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Curbing overutilization: the silver lining to HCFA compliance.

Sometimes you have to make people an offer they can't refuse. The threat of liability for Medicare noncompliance helped one institution finally rein in redundant bedside testing.

Thanks to recent legislation,[1,2] laboratory managers have become aware of their potential legal liability for inappropriate test utilization. That became clear when the Office of the Inspector General for the Health Care Financing Administration promulgated the Model Laboratory Compliance Plan under the Medicare Integrity Program.[3] But there is a potential benefit from this heavy regulatory. burden. The need for hospital-wide corporate compliance can be used to control inappropriate laboratory utilization - a useful tool, instead of a sword hanging over our heads. Clinicians who have remained indifferent to utilization control and cost containment become much more interested when the issues are couched in terms of Medicare fraud. We leveraged our institution's development of a HCFA compliance plan against the overuse of a common form of bedside testing, with results that saved thousands of dollars a year.

Compliance protocols

The University of Alabama at Birmingham Health System includes the University of Alabama Hospital, a variety of outpatient clinics, home health services, and an outreach laboratory serving healthcare providers in central Alabama. The Department of pathology and UAB Hospital Laboratories developed a compliance plan that conformed to the OIG model. This plan establishes clear lines of communication, identifies departmental roles in compliance monitoring, and ties the hospital laboratories to the UAB Health System's corporate compliance office.

Test orders and billing records generated in various laboratories are forwarded to the laboratory information system (LIS). The LIS provides data used to generate reports on compliance for laboratory administrators and section heads. Reported parameters include information on appropriate diagnosis coding, proper bundling of tests in approved panels, and specific requirements for individual laboratories. When laboratory processes are found to be in compliance, section heads forward compliance tracking reports to the compliance office. When compliance problems are identified, the section head notifies the division director, develops and implements an action plan to address the problem, and files a noncompliance tracking report with the compliance office.

Most of the laboratory's compliance effort has focused on outpatient coding and billing, but the laboratory administration has examined inpatient testing as well, starting with bedside testing for glucose, blood gases, and electrolytes. Several critical care areas at UAB use i-STAT portable clinical analyzers (i-STAT Corp., Princeton, NJ) for glucose, blood gases and/or electrolyte testing. We took a closer look at how bedside testing was being used, and how far inappropriate utilization could be curbed in the context of corporate compliance.

Overlap alert

Several of UAB's key clinical centers made extensive use of the i-STAT 6+ panel (sodium, potassium, chloride, urea nitrogen, glucose, and hematocrit), including the neurosciences intensive care unit (NICU), the coronary care unit (CCU), and the heart transplant intensive care unit (HTICU). A review of LIS records revealed a significant duplication rate for both 6+ panels and fluid balance profiles (sodium, potassium, chloride, bicarbonate, anion gap, glucose, urea nitrogen, and creatinine) from the core laboratory. We defined duplication as a fluid balance profile and a 6+ panel run within 1 hour of each other. Our initial survey in October 1997 found duplication rates of 32% in CCU, 54% in HTICU, and 49% in NICU.

After interviewing nurses about possible reasons for this redundant testing, we developed and distributed a survey to determine which reasons were most commonly offered (see Table). Only a minority of nurses explicitly said that they distrusted bedside results, but more indicated that physician distrust was a factor - and the overwhelming majority felt the need to verify abnormal bedside analyzer values with core laboratory tests. The next two most frequent responses - follow-up after treatment or a change in the patient's condition - meet the criteria for medically necessary testing.

Delivering the message

We arranged a series of meetings with nurse managers, staff nurses, and attending and resident physicians to discuss corporate compliance and utilization. Where applicable, we presented evidence of the reliability of bedside testing results. However, we emphasized the need to choose the most appropriate testing methods and limit duplicate testing to conform to the criterion of medical necessity. When bedside testing values were abnormal, we advised the nurses not to automatically order a follow-up test from the core laboratory in anticipation of the physician's response. Then we presented physicians with clear test ordering options that eliminated unintended coincidental orders. As these interventions came on line, we kept a close eye on utilization patterns.

Why run redundant tests?

In a survey, nurses were asked why a six-test panel on a bedside
analyzer was run concurrently with a similar profile in the core
laboratory. Here are the results:

Check validity of
abnormal analyzer result 75.8%

Follow up on a change
in patient's condition 57.9%

Physicians do not trust
analyzer results 50.5%

Coinciding orders 50.5%

Follow up after treatment 48.4%

I do not trust analyzer results 15.8%

Convenience 6.3%

The effort paid off, as the Figure illustrates. Predictably, some improvement occurred as soon as attention was drawn to the issue (the Hawthorne effect). But improvements continued in all units, with duplicative testing declining to 18% in CCU, 21% in HTICU, and 15% in NICU. The reward for this greater control was significant cost containment. When routine fluid balance profiles were run alone, instead of being paired with i-STAT 6+ panels, the reduced use of i-STAT cartridges generated a savings of $1,500 per month in supply costs alone.

A zero duplication rate was never a goal of the program. When a patient's condition is highly unstable, or when the effects of treatment require close monitoring, multiple laboratory tests may be medically necessary. Needless testing, on the other hand, provides no benefit and actually may pose risk to patients, in addition to consuming scarce medical resources. Laboratory managers must comply with DIG guidelines or risk severe consequences; those who exploit the opportunity provided by this requirement can gain a tool to trim inappropriate utilization of laboratory services.


1. Public Law: 104-191, Health Insurance Portability and Accountability Act of 1996. h.r.03103:. Accessed 7/23/98.

2. Public Law 105-33, The Balanced Budget Act of 1997. 105th Congress of the U.S. h.r.02015:. Accessed 9/4/97. Government Printing Office: Washington DC; 1997.

3. Health Care Financing Administration, Office of the Inspector General. The Medicare Integrity Program. Accessed 7/23/98.

Meredith Kilgore is a doctoral fellow at the RAND Graduate School in Santa Monica, CA. LuAnn Hensley and Carol Howard are bedside testing coordinators, and Jennie Craft is director of hospital laboratories, all with the University of Alabama Hospital in Birmingham. John Smith is professor and director, laboratory medicine division, department of pathology, University of Alabama at Birmingham.
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Article Details
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Title Annotation:Health Care Financing Administration
Author:Kilgore, Meredith; Hensley, LuAnn; Howard, Carol; Craft, Jennie; Smith, John A.
Publication:Medical Laboratory Observer
Date:Mar 1, 1999
Previous Article:Easing the switch to medical necessity documentation.
Next Article:Stopping the spread of vancomycin-resistant enterococci.

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