OIG vey!

Gene Hardy is vice president of information technology of HEALTHeCLAIM.net, a Richmond, Virginia-based training and billing firm.

Consolidated billing creates new liability risks

MENTION "COMPLIANCE" TO A HOSPITAL ADMINISTRATOR AND you'd better hunker down for an involved discussion of billing, liability, and related issues. This is one worry SNF administrators traditionally have not had to share, but that is beginning to change.

The reason? The Office of Inspector General's workplan for 1999 has SNFs right in its crosshairs. Eleven areas of focus in the plan relate to SNFs, including the billing of routine medical supplies as ancillary medical supplies, historically a troublesome area for nursing home billing departments. Additionally, the OIG plans to look at your facility's compliance with consolidated billing rules--specifically whether, between last July 1 and December 31, outside companies continued to bill products and services to Part B that should have been included in the Part A rate.

One challenge is identifying current items and services covered by Part B and/or billed to Part B by outside companies. Orthotics, diabetic shoes and inserts, optical lens and eye frames, wound care, and many other items and services that you may not have purchased previously are your responsibility to provide under Part A reimbursement. Under consolidated billing for non-Part A patients, which is currently postponed, you will need to be prepared to submit Part B claims for most of the items and services used by non-Part A residents. This does not mean that you must know every detail of every item or service billed, but you must take steps to ensure that companies providing services have systems in place for compliance and appropriate billing.

You must also make sure that appropriate products and treatments are being used, as you can be held liable if they are not. For example, in recent months, there have been several large jury awards concerning wound care treatment. "Juries," notes Rodney K. Adams, a health care attorney with the Richmond, Virginia, firm of LeClair Ryan, "have no patience for second-class care due to poor reimbursement. Defending a decubitus ulcer case is always a challenge, and economics is never a defense." Establishment of wound care protocols should be based on medical necessity, not on an item's reimbursement capability. These protocols should be determined by your medical staff and should include an appropriate wound care formulary.

Make sure wound care products qualified under the Part B benefit are indeed being billed for residents with Part B insurance. Many times, nursing staff who are not educated concerning wound care Part B coverage include wound care products in private-pay statements to responsible families, or the SNF or an outside company bills wound care items to the durable medical equipment regional carrier while also including some in the private-pay statement. In many cases, neither the SNF nor the outside wound care company bills the durable medical equipment regional carrier. Private-pay families, which pay Part B premiums, are becoming more savvy about their nursing home statements, however, and won't appreciate continuing to receive medical supply charges for care that should be billed to Part B.

Orthotics is another area requiring a better understanding of Part B benefit, qualification, and coverage. Ordering orthotics has traditionally been left up to therapy and the orthotic company, whose main criterion for selection is usually profit margin. You should therefore keep an eye out for unbundling of products which could lead to fraud issues.

To prepare your facility for billing compliance, look at the charge structure for ancillary services and products. Start with your chargemaster file, the listing of every medical supply your facility stocks and every service you offer. Ask yourself which staff member is responsible for designating services, products, and medical supplies as billable to private pay, Medicaid, and/or an ancillary to Part A. When was the last time someone in your facility reviewed the entire chargemaster file to verify the current cost, appropriate charge, and billable status of each item?

Have outside vendors explain to your key staff Medicare Part B qualification, coverage, and the certificate of medical necessity with respect to their products and services. How well do they understand the new billing rules? Are they up-to-date on changes in policy and coverage? Ask how they plan to keep your staff updated and to integrate these processes. Finally, apply the information to your communication systems, billing, and training.

With the advent of PPS, you are already buying products and services with an eye on application, expected outcome, and cost. When consolidated billing for non-Part A patients kicks in, you will find that this education will have been a solid investment.