A Bridge to Tomorrow. 75 th Annual NHRMA Conference & Tradeshow. Presented by

Transcription

1 A Bridge to Tomorrow 75 th Annual NHRMA Conference & Tradeshow Presented by

2 ARE YOU GETTING RIPPED OFF? Employee Benefit Best Practices

3 Prices Are Rising -- Again Group Health Insurance Rates to Rise 9% to 11% in 2013 According to Milliman 9.0% for HMOs 11.0% for PPOs Source: Milliman, 8/26/2013

4 Mistakes Are On the Rise The American Medical Association, in their 2012 Health Insurer Report Card, reports a 20% (1 in 5) error rate by the 7 largest health insurance companies nationwide. The AMA says that those payment errors are costing the American Public $15.5 billion this year. AMA Statement: Creating a single transparent set of processing and payment rules would create system wide savings and allow physicians more time and resources for patient care.

5 9 OUT OF 10 That s how many physicians in the U.S. say they practice defensive medicine ordering tests, hospitalizing patients and prescribing medication and surgical procedures they consider medically unnecessary in an attempt to avoid lawsuits. Source: Jackson Health Care/Natural Health Magazine,

6 $700B of Waste in Health Care Fraud & Abuse, creative billing schemes, claim system deficiencies, lack of good & aggregated data and transparency are all prime drivers AMA Health Insurance Report Card 2012: Best in Class Commercial Insurance error rate of 19.3% Aetna discloses 11% payment error rate BCBS Association estimates that 5 10% of healthcare claims are paid incorrectly. Business Insurance Federal Government negotiated more than $1.8B in judgments and settlements in health care fraud matters. Health Care Fraud and Abuse Control Program Annual Report by the DOJ and HHS. 1 out of 10 physicians has reported medical signs or symptoms a patient didn t have in order to help a patient get services paid for.

7 $700B of Waste in Health Care Fraud & Abuse, creative billing schemes, claim system deficiencies, lack of good & aggregated data and transparency are all prime drivers 1 out of 5 U.S. adults say it s acceptable to defraud insurance companies under certain circumstances. 4 Billion transactions annually 6.3% error rate. HHS-OIG $250B in fraud is paid by commercial payers annually National HealthCare Anti-Fraud Assoc. 54% of Physicians reported using deception of third-party payers to obtain benefits

8 $700B of Waste in Health Care Fraud & Abuse, creative billing schemes, claim system deficiencies, lack of good & aggregated data and transparency are all prime drivers The National Health Care Anti-Fraud Association estimates at least $86 billion dollars is lost to fraud and abuse each year just in the private sector. Medicare and Medicaid lose an estimated $60 billion or more annually to fraud, including $2.5 billion in South Florida. 80 percent of healthcare fraud is by medical providers, 10 percent is by consumers and the balance is by other sources

9 Most Common Types of Fraud and Abuse Billing for services, procedures, and/or supplies not provided. Misrepresentation of what was provided, when it was provided, the condition or diagnosis, the charges involved, and/or the identity of the patient. Providing unnecessary services or ordering unnecessary tests solely to generate revenue. Unbundling of procedures. Double billing. Upcoding. Kickbacks. Artificially inflating prices.

10 So, it s not about whether or not you get your claims paid quickly and easily. It s about paying them RIGHT and paying only what you SHOULD be paying.

11 Plan Sponsor Responsibilities Under ERISA ERISA fiduciary duty (section 404 & 405 of Title I) is the major consumer protection. It is not a list of do's and don'ts. It simply demands that everyone subject to fiduciary duty see that the plan is managed in the most "prudent" way (and DOL judges whether you were "prudent" by 20/20 hindsight). As a rule of thumb, fiduciaries are expected to maximize the security & size of plan assets (including, of course, minimizing expenses). They are also responsible to maximize the size and security of legitimate payments to legitimate plan participants. What are the risks? The charges can be both civil, and also simultaneously criminal (jail time, especially in cases where the person gained from the non-prudent activity). Prosecution also goes beyond the corporate veil. They can pursue individuals' personal assets for fines & restitution.

12 What s Going On Out There and What You May Be Paying For Some Interesting Examples

13 Not Everything Is The Same Providers have multiple contracts with multiple carriers, PPOs, HMOs, Coalitions and employers. Each contract is unique with different fee arrangements, payment terms and discounts Medicare & Medicaid have their own set of rules Everybody gets billed differently Lack of transparency rules allows providers to bill however they see fit.

14 What Consultants Are Promising Providers

15 Upcharging: Your Worst Enemy

16 Dialysis Pretty Expensive. Sometimes. $4,500 $4,143 $4,000 $3,500 LDO Full Billed Chg 70% Discount $3,000 $2,500 $2,190 $2,478 $2,568 $2,942 U&R LDO ARPT Medicare $2,000 $1,500 $1,242 LDO= Large Dialysis Organization $1,000 $500 $882 $734 $770 $657 $585 $631 $460 $336 $334 $390 $334 $340 $337 $330 ARPT= Average Revenue Per Treatment $- $233 $238 $257 $259 $

17 It s Good to be King - Impact of Dialysis Monopoly in the United States DaVita reported a 48% increase in first-quarter profit compared to last year; (net income of $140.1 million) DaVita performed 68,132 treatments per day; (an increase of 14.2% from Q1) DaVita acquired 28 centers / opened 13 centers in Q1 Fresenius reported a 68% increase in first-quarter revenue, including $127 million from the acquisition of Liberty Dialysis Holdings Inc.; Fresenius net profit for Q1 grew by 10% absent the Liberty purchase with dialysis revenue growing 11% Source:

18 Dialysis Costs Climb Dramatically In recent years, a large influx of outpatient dialysis centers has resulted in billings that are more that 80% above U&C charges Epogen charges: 70% - 90% discounts available if pursued Home Heomdialysis costs half of outpatient facility treatments with far higher functionality Simple SPD language changes can reduce an employer s cost of covering ESRD patients by 70% and more

19 Spinal Tray

20 Spinal Tray In 2003, 12% of Hospitals Billed The Revenue Code 310 (Spinal Tray) In 2013, Over 90% Of Hospitals Charge it Average Hospital Cost: $10.00 Average Hospital Charge: $12,000 CA Hospital Administrator: We charge that much because WE CAN. Letter sent by hospital: We bill this and you must pay our charges because we are protected by our PPO contract.

21 Geography Means A Lot Study by the Robert Wood Johnson Foundation Data on 19,000 Appendicitis Patients The Standards Uncomplicated Cases Hospital Stays of Less than 4 Days Ages The Range Smallest Bill: $1,529 Rural Northern California Biggest Bill: $182,955 California s Silicon Valley Average Bill: $33,000 National Average** $28, **Federal Agency of Healthcare Research & Quality & the International Federation of Health Plans

22 A Band Aid Costs How Much? $83 Shoulder sling Same sling online? - $7 Patient James Dichter Somewhere in our health-care system, common sense has left the building Hospital Justification? You re comparing apples and oranges. Provider offers a full range of services for the patient, including fitting and positioning of the product, establishing quality standards, providing access to clinical staff and expertise to respond to patient questions, operating a complaint process, providing follow-up services, and maintaining patient medical records

23 Hospital Submitting Huge Charges Expecting Reductions A VA hospital submitted an out of network outpatient bill for the technical component of myocardial perfusion imaging. The costs of the tests were $4,993.63; however, they were billing $11, for the contrast used. The National Drug Code (NDC) number was requested for the contrast so that we could run the Average Wholesale Price (AWP) for it. For out of network claims, we reimburse the AWP + 10%. The facility refused to submit the NDC number, stating that they knew we were going to cut it down. Even after explaining to them that their reimbursement rate would be higher if they provided us with the specific NDC, they still refused to do so. Based on the information submitted, a comparable AWP was found for the contrast. Total amount allowed was $ Payment Accepted: $ No Balance Bill to Patient.

24 Physician Charges for Undocumented/Unbundled Procedures A claim was submitted for the professional (physician) component of a major back surgery, along with assistant surgeon charges and intraoperative monitoring. The total cost of the billed charges was $201, The claim was sent to a peer independent reviewer for a thorough review to determine that all the services were documented as billed and were coded properly per Medicare and AMA coding guidelines. The review found that 6 of the procedures billed for were not documented in the operative report. An assistant surgeon was not medically necessary for 2 of the procedures. 4 of the procedures were unbundled. The intraoperative monitoring physician unbundled 2 of his charges. Total savings on the file: $51, Payment Accepted: $150, No Balance Bill to Patient.

25 Pain Charges Patient saw a pain management physician for a new evaluation, who then proceeded to do a set of facet joint injections. Total billed: $7, for one date of service in an office setting. Medical records were requested and the file was sent to a peer independent reviewer of the same specialty for review. Reviewer stated that facet joint injections were not an accepted standard of care for the patient s condition based on the submitted medical record. Total savings for one date of service: $6, Payment Accepted: $1, No Balance Bill To Patient.

26 Same Procedure, Same Physician, Different Charges - Facility claim for a dermatology procedure: $14, The same procedure was billed for the same patient on two subsequent dates of service at a lower charge of $ Provider submitted a new bill with the charge reduced from $14, to $ The savings to the client: $13, Payment Accepted: $ No Balance Bill to Patient.

27 The Bed Pre-cert for lengthy hospital stay for morbidly obese patient requiring special bed. Hospital bed rental: $1,800 per day, stay expected to be 30+ days Total cost to purchase entirely new bed (same make and model) was $4,000. Provider instructed that EITHER the client would purchase a new bed and have it shipped to the hospital, then would expect the hospital to ship bed back to client upon discharge OR accept $1,800 for the entire stay Provider, without hesitation, accepted $1,800 charge Client Savings: $52,000 + Payment Accepted: $1,800. No Balance Bill to Patient.

28 Hospital Charges Wayyyyyyy Over Customary Charge - Ambulatory Surgical Center performs a left knee arthroscopy and charges $67, % of Medicare: $6, Provider is offered payment of $25,000, paid in full - Provider refuses - Provider is paid $2, (patient had deductible/coinsurance) - Another claim from same facility a few weeks later, this time a right knee arthroscopy; charges are $105, Knowing that provider would not accept negotiated rate, they were paid $4, with the rest going to patient deductible/coinsurance. - Provider contacted payor and agreed to settle on $25,000 offer with no balance bill to patient. - Savings to client: $123,139.60

29 Billing Errors Hospital, physician and ancillary claims for cardiac patient Hospital charged $24,000 for pacemaker Upon review of cardiologist charges in side-by-side comparison, no pacemaker insertion charge was included in doctor bills Discussion of this with hospital (followed by their internal audit) resulted in pacemaker charge being removed from hospital bill because patient never received pacemaker Billing Office: Pacemaker must have been for the patient just before or after in that O.R.

30 Cancer Costs Climb Dramatically A decade of new, more individualized non-surgical therapies: Breast cancer: ~$2,000/patient in 1997; up to $500,000 today Lung cancer: $0 - $50,000 in 1997; >$600,000 today Colorectal cancer: $5,000/patient prior to 2000; >$500,000 today for pre- & post-surgical drug therapies 750 new therapeutic agents in development, of which will be commercially available by 2013 (PhRMA; IMS Health) Cancer drug sales are expected to grow 50% by 2013 (IMS Health)

31 But Doesn t My PPO Protect Clients From Fraudulent and Erroneous Billing? Doesn t the PPO Save Clients Money With Their Contracted Discounts?

32 No. Maybe.

33 PPO Rules These Days, PPOs usually contract with providers on a discount from charges basis, without dictating what charges actually need to be. Typically, provider charges must be paid in full with the discount amount taken into account irrespective of whether or not there is unbundling, lack of documentation or inappropriate charges. Almost never do PPOs require limits on provider rate increases.

34 PPO Rules Even when audits are allowed for innetwork claims, employers usually have to pay first, then try to get their money refunded by the provider.

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36 Do PPO Discounts Give You The Best Deal? EXAMPLE PPO Physician charged $12,825 for CPT (Laser vaporization of Prostate). PPO discount: 19%, for total allowed payment of $10, Physician is a participating Medicare provider Medicare reimbursement for procedure: $ Physician would not negotiate, citing PPO contract PPO upheld provider decision Payment to provider: 1,485% over Medicare accepted payment

37 Do PPO Discounts Give You The Best Deal? EXAMPLE In-Network facility charge for 53 day inpatient newborn stay: $177, PPO Discount: 17%, for a payment of $147, Detailed review of claim done and claim contained $31, in unsubstantiated charges Proposed payment: $121, (charged amount less unsubstantiated charges, less PPO discount) Hospital did not accept offer, citing PPO contract for discount off charges PPO Upheld provider appeal

38 Now PPOs Are Being Sued For Not Protecting Clients May 5, 2011: Superior Court of the State of California The State of California (Plaintiffs) vs. MultiPlan, et al (Defendants) The state of California is suing hospitals for fraud and naming Multiplan et al as a co-conspirator by precluding insurance companies/tpas from doing any kind of audits on their bills. PPOs are not protecting the clients who pay them to reduce their health care costs.

39 So What Should Administrators Be Doing For Clients?

40 The State-of-the-Art Administrator Review claims to determine the coding is correct per Medicare, AMA and other nationally accepted guidelines. Verify that the physician(s) billing for the services are the ones who actually performed them. Verify that the charges billed are accurate and not specific plan exclusions. Review hospital bills line by line for billing errors, duplicate charges, coding errors, inconsistencies in pricing, upcoding, unbundled charges, and other spurious practices. Request medical records and conducting peer independent reviews on treatment that appears to be not medically necessary. Negotiate, Negotiate, Negotiate

41 The State-of-the-Art Administrator Present plan language that reduces or eliminates ESRD expenses Research, Partner with and bring to clients best-inclass providers of health care cost containment solutions Plan design evolution Stop Loss solutions new products/services Avoidance of claims through wellness and medical advocacy programs

42 Leading Edge Loss Control Solutions Employers Can Expect a reduction in OVERALL claim costs of 5% - 10% through these efforts: Provider Integrity Program Data Driven Fraud & Abuse Prevention Intelligent Claim Surveillance Pre-Payment Investigations Automated Code Edits Provider R&C Negotiations

43 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation

44 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis

45 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis Cancer

46 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis Cancer Diabetes

47 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis Cancer Medical Advocacy Diabetes

48 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis Cancer Medical Advocacy Telemedicine Diabetes

49 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis Cancer Medical Advocacy Telemedicine Organ Xplant Carve-Out Diabetes

50 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis Cancer Medical Advocacy Telemedicine Organ Xplant Carve-Out Diabetes Diagnostic Imaging

51 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis Cancer Medical Advocacy Telemedicine Organ Xplant Carve-Out On-Site Medical Diabetes Diagnostic Imaging

52 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis Cancer Medical Advocacy Telemedicine Organ Xplant Carve-Out On-Site Medical Medical Tourism Diabetes Diagnostic Imaging

53 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis Cancer Medical Advocacy Telemedicine Organ Xplant Carve-Out On-Site Medical Medical Tourism Next Generation UM/DM Diabetes Diagnostic Imaging

54 Leading Edge Loss Control Solutions Claim Review, Auditing, Negotiation Dialysis Cancer Medical Advocacy Telemedicine Organ Xplant Carve-Out On-Site Medical Medical Tourism Next Generation UM/DM Diabetes Diagnostic Imaging Medicare+/ Cost+ Plans

55 Semper Fidelis Employers must be ever vigilant in their efforts to assure that they are paying only what they should be paying Administrators must employ the industry s leading edge cost control solutions to make sure clients aren t being ripped off Provider billing practices are fluid constantly changing to work to their advantage. Employers must recognize that and be willing to change with the environment to maximize savings

56 Contact Tom Doney, President Cypress Benefit Administrators QUESTIONS