QUARTERLY NEWSLETTER - WINTER ISSUE 2011 - #2 Welcome to the second edition of the SAC Review. The response has been fantastic and we are thrilled with the positive feedback we’ve received from you. Your enthusiasm has encouraged our team to put together an extra special holiday edition packed with valuable information. Please enjoy our new column Ask SAC; a section devoted to answering common client questions. In addition to the hard copy mailed to you, the newsletter and bonus content can be found on our website at www.sacfirm.com. We wish you and your entire staff a happy and healthy holiday season. Joy, George, Vince
HOT TOPIC
GETTING AROUND THE SHARP DECISION
OBTAINING PAYMENT FOR TREATMENT OF “IN-CUSTODY” PATIENTS By: Aleksandra Sarosiek, Esq. & Karlene J. Rogers-Aberman, Esq. It is generally difficult for hospitals to obtain payment from California cities and counties after giving care to arrested persons in need of immediate medical attention. Over time, this struggle has become even more difficult as a result of both legislative activity and rulings by California courts. •
•
•
In 1992, an amendment to California’s Penal Code provided that cities should not be liable for medical costs resulting from an officer transporting an arrested person to the hospital prior to booking them into county jail. Between 1992 and 2007, hospitals were able get around the amendment by relying on the longstanding 1968 case of Washington Township Hosp. Dist. v. County of Alameda, which gave a broad meaning to the term “booking.” Under Washington Township, an arrested person was considered “booked” even if he or she was not physically committed to a cell. This was called a “constructive” booking. Under Washington Township, the constructive booking theory meant that the arresting entity was responsible for paying for the arrested person’s medical care from the time he or she was placed under arrest. The reasoning was that if the arrested person had not been injured, he or she would instead have been taken directly to jail. In 2007, the case of Sharp Healthcare v. County of San Diego essentially
overturned the holding of Washington Township by doing away with the theory of constructive booking. In Sharp, the California Court of Appeal ruled that San Diego County was not liable for the medical care expenses of a person arrested and treated at a hospital before the arrestee was committed to the county jail because there was no duty to book an arrested person “in absentia.” The Sharp court held that “County may elect to delay booking of arrestees until after they have received medical attention.” Despite the ruling in Sharp, it is important to note that nothing in the case prevents the sheriff from voluntarily booking an arrested person. In other words, the sheriff or other enforcement officer can waive the right to delay booking. A hospital could therefore make the argument that if a patient is transported to a hospital and “field booked” by the government entity while receiving treatment, the patient has been voluntarily “committed” under Sharp. (A “field booking” generally occurs outside the physical confines of jail and is completed from a remote location such as a hospital. Field bookings use the same procedures and render the same results as a jailhouse booking). By voluntarily field booking the patient, the government entity is effectively acknowledging it has a duty to pay for the care rendered to the individual. In practice, this voluntarily booking is usually represented by an “In-Custody Medical Treatment Form” completed by the arresting offer. The form typically lists the name of the patient, their age and gender, as
well as the arresting officer’s signature and badge number. Most importantly, it (i) certifies that the treatment was authorized by the appropriate enforcement division (e.g., the County Sheriff’s Department), and (ii) provides a booking number. Hospitals are therefore in a good position to get around the Sharp decision if they obtain a properly completed In Custody Medical Treatment Form at or near the time treatment is rendered. If the hospital waits too long to obtain the In Custody Medical Treatment Form, it could give the city or county an opportunity to argue there was a “delay” in booking. That then gives the county an “out” to argue it has been absolved of any financial responsibility for services rendered. Hospitals are also in a good position to get around Sharp if there have been any partial payments received from the city or county in connection with the hospital’s treatment of the arrested individuals. By making a payment on the claim, no matter how small (and it usually is!), the city or county is effectively acknowledging some responsibility for the treatment rendered. As a side note, there are many legal nuances and holes in the Sharp case that remain open to interpretation and will likely lead to more litigation in the future. For example, Sharp never clearly defined the term “commitment” and did not specifically address field bookings. Therefore, it is left to be seen whether other judges or the California legislature will agree that a field booking renders an arrested person “committed” as intended by the Sharp decision.
BEST PRACTICES
PROOF IS IN THE PAPERWORK Document request and retrieval for our assigned accounts is essential. By: Richard Lovich, Esq. & George Colman, Esq. Patient financial services professionals know very well the documents that make up their daily work. These documents, including computer notes, UB04s, EOBs, and correspondence with payors are so common in the field that their significance in obtaining appropriate reimbursement are often overlooked. Although routine in their applicability, these documents become the ammunition used to force payors to live up to their financial responsibilities. Disputed claims referred to the pre-litigation and litigation professionals at SAC become more easily appealed/litigated and overturned with the proper and essential documents. The ability to recover for medically necessary services the hospital has rendered is often based on what was done in submitting the bill, in following up, appealing, and corresponding with the payor. Most accounts we litigate do involve issues of medical necessity, however, there are many contractual issues involved in the recovery process as well (i.e. contractual timely submission of a claim, contractual timelines to submit an appeal, etc)., The best way to ensure recovery under these circumstances is to present persuasive evidence and documentation for each act. Evidence comes in the form of documents and testimony and the bulk of evidence is documentary. This is because most often, by the time the claim reaches arbitration, the person who actually sent the records is not available to testify or simply because of the volume of claims they handle daily, prevents any current recollection of what happened on that individual claim. This means that in order to establish that the hospital is entitled to the expected reimbursement, it must be shown with internal hospital documents that the bill and subsequent appeals were submitted correctly and timely. If the documents fail to establish each step of this process, the claim has to be considered weak and the likelihood of recovery is diminished. The case is strongest where the computer notes or correspondence clearly and unequivocally indicate what was done. Creating clear, complete, and timely claim documentation – a task within the hospital’s control – can lead to a significant increase in recovery.
MORE PET PEEVES REGARDING MANAGED CARE CONTRACTING OPERATIONS MANUALS A number of contracts I have seen have a provision stating, “Payor has an operations manual that is incorporated by reference into this contract”. This troubles me for several reasons. First and foremost, this allows for a unilateral contract change since the Operations Manual is totally controlled by the Payor with no input from the Provider. These Operations Manual changes become part of the Provider contract. Providers could then be barred by a unilateral directive from the Payor. This is not a good provision as it allows a Payor to make “backdoor” changes detrimental to the Provider. My second point of concern is that the incorporation language is contrary to the California Providers Bill of Rights. The bill, in essence, says a Payor cannot make a change to its agreement with a Provider without the Provider’s WRITTEN consent. How often have Providers given their written consent regarding changes in the Provider Manual? Providers need to insist on the written consent provision of the Provider’s Bill of Rights regarding changes to their contract. “ Another option is to exclude any reference to an incorporation by refer-
ence in your contracts, or at a minimum, freeze the Provider Manual provision to the manual in existence at the time the contract is signed with a provision that any charges need to be negotiated as a contract amendment and be signed by the Provider in order to take effect.
DISALLOWED CHARGES Why in the world would a Provider give a Payor the right to disallow charges for services it provided to a patient? Some contracts give Payors arbitrary control in this area. When a bill is submitted, a Payor can delete some charges from the bill to lower the total billed charges to less than a stop loss threshold mark or to lower the percent of charges it pays. This too is a very bad idea. My advice to Providers: do not give the Payor any discretion on what it will pay or not pay. I like the term “Total Billed Charges” in contracts to eliminate the Payor’s discretion to limit charges and reimbursement. These are my latest pet peeves. Although I hope for improved relationships with Payors with regard to reimbursement.
GEORGE COLMAN This quarter’s spotlight is on one of SAC’s founding partners, George Colman. For more than forty years, George has been involved in representing over 100 healthcare providers in revenue recovery and business office consulting, assisting in creating “on-site” programs in public and private hospitals, as well as specialized insurance and third party recovery programs throughout the country. Through his years of experience, George has contributed to vital programs, serving as a President of the Southern California Chapter of the Healthcare Financial Management Association (HFMA), the Chapter Liaison Representative for Region 11 of HFMA; he currently serves as national legal counsel to the American Association of Healthcare Administrative Management (AAHAM), and is the legal advisor to the California Association of Healthcare Admitting Managers (CAHAM).
No doubt many of you have had the pleasure of attending George’s lectures at his education seminars dressed in his signature bow tie. George is active in his community, tirelessly advocating for specialneeds children and studying American Sign Language to fully communicate with his grandson. His most recent accomplishment is receiving the “Heart of St. Francis” award at the St. Francis Charity Ball for his contribution to the community and for his instrumental role in their organization as Chairman of the Board of Trustees of the Foundation. His outgoing personality and funny wit are enjoyed by his family, clients and employees alike. We sat him down to ask questions to get some insight on his journey to where he is now, what’s next and ask him to offer some sage advice.
CONT’D - NEXT PAGE
GEORGE - CONT’D Q: How did you first meet Joy and Vince and form Stephenson, Acquisto & Colman? A: I met Joy and Vince at my prior firm, Hayt, Hayt & Landau. I was the Managing Partner at that firm and actually the one that hired both of them as healthcare attorneys for that firm. Vince had been an attorney with HFCA involved in Fraud & Abuse and at the ‘cusp’ in creating DRG’s. Many clients questioned the hiring of Vince considering HCFA the enemy – my comment is he is now on our side and we have garnered the secrets and contacts at the federal level that can enhance us all. Joy was so easy to interview and offer a job to. Her personality, creative thinking and astuteness with respect to the law, made a decision to hire her, a snap one. Joy is a fabulous litigator with respect to Administrative and Healthcare Law and has unquestionably raised the caliber of legal representation for hospital providers.
Q: Do you have any funny stories you can share from the 22+ year history of the firm? A: Most of the funny stories I can share are not for publication, however we certainly can share our 20th anniversary CD with anyone who asks. It parodies the SAC office with the well publicized television show – The Office.
Q: What is the single most important piece of advice you can offer our clients? A: March 2012 will mark my 43rd year of
practicing law – 14 years in New York as a trial attorney representing large commercial entities and physicians in their personal affairs. I have learned and experienced much over those years, and what I can offer our clients as advice has more to do with life. Whether personal or as employees, managers or administrators, behave as a human being first and as boss second. I have found that this posture works to create a mutually beneficial and sound working relationship.
Your Questions Answered By Our SAC Team of Experts George received the “Heart of St. Francis Award” at the St. Francis Charity Ball on October 1, 2011
Healthcare issues, and met with members of Congress to effect change. I have assisted several families with special needs children; visited our national government offices spending time with representatives of congress to move legislation forward that can assist providers to continue quality care for our population, even with reduced reimbursement and rising costs.
Q: What sort of things do you like to do during your down time away from the office? A: Golf, sculpt, read, visit museums, spend
time with my grandchildren. Although my golfing skills are slightly above the average golfer, it is the enjoyment of the outdoors with friends and the beautiful golf courses in Southern California which are the reward.
Q: Who is the better golfer? You, Joy or Vince and why? A: Joy is taller and more beautiful, and man, does she hit the ball far.
Q: Tell us something about your family. A: A wonderful group of people that stand by each other and provide constant support and love for each other. I owe much of my success and ability to “give back” to the community I live and work in, to my family. I am also proud of my family, my children and grandchildren; they are independent thinkers and achievers – having become successful and notorious on their own.
SPECIAL ALERT!!
Q: After we receive a letter from HDI identifying our claim for take back, we receive two medicare RA-s: one, showing a zero payment and another showing a take back of the amount Medicare originally paid for this claim. Why is Medicare taking their money back so soon, before we ever get a chance to appeal? A: Medicare is not taking their money at this
point – this remittance advice that looks like a take-back (with code N432) is really a tag, or a place holder.
Q: We have been seeing a significant increase in the number of denials of Medi-Cal claims in the last six months. What is happening? What can we do about it? A:
What you are seeing is the effects of Hewlett Packard being phased out as the Department of Healthcare Services (DHCS) Fiscal Intermediary. Just make sure you do not get caught up in the re-billing cycle - remember, you can keep re-submitting your claim for processing within the first six months after the discharge date. After that, unless you have a valid late billing excuse, you will have your claims cut back by 25% and then 50% and after 1 year, you will just get a plain denial. Make sure your staff is aware they need to comply with the MediCal administrative appeals process and that they submit their Claim Inquiry Form (CIF) and appeals timely.
Q: Medi-Cal is not paying for our expensive supplies. What can we do about it? A: Make sure you comply with their invoice
requirements - do not submit purchase orders, it is not the same thing.
Second, respect the fact that healthcare delivery in America is special, and the passion we have in providing care and overseeing the process must continue; even under the financial restraint and complex regulation that makes our jobs more difficult every day.
Medi-Cal DRG program, designed to replace the TAR process, has been delayed until at least January 1, 2013 and may be extended further.
Q: How do we go about having Medi-Cal reprocess an incorrectly paid claim?
FACT: LAST PLACE
Q: Do you have some career advice garnered from your experience? A: As an attorney we have an obligation,
California is LAST in the nation in Medicaid (MediCal) funding. In 2010, California was underfunded by $4.6 billion dollars. As providers you MUST identify your denied medically necessary days AND appeal and/ or litigate them. Getting appropriately reimbursed is essential. Contact Vince Acquisto or George Colman for more information.
patient claim Medi-Cal deducts an incorrect part B medicare amount or, processes claim with an incorrect patient id, deducts wrong share of cost... The fastest way to accomplish the reprocessing is to first do a CIF for take back and then promptly rebill (if you are still within the first 6 months after discharge) or, appeal once you receive the warrant showing that the take back was performed. To avoid having your CIF denied as untimely, make sure you mark the “overpayment” box.
in order to maintain our license to practice, for continuing education. Rather than begrudge it as a chore, I look to it as an opportunity to continue to best represent our clients and to enhance my career. Likewise, every opportunity that anyone has to obtain an education for a personal interest or on the job elevates oneself and promotes career opportunity.
Q: What causes and charities have you been involved in over the years? A: Juvenile Diabetes; Autism and National
UPDATE - RADIO SHOW Many of you have been looking forward to SAC’s debut on the KTLK radio show “Ledger on the Law”. Sadly Clear Channel has notified us that the show has been indefinitely postponed. We are still available to answer your questions offline though.
A: It happens all the time - e.g., on an in-
Q: If a claim is the financial risk of another capitated hospital / IPA or medical group, can we still go after the health plans for payment?
CONT’D - ON BACK
ASK SAC - CONT’D A: Yes. Although hospitals are aware of
the process of cap and deduct, very few hospitals actually take advantage of the process. Hospitals have to make sure that they bill the claim(s) to all parties and appeal to all parties within a timely manner. Those claims that were never billed to the health plans and appealed timely within the deadlines- regulatory or contractual deadlines, are the claims that are difficult to recover payments. Hospitals should also look at their contracts to determine what sort of payment obligations a health plan has when a claim is capitated.
Q: Is a denial for no authorization the same as a denial for medical necessity? A: No. Many people confuse the two. Deni-
als for no authorization is a failure to follow an administrative procedure of obtaining pre-certification whereas medical necessity is strictly a clinical denial. If a contract between the parties exist, that contract generally provides an outline on the administrative procedures that hospitals should following when obtaining authorization for post stabilization care and/or elective procedures. Insurers also have copies of their policies that can be obtained through the provider’s
online access. That said, for contracts that do not preclude retrospective reviews then those insurers should not deny a claim for lack of authorization.
Go to sacfirm.com for more frequently asked questions by clients and exclusive web content. Additional exclusive web content topics include: •
ICD-10, HIPAA 5010, new DHCS’ Fiscal Intermediary - Ladies and gentlemen brace yourselves, we are entering an eye of a hurricane....
•
If we were to look at your main account inquiry, will we be able to tell at first glance if a file was paid in full?
QUESTIONS / COMMENTS If you have any questions, comments or feedback you would like to address to our team for our next newsletter, please email SACReview@ sacfirm.com and check out the next newsletter for the answer.
DISCLAIMER: This newsletter is for general educational and informational purposes only. You should not act upon this information without seeking your own independent professional advice.
UPCOMING EVENTS 14th Annual HFMA Region 11 Healthcare Symposium January 29 - February 1, 2012 Caesar’s Palace - Las Vegas, NV Chuck is on the CORE committee with the general session speakers.
WWW.SACFIRM.COM Southern California Office 303 North Glenoaks Boulevard Suite 700 Burbank, CA 91502 (818) 559-4477 - Main (818) 559-5484 - Fax Northern California Office 5700 Stoneridge Mall Road Suite 350 Pleasanton, CA 94588 (925) 734-6100 - Main (925) 463-1805 - Fax