Who’s minding the compliance store?

By Allan P. DeKaye, MBA, FHFMA

President and CEO

DEKAYE Consulting Inc., Oceanside, NY

Q: Much has been made about the need for providers to develop compliance plans to ensure they meet federal regulations and guard against claims of fraud. Are these plans serving their purpose?

A: Everyone has a compliance plan or is talking about developing one. But is it genuine compliance or paper compliance? Even though providers put safeguards in place, is anyone minding the store? I think that’s the key question.

Take the example of the discharge vs. transfer issue — one of the federal government’s focuses for fraud under the False Claims Act. The hospital recording the discharge, not the transferring hos pital, gets the DRG payment. If someone in the transferring hospital didn’t know to enter "transfer to other facility" in the discharge column on the UB92 and recorded it as a "discharge" instead, then that hospital gets the benefit of the DRG. The benefit would be considerably higher than a per diem type of rate, which is usually assigned to a transfer. The reason for the error can be a careless mistake, a transposition, or a missed key on the keyboard. In a Windows-based system, a flip of the wrist can result in the mouse selecting the wrong answer. It might not be fraud, but the government will tell us what it thinks. It will take the hard line, [assuming] all these mistakes must be fraud. The onus is on the hospital to prove that they were good corporate citizens.

Q: Don’t compliance plans help guard against some of these mistakes?

A: Not if hospitals are not data-defensive. Some don’t even look at their own data; they just submit it. They are not taking a step back and seeing if they have any problems with it. I’m a firm believer that you need to measure and monitor your denials by payer, by reason, and determine whether these are refutable. What happens is that hospitals will develop a compliance plan and not follow through. Reports say that they are spending a lot of money on plans, but no one knows if the plans are working. Even the government isn’t sure it will attribute a reported drop in the incidence of fraud to compliance planning. Everyone just has to do some measuring of data.

Q: What specifically should be measured?

A: The government is already telling them its game plan. Discharge vs. transfer is high on its list. Hospitals might want to start screening the top 10 diagnoses. Wouldn’t it make sense if they have a compliance plan that talks about doing proactive studies about the diagnoses? Facilities don’t necessarily have to do it immediately.

Maybe they can decide to do a study on transfers in the third quarter. Then they can figure out a methodology and audit the data. If they don’t study all the diagnoses, maybe they can study a sample. Quality assurance committees will sometimes have meeting notes or discharge planning groups. That information can be used, too.

Q: What are red flags for possible problems?

A: If you are the discharging hospital, and you submit your claim and it doesn’t get paid because of a blocking admission somewhere else, then you know the problem was someone else’s. The other facility entered discharge instead of transfer information. But if the business office gets a call from the second hospital saying that your facility is blocking their case, the office will have to do a debit/credit adjustment. Any time hospitals have those kinds of Medicare debit/credit adjustments, they should see a red flag warning that tells them to look at transfers and see if other information should be in the discharge columns.

Q: What other compliance issues should concern providers?

A: "Readmit, same day" is going to become a quality issue that the government is going to start banging the door down about. A facility discharges a patient and then readmits him: What was it thinking? Medical records notation, especially to indicate what happened, is very important. If the same hospital is readmitting the patient, it will have to be more than mechanically careful on whether it creates a new admission. I can’t advise on whether the best policy is to reinstate the account or open a new one. Hospitals have to look at their bylaws and state regulations.

If they don’t do quality assurance types of studies on the discharge/readmit issue, they are vulnerable to [quality of care questions]. The clue is in the data. To paraphrase a source from my book, The Patient Accounts Management Handbook [Aspen, 1997], "The hospital systems that survive will be the ones who have good data and can use it" [Sperry, chapter 3]. With more government resources going to fight health care fraud, more fraud investigators are looking at data, asking, "What is wrong with the picture?"

Q: Then what is the compliance plan’s strength?

A: Hospitals need a good compliance plan to show they are concerned about compliance. They also must show that they review it to realize when they made a mistake. But a compliance plan alone doesn’t give you a veil of security that is impenetrable. That veil can be pierced. Providers need to put into practice that which they preach!