HCM 302

Financial Management

in the Healthcare Industry

Week V

WEEK V OUTLINE

- Group Project Class work 35min

- HC Youtube - Practice Test - Hospital Privileges - Stark versus Antikickback - Break-Even Analysis

HCM 302

Group Project02/16/2012

GROUP A

  1- Dana 3- Deja 2-Theresa

4- Nancy   Medical Practice Name: Women’s Specialty Care

  Details : Specialty: OB-GYN # Of Employees: 10 # Of Physicians: 6 # Of PA's :2 # Of MW‘s: 2   # Of Offices: 3 # Org Type: C-Corp  

GROUP B

  1- Diana 3- Hana 2- Devon

4- Cailin   Medical Practice Name: Community Care of New Castle County   Details : Specialty: Family Medicine # Of Employees: 14 # Of Physicians: 9 # Of PA's :3 # Of NP‘s: 3   # Of Offices: 2 # Org Type: LLC  

GROUP C

  1- Natalia 3- Irene 2-Norberto

4- Alyssa   Medical Practice Name: Pediatric Physician Care   Details : Specialty: Pediatric # Of Employees: 10 # Of Physicians: 6 # Of PA's :2 # Of MW‘s: 2   # Of Offices: 3 # Org Type: C-Corp  

WEEK IV & V 1) Mission statement 2) Sample contracts for physicians 3) Hiring of other office staff – LPNs/medical assistant/accountants/receptionist 4) Contracts with hospitals 5) Hospital privileges 6) Insurance Credentialing 7) Cell phones/pagers for physicians

8) Contract with office space (rent/buy) 9) Scheduling 10) Plan for how to grow patient base/how to receive more patients from local PCPs

Uninsured/unassigned/PCPs PCPs in Southern Delaware that still do not utilize hospitalists to the extent of

Christiana area 11) Retention strategy 12) Flow charts for structure of organization 13) Use specific dates for process; especially with hospital privileges and/or

credentialing 14) Website

HCM 302

Hospital Privileges 02/16/2012

FULL PRIVILEGES:

Physicians are allowed to admit unlimited number of patients to the hospital. Physicians are usually given all the privileges needed to perform ‘core procedures’ of their medical specialty. Physicians are also required to attend a required number of medical staff meeting regularly.

COURTESY PRIVILEGES

Courtesy hospital privileges limit the physician to admitting only a nominal number of patients to the hospital.

It still satisfies most medical insurance companies requirement for physicians to hold hospital privileges.

Physicians are usually exempt from attending medical staff meetings. Such privilege is used by physicians who do not expect to admit patients to the hospital or do procedures there.

PRIVILEGES STEPS

- Call the ‘medical staff office’ of the hospital and get a privilege application.

- Fill and Submit it back to the medical staff office.

- Follow up with your references to make sure they mailed the recommendations back to the hospital.

- Make sure medical office has everything they need on your file, prior to the next credentialing committee meeting.

HCM 302

Stark versus Antikickback02/16/2012

UNDERSTANDING THE DIFFERENCE BETWEEN THE FEDERAL ANTIKICKBACK AND STARK LAW)

-both laws cover similar ground, -an arrangement that is acceptable under one of these statutes could violate

the other.

-Both the antikickback statute and the Stark law were enacted to prevent healthcare providers from inappropriately profiting from referrals.

- These laws are intended to ensure physician’ medical judgments are not compromised by improper financial incentives and are based solely on the best interests of the patients

UNDERSTANDING THE DIFFERENCE BETWEEN THE FEDERAL ANTIKICKBACK AND STARK LAW)

-the antikickback statute is a criminal statute.

-the statute prohibits any knowing or willful solicitation or acceptance of any type of remuneration to induce referrals for health services that are reimbursable by the Federal government.

-Example, -a provider may not routinely waive a

patient's co-payment or deductible.

-the Stark law is a civil statute -the Stark law essentially provides that a

physician may not refer a patient to an entity with which the physician has an ownership interest or compensation arrangement if payments for the services furnished under the referral are to be made by the Medicare or Medicaid programs.

-Unlike the antikickback statute, the Stark law prohibits referrals for specific "designated health services

DESIGNATED HEALTH SERVICES

- Clinical laboratory services   - Physical therapy   - Occupational therapy   - Radiology services including magnetic resonance imaging, computerized axial tomography scans,

and ultrasound services   - Radiation therapy services and supplies   - Durable medical equipment and supplies   - Parenteral and enteral nutrients, equipment, and supplies   - Prosthetics, orthotics, and prosthetic devices and supplies   - Home health services   - Outpatient prescription drugs   - Inpatient and outpatient hospital services

EXAMPLES

Healthcare finance professionals need to ensure that all business transactions comply with the antikickback statute and the Stark law Sometimes, it is relatively easy to discern whether a transaction is a violation.

For example, a vendor offering free tickets to the Super Bowl to a provider in anticipation of future product referrals is in blatant violation of the antikickback statute, whereas a hospital offering free compliance training to physicians with privileges at the hospital probably would not be in violation of the statute, depending upon how the training is structured.

A clear Stark violation would be a physician referring patients for treatment to his or her spouse.

2010 FRAUD ALLEGATIONS AGAINST CHRISTIANA CARE HEALTH SYSTEMCASE STUDY

UNITED STATES EX REL. V. NEUROLOGY ASSOCIATES, P.A. AND CHRISTIANA CARE HEALTH SYSTEM

EVENTS LEADING UP TO LAWSUIT

In February of 1989 Christiana Care entered into an “evergreen” contract

with Neurology Associates Neurology Associates, P.A. was paid by

CCHS for providing, on an exclusive basis, interpretations of EEGs

EVENTS LEADING UP TO LAWSUIT

In 2002, other practices competed with Neurology Associates to be the

exclusive provider of EEG interpretations for CCHS

CCHS decided to stay with Neurology Associates, and entered a contract that

significantly lowered the fees CCHS paid for the EEG interpretations

LAWSUIT In April of 2005 a “qui tam” action was

filed by a competing neurology group, Wilmington Neurology Consultants

In qui tam lawsuits, private individuals who assist a prosecution can receive all or part of any penalty imposed

They had inside information that CCHS was violating the federal and state False Claims Act, the Physician Self-Referral Law, and the federal and state Anti-

Kickback Statute

FALSE CLAIMS ACT

Law that allows people who are not affiliated with the government to file actions against federal contractors they accuse of committing claims fraud against the government Act of filing such actions is called “whistleblowing” and

person typically receives a portion of recovered damages

CCHS allegedly violated the False Claims Act by overpaying physicians at Neurology Associates for in-hospital readings of EEG as a “reward” for referring patients to the hospital

PHYSICIAN SELF-REFERRAL LAW

Also known as the Stark Statue; prohibits a hospital from profiting from

referrals of patients made by a physician with whom the hospital has

an improper financial relationship

Contract was given to Neurology Associates and in return physicians were referring patients to

Christiana Care

ANTI-KICKBACK STATUTE

Very similar to the Stark Statute; prohibits a hospital from paying a physician to induce

the physician to make referrals to the hospital

Christiana Care receives reimbursements from Medicare and Medicaid for services rendered in their

facilities CCHS paid Neurology Associates P.A. significantly more

(in some cases multiples) than the amount Medicare & Medicaid was paying CCHS for those services

RESPONSE FROM CHRISTIANA CARE

Never admitted to any wrongdoing in this case

The case alleged that Christiana Care overpaid a medical group for services Never any allegation that CCHS was billing for

services that it did not provide or that it was billing for services that were not medically necessary

Patient care was not compromised in any way

RAMIFICATIONS

Out of court settlement of 3.3 million dollars to the United States & the state of Delaware Whistleblowers were awarded $190,000 in

settlement

RAMIFICATIONS

Christiana Care entered into a Corporate Integrity Agreement that is monitored by: Office of Inspector General of the US

Department of Health and Human Services United States Attorney for the District of

Delaware, David Weiss Delaware Attorney General, Beau Biden

HCM 302

Break-Even Analysis02/16/2012

WHAT IS BREAK-EVEN?

The break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even".

Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point.

FIXED COST

These are costs that are the same regardless of how many items you sell.

All start-up costs, such as rent, insurance and computers, are considered fixed costs.

VARIABLE COST

These are recurring costs that you absorb with each unit/service you produce.

BREAK-EVEN

HCM 302

EMR ROI02/16/2012

RETURN ON INVESTMENT SUMMARY

Standardizing Coding 1,897,063Elimination of Dictation 80,345No Show Reduction 300,000FTE Savings 60,000Subtotal 2,337,408

EMR Annual CostHardware * 57,528Software and Hosting 200,000Maintenance and Support 60,000Connectivity 33,600Subtotal 351,128

Annual Total Return $1,986,280

PAPER VERSUS EMR

EMR = With Standardized Coding X EfficiencyPaper = Prior to EMR

Differential = EMR - Paper

PHYSICIAN TYPES EMR PAPER DIFFERENTIALSkipper 92% 449,922 392,133 57,789Halftime 88% 440,549 392,133 48,416

Steady Eddy 88% 440,549 392,133 48,416Speedball 100% 468,669 392,133 76,536

Slider 75% 410,085 392,133 17,952Tortoise 60% 374,935 392,133 -17,198