The Wrong Kind Of Auditors
In 2002, the administration, with help from the then-GOP led Congress found a rather creative way to rip off the poor and the elderly. A bill was passed ostensibly to curtail unnecessary Medicare spending. Unfortunately, the bill (which set up a test program) resulted in a windfall to the private contractor hired to do the job. Fortunately, California officials are working hard to stop this "test" program. From the September 27, 2007 Sacramento Bee:
Medicare officials have declared a temporary "pause" in a controversial auditing program that has put a strain on dozens of California rehabilitation hospitals forced to surrender tens of millions of dollars on allegations that the care they provided elderly patients was medically unnecessary. ...
The pause, announced in a conference call to California hospitals Wednesday by the Centers for Medicare and Medicaid Services, is expected to last at least through October, said Patricia Blaisdell, vice president of medical rehabilitation services for the California Hospital Association, who participated in the call.
The association has been the leading critic of the program and the California contractor, Atlanta-based PRG-Schultz International, because of its rejection of almost all Medicare claims involving elderly patients treated at rehabilitation hospitals after knee or hip replacement.
The decision comes as the first wave of appeals of those cases is hitting administrative law judges for the Department of Health and Human Services. The judges are reversing many, if not all, of those decisions on grounds that it is impermissible under departmental rules for the auditors to call up cases more than a year old without good cause. ...
The audit program was established as a test by Congress in 2002 in an effort to reduce unnecessary Medicare spending. It took effect in 2005 in three states -- California, New York and Florida, all high-cost Medicare states. But rather than being paid a fee for their work, auditors are paid commissions of between 25 percent and 30 percent of the money they collect from rejecting claims as far back as five years.
In the case of PRG-Schultz, its contract permits it to keep the bounty so long as its decisions are not overturned at the first and second stages of administrative review. The reversals, however, are coming in the third stage. [Emphasis added]
Two things shocked me about this story. The most obvious one is the plan to routinely deny post-surgical rehabilitation hospital care for elders who have had knee or hip replacement. For those patients who are still living independently, going home directly from the surgical procedure is simply not feasible, especially if they live alone or with an equally elder partner. And these routine denials are done without any kind of medical peer review, i.e., no outside doctor reviews each individual claim to determine medical necessity.
Almost as shocking is the fact that the auditors are given a bounty for each such denial. That certainly explains the routine denial in a critical phase in the recovery from such surgical procedures. All the contractor had to do was identify one expensive medical program and routinely deny its necessity to collect 30% of the cost.
Clearly this "test program" wasn't ever about keeping Medicare costs in line, it was simply another instance of outsourcing a government function so that some private contractor could raid the public treasury to shore up its bottom line:
PRG-Schultz is struggling financially in its core business operations and is looking at the California Medicare contract and the expanded program as a promising source of continuing business. ...
Well, thankfully, the test program is currently on hold and California state legislators are pushing to have the federal program killed. Hopefully New York and Florida will weigh in as well.
Note: To complete the picture, the article ended with the following paragraph:
Among the investors in PRG-Schultz is Blum Capital Partners, headed by Richard Blum of San Francisco. Blum is married to Sen. Dianne Feinstein, D-Calif.
Shameful.
Medicare officials have declared a temporary "pause" in a controversial auditing program that has put a strain on dozens of California rehabilitation hospitals forced to surrender tens of millions of dollars on allegations that the care they provided elderly patients was medically unnecessary. ...
The pause, announced in a conference call to California hospitals Wednesday by the Centers for Medicare and Medicaid Services, is expected to last at least through October, said Patricia Blaisdell, vice president of medical rehabilitation services for the California Hospital Association, who participated in the call.
The association has been the leading critic of the program and the California contractor, Atlanta-based PRG-Schultz International, because of its rejection of almost all Medicare claims involving elderly patients treated at rehabilitation hospitals after knee or hip replacement.
The decision comes as the first wave of appeals of those cases is hitting administrative law judges for the Department of Health and Human Services. The judges are reversing many, if not all, of those decisions on grounds that it is impermissible under departmental rules for the auditors to call up cases more than a year old without good cause. ...
The audit program was established as a test by Congress in 2002 in an effort to reduce unnecessary Medicare spending. It took effect in 2005 in three states -- California, New York and Florida, all high-cost Medicare states. But rather than being paid a fee for their work, auditors are paid commissions of between 25 percent and 30 percent of the money they collect from rejecting claims as far back as five years.
In the case of PRG-Schultz, its contract permits it to keep the bounty so long as its decisions are not overturned at the first and second stages of administrative review. The reversals, however, are coming in the third stage. [Emphasis added]
Two things shocked me about this story. The most obvious one is the plan to routinely deny post-surgical rehabilitation hospital care for elders who have had knee or hip replacement. For those patients who are still living independently, going home directly from the surgical procedure is simply not feasible, especially if they live alone or with an equally elder partner. And these routine denials are done without any kind of medical peer review, i.e., no outside doctor reviews each individual claim to determine medical necessity.
Almost as shocking is the fact that the auditors are given a bounty for each such denial. That certainly explains the routine denial in a critical phase in the recovery from such surgical procedures. All the contractor had to do was identify one expensive medical program and routinely deny its necessity to collect 30% of the cost.
Clearly this "test program" wasn't ever about keeping Medicare costs in line, it was simply another instance of outsourcing a government function so that some private contractor could raid the public treasury to shore up its bottom line:
PRG-Schultz is struggling financially in its core business operations and is looking at the California Medicare contract and the expanded program as a promising source of continuing business. ...
Well, thankfully, the test program is currently on hold and California state legislators are pushing to have the federal program killed. Hopefully New York and Florida will weigh in as well.
Note: To complete the picture, the article ended with the following paragraph:
Among the investors in PRG-Schultz is Blum Capital Partners, headed by Richard Blum of San Francisco. Blum is married to Sen. Dianne Feinstein, D-Calif.
Shameful.
Labels: Government Contractors, Medicare
posted by Diane at 4:32 AM
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