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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
Los Angeles County Grand Jury
• 2013-2014
2. a Timely and Clean “Bill” of Health May Save $285 Million
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 7 findings
F1
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The Department of Health Services has developed and is implementing an electronic health record system. It will allow all providers within the DHS system to access patient records. The system is known as ORCHID. The first hospital and set of clinics is scheduled to begin implementation of ORCHID in August 2014, with the expectation of full implementation by the end of the first quarter of 2016.
F2
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The Board of Supervisors’ decision to allow DHS up to a 120 day extension on the “Go-Live” date could delay the full implementation of ORCHID beyond the scheduled target completion date.
F3
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Implementation of the DHS’s EHR will greatly improve access to patient data throughout DHS facilities and remove the silo-effect of the six separate entities in their current health information system.
F4
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Through the leadership of the Chief Information Office and the Chief Executive Office, the Countywide Master Data Management system is being developed and will soon be implemented. It will provide a roadmap to identify a “single view of the client”.
F5
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The Department of Health Services, Sheriff’s Department, and Probation Department are each using Cerner as their individual contractor for electronic health records.
F6
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Cerner has a contractual agreement to electronically connect these systems in the afore mentioned departments with minimal or no increased costs. 19 2013-2014 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT A HEALTH INFORMATION EXPRESSWAY OR LIFE IN THE SLOW LANES
F7
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In 2009, the Board of Supervisors directed the Chief Executive Office to develop LANES to facilitate a countywide HIE between public and private health care providers. LANES, as it is currently constituted, has implementation limitations, which include: a. Limited resources to implement and sustain LANES; b. Lack of sustainable funding; c. Absence of a full-time director; d. Indeterminate financial support from on-going stakeholders and buy-in from other potential health care providers; and e. Uncertainty as to whether the current Federated technology architecture employed by LANES has the capacity to deliver patient information in a timely fashion.
Recommendations 18
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R1Page 23Utilize DHS’s electronic billing system, Affinity Adjustment Codes on all accounts for classifying and better explaining the reasons for all write-offs.
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R2Page 23Update the DHS write-off procedure to include all Reason Codes, including new Codes, as they are developed.
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R3Page 23Expand the scheduled availability of Patient Financial Service Worker staff at all hospitals.
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R4Page 23Develop and track a Reason Code classifying write-offs for denied or late claims that are billed by the DHS Consolidated Business Office without Treatment Authorization Requests (TARs) or InterQual Reviews (IQRs) demonstrating the medical necessity of the services provided.
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R5Page 23Formalize the point at which Medi-Cal fee-for-service accounts are retrospectively reviewed for patients still in the Department hospitals.
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R6Page 23Conduct a Utilization Review staffing analysis at county hospitals as an increase in staff may substantially increase Department cash flow by decreasing backlogs and increasing the timeliness of billings. SECTION TWO Incomplete or No Medical Records DHS write-offs due to Incomplete or No Medical Records totaled $101,568,377 in gross charges between FY 2008-09 and FY 2012-13. During the fiscal years reviewed, write-offs of Medicare accounts totaled $57,673,677, or over 56 percent of the write-offs, because of Incomplete or No Medical Records. LOS ANGELES COUNTY 2013-2014 CIVIL GRAND JURY FINAL REPORT iv A TIMELY AND CLEAN “BILL” OF HEALTH MAY SAVE $285 MILLION The CGJ found three primary causes of Incomplete or No Medical Records write-offs:
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R7Page 24Utilize available systems and tools, and require DHS physicians to report their National Provider Identifier (NPI) number and complete the 855R form linking the NPI number to DHS, as required for Medicare billing purposes, prior to commencing work at a DHS facility.
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R8Page 24Monitor the processing of Medicare claims to ensure that the implementation of ORCHID, the Department’s new electronic health record system is aiding and providing Medicare itemized claims.
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R9Page 24Track the backlog for coding at all facilities through regular reports, similar to those produced by Los Angeles County/USC Medical Center. Aggregate and analyze coding backlog data at all facilities for resulting trends and to identify any problem areas.
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R10Page 24Perform a staffing analysis in DHS Health Information Management (HIM) divisions at all DHS facilities to assess whether additional staff might ameliorate the current HIM backlogs and delays in coding. LOS ANGELES COUNTY 2013-2014 CIVIL GRAND JURY FINAL REPORT v A TIMELY AND CLEAN “BILL” OF HEALTH MAY SAVE $285 MILLION SECTION THREE “No Authorization for Services” No Authorization for Services is the most common reason for write-offs in the “Failed to Bill for Third Party Requirements” write-off classification. Between FYs 2008-09 and 2012-13, the Department wrote off $68,247,162 in gross charges because it had not obtained authorization from the patient’s third party payer prior to providing non-emergency inpatient and outpatient services. A total of $58,567,426, or 85.8 percent of write-offs due to “No Authorization for Services” was Medi-Cal Managed Care accounts. Factors contributing to the “No Authorization for Services” write-offs include:
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R11Page 25Implement an electronic notification method for alerting physicians of the patients’ required authorization from third party payers when follow-up services are required.
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R12Page 26All physicians must be trained on the new electronic notification system and accountability measures should be implemented to ensure that physicians schedule follow-up services appropriately. LOS ANGELES COUNTY 2013-2014 CIVIL GRAND JURY FINAL REPORT vi A TIMELY AND CLEAN “BILL” OF HEALTH MAY SAVE $285 MILLION
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R13Page 26Require all DHS facilities to regularly pre-screen scheduled outpatient appointments to ensure that authorization is obtained or the patient is referred to a more appropriate provider.
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R14Page 26Evaluate effective and efficient staffing models to support the need for obtaining authorization from third party payers for inpatient services; such as a designated unit, a centralized staff, or an independent utilization review unit.
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R15Page 26Determine the cost-effectiveness of implementing third party payers’ online authorization tools to ensure timely authoriza- tion for inpatient services.
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R16Page 26Collaborate with Cerner, the Department’s vendor for its new electronic medical record system, ORCHID, to determine if enhancements in the new system could facilitate online processing of health care plan authorizations for DHS services. SECTION FOUR County Financial Incentive Policies Historically, DHS has ended a fiscal year with surplus revenue. It was able to retain these surplus funds for DHS operating expenditures in subsequent years and the county General Fund contribution to the DHS budget was not reduced in subsequent years to offset the retained surplus funds. The Board of Supervisors could vote to reduce the county General Fund contribution to the DHS budget, subsequent to fiscal years with surplus revenue, as long as the total County contribution still meets the required minimum contribution amount per its agreement with the State of California. RECOMMENDATIONS To provide financial incentives for DHS to improve revenue collections, the County Board of Supervisors should:
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R17Page 26Consider the advantages and disadvantages of adopting a formal policy to allow for a minimum level of annual General Fund contributions to the DHS budget.
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R18Page 26Allocate a portion of the funds to DHS, if additional revenue is obtained through improved collection efforts, that are beyond the required contributions by the state and irrespective of any additional revenue DHS is able to obtain through improved collection efforts. LOS ANGELES COUNTY 2013-2014 CIVIL GRAND JURY FINAL REPORT vii A TIMELY AND CLEAN “BILL” OF HEALTH MAY SAVE $285 MILLION A TIMELY AND CLEAN “BILL” OF HEALTH MAY SAVE $285 MILLION TOPIC OF INVESTIGATION The Los Angeles County Board of Supervisors approved write-offs totaling $285,421,607 in gross charges billed to third party payers by the Department of Health Services for the five fiscal years from FY 2008-09 through FY 2012-13. An average of $57,058,431 in gross charges was written off per year for the past five fiscal years. After a preliminary investigation, the 2013-2014 Los Angeles County Civil Grand Jury (CGJ) initiated an audit to investigate and analyze the Department of Health Services (DHS or Department) annual write-offs, processes, and systems used for electronic health records and billing for third party payers. These third party payers include Medi-Cal, Medi- Cal Managed Care, Medicare, and private insurance.