REMEDIATION
PLAN
FY2007
“As
per
The
Hospital in response to the above cited Guam Public Law, presents the following
comprehensive “Collection Improvement Plan”.
SELF
PAY
Over
the past three fiscal years 2004, 2005, and 2006, the Hospital has had Self Pay
patients be a leading segment of total patient seen at the Hospital. The estimated remaining types of patients
(70%) have medical coverage, citing their employer, the federal government, local
government, or private entity as being the intermediary for the coverage.
Fiscal Years[1] Total
Census Number of
Self Pay %
FY03 47,415 15,837 33
FY04 44,152 16,200 37
FY05 41,770 15,940 38
FY06 43,423 12,727 29
These
numbers can easily translate into approximately twenty million dollars ($20M)
in billings in a single fiscal year for self pay alone. (The Hospital bills
over one hundred million dollars ($100M) in a single fiscal year or approximately
nine million dollars ($9M) a month).
Through
experience, the Hospital has come to understand a Self Pay patient as being possibly
identified as an:
1.
Individual
who does not qualify for government provided insurance due to their income
surpassing the minimum income standard but at the same time is unable to
financially afford the health insurance provided by their employer.
2.
Individual
who does qualify for government sponsored insurance but is pending receipt of an
insurance card.
3.
Individual
who does have health insurance but has not met their deductible for the
qualifying insurance period.
4.
Individual
whose health insurance provider has been billed and payment received by the
Hospital. The remaining balance on the
bill has been identified by the health insurance provider as being a
non-covered benefit.
5.
Individuals
who do qualify for government provided insurance but is unaware of or has not
pursued such health coverage.
NOTE: The
Hospital has addressed such patients with the inception of the Medicaid
Specialist situated in Patient Registration in November 2004. All Self Pay patients are contacted by the
Medicaid Specialist for possible qualification.
The Medicaid Specialist works with the patient by providing the
applications, assisting them in filling out the application, obtaining an
appointment at the Department of Public Health & Social Services (DPHSS),
and in extreme cases, delivering the application to DPHSS for the applicant. If approved, the patient would provide the
valid coverage card to the Medicaid Specialist.
The Hospital would then bill the appropriate government provided
insurance.
It
must be clearly stated that the Hospital is not in the position to determine at
the time of registration:
-
If the
patient is providing inaccurate or incorrect patient demographics (phone
number, address, etc.). Information
provided by the patient is assumed and taken to be true and correct at the time
that it is requested and given.
-
The
financial ability of the patient or guarantor to or not to render payment. Notwithstanding this fact, the Hospital staff
will in no way coerce the patient in rendering payment at the point of
registration or discharge. The Hospital
staff will work with the patient or guarantor.
The
above facts have not deterred the staff of Patient Registration from performing
collection calls to the patients.
Collection calls are all performed within the guise of the Fair Debt
Collection Act, such as:
-
Collection
calls are done between
-
Hospital
staff is not allowed to misrepresent themselves, the Hospital, or the amount
outstanding;
-
Hospital
staff is not allowed to use threatening, offensive, or vulgar language while
conversing with the patient and/or guarantor.
Results
of collection calls are placed into the Hospital’s Information System patient
notes for documentation.
Collection
calls are made three to five days after the patient has been discharged. The time lapse is to allow the Hospital’s
Information System to properly identify and capture all related patient charges
and ensure the totality of the patient medical record.
NOTE: The
Hospital currently collects approximately four and one half million to five
million dollars ($4.5M to $5M) a month towards Self Pay accounts.
As
been the practice of previous years, the Hospital, in conjunction with the
Department of Revenue and Taxation via a Memorandum of Understanding, has
successfully identified and referred over fifty one million dollars ($51M)
worth of Hospital accounts for tax garnishment.
The assertion is that those owing the Hospital would expectantly receive
a tax refund. In that event, the tax
refund would be directed to the Hospital to offset the amount owed.
Finally,
the Hospital is exploring the possibility of the possible garnishment of the
COLA recipients. Initial inquiries have
proven that such efforts would be unsuccessful.
The matter has been referred to the Hospital’s legal counsel for further
research. In the mean time the Hospital
has obtained a listing of the COLA recipients to determine the likelihood of
any having an outstanding account with the Hospital.
SEE ATTACHED ACTION PLAN FOR IMPROVING
COLLECTION FROM SELF PAY
UNFAVORABLE
SETTLEMENT RATES FROM INSURANCE COMPANIES
The
relationship between the Hospital and the local insurance providers is
symbiotic in nature. Both are conversely
in need of each other in order to fulfill their intended mission. The insurance companies need to have a venue
available to provide quality medical care to their members and the Hospital is legally
mandated to provide quality medical care to all.
Historically,
the Hospital and local insurance companies have managed to negotiate
contractual allowance that amounts to 8% of total billing. This 8% represents an amount that is taken
from the gross billed amount. It has
served as an incentive for insurance companies to provide payment to the
Hospital outside the scope of the negotiated contract (contract terms allow for
the insurance companies to render payment on the 1st and 15th
of every month). Because of the 8%,
insurance companies have been rendering payment on a weekly basis. This has significantly improved the cash flow
of the Hospital. The Hospital would be
enduring financial hardship if the payments from the insurance companies
resorted to only twice a month (24 times a year) as opposed to weekly (52 times
a year).
The
contract between the Hospital and insurance companies involves many layers of
wants and needs. Prime examples of this
convoluted relationship are as follows:
-
The
insurance companies need access to patient medical records in order to
determine the medical necessity of services rendered. The Hospital in turn needs to ensure that
each patient medical record is complete and fully documents the patient’s
medical situation. Their members also
have a vested interest in ensuring that their medical stay is documented. Services that are determined to be a medically
non-necessity will be borne by their member.
-
The
Hospital also needs to be able to properly identify the insurance members in
order to properly bill their insurance provider. The insurance companies need the Hospital to
perform this function 100% of the time in order for their members to receive
non payment on their Hospital accounts.
- The timely remittance and recognition of Hospital claims to the insurance provider is also in consideration. At times the issue of whether or not Hospital claims were billed and received by the insurance provider becomes an issue. Insurance companies have been working towards enabling the Hospital to remit claims electronically.
The
Hospital is looking to negotiate for FY08 health insurance contracts beginning March
08 of next year. Both parties are
looking forward to addressing such concerns and the continuance of the current
contractual allowance. The Hospital
hopes to conclude negotiations well before the beginning of the next fiscal
year which would greatly assist the overall Government of Guam Health
negotiations for that fiscal year.
Overall
the Hospital is working towards improving its delivery of service to the
insurance companies. Such efforts would
place the Hospital in a better negotiating position with the insurance
companies. The Hospital is cognizant
that additional measures need to be determined and accomplished but prudently
done in increments.
-
The
Hospital is system capable to transmit claims and receive payments
electronically. The Hospital is waiting
for the insurance companies to be compliant.
Claims would be screened via a required clearinghouse to ensure that the
information being transmitted is clean and within preset claim format. Transmission and receipt would be
instantaneous and documented. An important
portion of this capability would enable the Hospital to correct and resubmit
the corrected claims electronically. Lastly, payment would also be submitted
electronically into the identified Hospital’s bank account and reflective in
the Hospital’s Information System. All
time saving and a cost savings to both parties involved.
-
Migration
towards a paperless environment. The
effect would be an almost immediate receipt of the Protected Health Information
(PHI) by the intended insurance provider.
The challenge would be full funding of the comprehensive project and the
development of a complete infiltration plan that would encompass the myriad of
Hospital internal systems. Partial
funding has been identified and the Hospital is reviewing the various paperless
options available. The Hospital is
looking at implementing the paperless environment in incremental steps. The first department to realize the benefits
of paperless is slated to be Medical Records. The Hospital would also look at how to incorporate
its Information system provider, Keane to ensure computer system compatibility.
-
The
Hospital is also working towards improving quality and integrity of patient
claims with the reimplementation of the Post Discharge Review that was initially
initiated during the FY03 fiscal year.
This process enabled the Hospital to perform a medical/utilization
review of claims prior to the transmission of the claim to the intended
insurance provider. Unfortunately, a
loss of staff resulted in the stoppage of the process. This again would be a comprehensive effort by
a number of Hospital departments, Utilization Review, Medical Records, and
Patient Affairs. Clean claims will
shorten the reimbursement period of claims as the insurance companies will have
the opportunity to question its validity or veracity.
The
Hospital has made great advances in clarifying aged unpaid claims. The Hospital has worked diligently in
providing requested data and documentation in order for the insurance companies
to render payment as opposed to settling.
The Hospital has assigned a staff who is responsible to work directly
with the local insurance companies in “cleaning” out outstanding claims. Both the insurance companies and the Hospital
have developed a mutual arrangement in the transmission of PHI. Insurance representatives are able to access
PHI for their clients either by directly reviewing the PHI or having the
information scanned to a secure site via a secured line. This is a vast improvement to the previous
arrangements of the Hospital making copies of their client’s PHI and physically
transmitting such PHI to their office.
SEE
ATTACHED ACTION PLAN FOR IMPROVING UNFAVORABLE INSURANCE SETTLEMENT RATES
POOR REIMBURSEMENT RATES FROM MEDICARE
The
Hospital is Medicare certified and thus is able to bill and receive payment for
Medicare patients. Bear in mind that
although the Hospital is reimbursed on a fee for service basis (impinged by the
Tax Relief and Fiscal Responsibility Act (TEFRA), Medicare charges are
reimbursed on a per diem basis. This per
diem rate is determined on the results of the annual Medicare Cost report that
must be filed five (5) months after the close of the fiscal year the Cost
report is being submitted for. The Cost
report can be equated to that of the Hospital’s tax return. The Cost report is a report card of how the
Hospital operates, looking at usage of space, how the hospital captures and
records expenditures, physician time studies, and more recently, the amount of
bad debts the Hospital has acquired. The Hospital receives notice from Medicare
of the official reimbursement rate for that particular fiscal year for all
realized claims for that year.
It
should be noted that Medicare patients do not have a deductible or patient share. The residual, after payment from Medicare has
been received, is recognized contractual allowance.
To
improve reimbursement rates from Medicare would signify a long term plan
encompassing all of the Hospital’s internal working systems – medical and
administrative. As the Hospital is
committed towards attaining Joint Commission on Accreditation of Healthcare
Organizations (JCAHO) recognition such encompassing plans is in the works. JCAHO is an independent, not-for-profit
organization that maintains state-of-the-art standards that focus on improving
the quality and safety of care provided by health care organizations. The Joint
Commission’s comprehensive accreditation process evaluates an organization’s
compliance with these standards and other accreditation requirements.
The
Hospital has many ongoing projects that would all culminate in the improvement
of both services and the collection of such services. As mentioned in the plan, the Hospital is
geared in the direction of JCAHO accreditation and concurrently, GMHA is
currently working with the US Department of Interior Consultants to develop a
Financial Management Improvement Plan (FMIP).
The consultants began to develop the Financial Improvement Plan (FMIP)
in February 2006. Governor Camacho sent
a letter to the Department of Interior requesting assistance for the
Hospital. The Governor’s request was
made in conjunction with a request from the Office of the Public Auditor. The Department of Interior and the
The
goal of a Financial Management Improvement Plan is to help GMHA’s management
identify areas for improvement and implement needed solutions. A Financial Management Improvement Plan will
look at all aspects of the hospital including medical and business
services. The consultants have made three onsite visits
to the Hospital providing guidance as required.
The FMIP process is one that the Hospital and its employees are to take
ownership. The consultants are only
that, consultants. They provide guidance
and steer the in-house FMIP core group in the direction that can be
achieved. The in-house FMIP core group
has had a recent set back as the assigned FMIP director resigned from the
Hospital. A replacement has been
identified and has resumed progress.
SEE
ATTACHED ACTION PLAN FOR POOR REIMBURSEMENT RATES FROM MEDICARE
METHODS TO IMPROVE COLLECTIONS FROM MIP
Guam
P.L. 27-30, §2916 tied the
reimbursement rate the Hospital receives for MIP patient charges to that of the
prevailing Medicare per diem rate. Although MIP patients do have a deductible and/or
patient share, numerous times, they are unable to render payment. If it has been adjudicated by DPHSS that
rendered medical services are inappropriate or deemed non-emergency in nature,
the financial burden is passed on to the patient. Thus, the remaining balance becomes
uncollectible. Add to the fact that many
of the MIP clients use the Hospital’s emergency room instead of the Public
Health clinics as they are seen by the physician quicker or the clinic is
closed and they do not want to wait until the next day. The Hospital would bill for the services but
the Department of Public Health and Social Services (DPHSS) would deem the
charges as being non emergency in nature and deny the claim. The MIP client, as informed at the point of
registration that they would be ultimately responsible for the bill if payment
is not rendered by MIP, would be billed for the services but unable to make
payment. The Hospital does have the option of referring
the account to a collection agency but in reality, it would be ineffective as
the patient does not have the means to render payment. Sending the delinquent account to the
collection agency would prolong the life of the account until it is either
determined to be uncollectible or payment has been solicited.
The
problem in collecting from MIP is not with the billing process. The claims are regularly sent to DPHSS
(copious as evident in the boxes that are received by DPHSS on a daily basis). DPHSS was experiencing a staffing shortage
that had a direct impact on the inputting and payment of Hospital claims. The Hospital, realizing that it would only behoove
them to take action, has had a Hospital staff assigned at DPHSS to enter
Hospital claims. The arrangement has had supplemental benefits for any
questions on the claims can be corrected as they are being entered prior to the
adjudication process.
The
Hospital proposes to reenact previous legislation that reimbursed the Hospital
for bad debts to include delinquent MIP patient accounts. The Hospital would compile such accounts that
have not been paid and the patient has been determined unable to render payment
and forward it to the Legislature. The
Legislature would then appropriate funds to reimburse the Hospital for the
medical care that has been rendered towards MIP patients.
An
alternative to the Hospital receiving financial reimbursement for delinquent
MIP accounts would be to have exchange of medical services for work
services. The MIP client may have
administrative skills, carpentry skills, or grounds abilities that can be used
to offset their Hospital bill. The MIP
client can work at the prevailing minimum wage.
No benefits would be recognized by the Hospital on behalf of the MIP
client.
Prospectively,
to truly mitigate the growing health care needs of the indigent people is to
educate them on proper healthcare. The
island may not be able to correct the healthcare problems of the adults, but if
the education process is begun early enough, then the number of patients seen
both the Hospital and the public health clinics would subside. It can be mandated that all MIP clients
attend health care and management classes.
SEE
ATTACHED METHODS TO IMPROVE COLLECTIONS FROM MIP
RECAPITULATION
Conclusive long
terms solutions that need to be considered are as follows: (Long term can be defined in the following
solutions as over a period of two to five years).
1.
Revisit
Guam P.L. 23-22 mandating the manner in which the Hospital is able to price its
services and supplies. The Deloitte and
Touche Pricing Model was legally adopted as the authorized method to price new
services and supplies. The legislature
and the Hospital need to both look at more modern methods, methods that allow
the Hospital to be flexible but realistic in how the Hospital can be allowed to
determine the rate of reimbursement.
There are companies that are familiar with Hospital pricing schemes that
are accessible via the internet. Updates
to the Hospital’s pricing model with appropriate Current Procedural Terminology
codes (CPT) can be done with a simple download.
Currently updating of CPT codes is done manually. Another service that would be available is
the provision of average cost of services and supplies. Such service would provide a base line of the
minimum cost of the product. The Hospital
would have to take into consideration shipping costs in order to be comparable. The point is the Hospital needs to revamp the
manner in which costs are recovered. The
Hospital is tied to a model that is antiquated and archaic.
2.
Allow
the Hospital legislatively to procure its medical supplies competitively,
outside the realm of the government of
3.
Work
with the Guam Delegate in excluding
Per
the
The
Hospital is cognizant of it’s need duty and obligation to be self sufficient
and maintain financial stability. In the
same token, the reality of the cost of providing quality medical care is
growing. The Hospital is a working as
efficiently with what precious resources are available. The state of the island’s healthcare is
changing which makes it very difficult for the Hospital to effectively have all
the necessary medical services and supplies on hand. The Hospital is appreciative of the
assistance afforded by, the Legislature, the Governor, and the Federal
Government. The Hospital will continue
to do it’s part and strive for advancement.
¤¤¤¤¤¤¤¤¤¤
[1] Admission Listing for:
AS400 Report Reference: PIRP9002-001
Report
represents the patient’s status (Financial class) at the time of Registration.