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By Myles Riner
CEP America, an emergency physician partnership that staffs 72 emergency departments across the country (including 62 in California), led a pilot project to address dual-eligible claims. The pilot demonstrates a financial benefit to providers and Medi-Cal when providers processed the recoupment claims.
This is a sample article from HFMA's subscription newsletter, Revenue Cycle Strategist, which helps finance leaders improve their bottom line and maintain regulatory compliance.Learn more and subscribe to Revenue Cycle Strategist.
CEP America learned about Medi-Cal's dual-eligible recoupment program when the DHCS vendor incorrectly billed a patient for services he did not receive, and the patient complained to CEP America. The organization's investigation identified the following concerns with the DHCS program:
For those reasons, CEP America approached DHCS about implementing a pilot project to test whether the provider's billing service could more effectively recoup payments from the commercial insurance. The project began in August 2009 when Medi-Cal turned over 3,369 claims for services provided by CEP physicians for processing by CEP's billing service, MedAmerica Billing Services, Inc. (MBSI). At that time, DHCS estimated that it was due $248,097.03 in rebates for prior Medi-Cal payments on these claims.
On CEP America's behalf, MBSI designed a process that started with manually keying in data because claims were delivered in hard copy. All claims had already been checked against Medi-Cal Online Eligibility Request (MOLER) prior to the initial submission to Medi-Cal.
When CEP America received the refund request letters, this was the first indication that patients may have had dual-insurance coverage. MBSI then cross-checked eligibility with commercial insurance carriers' online systems to confirm accuracy and coverage on the date of service. One additional FTE was required to manage the pilot program, and this position has been made permanent to manage ongoing retroactive refund requests.
MBSI then submitted claims to the commercial insurer when appropriate, and provided the vendor with documentation of the results of the claims adjudication process. Recent legislation extended the timely filing limits for submission of these claims to the commercial insurer, and the DHCS has extended the time allowed for the provider to adjudicate these claims to 120 days before refund retractions are made.
The pilot project was completed in July 2010. Of the claims identified by the DHCS vendor, 66 percent did not warrant recoupment by the Medi-Cal program. Most of these incorrectly identified claims were either not covered by the commercial carrier on the date of service or covered appropriately by Medi-Cal as the secondary payer.
CEP America identified 1,158 claims for which the patient was covered by a commercial plan on the date of service and rebates to the Medi-Cal program were appropriate. As a result, $82,761 was rebated (through retractions) to Medi-Cal (see the exhibit). According to DHCS, this amount significantly exceeded what the vendor had previously been able to collect from a similar number of claims.
CEP America collected $211,315.96 for providers from commercial carriers, for a net gain of $128,555, after rebates to Medi-Cal (i.e., $211,315.96 - $82,761).
Tracking dual-insurance coverage for patients covered by both Medicaid and private insurance resulted in a net gain of $128,555 in revenue for providers in California.
View the exhibit.
This pilot project brought the following benefits to both providers and the DHCS:
These results show that providers can work with state Medicaid agencies as partners to reduce unnecessary Medicaid expenditures. This is a win-win situation, because providers are also able to recover higher reimbursements from commercial insurers than they had from the Medicaid program.
Thanks to the program's success, DHCS will be enabling other physician groups to participate in this program, and has already rolled it out to some hospitals, as well. The result is that other hospitals have experienced similar revenue benefits, which has also improved the Medi-Cal bottom line significantly.
I encourage hospitals to consider screening all patients for commercial insurance coverage at the time of service, even if Medicaid is listed as the primary insurer, to avoid retroactive refund requests. Additionally, all providers should investigate how their state Medicaid program recoups Medicaid payments on claims where the patient has simultaneous commercial coverage to ensure they are not losing out on revenue they could be collecting from commercial insurers.
Currently, the terms of the provider-DHCS agreement include an automatic retraction of refunds from the provider for claims not processed within 120 working days, which CEP America found was necessary as it often takes insurance plans months to respond to these claims. Given the demonstrated financial benefit to providers from participating in this program, I strongly believe there is sufficient incentive for providers to adopt this process without the DHCS requiring automatic retraction of refunds.
Myles Riner, MD, is a partner emeritus, CEP America, Emeryville, Calif. (email@example.com).
Publication Date: Tuesday, March 01, 2011
Brian Kueppers, founder and CEO, Apex, discusses the importance of a robust patient payment strategy in boosting organization revenue and enhancing patient satisfaction.
Brian Grazzini, CFO, HealthPort, describes the importance of efficient and compliant information exchange and audit management in helping HIM staff spend less time on paperwork and more on mission-critical projects.
Cindy Matthews, executive vice president, Community Hospital Corporation, discusses how rural and community hospitals can use collaborative partnering to position for success through tough market conditions.
Rick Heise, senior vice president, revenue cycle, at Cerner Corporation, discusses the importance of integrating clinical and financial data to excel in health care’s changing payment environment.
Dale Hockel, senior vice president of operations, and Jim Fanelli, CFO, TriMedx, share strategies for elevating clinical engineering through innovative management programs.
Russ Graney, founder and CEO for Aidin, and John Laursen, head of business development for Aidin, share insights on how to improve care transitions between acute and post-acute care settings and incentivize high-quality patient outcomes.
Scott Elston, strategic accounts manager, GE Healthcare Services, describes how substantial cost reduction in health care requires rethinking business strategy and asset use.
Robert Williams, MD, director, Deloitte Consulting LLP, and Arielle Freiberger, product strategist, ConvergeHEALTH by Deloitte, explain how sophisticated retrospective, real-time, and predictive data analytics can inform decision making to reduce costs and improve care.
Stuart Hanson, director of business development (healthcare solutions) at Citi Retail Services, discusses how improving the payment experience can benefit consumers and healthcare providers.
Scott Schmidt, vice president, Cerner RevWorks, LLC, shares insights on best practices for maximizing a revenue cycle management partnership.
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