June, 2009

A few weeks ago, Dr. Stoller sent me this (and I have just been too swamped to keep up):

"OXFORD:  ALERT! Recoupment Requests Based on Extrapolation

Some members have received letters from Oxford requesting that they pay large alleged overpayments based on extrapolation. Members are urged to alert their office staff to be aware of the process. A letter from Oxford notifies the physician of an audit that will cover medical billing and coding for e&m claims. The letter may seek information from physicians who are no longer Oxford providers. It will include a list of patients whose records have been selected for review. The
letter may include instructions from CODeXACT, Powered by PARSES (PARSES), which sets forth instructions on how to provide the requested documents. After the physician provides documents Oxford may send a letter from a Provider Compl iance Analyst seeking a repayment for alleged overpayments based on the “random sample.” This letter indicates that the overpayment is based on a “statistical methodology” and extrapolates to assert an alleged overpayment amount.

MSNJ believes that Oxford’s use of extrapolation to derive an overpayment amount is in violation of state laws and regulations. We have forwarded examples of this business practice to the New Jersey Department of Banking & Insurance (DOBI’s). We want to ensure that all such overpayment requests have been discovered. Members are urged not to pay the alleged overpayment amount. Given that the PARSES analysis will be used to extrapolate an alleged overpayment amount physicians may want to consider objecting to the request rather than providing the requested documentation. 

Please respond to this article by writing to info@msnj.org if you have received one of the notice letters or one of the overpayment request letters. Please indicate whether you have paid any such overpayment request.

We will keep members apprised of developments concerning DOBI’s investigation of this business practice."

At about the same time, some of our clients in TN were being harassed by a "recovery contractor" in an effort to recover money supposedly overpaid by TN BCBS (read about the TN Medical Society's response).

Now, a few weeks later, Dr. Stoller has updated me:

OXFORD: Cease & Desist Order Issued on Recoupment

The New Jersey Department of Banking & Insurance (DOBI) issued a
cease and desist order against Oxford Health Insurance, Inc. on June
23, 2009, asserting that it has violated New Jersey law by seeking
overpayments from physicians based on extrapolation. DOBI asserts that
the Health Claims Authorization, Processing & Payment Act (HCAPPA)
restricts the situations in which a carrier may seek reimbursement for
overpayments based upon extrapolation. In particular, DOBI was
concerned about the use of extrapolation based on fraud.

The papers filed by DOBI indicate that Oxford justified its recoupment
attempts based on fraud. However, the statute only allows extrapolation
where there is “clear evidence of fraud” and the payer has both
investigated in accordance with its fraud prevention plan and has
referred the claim to the Office of the Insurance Fraud Prosecutor
(OIFP).  According to DOBI, Oxford did not make such a referral. In
fact, DOBI’s papers cite numerous circumstances that suggest that
Oxford did not consider the physicians’ conduct to be fraudulent,
including the fact that Oxford allowed the targeted practices to remain
in its network. Moreover, the papers indicate that Oxford’s referral to
the OIFP was only made after DOBI’s inquiry into Oxford’s recoupment
practice, suggesting back-tracking on the part of the company. 

The cease and desist order requires that Oxford: discontinue its
recoupment activity based on extrapolation; reimburse physicians for
overpayment recovery that violated the HCAPPA, together with 12%
interest; and file a report with DOBI detailing its efforts in this
regard.

DOBI’s action may take away some of the anxiety physicians feel when
insurers intimate that they have acted fraudulently when, in fact, they
are billing services and collecting payments in good faith.

Susanne Madden predicted this very behavior a few months ago, but I don't think she was going out on a limb there, either.  It's going to get worse before it gets better, I think.  And - brief applause for the NJ and TN Medical Societies.

I had an interesting conversation the other day with the sales head of one of the big EHR/PM systems (you've heard of them) who bragged to me about their lobbyists down in Washington DC and implied how he, as a result, is more aware of what's "really" going on down there than the rest of us.

Of course, it would never occur to me to have a lobbyist working for PCC.  I know I'm naieve, but we just don't think that way.  Lobbying on behalf of our clients, though - that's another story.  

Which leads me to Dr. Sue Kressly who was down in DC on Wednesday, fighting for a little fairness for pediatricians as part of the stimulus bill.  Some of the reasons I think the HIT stimulus package is a load of phooey are addressed by Sue.  Thanks to Greg Anderson, of OP fame, for sending this along.

http://www.youtube.com/watch?v=fIoL5aTCqKw

This links to section 12, which is her original testimony. you can hear her, but for
some reason the camera shot stays focused on the chairwoman. ...
Also, Sue is quoted below in an article about the hearing that was published in
Congress Daily.

Smaller Medical Practices Get Help With Electronic Records
Thursday, June 25, 2009

The Obama administration's implementation of stimulus package incentives intended to
spur nationwide adoption of electronic medical records will give special attention
to solo practitioners and small group practices, HHS Health IT Coordinator David
Blumenthal told lawmakers Wednesday.

He testified before the House Small Business Regulations and Healthcare
Subcommittee, which heard from pediatricians, optometrists and others who fear they
could be disadvantaged when the government doles out about $17 billion in Medicare
and Medicaid bonuses, grants and technical assistance.

Under the statute, physicians beginning in 2011 will be eligible for up to $44,000
under Medicare for using health IT, although what constitutes "meaningful use" of
that technology has yet to be determined. Starting in 2015, penalties for those who
fail to demonstrate "meaningful use" will take effect. Blumenthal said HHS is
setting up listening sessions around the country targeted at small practices to hear
how they believe stimulus money can work for them.

Currently, 21 percent of physicians have adopted electronic medical records, but
only 13 percent of small providers have done so. For that reason, Congress created
grant programs to stand up regional extension centers that would assist and educate
providers, with priority given to small practices and those focused on primary care,
Blumenthal said.

House Small Business Regulations and Healthcare Subcommittee Chairwoman Kathy
Dahlkemper, D-Pa., said the bill she introduced in conjunction with the hearing will
build on the stimulus by establishing a Small Business Administration loan program
designed specifically for doctors who want to make health IT investments. The
starting price tag for such systems is $32,000 per doctor, she noted.
"That's a big investment for any business, and for many physicians it is enough of a
hurdle to stop them from purchasing HIT," she said.

Susan Kressly, who testified on behalf of the American Academy of Pediatrics, said
her colleagues are deprived by low-payment rates under Medicaid and because of
disparities between stimulus requirements for practices paid by Medicaid rather than
Medicare. The Academy thinks pediatricians whose caseload consists of 20 percent
Medicaid, Children's Health Insurance Program and the uninsured should be eligible
for stimulus funds. Pennsylvania Optometric Association Executive Director Charles
Stuckey added his group is troubled that a "large and diverse group of providers"
could be left behind.

An eagle-eyed resource sent me this today:

We received information from First DataBank that it was no longer going to include the FET in its AWP calculation. We monitor the pricing publications and noted that the First DataBank AWP for June reflects that the excise tax is no longer included.

For those of you who have contracts who use FDB to set imms pricing need to jump on this with your payers to make sure that they continue to include excise tax in your calculations or you stand to have your reimbursements cut!
I'd love to know FDB's reasoning, anyone is welcome to clue me in.

A few weeks ago, over on PedTalk, I promised I'd make a public walk-through of an insurance fee schedule offering so folks can see the math that I like to do.  We're opening Pandora's Box here and I don't want this entry to be 10 pages long, so we're ignoring some important aspects of this contract offer in order to focus on the math (namely - payer mix, practice coding behavior, why some codes are not paid at all, etc.).

To read along, download either the OpenOffice or Excel versions of the spreadsheet I made. 

Let's recap what we're doing.  A dear client wrote to say that she had received a spreadsheet of a potential fee schedule and took me up on my request to analyze it.  If you open the spreadsheet above, here's how it reads:

• Everything in green is from their original spreadsheet.
• Everything in orange is from a Partner report I ran.
• Everything in yellow is calculated within the new spreadsheet.

As spreadsheets go, this one is remarkably nice - as you can see, it outlines a stepped offer with two price increases over 36 months.  The payer has provided code-by-code detail and even indicated the expected revenue change.

The first thing I did when I received the spreadsheet was check the math.  I have seen more than one payer offer not add up correctly and you know which way the mistake always goes.   My quick dash through it indicates that their math looked good - if, indeed, those are the expected fees and volume for this practice, it adds up.

But when I talk about doing the math, it's that "if" above that I focus on.

So, the second thing I did was to run a comparative report on the practice's system.  All you Partner clients and most of the rest of you can do this easily.  My goal was to compare what the insurance company says was the volume and revenue for the charges to what the practice actually sees.   I then dropped my report spreadsheet into the spreadsheet from the payer and lined up the procedures.  This was, by far, the most time-consuming part of the process.  

The first thing I noticed is that there were procedures expected from both sets of data that were not on the other set.  I don't know the exact time sample that the payer used for their expected unit count, so I'm not surprised they differ, even by a fair amount.  I'm not, yet, going to be cynical.  You'll see that there is a $185,000 difference (F100 vs. J100) which can be explained by both the time sample and any difference between how payer patients are counted on the practice system (if they haven't configured their insurance groups just perfectly, for example). 

The per-charge-revenue differences are closer-than-usual, I find, especially for the large-volume codes.  It might be worth looking into a vew individual procedures that have decent volume but a difference that costs (99173, 99223).You'll see that there is a 1.4% difference between the expected payments and what the practice really received - 1.4% is, sadly, in the acceptable range for uncollected balances, particularly as more and more of your insurance balances end up with the patients.

If we assume that the practice's procedure distribution is closer to reality than the payer's - or at least, reality may be some where in between - we simply need to calculate the new revenue based on the offered prices and the real volume.  You will see the results in columns N and Q.  The results are straightforward - it looks like a 4.8% increase out of the gate, followed by a second increase of 3.5% (N102 and Q102).  

Without any context, I'd say a 36 month contract that puts you ahead by 8.3% over 3 years is pretty good in this climate.  However, the context is very important!  If this payer is only at 85% of Medicare to start, this is an insulting offer.

Your milage may vary, contents may settle during shipping.

[Special thanks to Philomena Smith!]

The other day, I posted our new Sick:Well visit benchmarks that take into account the -25 modifier usage.  I remarked that there appeared to be an interesting dip in the benchmark in 2004 and asked if anyone had an explanation. 

Turns out that Chipsblog Super Fan (my label) Dr. Suzanne Berman did a little research in her practice and may have come up with some of the answer.  At first, she wrote to me:

I betcha one reason is because the 2003/2004 flu season was so screwy and awful. We recall it in our practice annals as the Awful Influenza Year -- influenza vaccine was delayed, no one paid for FluMist yet, the vaccine was a mismatch, and worst of all, the season hit way early (November), before we were prepared for it. This would push a lot of kids that you'd normally see in early 2004 to late 2003, making the 2003 ratio higher and the 2004 ratio lower.

She then confirmed that her S:W ratio dropped quickly in 2004 and jumped up slightly in 2005.  She ran off to test her hypothesis and came back with this beauty...

The X-axis is the month of flu diagnosis.  The Y-axis is the overall percentage of flu diagnoses for that season (if 70% of the flu diagnoses for the season (Nov-April) were made in February, February's Y axis is a 70).

Sure enough, 2003 came a few months early, pushing a stack of kids who would have otherwise shown up sick in 2004 back into 2003. She then pointed me to this cool CDC flu site showing that a similar trend was felt across the country, saving me from having to run the data for our clients...

Here's the kicker - Dr. Berman realized that this trend above would only really affect the ratio if flu diagnoses make up a significant portion of sick visits on an annual basis.  Turns out, at least in her office, the flu shift that year was part of the cause - but not all of it.  Was the super-late arrival of the 2004 flu mean that you didn't actually see all the sick kids you'd normally see, as you were already into your well schedule/season?

Anyone else?  This is great stuff.  Thanks, Dr. Berman.

Within the AAP, there are some fairly strict/arcane/goofy rules about campaigning for AAP President-Elect.  Most AAP members here are aware of how it works.

I, however, am not an AAP member!  So, I can campaign for whomever I wish without breaking any rules.

There has been a positive shift in the AAP's work with private pediatricians over the last few years, and Dr. Francis is a major part of that change.  The rest of you know who you are.

More importantly, whether or not you agree with her positions, AAP members are really bad about voting for their leadership.  Given all the complaints I've heard from AAP members over the year (a considerable amount), you can't blame someone else when you get another non-practicing pediatrician and you didn't vote...

So, come learn about one of the two AAP nominees at Dr. Francis' personal site:

http://www.annefrancismd.com/

Emjoy.

While I was at Skytop lecturing last week, I ran into JR Vought - actually, he literally ran into me on purpose - who proceeded to do what he usually does in my classes, which is ask me questions which are somewhere between really good and yanking my chain. 

JR pays attention, you see, and his natural instinct combined with me telling him a handful of times over the years, meant that when I turned to the class and said, "...and when you institute your new patient recall mechanism, monetize it.  That is, convert the results into something the physicians understand.  You might feel like your recall system was a success, but why not prove it - the data is easy..." JR already had a spreadsheet for me when I returned from my trip.

Let me put his results below into perspective.  JR dutifully manages a busy 5-doctor practice in northeast PA.  Nice folks, I've known them forever. But when you look at his results below, don't think that this is some 25-doctor monstrosity.  This is a practice that resembles more of you reading this than it doesn't.  I am going to quote his email, which included an amazing spreadsheet, here:

Hi Chip-
In 2008, we did ~4,400 overdue well visits through our  recalling process (see attachment).  The revenue impact??  An additional $493k, (avg $112/well visit in 2008), excluding vaccines. 

Yup, read that carefully. 5 docs following up on their visits all year long push out an additional 4.4K visits and bring in nearly half a million dollars, or $100K each. 

$100K each!  For doing their most important work!  And $112/visit reflects the low revenue in his part of the country...many of you should exceed that easily.

What I love about JR's message and his attachment is that he can tell me exactly how many visits he brought in, how much they made (excluding immunizations!), and what the impact is on his practice.  From his spreadsheet, I can see which months had the most effective recall success.  Which physicians had the biggest gaps and caught up the most (or the least).  And even, in his case, the effect of running a second recall on the kids who don't respond to the first one - the result?  The second recall letter had a higher response rate than the first.  None of this is difficult or even hard work.  Just requires being organized.  OK, that's hard work for me, but you get my point.

And here's the best part, for me - JR's spreadsheet, showing recall data for each doctor, broken down by month - indicates that he has a full preventive care program in place in his office.  It wasn't some one-time deal, JR actually has a Medical Home and he's getting paid to do it.

 JR, you are my new example in my "Preventive Care For Fun And Profit" class.  Awesome work.

A long time ago, PCC came up with the concept of an important pediatric clinical measurement, the Sick-to-Well Visit ratio.  The concept was straightforward: how could we encapsulate, in a single number, a practice's focus on providing preventive care?

The ratio and another (intentional) use - it's a really good indicator of the financial health of a practice.  There are exceptions - queue Lynn Cramer - but unless a practice has a strong chronic disease management program in place, I can tell a lot about a practice based on this simple number.

Originally, we calculated the ratio the easy way: we added up 99201s through  99215s and divided them by 99381s through 99395s.  There are all kinds of problems with this, though the results were better than nothing. 

Today, we're a little smarter.  The big change we've made is recognizing the growth of -25 modified code usage.  Obviously, when trying to measure the preventive care focus of a practice, we don't want to count well visits with attached sick visit codes as sick visits.  So, now we count all visits that have a well visit in them as a well visit (even with additional, modified E&M codes).  The results are interesting.  Thanks to Igor, as usual.

So, anyone want to tell me what happened on 2004?!

First, I just got back from a great weekend at Skytop Lodge, where I spoke for the Goryeb Children's Hospital.  Had an excellent time, hung out with some old friends, learned a lot.  This may be the best pediatric conference to which to bring a family anywhere in the country.  Well, that and our AAP endorsed Orlando event in July.

Meanwhile, I asked the other day if anyone were interested in putting together a pediatric-focused "concierge medicine" community.  I've had a few positive reponses and no negative, so I'm going to work on it here at PCC.  Stay tuned.  

Meanwhile, check out Dr. Hodges, who showed up here a few months back.  She's turned it up a notch! I'll have to ask her about the iPhone apps.  She might appreciate PCC's :-)