Quarterly Newsletter - FALL EDITION 2015 - #17
Here They Come…Hey-Hey It’s the ICD-10 Codes Starting October 1, all U.S. providers are required to start using a new system known as ICD-10 medical codes to describe illnesses and injuries when they bill a claim. The codes will cover common illnesses as well as rarer medical calamities such as whether the patient was crushed by a horse, injured by a boat propeller, struck by a turtle, hurt knitting and crocheting, spacecraft collision injuring occupant, swimming pool of prison as the place of occurrence of the external cause, pecked by a chicken, burn due to water-skis on fire, art gallery as the place of occurrence of the external cause, and problems in relationship with the in-laws.
doctors, hospitals, clinics and nursing homes to report vastly more information about the care they provide. Physicians will now have to answer questions like these:
“The coming ICD-9 shift may be the most dramatic change in health care reimbursement in decades.”
Was the patient bitten by a horse, a snake or a shark? Pecked by a turkey? Crushed by a crocodile? Or sucked into a jet engine?
According to a New York Times article, the coding change is causing waves of anxiety among health care providers, who fear that claims will be denied and payments delayed if they do not use the new codes, or do not use them properly. Some doctors and hospitals are already obtaining lines of credit because they fear that the transition to the new system will cause cash-flow problems. Under the new coding regime, government programs and private insurers will require
Did a diabetic also have kidney disease, eye problems or nerve damage? Did a patient with high blood pressure also have signs of congestive heart failure? Was that broken finger on the left or right hand? Was the fracture in the top, bottom or middle of the finger? But the questions from medical providers will need to go even deeper.
The new catalog of codes includes more than 100 for gout and more than 200 for diabetes. In a sign of the times, the government lists more than 30 codes for injuries caused by acts of terrorism. The codes, from the 10th revision of the International Classification of Diseases, or ICD-10, have significant implications for patients. Physicians may need to perform additional tests to help determine if a patient with high blood pressure has heart failure. ICD-10 includes 68,000 diagnostic codes, compared with 14,000 in the current compendium. The number of codes for inpatient hospital procedures will expand
to 87,000, from 4,000. Health Care consumers often need prior approval from insurers for expensive tests and medical procedures. To get approval, they need a valid diagnostic code. Physicians fear there could be initial delays as the initial process gets underway next month. Professional coders play a valuable role in the health care system. Coders read through mountains of medical records in order to assign codes to describe a patient’s medical condition. Accurate coding helps ensure patients receive the necessary care they require. It is also a way to justify the services provided. The previous 30-year-old codes had failed to keep up with changes in medical technology and treatment. The coming ICD-9 shift may be the most dramatic change in health care reimbursement in decades. In 1983, Medicare started paying hospitals a DRG rate, which is a fixed amount for each case, based on the diagnosis. However, this shift was only for hospitals and Medicare patients. In 2014, under the Affordable Care Act (aka Obamacare), millions of uninsured people obtained Medicaid or government subsidies for private health insurance, but together those changes affected fewer than one in 10 Americans. However, the ICD-10 codes will be used by doctors and hospitals for virtually all patients.
Hospitals: Did You Check To See Whether the Payor Signed Your Letter of Agreement? We take this opportunity to share a cautionary tale with the hope you will avoid some of the pitfalls that can come with negotiating letters of agreement (“LOA”) with cost-containment companies. It is not unusual for a hospital to enter into a LOA with a health plan for a specific hospitalization when the parties are otherwise non-contracted. Sometimes the LOAs are entered into prior to a planned procedure and sometimes an agreement is made following the hospitalization. Costcontainment companies are often used by health plans to negotiate the LOA’s on their behalf. Typically, the payor or the health plan is seeking a discount from the hospital’s usual rates. This particular case from one of our clients caught our eye. Our hospital was contacted by a costcontainment company after treatment was rendered to a health plan member. The cost-containment company requested a discount off the hospital’s billed charges and sent a proposed LOA to the hospital. The LOA essentially provided that the hospital would accept 80% of its billed charges as payment for this particular hospitalization. However, there was no counter-promise in the LOA that required any party to pay the claim. The LOA also contained a provision that relieved the cost-containment company of any financial responsibility for the claim. The hospital was instructed to sign the LOA if the terms were acceptable. The hospital signed the LOA, however, the LOA was not signed by any other party, nor were there signature lines for any other party. Although a party was listed in the LOA as the “payor,” that party was merely the third party administrator. A small payment was issued by the third party administrator but it was less than the 80% rate contained in the LOA. Unfortunately, since the payor was neither identified as a party to the LOA, nor did it sign the LOA, it will be very difficult, if not impossible, for the hospital to enforce the terms of the LOA. We recommend that hospitals remain diligent in confirming the identity of payors and obtaining appropriate signatures when entering into LOAs.
All About That Base!
The first and arguably most important document needed to effectively evaluate the strength of a hospital claim for reimbursement pursuant to a contract is the “base contract.” This is the contract between the hospital provider and the payor. It is the foundational document which outlines the parties’ agreement at the initial phase of a contractual period. Parties typically agree to this base contract, and then as they realize later during the life of the agreement that slight changes may be necessary, they negotiate amendments to the base contract. Typically this means that provisions not in the amendment or amendments remain enforceable under the base contract. If the parties require a significant overhaul of the relationship terms, instead of agreeing to amendments, they often agree to a new base agreement. So why is the base contract important? It is usually the document that includes some very important basic information, such as the following:
The Limitations Period: Pursuant to statute, parties generally have four years from a breach to file an action for breach of a written contract. However, parties often contract to shorten that period. This means that a hospital might have contractually agreed to much less than four years to file a claim for a breach of contract. Accordingly, it is essential to review a base contract to determine whether the limitations period has been shortened. This allows you to properly set the last day by which you can pursue your right to bring an action on your unpaid claim. Failing to file within that deadline may prevent you from recovering for that claim. The Appeals Process: The appeals process generally outlines the period during which you can attempt to informally resolve your claims with the payor before filing arbitration or litigation. Is one appeal necessary or two? Is meeting and conferring a condition precedent to litigating a claim? These questions are
all usually dealt with in the base contract. Again, a failure to abide by the time deadlines for the appeals process may prevent pursuit of the claim. Definition of Terms: Many terms are usually defined in the base contract. For example, if a claim is denied because the payor deems the services not “medically necessary,” it is important to know how the parties define “medical necessity.” This allows for an evaluation of whether or not, according to the terms of the contract, the care was medically necessary. Similarly, if a payor underpays a claim because, for example, it believes the claim should have been billed as outpatient instead of inpatient, the contract must be evaluated to see whether the definition of inpatient care includes stays that exceed a certain number of hours, like those more than 24 hours or those that go past midnight. It might seem odd to require a review of base contracts that may date as far back as the 1990s. However, as you can see from the short list above, the base contract may include essential information.
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Registration Deadline December 31, 2015
The Bili Project Foundation will be a ‘Participating Charity’ in the 2016 Skechers Performance Los Angeles Marathon! Be a part of an exciting group of BILIevers as they run for one of the best foundations in one of the best marathons in the country. For more info on how to be a part of our team, visit www.thebiliproject.org!
organizations, but I still try to support them in any way that I can.
Do you have family and/or pets you’d like to tell us about?
Alexander T. Nguyen This quarter’s Spotlight is on attorney Alexander T. Nguyen.
Spotlight Q&A What is your area of expertise within SAC? I joined SAC in early 2015 as a litigation associate, and I handle both arbitrations and court trials. My experiences at SAC as a litigation attorney include: researching and analyzing new insurance legislation and the effect they would have on existing contracts between providers and insurers, reviewing and evaluating contracts and claims for their strengths and weaknesses, negotiating settlements and resolving disputes outside of an arbitration hearing or court trial, and of course, preparing for and conducting arbitrations and trials.
What one piece of sage advice can you offer to our clients that can help them in the future? My advice is to document everything, specifically with computer notes, and to be as thorough as possible when doing so. It is very beneficial for SAC when assessing and evaluating a claim to know such details as when a patient was admitted, when the IPA was contacted and authorization was received, if the insurer was contacted and what was discussed, if an account was underpaid the reasoning for the perceived underpayment, etc. I believe the more work and attention to detail that is able to be done on the front end will result in quicker, larger and more efficient recoveries on the back end.
Can you talk about a recent success story of yours? What was the challenge and how were you able to overcome it? A recent personal success of mine was running and completing the Dodgers 10K, which took place around Dodger Stadium and through Elysian Park. I generally enjoy working out and staying active, but the one physical activity I don’t enjoy is running. I’ve long heard about “runner’s high” and the rush of endorphins people get from distance running, but I’ve never personally experienced it. So, this past summer, I decided I would finally give running an honest effort. I researched different training programs, and decided to go with the Couch to 10K app. I followed
the program diligently, logged each session, and tracked my progress along the way. Prior to embarking on this training program, the most I ever ran was maybe 3 miles, and so, to be able to train and get up to a distance of 10K, or about double my previous high, was truly quite satisfying. This particular 10K was also fun and rewarding because I was born and raised in the Los Angeles area and am a huge Dodgers fan (naturally), and to have the opportunity to run inside Dodgers Stadium along the playing field and warning track was pretty thrilling.
Do you have any hobbies or interests outside of work? I like watching movies. Specifically, I like watching movies at the theaters rather than at home because I enjoy the experience of watching a movie with an audience (and also because movie theater popcorn is so much better than popcorn you pop at home). My top five films of 2015 (so far) are: 1) Mad Max: Fury Road, 2) Ex Machina, 3) Kingsman, 4) Me and Earl and the Dying Girl, and 5) Inside Out. Also, I’d be remiss if I didn’t mention how excited I am for the new Star Wars: The Force Awakens to come out. (And since I like lists, here are five other movies I’m looking forward to: The Assassin, SPECTRE, Creed, The Hateful Eight, and The Revenant).
Do you have any charitable causes that interest you and events you have participated in recently? I am most interested in and passionate about assisting victims of domestic violence with getting the help and resources that they need. I was an extern at the Brooklyn District Attorney’s Office – Domestic Violence Bureau while I was in law school, and after law school, I volunteered with LACBA’s Domestic Violence Project at the Stanley Mosk Courthouse. Both of these experiences helped to expose and educate me about the challenges domestic violence victims face, not only on a personal level, but also with navigating the complex criminal justice system. While volunteering with LACBA’s Domestic Violence Project, I worked directly with the victims and assisted them with taking the difficult step of obtaining a temporary restraining order against a family member or a significant other. Now, as a practicing lawyer, I am not able to volunteer as much of my time with these domestic violence
I come from a pretty big family, both immediate and extended. I’m the oldest of four children; three boys and one girl. My mom is one of nine children; two boys and seven girls, and all of these aunts, uncles, and their kids live in the Los Angeles area (except for one aunt who somehow ended up with her husband and kids in Toronto, Canada of all places. Go figure.). Growing up, because we were all so close to each other (both figuratively and literally), we would have large family gatherings at least once a month where my mom or one of my aunts or uncles would cook up a feast of Chinese and Vietnamese food. These gatherings were an opportunity for me to hang out with all my cousins and for my mom to play mah jong with all her siblings. For the longest time I thought it was a very normal thing to have these mini-family reunions on a regular basis, where you got to see and hang out with all your relatives. I found out (in my “later” years), however, that this was not the case for most people, and that I was fortunate to have such a large extended family that enjoyed spending time with each other. Now that we’re all a little bit older and have jobs and/or families of our own, we see each other less frequently, but when we do, it’s still as noisy and fun as ever (my cousins from Canada even make it down for the holidays from time to time!).
Do you have any guilty pleasure television shows, movies or other activities to tell us about? According to Wikipedia, a guilty pleasure is something, such as a movie, a television program or a piece of music, that one enjoys despite feeling that it is not generally held in high regard. And for me, it doesn’t matter if something I enjoy is not generally held in high regard by other people. We’re all allowed to like different things (or dislike different things), that’s what makes life interesting – it’d be pretty boring if we all held the same things in high regard and vice versa. So, to answer the question, no I don’t have any guilty pleasures.
What are your favorite Colors? Other favorites?
foods?
Burritos. If I were only allowed to eat one type of food for the rest of my days, it would be burritos. Ideally, I would be able to choose a different burrito daily from the burrito food group, i.e., Monday - Breakfast burritos, Tuesday - California burritos, Wednesday - Mission burritos, Thursday - Chipotle burritos, Friday - King Taco burritos, etc., but either way, I like burritos.
2015 Vince Acquisto Memorial Golf Tournament More than 85 golfers tee’d it up at the 4th Annual Vince Acquisto Memorial Golf Tournament on Monday, October 12, 2015, at Blackhawk Country Club. The winning foursome in the scramble format, with a best ball score of 56, were Susan Acquisto, Dr. Bob Kerlan, Ed Moses and Joy Stephenson-Laws. After the round of golf, more than 110 dinner guests enjoyed a cocktail hour featuring a silent auction featuring golf memorabilia and wine. All proceeds from the auction will benefit The Bili Project Foundation.
UPCOMING EVENTS November 8, 2015 - Community Outreach, CCLM, San Bernardino, CA We will be assisting the Central City Lutheran Mission (CCLM) which is an organization dedicated to serving people living in poverty in San Bernardino, California. For more information please contact T. Denise Ransdell at transdell@sacfirm.com November 12, 2015- Armed & Dangerous Educational Seminar, Glendale, CA
All articles are written by the SAC Litigation team. The SAC Litigation team includes attorneys, nurses and physicians with extensive experience in all areas of law related to healthcare matters. Additionally, SAC partners hold legal advisory positions with healthcare organizations and sit on the boards of numerous healthcare-related organizations and monitor all out-going SAC client marketing materials and related content.
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Quarterly Newsletter FALL Edition Enclosed
We would love to hear from you! If you have questions, comments or feedback please email us at SACReview@sacfirm.com.
Join us for this one-of-a-kind educational seminar where we will ARM you with the knowledge of both how your contracts work for you and, more importantly, how they can work against you. Once armed with this knowledge, you will be DANGEROUS to the payor community and they will think long and hard about denying your claims.