late filing.
2) Carrier indicated (on follow-up calls for claims status) that the claims could not be found, thus requiring resubmission on paper, which allows the carrier to take an additional 45 workings day to respond to the claim.
3) Carrier has failed to respond to the claim within 45 days, requiring additional follow-up calls – status pending.
We anticipate that when all 1472 pending claims have been successfully (and accurately) adjudicated, CEPA may collect an additional $80,000 in revenues, and provide an additional $30,000 in rebates to the Medi-Cal FFS program, for a total net additional revenue of over $120,000 from the 3369 claims identified by HMS. The cost of managing these claims will probably be around $20,000. Based on even this incomplete result, the DHCS now appears to be ready to remodel the recoupment program with HMS to enable all providers in California to participate in the process. Given that CEPA represents about 15% of the California ED physician market, this could mean an additional $1-2 M a year for ED physicians in our state. This is not a huge amount, but it appears to be worth the effort, and perhaps more importantly, eliminates the mistakes that can undermine provider relations with our patients, while allowing the Medicaid program to recoup payments appropriately.
It is likely that the same recoupment process, which has been in place in California for several years, is also in effect in many other states, and may deserve to be remodeled to incorporate, rather than exclude, providers. I think you will see that HMS is in many states doing what they have been doing for the CA Medicaid program, and by the way, HMS also does this or similar recoupment processes for several other government and private clients. In fact, in CA they provide recoupment services for Medicaid HMOs, though in this program providers get to participate. However, the provider has only 45 working days to adjudicate the claim with the alternate payer before the Medicaid Managed Care payment is retracted. In CA, HMS ‘demands’ recoupments without bothering to do the work of checking with the alternate payer’s on-line coverage eligibility database for coverage on the specified date of service, resulting in demands for recoupment for many patients that did not have simultaneous coverage on the date of service.
I would suggest that ACEP members send out inquiries to their Medicaid departments asking if HMS, or any other organization, has been contracted to manage recoupment for Medicaid patients in the state that were thought to possibly have simultaneous commercial or Medicare coverage, and whether this contractor was responsible for submitting claims to these alternate carriers, using the provider’s name and id numbers on these claims. If the answer is yes, I would suggest stating concerns about the inadvertent impacts such a program might be having, based on the fact that the contractor is likely misidentifying (with their cross-check process) far more instances of simultaneous coverage than actually occur (see the issues listed above), and insisting that providers should have the opportunity to send these claims themselves, and provide rebates to Medicaid when appropriate.
Assuming that the Department in question is willing to revise the program to include provider participation, I would suggest insisting that 1) the provider have at least 120 working days to adjudicate the claim with the new primary before any recoupment or retraction is made, 2) HMS be required to do online eligibility determinations with the potential new primary carrier for the date of service in question before sending the information and recoupment request to the provider, 3) that HMS be required to use the patient’s name and at least one and preferably two additional patient identifiers (date of birth, Medicaid enrollee number) to ensure proper patient identification, and 4), that any retractions done by the Medicaid program should properly identify on the retraction notice (warrant) the specific claim to which the retraction applies. Ideally, no retractions should be due unless the commercial carrier has paid first. EMTALA obligated providers can not afford to be bypassed in the recoupment process.