Charge Integrity of Surgical Services

Transcription

1 Charge Integrity of Surgical Services Crowe Healthcare Webinar Series Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP

2 Agenda 1. Objectives 2. Surgical Services Charge Structures 3. Accounting for Surgical Services Resource Consumption 4. Five Key Surgical Services Tips Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 2

3 Objectives Define and understand the common surgical services charge structures and how a change in structure can optimize reimbursement Learn how to appropriately account for resources consumed during surgical procedures Identify 5 key surgical services revenue integrity tips Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 3

4 Current Industry Trends Elective Surgeries Down nearly 30% in some markets Surgical Cases Volume down 10 to 20% ED Visits Commercial/Private Insurance Medicaid Expansion Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 4

5 What needs to be done? Current processes optimized Charges monitored/audited Reimbursement maximized Denials minimalized How can this be done? Implementing Charge Integrity in Surgical Services Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 5

6 Overview of Charge Integrity 1. Process Improvement Have effective processes in place to collect revenue for care provided Review the operational aspects of charge integrity Process Improvement Financial Performance 2. Quality Assurance Eliminating mistakes, whether it involves a process or compliance issue Reconciliation of charges for departments on daily, weekly, and monthly basis to ensure proper charges are being posted to patients accounts Charge Integrity 3. Financial Performance Charges must be captured effectively to keep facilities in proper standing financially Process improvement, quality assurance, and corporate compliance all play crucial roles in the financial performance of a facility Quality Assurance Charge Reconciliation 4. Charge Reconciliation Manage revenue risk Billing for services appropriately Is there documentation to support services charged? Is there medical necessity? Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 6

7 Assessing Current Operating Room (OR) Charge Structure Several different methods of charging for surgical services in the OR: 1. Time based 2. Procedure specific 3. Acuity based 4. Time & acuity hybrid Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 7

8 Polling Question #1: What type of charge structure does your main operating room utilize? A. Time Based B. Acuity Based C. Procedure Specific D. Time and Acuity Hybrid Model E. Unsure Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 8

9 Time Based Structure OR charges are generated based solely on one (1) component: TIME Different timing increments can be utilized based upon facility preference. The most common: One (1) minute increments Fifteen (15) minute increments Thirty (30) minute increments One (1) hour increments What are the problems associated with time based structure? Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 9

10 Acuity Based Structure Flat fee for different levels based upon intensiveness of procedure being performed and/or category of procedure (i.e. cardiac, gastroenterology (GI), Ortho, etc.) At times, a point system is used to assign a level. Categories that can attribute to level assignment: 1. Number of staff, typically nurses, in the procedure 2. Non-chargeable supplies (trays) 3. Equipment 4. Set-up time What are the problems associated with acuity based structure? Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 10

11 Procedure Specific Each procedure is specifically linked to a single charge Often times this is best utilized outside of the main OR (interventional radiology (IR), GI, etc) Circulator nurse is expected to select the procedures real-time Hardcoded Current Procedural Terminology (CPT) codes within the Charge Description Master (CDM) What are the problems associated with acuity based structure? Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 11

12 What is the Solution? Problem with time only? Does not account for procedures that may have higher costs associated with equipment and nurse specialty Problem with Acuity and Procedure based charging? Does not account for time complications Can be difficult to rely on circulator nurse charging procedures real time Best way to minimize the problems associated with the charge structures above? Implement a hybrid model utilizing both time and acuity Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 12

13 Time and Acuity Hybrid Model Time and Acuity Hybrid Model Acuity structure Time Increments Price point for each level Description Level 1 Initial 30 Min OR Level 2 Initial 30 Min OR Level 3 Initial 30 Min OR Level 4 Initial 30 Min OR Level 5 Initial 30 Min OR Level 1 Each addl 15 Min OR Level 2 Each addl 15 Min OR Level 3 Each addl 15 Min OR Level 4 Each addl 15 Min OR Level 5 Each addl 15 Min OR Equipment: (defined by total pieces of equipment) Points Little or no equipment (Minimal) pieces of equipment (Basic) pieces of equipment (Complex) pieces of equipment (Specialty) 4 7+ pieces of equipment (Advanced Specialty) 5 Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 13

14 Polling Question #2: Non-labor costs or surgical supplies represent approximately what percent of costs in the OR? A. 20% B. 45% C. 60% D. 75% Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 14

15 Surgical Routine vs Non-Routine Supplies To charge or not to charge that is the question Routine (not separately billable) Usual course of treatment Included in unit supplies and not designated for specific patient Account for costs in generating OR charges 100% of time bundled Non-routine (separately billable) Must be the following to be separately reimbursable Directly identifiable to patient Not reusable Physician request due to medical need Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 15

16 Optimizing Reimbursement for Implants Structuring of price for implants is crucial to optimize reimbursement from payors Contracts may carve out payment for implants Structured to pay (i.e.) 75% of charges to equate to cost Do the math Charge X 75% should equal invoice cost How do you ensure that the costs are covered? Assessments of patient encounters Monitoring of CDM and pricing Monitoring of Managed Care contract language Monitor implant costs Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 16

17 Polling Question #3 Does your facility s OR utilize high cost equipment, such as lasers, DaVinci, etc? A. Yes B. No C. Unsure Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 17

18 Hybrid Model: Accounting for Anomaly Very high cost lasers/machines Separate charge for procedure altogether Charge in addition to Level for procedure Description Units Total Charge Level 3 Initial 30 min 1 $ 4,300 Level 3 Each Add'l 15 min 3 $ 900 Laser Add-On 1 $ 4,000 Procedures done in areas of hospital other than OR GI, Interventional Radiology Post Anesthesia Care Unit (PACU) Other Treatment Rooms Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 18

19 Surgical Services: Quick Tips to Optimize Anesthesia Charging Account for varying costs for different modes of anesthesia Monitored Anesthesia Care (MAC), General, Regional Charge based upon time Post-operative Pain/Nerve blocks Charge separately when block intended for post-op analgesia and not primary anesthetic Utilize Modifier 59 Medicare s Global Surgery Rule Example: 416 Bed Hospital, 2.6B revenue Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 19

20 Surgical Services: Quick Tips to Optimize PACU Charging Time based vs flat rate PACU Phase I Immediate post procedure care One-to-one nurse to patient PACU Phase II Nurse to patient ratio decreases Tolerating oral intake IV catheter still in place from intake Extended Recovery Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 20

21 Polling Question #4 What is the typical Global Recovery Time? A. 1-3 Hours B. 2-4 Hours C. 4-6 Hours D Hours Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 21

22 Patient Recovery Placement Extended Recovery vs Observation Procedure Performed 4-6 Hour Routine Recovery Is it Safe for patient to go Home? Yes Discharge No Is there unplanned outcome or exacerbation of a condion? Yes Admit to Short Stay observation No Extended Recovery Time Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 22

23 Net Revenue Enhancement Description Annual Hospital Gross Revenue Net Revenue Enhancement (12 Months) Surgical Services Overall Net Revenue % Increase Anesthesia OR PACU Total Small Community Based Hospital $515M 13.1% $ 165,332 $ 478,836 N/A $ 644,169 Mid-Size Hospital $ 1.26 B 28.3% $ 944,610 $ 1,334,123 $891,129 $3,169,861 Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 23

24 5 Key Surgical Services Tips Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 24

25 5 Key Surgical Services Tips for Charge Integrity 1. Reconcile Surgical Charges a) Scheduled cases = charged cases b) Check for charges on every account (anesthesia, OR, PACU) c) When applicable - chargeable supplies d) Example: 5 nerve blocks done for post-op pain, make sure 5 charged Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 25

26 5 Key Surgical Services Tips for Charge Integrity 2. Monitor Account Reimbursements a) Low reimbursements vs charges b) Reimbursement that equal charges c) Zero charge accounts Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 26

27 5 Key Surgical Services Tips for Charge Integrity 3. Address underlying cause of surgical denials a) Dive into the root cause b) Implement change c) Monitor denial grouping (medical necessity, pre-authorization, inpatient only procedures) d) Be aware of specific procedure medical necessity guidelines (Medicare) Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 27

28 5 Key Surgical Services Tips for Charge Integrity 4. System Maintenance a) CDM Quarterly/Annual Updates b) Consistent Pricing across departments for similar services c) Upkeep of OR Procedure Acuity List d) Maintaining Surgical Dictionary Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 28

29 5 Key Surgical Services Tips for Charge Integrity 5. IP Only Procedures a) Process in place to ensure patient status is correct b) CPT Code with status indicator C in Addendum B to Federal Register c) Communication between patient access, utilization management, and back-end business office Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 29

30 Questions? Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 30

31 For more information, contact: Braden Lambros Mobile Tanja Pavlovic Mobile Crowe Horwath LLP is an independent member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International Crowe Horwath LLP Audit Tax Advisory Risk Performance 2015 Crowe Horwath LLP 31