I think I have heard this complaint locally here in southern California and if reading this correctly, when receiving reimbursements, if there are changes in payments on claims after they have been paid and determined they were overpaid, denied or the payment for whatever reason is being rescinded, the funds are being deducted from future EOBs received. In other words, and sometimes this takes time for a denial of a claim to take place, if a claim on Jane Doe was originally paid and a couple months later it is determined it was overpaid denied or whatever, that amount of money gets deducted from an EOB that is lets say paid today. The alleged lawsuit are stated to be non compliant with laws from Employee Retirement Income Security Act of 1974 for private employee benefit plans.
So the payment made on Jane Doe’s claim 3 months ago is being rescinded and deducted on an current EOB for other patients where Jane Doe is not even on the patient list I can see where this affects the practice management software for the ambulatory doctors in the fact that the EOB is now short paid, and the short pay is not for a patient listed on this EOB for compensation, and thus the adjustments to keep current with all claims could stand to be an accounting nightmare. Again, correct me if I am not interpreting this correctly but from what I read here this appears to be the issue with the lawsuit filed. This would be accomplished with algorithms run through accounting software to deduct the amount from EOBs received. As mentioned the lawsuit also includes the suppliers of durable equipment to be included. An alternative solution would be to invoice for money rescinded to the ambulatory doctors and DME suppliers. The link below has a short blurb on a story from a short while back to where Walmart got into trouble with ERISA laws with a lot of bad press and rightly so for how it played out.
Whether the process is in house or contracted to a 3rd party, auditing medical claims is an algorithmic process when searching for fraud, errors, coding accuracy and so on and from the news coming out currently there seems to be quite a few inquiries into the validity of the algorithms that run to determine if the claim is filed, coded and submitted correctly. Auditing processes are not new and they are necessary to catch fraud but again we come back to an interpretations when reports are created.
Back in 2009 such an audit of medical claims was in the news to where a number of dermatology offices throughout California had major issues via such mechanisms. Within 5 days all offices were no longer receiving compensation for services already provided and the story at the time stated it was the Ingenix algorithms that detected a high amount of claims and again this is from 2009 and I might guess there’s still a lot of fall out ongoing with the offices involved here.
“Ledesma said the decision came from what he called the special investigations unit of Ingenix, a Minneapolis-based company owned by United Health Group that sells information services to many insurance companies. He believes their clinics were singled out because Ingenix noticed a high number of claims.”
This is really a big deal with algorithms that check and review claims and all carriers do it to a degree and United has their own in house technology group that sells such services. Any any rate EOB statements and how they are prepared and compensated in California goes back a number of years to where I had seen capitation statements with what was called “the floating patients” to where some months they would appear and other months they were not on the list and would guess some type of query was run to make the adjustments and I created a spreadsheet process where MDs could compare every month when they requested the statements in an Excel format for easy identification and then they could inquire from there as to why this was occurring. Again that goes back to when HMOs were started in California and what I found 12 years ago and is just an example of how complicated it can get.
Again, this gets very complicated and with all the systems available out there today for revenue cycling and today’s marketing, these ambulatory and DME centers may also be the recipients with even more solicitations promoting more software solutions to solve and address this issue too as these types of algorithmic processes kind of feed themselves and builds needs for more processes to come in a help alleviate such issues and that’s been going on for years and thus they are presented with yet more new software to potentially purchase. When looking for fraud there can be “false positives” in the algorithmic processes as was noted a couple years ago in the news.
Back in 2009 I stated we might be looking to think about establishing a Department of Algorithms or something along this line to ensure everyone is in check and occurrences as such don’t come up in a blind sided fashion later as payroll and other operating expenses are paid from this compensation and depending on the dollar amount being deducted for claims, this can work a real hardship on medical practices today.
Just a couple days or so ago this was highlighted in an article in the New York Times about how practices are struggling to stay in business. I am happy to see this get some attention as I have been watching the erosion happen for years. Occasionally there are cases to where the formulas are questioned and court cases determine the unethical use such as the one below and this goes back to the out of network claims that used the Ingenix data base for around 15 years that Andrew Cuomo challenged and won, and there’s still a bunch more of these types of cases tied up in court systems today. Here’s one filed last year in California to where the short payments on customary fees were accursedly affecting surgical centers who were not included in the big AMA/United settlement on paying short on out of network charges and thus filed their own class action for their centers.
In the example below HealthNet in 2009 joined in to not use the data base for calculating out of network charges and made a decision to pay the claims at 14% above what the software indicated. Of course to fight such legal battles is takes a lot of time and money and your small practices does not have either the time or budget to file suit and question the algorithmic processes.
With our current billing system today, yes we need processes to audit claims, but the questions remain on how they are used and where the parameters of the algorithmic queries are set and utilized and thus we have one lawsuit after another and basically this is what it comes down to – those algorithms again. Sadly what we have today is a lawmaking process that is truly dated and they can’t keep up and need some updated technology (and users thereof) of their own to see in real time what is happening today and venture away to useless discussions on abortions and birthers that fill the news today as the discussions are aimless and do not create any real solutions other than to command big press stories and as a result more lawsuits are filed in order to either get new laws or validate the interpretation of the algorithms. Last week we were vividly entertained with lack of knowledge with then Colbert report caught a news station that stated “Pap smears” were available at Walgreens and it was funny (I liked it too) but also satirical in showing how little sometimes the public, to even include newscasters understand about what is happening in healthcare today.
Once more as a suggestion as I have done so many times I’ll mention a book that is good reading that gives some insight here with mathematical formulas and if nothing else it will start you thinking about how things are done today by Charles Seife.. It’s an excellent read and will spur your brain to give some thought to how we make laws, how they are interpreted and how not to be always sucked in by statistics today without some real thought. Links are in the article clip below to read the legal filings. BD