payers & providers – issue of april 15, 2010

8/9/2019 Payers & Providers – Issue of April 15, 2010

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A new report by credit reporting giantTransUnion concluded that hospitalsaround the country are not only being hithard by the recession, but California’s

facilities may be faring worse than others.As a result, TransUnion officials say atleast two hospitalchains in the statehave turned topresenting bills topatients before theyleave the hospital toenhance their chancesof receiving payment.

According toChicago-basedTransUnion’s survey,96% of hospitals have

been hit by having totreat uninsured andunderinsured patients.But some factors inCalifornia may beexacerbating thephenomenon forhospitals. Theyinclude:

• The number of payments by privatepayers –health plans and patients – toindependent practice associationsdeclined about 6% in California between

the first quarter of 2009 and 2010,according to TransUnion, whichhandles nearly 70% of all suchtransactions statewide. Such

transactions are sometimes a precursorto hospital admissions.

•The overall creditworthiness of Californians –which wassignificantly betterthan the nationalaverage at the startof the recession –is now worse thanthe nationalaverage. According

to TransUnion,Californians were2% lesscreditworthy thanthe rest of thenation at the endof 2009. Thatcompares to being8.7% morecreditworthy than

the national average at the end of 2007.

Hospital Collections Hit By RecessionFacilities Now Turn To Real-Time Adjudication of Bills

California Edition

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April 26-27

May 13-16

Calendar

15 April 2010

May 4

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the details of your event, or call(877) 248-2360, ext. 3. It will be

published in the Calendar section,space permitting.

Continued on Next Page

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Payers & Providers

• A strong regulatory environment.With the passage of AB 774 in 2006,

California has some of the strictestregulations regarding how hospitalsproceed with collecting on patient bills.

“This all goes hand in hand withhospitals having difficulty with patientrevenue,” said Jim Bohnsack,TransUnion’s vice president of productdevelopment for its healthcare division.“California is more heavily regulated thanother states, and it makes it more difficultor them to collect.”

Hospital officials concur with theTransUnion survey. “It’s a balancing act . If

we go after patients too aggressively, weget criticized by advocates,” said JanEmerson, vice president of externalrelations for the California HospitalAssociation.

K.B. Forbes, executive director of theConsejo de Latinos Unidos, a Los Angeles-based advocacy group that pushedhospitals throughout the state earlier inthe decade to modify their collectionpractices, said that AB 774 hasdramatically cut down on patientcomplaints his organization has received.He estimated that Consejo has received

about 50 cases so far in California thisyear – compared to 300 to 400 a month

five or six years ago. “(Virtually all) of thecases are resolved when we suggest thepatients apply for charity care,” Forbes

said.With fewer paying patients andnarrowed alternatives for collections, thatputs California’s hospitals in the position ofinding new ways to collect revenuewithout violating AB 774. Bohnsack notedthat some facilities are turning to real-timeadjudication, using an on-site point-of-salesystem to produce a bill for the patientbefore they leave the faci lity. TransUnionoffers such a product to its healthcareclients.

“If a hospital tries and collects beforethe patient leaves, 90% of them will get

something,” Bohnsack said. “If they leavewithout a bill, the payment rate goes downto about 10%.”

According to TransUnion officials, SanFrancisco-based hospital chain CatholicHealthcare West and Burbank-basedProvidence Health & Services haveinstalled such systems or are in the processof doing so at several of their hospitals.

The official in charge of the CHWinitiative did not return a phone callseeking comment. Providence officialswere not able to immediately providecomment.

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In Brief

Healthcare M&AActivity Waned In First

Quarter

Healthcare-related merger and

acquisition activity dropped 21% inthe rst quarter of 2010 compared tothe fourth quarter of 2009, accordingto a new report by Irving LevinAssociates.

The Norwalk, CT-based Levin saidonly 211 deals were consummatedduring the rst quarter, compared to268 in 2009.

“The decrease in deal and dollarvolume from previous quarters may beattributed in large part to the attentionfocused on national politics leading upto the passage of health care reform inearly March. Deal makers appearedreluctant to announce newtransactions until the outcome of this

erce debate became clear,” thecompany said.

Hospital m&a activity accounted for just 9% of all activity during the rstquarter of this year. Most of the activityfocused on pharmaceuticals andmedical technology rms.

Los Angeles DMEBusiness Owner Pleads

In Medicare FraudCase

The owner of a Los Angeles-baseddurable medical equipment firmpleaded guilty this week tosubmitting nearly $500,000 in falseclaims to the Centers for Medicareand Medicaid Services.

Sylvester Ijewere, 49, submittedthe guilty plea to one count of healthcare fraud on Monday in theCentral District Court in LosAngeles. He faces up to 10 years in

Payers (Continued from Page One)

After levying six administrative penalties forsurgery-related mishaps against hospitals thisweek, the California Department of PublicHealth acknowledged that there has been asignicant rise in such violations. But agencyof cials say it has more to do with anincrease in hospital transparency than anactual elevation of risk at facilities statewide.

Payers & Providers rst reported adramatic rise in surgical-related penalties lastyear. In September 2009, the CDPH levied12 administrative penalties against hospitalswhose surgical staffs had left objects inpatients. Prior to that, only nine suchviolations had been levied since early 2007.

“At this point, it is largely becausehospitals are getting better at self-reporting,”

said CDPH spokesman Ralph Montano. Hepointed to SB 1301, a law enacted in 2006 threquired hospitals to report any event thatleaves patients in immediate jeopardy withinve days of its occurrence. “At some point, wexpect to see these adverse events plateau, abegin to decrease as we see hospitals increastheir vigilance,” he added.

Montano noted that medication mishapswere still the leading cause of the 146penalties levied to date, with 42 suchviolations. Retained surgical objects is thesecond-leading violation, with 28 levied todate.

Continued on Page 3

NEWS

Continued on Next Page

CDPH: Surgical Mishaps Still On RiseLinked to Greater Transparency; Southwest Fights



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NEWS

In Brief

prison and a $250,000 fine whenhe’s sentenced on Aug. 16.

Ijewere owned a firm calledMaydads Medical Supply. Between

June 2007 and October 2009, heprocured false medical documentsand prescriptions in order tosubmit bogus claims for high-end

medical equipment.Investigators were suspicious

when more than half of the claimswere submitted on behalf of Medicare beneficiaries who livedmore than 100 miles from Ijewere’sbusiness.

CMS officials have made it apriority to crack down on medicalequipment fraud in SouthernCalifornia after a 2006 surveyrevealed score of such businessesthat had submitted claims did notphysically exist.

City of Hope Officially

Launches $1BCampaign

City of Hope in Duarte hasannounced a fundraising campaignit expects will raise $1 billion.

The campaign, known as “ThePower of Hope,” was given a softlaunch in 2005 and has raisedsome $500 million to date.However, officials with the 217-bed hospital want to make a finalpush over the next three years toreach its goal.

Of the money raised, $750

million will be used for cancer,diabetes, stem cell and hematologyresearch, and advancing cancertreatments. The remaining $250million will be used to improveexisting structures or build newones.

“We are seeing tremendouspromise and opportunities inresearch,” said Michael A.Friedman, M.D., City of Hope’schief executive officer.

The end of the campaign in2013 will mark the hospital’s 100thanniversary.

This week’s penalties, which were leviedagainst seven hospitals for 10 separateincidents, have elicited diametricallyopposite reactions from some of itsrecipients.

Southwest Healthcare System inMurrieta issued a strong statement that itwould appeal the three penalties totaling$225,000 it received this week. It was twicepenalized for failing to follow procedures fortreating newborns with high concentrationsof bilirubin in their bloodstream – acondition that can lead to brain damage ordeath. It was also penalized for failing tomaintain proper humidity levels in an areawhere cesarean sections were beingperformed, creating a re hazard.

“Southwest does not agree that any of the current nes assessed against Southwestmet the criteria for ‘immediate jeopardy’because they neither caused, nor were likelyto cause, serious injury or death to anypatient,” the statement read in part.

Southwest has received sixadministrative penalties, making it the mostpenalized hospital in California. All thepenalties are being contested by the hospital,which is owned by Pennsylvania-based for-prot operator Universal Health Services,Inc.

Montano conrmed that Southwest

underwent a multi-day, “full-validation”inspection in mid-January by both the CDPHand the Centers for Medicare and MedicaidServices. Such inspections often lead to thewithdrawal of a hospital’s Medicare andMedicaid funding should they fail. A CMSspokesman said the report has not yet beenreleased.

By contrast, Kaiser Permanente’sSouthern California Region issued astatement of regret after its hospitals inFontana received two penalties for surgicalmishaps. It was ned $25,000 for inictingthird-degree burns on a patient in late 2008

after an instrument ash sterilized during theprocedure was not allowed to cool properlybefore being redeployed. The patient laterrequired skin grafts. Its second penalty, for$50,000, was for leaving a sponge in a patienin early 2009 during a cesarean section. Thesponge was subsequently removed.

Special bags are now used to collectsurgical sponges, which are used to reconcilesponge counts, according to Kaiser.Instruments that are ash sterilized are nowtreated with sterilized cool water before beingredeployed.

Other recipients of administrativepenalties included St. Bernadine MedicalCenter in San Bernardino; Sutter DavisHospital; Scripps Mercy Medical Center inSan Diego; California Pacic Medical CenterPacic Campus Hospital in San Francisco; anSt. Joseph Medical Center in Orange.

St. Bernardine was ned $50,000 for a2009 incident where the tip of a laryngoscopewas left in a patient’s throat. The patient latercoughed up the tip and brought it back to thehospital. The hospital agreed to partially reviseits procedures for intubations.

Sutter Davis was ned $25,000 foradministering contrast dye to a patientundergoing a CT scan who had an allergy toiodine. The patient later died.

Scripps Medical Center was ned $25,00

for a 2007 incident where a sponge was left ina cancer patient undergoing a hysterectomy.The sponge was not discovered until early2009. It required two procedures to remove.

California Pacic Medical Center wasned $25,000 for a 2008 incident where anorthopedic surgeon performed a kneearthroscopy on the wrong knee. The surgeonrealized the mistake during mid-procedure,and peformed a second arthroscopy on thecorrect knee.

St. Joseph was ned $50,000 for a 2009incident where staff failed to monitor theoxygen provided to a patient who later died.

Penalties (Continued from Page Two)

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Have you ever seen a CAT scan technicianreading a novel when the waiting room isfull of patients? I’ve seen it many times.It’s usually the result of a patientbottleneck rather than staff laziness.Receptionists often fail to realize, orforget, that the last patient has left and thescan room is now open. It is seeminglymundane – but critical issues – such asthese that the new healthcare reform lawwill likely never address. However,providers must confrontthem immediately.

Good patient flow isrepresented by short waits atregistration, examination,diagnostic testing, surgery,placement in beds, anddischarge. Poor patient flowis a symptom of a poorstaffing plan, inability to usecritical resources atmaximum capacity, and alack of synchronization.

Hospitals are largelymanaged by physicians andnurses who have never

contemplated the design of theirworkplaces, nor compelled to look forcost-cutting efficiencies. Because over50% of funding for healthcare comesfrom the government and most of theremainder from insurance companies,health providers have found that the morethey bill, the more they are paid.

This lack of incentive to cut costs haslead to the remarkable statistic that theU.S. spends 2.5 times as much onhealthcare per capita as any othercountry, despite the fact that we lag waybehind all Western nations when it comes

to positive patient outcomes.Simple steps can produce vast savings.Working with over 20 major Californiahospitals, my team of students and facultyfrom the USC Industrial EngineeringDepartment has found an ample supply of low-hanging fruit when it comes to cuttingcosts. Because healthcare is a serviceindustry, the first variable we generallyexamine is the time it takes for medicalprofessionals in any particular hospitaldepartment to do their jobs.

We start out by examining the overallflow. What happens to the patients as themove through the system, whether for asimple radiology procedure or for a compsurgery? Often drawing a diagram is veryhelpful in gaining a necessary level of understanding, as are discussions with thehospital staff. Next, like engineers alwayswe try to measure what is going on and toquantify things. How long is the patientwaiting time? How often are resources

utilized, and how often dothey sit idle? What is the

hospital’s real capacity?We also look at the dataavailable from computersystems. We generally fintremendously detailedclinical data on patientconditions, but shockingllittle information on how system is working or whebottlenecks occur.

We also look foropportunities to make animpact, such as by

eliminating delays, changi

the work schedule for underutilizedstaff, or changing the physical layoueliminate unnecessary steps.

Hospitals must move toward the‘pull’ method of work flow rather ththe ‘push.’ Implementing this

innovation, first introduced as part of theLean Method in manufacturing, encouragthe technician, and other hospital personto ‘pull’ the patient from the waiting roomrather than waiting for the front office to‘push’ the patient inside. It can result in to 50% improvement in patient flowefficiency. I will discuss this in greater de

next week.

OPINION

Clearing Healthcare Delivery’s ClutteUsing Techniques From Manufacturing Can Cut Cos

By

David

Belson,

Ph.D.

David Belson is an industrial engineering

professor at the University of Southern

California and a healthcare manageme

consultant.

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Op-ed submissions of up to 600 words a

welcomed. Please e-mail proposals to

[email protected], or ca

(877) 248-2360, ext. 3.



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payers & providers – issue of april 15, 2010

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