“Moments in the life of a zoo keeper” Keith Joyce Hospital Leakage July 2008 “Moments in the life of a zoo keeper” Keith Joyce

Hospital Benefit Outlays

Hospital Benefit Outlays Looking For: Abnormalities ie State/Provider variations Re admits (same site, different site, step downs) Certificated services i.e. ICU, 3B HITH

Hospital Leakage: MBS doesn’t cover i.e. cosmetics Where Private bed charged with shared bed provided What about per diems particularly Psych, public, rehab Plus Episodic, outliers, upcoding Multiple admits in one year vs similar time for several years High cost and or long stay

Rules Product black holes; Existing products Revised/new Rules : Thelma Eclipse Availability of data to scope down into the BO VS online???

Contract Determines Where You Look Capped Payment Systems – DRG or CEP Based Depending on what is bundled into the capped payment determines whether there is any value in reviewing the payments Some Funds bundle all costs bar medical and prostheses (variable inclusions) in its CEP (Casemix Episodic Payments) payments. Others might exclude ICU days from the bundling. There is no point therefore with CEP episodes in examining, for example, ICU certificate classifications, or whether CMBS items link to OR bands, or excessive length of stay etc as the price is the price. Fee for Service Systems As the Industry still pays 30% (?) of all payments on a FFS basis (varies between Funds) some Funds do look at the above items, but ??????? As the number of services, and length of stay, and OR band and ICU classification etc all add to cost, then auditing of these cost inputs are important

Scope of Private & Public Hospital Leakage The list below indicates some areas: Claims of any type that are not allowed, because of Government regulations: cosmetic Non contract (HPPA) compliant claims Incorrect certificates eg ICU, 3B, C, B Pre-existing ailments Ex Gratia payments Incorrect claims (wrong items, add on items etc), duplicates, etc Incorrect invoicing because of upcoding or over coding (revenue maxn ?) Incorrect automatic assessing due to weak or non existent controls and rules in hospital EDI, Eclipse, etc Incorrect manual assessing due to mainframe system inadequate controls, reference tables, contracts, schedules, etc Incorrect manual assessing due to poor assessor knowledge, keying errors etc Over servicing ? Unnecessary servicing, hospital misadventures ?

Payment Compliance with Government Regulations and Hospital Contracts No matter how you contract you need to ensure that: Hospitals are billing correctly e.g.: Capped systems – DRG coding & unbundled items e.g. prostheses FFS systems - CMBS coding, OR bands, ICU levels, prostheses, outreach programs FFS & not DRG where outliers are paid on an FFS basis Services meet certification requirements e.g. types ICU category, C, B, 3B, Assessors are assessing correctly FFS and not DRG and vice versa System controls are working, reference tables are correct etc Hospitals may have incorrect data depending on whether it is drawn from the OR, Patient Admissions, admitting doctor’s records, Finance department, etc

How Does The Industry Detect Hospital Leakage ? Systems analysis to check effectiveness of system controls, product rules, business rules, accuracy of reference tables in the system etc Targeted statistical analysis & benchmarking (claims, services, etc) Hospitals Fund Staff Services Contract compliance review High dollar claims review to validate claims assessing Chart to Bill audits for document validation of invoices Hospital DRG coding audits to look for upcoding Data Mining to find aberrant patterns in data Random provider, staff & service items audits Tip Offs (Members, Public, Staff, Other Institutions) Member Surveys to validate services claimed While some leakage can be prevented proactively, there will always be a need for retrospective analysis because systems can’t verify the claims elements upfront eg certificates

Skilled Teams: Expertise: Coders, Claims assessors, Nurses, Medicos, Para – legal Systems

Skilled Teams: cont Member confirmations of: Service using clear messages Independent contractor – why? + National focus plus additional skilled resources – resource as needed Providing approx 90% response MPL level: 200/year contacting 100 members each review Streamline the process, educate agents, minimize push back Support compliance reviews – National focus i.e. Thelma

New World: E Business System reviews, sample selection (letters sent/outbound calls), proof of service, PRIVACY?? Politics – State, Federal, Hospital Owners vs PHI appetite

Outcomes: Member Value: Why do we do it? – Recoveries/behaviour PHI sustainability of product/value proposition Barriers: Politics - Internal & External Vs lines in the sand!

Logical Steps: Privacy (contracts, Publics, DHS (State & Feds) Communications, Media/Retail/Call Centre Internal high level support External – PHIO Evidence is power Mount the internal case

Summary:

QUESTIONS