Tip: Steps for Red Flags Rule compliance

Don’t forget – Red Flags Rule enforcement by the FTC begins November 1.

John C. Parmigiani, HIPAA security and privacy consultant and president of John C. Parmigiani & Associates, LLC, in Ellicott City, MD, suggests several steps to help providers become compliant by November 1.

First, conduct an organizational audit. Identify potential problems associated with your unique organization. Be sure to allow sufficient time to conduct a thorough investigation. Then develop a theft prevention program; this is an FTC requirement and necessary to track every account on your books. The amount someone pays is irrelevant—even if it’s only a dollar per week, says Parmigiani.

The written program must:

• Identify potential red flags that exist within your institution
• Help detect red flags when they occur in real time
• Detail how you will respond to incidents of attempted identify theft (i.e., how you can either prevent the incident or how you will mitigate damages if you are unable to do so)

These steps are also important to maintain good business standards, says Parmigiani.

Editor’s note: This tip was adapted from the article “Compliance update: FTC moves Red Flags Rule compliance deadline to August 1,” which appears in the April 2009 issue of HCPro’s monthly newsletter Health Information Compliance Insider.

Question on the HINN

Q.  We are not sure how to implement the Preadmission/admission HINN. At what point [does] it get delivered to the patient? Does there need to be an inpatient order? If they did not meet inpatient criteria, why would there even be an inpatient order? I could see this possibly happening for direct admits from the doctor’s office in which the hospital is not in agreement. But what about those in the ED where the majority would be? Our understanding is this is used for patients who do not meet either Observation or Inpatient criteria.

A. In order to be effective, a Preadmission/Admission HINN must be delivered to the patient (or his/her representative) no later than the date of admission.  Ideally, the HINN would be delivered at the earliest opportunity, if not prior to admission, then at the time of admission, during the registration process.  The inpatient stay generally begins at the time of the physician’s written  admission order, so whether there’s a written order at the time of delivery of the HINN depends upon when the HINN is provided.  If provided prior to admission, there would be no written order.  If provided after admission, presumably there would be a written order.

Remember, that it’s the physician who orders the admission.  Although in the best case scenario the physician’s decision as to whether to admit to inpatient care or to order outpatient observation is guided and informed by case management (CM) and utilization review (UR) staff, it ultimately is the physician’s decision.

In the case where the hospital believes that the admission does not meet inpatient guidelines for coverage under Part A, the hospital must provide the Preadmission/Admission HINN in order to reserve its right to bill the patient if Medicare denies coverage for that stay.  When a HINN is provided, the hospital is simply stating that, based upon its understanding of Medicare inpatient guidelines, the hospital doesn’t believe that Medicare will pay for the stay under Part A.  Medicare, however, will ultimately determine whether that stay is covered under Part A.

The Preadmission/Admission HINN is most likely to be used where the patient understands from the outset that this stay is not likely to be covered by Medicare, and they are expected to assume responsibility for that inpatient stay.  Perhaps they have other health care coverage that they believe will cover that inpatient stay.

The Preadmission/Admission HINN only indicates that the hospital believes the inpatient admission does not meet Medicare’s inpatient guidelines.  Observation services are outpatient services.  Therefore, different coverage criteria apply to determine whether observation services will be covered by Medicare.

If covered, those observations services will be covered under Part B, not Part A.  In those cases where it isn’t clear that the patient currently meets inpatient guidelines, but the physician determines it isn’t safe to discharge the patient, it may be appropriate for the physician to order observation care to monitor the patient and obtain additional information regarding further care.  It would be inappropriate to provide a Preadmission/Admission HINN when the hospital believes that the observation care meets Medicare medical necessity requirements.

Editor’s note: This question was answered by Judith L. Kares, JD, an instructor for HCPro’s Medicare Boot Camp – Hospital Version. Kares was a speaker on the HCPro, Inc. audio conference, Master the HINNs: Integrate Policies and Procedures into Hospital Operations.

Individual insurance market falls short for families

During the past three years, nearly three fourths of individuals who tried to buy coverage in the individual insurance market never purchased a plan—because they could not find a plan that meets their needs, could not afford coverage, or were turned down because of a pre-existing condition, according to a new study from The Commonwealth Fund.

This parallels developments between 2001 and 2007 when increasing shares of adults with private insurance—either obtained through employer based coverage or an individual market plan—spent a larger portion of their incomes on premiums and out of pocket medical costs, were underinsured, and/or avoided needed healthcare because of costs. Those with coverage obtained from the individual market were the most affected, the report said.

Read the full story by HealthLeaders Media’s Janice Simmons.

RACs officially set to begin

Heads up, healthcare providers: Connolly Healthcare, the RAC for Region C, has posted the first set of issues eligible for RAC review on its Web site.

The issues are approved for outpatient hospital and physician providers in South Carolina. But even if you aren’t located in South Carolina, if Connolly is your RAC, prepare for these issues in your state as well, says Nancy Beckley, MS, MBA, CHC, of the Bloomingdale Consulting Group, Inc.

Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro, Inc., agrees that providers outside Connolly’s jurisdiction may want to review the issues as a clue to what RACs might audit in their area. However, she notes that providers should anticipate that RACs will audit for different issues for different jurisdictions although there certainly could be some overlap.

Read the full story on our Revenue Cycle Institute Web site.

Red Flags Rule deadline pushed back again

Remember that August 1 deadline for the Red Flags rule? Never mind.

The Federal Trade Commission announced July 29 that—for a third time—it has pushed back enforcement of the anti-fraud regulations until November 1, a full year after it was first scheduled to take effect.

The additional three months—which comes at the request of the House Appropriations Committee—will be used to educate small businesses about Red Flag compliance and to allow financial institutions and creditors more time to implement written identity theft prevention programs, according to the FTC.

Read the full story by HealthLeaders Media’s John Commins.

EDs can’t sustain care in current economic environment

A recent federal report casts more concern that hospital emergency rooms are having increasing difficulty treating all comers, especially because federal payments and the uninsured don't pay their full cost of care.

"There is a growing concern that EDs will not be able to sustain care for all persons in the current economic environment," according to the report, entitled "Payers of Emergency Department Care, 2006," that was published by the U.S. Agency for Healthcare Research and Quality.

"Between 1993 and 2003, there was a 23% increase in ED visits and a closure of 425 hospital EDs. In addition, a recent Institute of Medicine report notes that EDs have become increasingly overcrowded, overburdened, and underfunded. Yet little is known about who is paying for ED care, what the charges are for the care, and how to potentially relieve this pressure," the report said.

Of all visits to hospital emergency departments in 2006, 41.8% of the care was billed to the federal government–21.6% to Medicaid and 20.2% to Medicare. Another 17.7% were uninsured. An estimated 34.6% was billed to private insurance, and the rest to other private payers.

Read the full story by HealthLeaders Media’s Cheryl Clark.

Have you had an experience with Medicaid Integrity Contractors?

Medicaid beneficiary fluctuations are leading to more costs

Medicaid's "cumbersome" policies often lead to patients not getting or filling their prescriptions, receiving important diagnostic tests, or managing their chronic disease, which will lead to more costs down the road, according to a new report released by the Association for Community Affiliated Plans.

The Medicaid system, which varies by state, requires beneficiaries to show proof more than once a year that they and their children are still eligible for the public program. This leads to many falling off the rolls, which is a cycle that interrupts their continuity of care and jeopardizes their health.

Additionally, with so many people "churning," which means dropping out and back in to the Medicaid rolls every few months, the federal goal of measuring the quality of the patient care has become extremely problematic if not impossible, according to the group, which represents 42 nonprofit safety-net health plans serving six million beneficiaries in 23 states.

Read the full story by HealthLeaders Media's Cheryl Clark.

Hospital’s pre-registration efforts pay off in collections

The last thing you want to learn at your hospital, as a patient sits at your registration desk:

•  They can't pay, and no one knew prior to service
•  Their insurance changed, and authorization is required
•  They recently lost their job and have not paid their COBRA benefits

At this point, you may end up with an unpaid account—and in this economy, that's not good news when hospitals continue to lose reimbursement dollars.

Read the full story by HealthLeaders Media’s Dom Nicastro.

Revenue Cycle Institute posts free ABN Audit Preparation tool

Help ensure your facility properly obtains Advance Beneficiary Notices (ABN) from patients for Medicare noncovered services with an auditing checklist.

Click here to download the sample ABN Audit Preparation tool.

Editor’s note: This sample tool is excerpted from the Medical Necessity Training Toolkit, published by HCPro, Inc.