Appropriate Billing of Human Subject Research Charges.

Abstract

Agencies of the federal government have become more concerned about issues relating to compliance, including Medicare billing of research charges. A system has been established at the Palmetto Richland Memorial Hospital in Columbia, South Carolina, to properly identify and bill the appropriate entity for charges incurred solely for the collection of research data. In this system, principal investigators identify charges generated solely for research purposes. Study personnel then confirm and forward these charges to a research-charge designee who makes sure billing for these charges is handled appropriately. The method described was developed using HBO software charging and billing terminology but can easily be adapted for use with any computer system.

Introduction

The work plans of the Office of Inspector General (OIG) for 1998 and 1999 state that field inspectors will conduct reviews to determine whether hospitals or other providers are inappropriately billing Medicare for items and services for research studies.

A research charge is any billable event that is generated on a patient account for the sole purpose of collecting research data. Although the OIG has not yet started reviewing institutions on a full-scale basis, it is advisable, given growing federal concern about compliance issues, that institutions be proactive in this regard. Using Medicare guidelines as the benchmark for coverage, private insurance companies and other guarantors are sure to follow suit.

Palmetto Richland Memorial Hospital is a member of the Palmetto Health Alliance, which comprises three hospitals in the state of South Carolina. Palmetto Richland is the primary teaching and research hospital for the University of South Carolina School of Medicine. The hospital is also the base for the South Carolina Cancer Center, which is involved in many research projects.

With the introduction of the 1998 OIG work plan, along with concomitant alerts from various sources, the research administration office at Palmetto Richland realized that a system needed to be initiated to deal with research charges and other research expenses in a compliant manner.

The administration believed that not all research expenses were being properly accounted for in the hospital budget. Expenses were not properly charged to patient accounts. Financially, this was inherently bad for the hospital. At this point, a research associate was hired by the institution to develop and monitor a system that identifies and properly bills research charges. The process of developing and implementing the system took six months to one year. The length of time was primarily to train the study personnel in the new system.

Since the system has been instituted, research charges have been readily identified, appropriately billed and easily paid. More physicians are becoming involved in research projects since the administrative procedures for handling research costs have been simplified. It is in the mission statement of Palmetto Health Alliance that research and innovation must be pursued for the good of the community. Therefore, the hospital often absorbs the costs of research when no funding is available. However, these amounts are now properly accounted for as expenses incurred for the benefit of the people involved.

The following article explains the steps used in the procedure. With a few modifications specific to the situation, this procedure can be used as a standard for proper billing of research charges. Figure 1 presents an overview of the billing procedure.

Step I

The first and most important step in the process of appropriate handling of research charges at Palmetto Richland Hospital is to identify charges at the "front end."

The principal investigator (PI) for the study fills out a form that identifies research charges as part of the application packet for protocol submission to the Institutional Review Board (IRB). Treatment plans for some diagnoses leave a large gray area as to what is "standard of care" for the patient. Since physicians may order different tests at different intervals, who better than the P1 to determine what is and what is not a charge incurred solely for the research study?

The IRB application forms are sent to all members of the IRB for review. Since some of the members of the IRB at Palmetto Richland are physicians, they understand the treatments necessary for a diagnosis and will speak up when anything is amiss. By signing the form for review by the IRB, the PI takes responsibility and accountability for the determination of research charges and must be prepared to back up his/her decision if questioned by the IRB.

Research charges are incurred for procedures that are not normally done for standard care of the patient. Typical research charges are: extra MRIs, EKGs, x-rays, laboratory tests and assays as well as the cost of laboratory preparation, including mailing samples to a central laboratory. If the laboratory does not have codes for these charges, a price list is established and charges are billed using a miscellaneous code.

Step 2

A research charge must remain in the system for the test to be ordered and the results to be properly reported. Also, this system is set up to have minimal impact on any ancillary departments of the hospital, including the charging departments. Research charge billing should be "transparent" for most personnel. Therefore, the research charge is placed on the patient's regular hospital bill. A research-charge designee (RCD) in research administration must be informed of the research charge in a timely fashion.

Step 3

When a research charge is put on a patient's hospital account, it is the responsibility of the study personnel to ensure that a ROD is notified within two days by using a request form for research billing. This RCD then registers the patient on a contract account that has been set up for that protocol and transfers the research charges into that account.

The deadline ensures that the charge is removed before the patient account information is sent to the patient accounts department for billing. It is preferable to show both the charge and the credit on the patient's bill, so that the patient is assured that they have not been charged for the research procedure.

When a request is made for a research charge to be credited and billed correctly, the associated patient identifiers must be very clear. The patient's full name is put on the request form as well as the date of birth and social security number. In large hospital databases, it is very common to enter a patient's name and get multiple selections. This additional information is required to guarantee that the RCD can correctly modify the proper accounts.

Step 4

The RCD for the institution monitors the study patient accounts. This RCD also has the capability to credit accounts, register patients to contract accounts and charge contract accounts.

Contract accounts are set up so that there is one funding source for each account. In the case of group studies, it is helpful to have one contract account set up for each group. Contract accounts that are set up for research charges incurred by protocols generated in-house are paid from that department's "research fund" or out of that department's operational budget.

As research charges accumulate on the research contract account, it becomes proof of compliance in handling research charges. The contract accounts that have been set up for research contain only research charges. This is a way to assure that research charges are being taken care of by research funds and not inappropriately billed. This also becomes a clean way to account for research charges generated for each protocol or set of protocols.

Step 5

At this point, the patient's regular charges are billed as usual to patient or guarantor and the research charges associated with that patient are charged to the appropriate contract account set up for research. The research contract accounts are checked periodically by the RCD to be sure that erroneous charges have not been made.

When a patient is registered to a contract account, for a short time that patient may be identified by two account numbers when the unit secretary (or whoever is putting the charges in for that patient) calls the patient's name up in the computer system. This has the potential for causing regular patient charges to be put erroneously into the research contract account. If this happens, the problem is rectified by in-service training by the RCD. This does not happen at this institution as much as one would think, and it has been all but alleviated by the use of the word "research" as the first word in the name of the contract account.

Step 6

The research contract accounts are offset appropriately at the end of the billing cycle. In some cases, the charges are written off to charity. This is often the case in research that involves children.

Some contract accounts are able to be internally adjusted using accounts that individual departments may have set up for research, especially for protocols written in-house, or an invoice is generated by contract accounts, billing the study sponsor directly.

Summary

In most cases, a busy physician does not have the time to develop and implement a procedure for properly billing research charges. Thus, a PI may inadvertently be non-compliant in identifying and billing the extra charges for research, and these charges may go through the carrier for the sake of expediency without a conscious effort to defraud.

At Palmetto Richland, PIs and other study personnel are very earnest about making sure all research charges are identified at the outset. Some may call it "the fox guarding the chicken-coop," but we have found that having the PI, along with research nurses and study coordinators, identify the research charges is the best way to handle this issue. Furthermore, since the PI must identify research charges for the IRB, the PI's peers on the IRB can be a powerful check on any investigator who is unethical or uninformed.

With much vigilance by the research administration office, coupled with a change of attitudes of clinical study staff, this system is working well at Palmetto Richland Memorial Hospital. More than $18,000 worth of research charges have been accounted for on research contract accounts since January 1, 2000, with about $5,000 being written off to fulfill the hospital's commitment to research and ultimately the good of the community.

There are currently 17 research contract accounts set up to accept research charges that have been removed from a study patient's account or have been otherwise incurred for research purposes. Best of all, not only the administration, but also the clinical study staff, seem to be happy with the procedure and are compliant and helpful with working out problems. It is also becoming easier to develop realistic budgets for industry-sponsored clinical trials.

Since this is an issue that is just being brought to the attention of institutional officials, there may be some resistance to change the way research charges are reported. Some institutions may feel that this will send up a "red flag" to federal agencies and result in an audit. However, this system, once established, greatly reduces the likelihood of inappropriate billing of research charges and increases payments for charges that have been written off as billing errors in the past. Administrators should keep in mind that identifying and initiating steps to rectify the problem shows good faith if the research site is audited.

Rosemary Biscardi ("Appropriate Billing of Human Subject Research Charges") is a Clinical Research Specialist in the Research Administration office of Palmetto Richland Memorial Hospital. She received a BS degree from St. Bonaventure University and is currently working on a Masters in Business Administration