Improper payments often about inaccuracy

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Elizabeth Newman
Elizabeth Newman

One of the common aphorisms uttered in the Newman house is Hanlon's razor. It has various iterations, but it is basically “never assume malice what can be explained by stupidity.” It's often cited when we are discussing local or national politics, or in the context of other people's business decisions.

I thought of it again this week during a conversation with Kristen Walter, spokeswoman for every long-term care provider's favorite pro-RAC group, the Council for Medicare Integrity. We were discussing the latest HHS Office of Inspector General report, which found that the error rate for Medicare Fee-for-Service in fiscal year 2015 was 12.09%.

The threshold is 10%. As related in the McKnight's story, the report noted SNFs improper payment rate increased 4.1%.

To be fair to long-term care and Hanlon's razor, “stupidity” is a little harsh when dealing with billing mistakes. But carelessness is sadly common in many areas of documentation. It's easy to start the OIG report and think the federal government wants to nail those committing fraud. It does, of course, but it's likely more concerned with those making mistakes. The report focuses on accuracy, noting the OIG was asked to review verifying payment reduction goals and efforts to recapture improper payments. HHS knows the primary causes of improper payments are related to insufficient documentation and medical necessity errors.

“It's basically things like coding errors: I did this work and I submitted the wrong code,” Walter told me. “We're not talking about fraud; we're talking about waste and mistakes.”

She said she sometimes thinks facilities or individuals think one person making a mistake is “no big deal.” After all, people are human. But when looking at the multiplier effect across the SNF industry, “that's where the number gets big.”

The reason I agree with her is based on stories I've heard from administrators. It's an error with a date that causes error 12206 — The Number of Days Billed Do Not Equal the Date Span. Or it's a problem with the beneficiary's name and the claim not matching. It's what happens when you have an industry of hard-working people who went into long-term care to help older people, not delve into the minutiae of reports, data and forms. However, this is the system we have and, in another common phrase said often in my house, uttered first by Molly Ivins, “You gotta dance with them what brung ya.”

How do we drive home the importance of double-checking codes and billing? When you are trying to explain the importance of accuracy at your facility, reflect on examples you or your employees may have experienced with your own health insurance. For example, I have seen physicians and never seen a claim filed through my insurance, or a bill. It's nice to think I was so charming that the doctors waived the bill, but it's more likely due to an administrative mistake.

On the flip side, I once received a massive ophthalmology bill because my last name was incorrect. I also have opened the mail to find a sizeable hospital bill, where it appeared the hospital never contacted my health insurance. What I owed was about half of what was listed. I've also gone back to my insurance and provided more documentation, from a physician, about why a test was medically necessary. That resulted in my health insurance relenting and paying.  

In all of these cases, I worked out the issue satisfactorily because I caught the problem early and actively engaged in fixing it BEFORE I sent a check. Working on better accuracy in billing will ultimately benefit you and your facility, as you will have fewer audits. It really should be in tandem with what the OIG recommended to HHS: It should "focus on root causes for the improper error rate percentage and evaluate critical and feasible action steps to decrease the improper error rate percentage below 10%."

The process may sting, but it's hard to disagree with that goal.

Follow Elizabeth Newman @TigerELN.

Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.