Item N7
SUPPLEMENTAL AUDIT REPORT OF
MONROE COUNTY
HEAL TH BENEFIT PROGRAM
April 21, 2004
Prepared by:
Internal Audit Department
Clerk of the Circuit Court
Danny L. Kolhage, Clerk
Monroe County, Florida
CLERK OF THE CIRCUIT COURT
MONROE COUNTY
BRANCH OFFICE
MARATHON SUB COURTHOUSE
3117 OVERSEAS HIGHWAY
MARATHON, FLORIDA 33050
TEL. (305) 289-6027
FAX (305) 289-1745
MONROE COUNTY COURTHOUSE
500 WHITEHEAD STREET, SUITE 101
KEY WEST, FLORIDA 33040
TEL. (305) 292-3550
FAX (305) 295-3663
BRANCH OFFICE
PLANTATION KEY
GOVERNMENT CENTER
88820 OVERSEAS HIGHWAY
PLANTATION KEY, FLORIDA 33070
TEL. (305) 852-7145
FAX (305) 852-7146
April 21, 2004
The Honorable Danny L. Kolhage
Clerk of the Circuit Court
RE: Supplemental Audit Report of Monroe County Health
Benefit Program
Dear Mr. Kolhage:
The Clerk's Internal Audit Department has completed the supplemental audit of the Monroe
County Health Benefit Program. The purpose of the audit was to determine if additional areas
were of concern regarding the efficiency and effectiveness of Acordia National and the Keys
Physician Hospital-Alliance (KPHA) in coordinating the plan and to further evaluate County
Management's systems employed to monitor the Contractor's performance.
We would like to thank the Division Director of Administrative Services and her staff for their
cooperation while conducting the audit. By its nature, this report focuses on exceptions,
weaknesses, and problems. This should not be understood to mean there are not also various
strengths and accomplishments.
Due the complexity of our Health Benefit Plan and the substantial expenditures involved, the
contracts with KPHA, Acordia and providers need to be continuously monitored and improved
for clarity.
The audit was conducted with the assistance of Patricia Sutton, Internal Auditor.
The accompanying audit report is provided for your information. Additional copies of the report
will be provided upon your request.
Sincerely,
~ d (YJ~
Sandra L. Mathena, CPA, CFE, CIA
Director of Internal Audit
Cc: Board of County Commissioners (5)
James Roberts, County Administrator
Richard R. Collins, County Attorney
Sheila Barker, Division Director of Administrative Services
Sandee Carlile, Clerk's Finance Director
SUPPLEMENTAL
AUDIT REPORT OF MONROE COUNTY
HEAL TH BENEFIT PROGRAM
TABLE OF CONTENTS
Page
I. SCOPE AND OBJECTIVES
1
II. METHODOLOGY
1-2
III. BACKGROUND
3
IV. CONCLUSIONS
4-5
V. AUDIT FINDINGS:
A. Network Providers Paid Incorrectly
1. Dimension provider claims paid as referrals 6- 7
2. KPHA provider claims paid as referrals 8
3. KPHA dental providers added to Acordia's system incorrectly 9
B. Payment Method Employed For Surgical Procedures 10-11
C. Discounts Rescinded by Providers 12
D. Overpayments Identified in May 2003 Health Benefit Program Audit
1. KPHA provider claims paid as referrals 13
2. Incorrect discounts for durable medical equipment 14
3. 90th Percentile Medicode overpayment 15
E. Network Providers Billing With Multiple Tax Identification Numbers 16
F. Group Insurance Management Should Perform Regular Audits of Acordia
Claims and Reports 17-18
G. Group Insurance Management Should Provide Employee Education Regarding
Health Care Claims 19-20
VI. EXHIBITS
A. Letter to Acordia, June 18,2001
B. E-Mail from Acordia, August 26,2003
C. Sample Letter from Fisherman's Hospital
D. E-mail from KPHA
E. Letter to Acordia, August 5, 2003
VII. AUDITEE RESPONSES
SUPPLEMENT AL
AUDIT REPORT OF MONROE COUNTY
HEAL TH BENEFIT PROGRAM
I. OBJECTIVES AND SCOPE
In response to the prior audit of the Health Benefit Program issued May 2003, the Monroe
County Clerk of the Circuit Court and the Monroe County Board of Commissioners
requested the Internal Audit Department to complete a supplemental audit of the Health
Benefit Program.
The audit objectives were to determine if additional areas were of concern regarding the
efficiency and effectiveness of Acordia National and the Keys Physician Hospital-Alliance
(KPHA) in coordinating the plan and to further evaluate the effectiveness of County
Management's systems employed to monitor the Contractor's performance.
II. METHODOLOGY
A. We interviewed the following personnel to obtain information about the Monroe
County Health Insurance Plan:
1. County Administrator
2. Director of Administrative Services
3. Group Insurance Administrator
4. The Clerk's Finance Department personnel
5. Assistant Administrator, Lower Keys Medical Center &
Director of Operations Keys Physician-Hospital Alliance
6. Vice President of Claims at Acordia National
7. Assistant Vice President and Monroe County's Team Manager at Acordia National
8. Dimension Health Network personnel
B. Internal Audit Department examined the following documents:
1. Monroe County Employer Liaison Committee Agenda's 2003
2. Acordia Refunds & Reversals Audit Report, 2000 to 2003
3. Clerk's Finance Department deposit records
4. KPHNDimension provider listings
5. Acordia Referrals by Authorizing Providers, 2000 to 2003
6. Acordia Single Provider Payment Listings
7. Acordia listing ofKPHA Providers
8. Acordia Non-PPO Network Savings Report, 2000 to 2003
9. Specific claim detail and invoice detail for large hospital billings
10. Explanation of Benefits (EOB's) from Acordia for specific claims
C. The Internal Audit Department reviewed Single Provider Payment Listing reports for
physicians and hospitals.
D. Internal Audit reviewed Referral Analysis By Authorizing Providers reports.
E. Reviewed spreadsheets provided by Acordia calculating claim overpayments.
F. Reviewed Acordia Out of Network reports.
G. Compared Acordia Refund and Reversal reports to Finance Department deposits.
H. Reviewed a sample of claims to determine if appropriate network discounts were
applied.
1. Requested Acordia to reprocess claims that were detenl1ined to be inaccurate.
2
III. BACKGROUND INFORMATION
Medical, dental and vision claims of $9,426,645.09 were paid for retirees, employees, and
dependents of Monroe County for the fiscal year ending September 2002. This was an increase
of 12.1% over claims paid for fiscal year ending September 2001. For the fiscal year
September 2003 the paid claims totalled $10,905,253.43. This is an increase of 15.7% over
fiscal year 2002 and a 29.7% increase over fiscal year 2001. The County modified several
factors of the health benefit program to reduce health care costs for calendar year 2004. The
County increased the overall proportion of health care cost paid by the employees and retirees,
with anticipation of an approximate 20% decrease in costs.
In the May 2003 report, Audit Report of Monroe County Health Benefit Program, twenty
findings were identified. Of the twenty findings, the following overpayments were identified
and are not included in the supplemental report:
Acordia Claims Examiner Error
Employee Portion of Examiner Error
90th Percentile Medicode Not Updated
Employee Portion Of Medic ode Not Updated
IneligIble Providers
Incorrect Billing
25% Discount Override
KPHA Providers Added With Incorrect Discounts
Total Overpayments May 2003 Audit
$82,362.44
$14,686.26
$52,877.70
$6,607.63
$1,382.23
$234.00
$66.05
$47,529.39
$205,745.70
Further testing was implemented in the supplemental audit to specifically identify the amount
of overpayments discovered as a result of the initial audit sample and to determine additional
areas lacking controls to prevent overpayments in health care benefits. An additional
$110,458.30 was discovered as a result of network providers being paid as referrals in the
supplement audit. In addition, it was discovered that the initial audit included $35,781.04 that
was identified incorrectly as overpayments. The net overpayment discovered in the initial and
supplemental audit is reported as follows:
Overpayments May 2003 Audit
Overpayments February 2004 Supplemental Audit
Incorrectly Calculated Overpayments May 2003
$205,745.70
$110,458.30
($35,781.04)
Total County Overpayments
$280,422.96
3
IV. Audit Conclusions:
AI. Numerous Dimension provider claims were paid as referrals and resulted in an
overpayment of $83,997.72 for the period January 1, 1999 to August 18, 2003 and is
due the County. The providers have been notified and $7,058.19 has been received.
A2. Numerous KPHA provider claims were paid as referrals and resulted in an
overpayment of $3,774.68 for the period January 1, 2000 to August 18, 2003 and is
due the County.
A3. KPHA dental providers were added to Acordia's system incorrectly. Acordia
calculated the claims resulting in an overpayment of $22,685.90. The dentists have
been notified and $5,715.18 has been received.
B. Group Insurance Management stated that payment for surgical procedures should be
calculated according to Medicare's Multiple Surgery Guidelines. These guidelines
would provide the County additional savings in health benefits. Correspondence
between the County and Acordia has not clarified the guidelines to be implemented.
C. Review of the Single Provider Payment Listing reports for the network hospitals
identified claims that did not have the appropriate discounts applied. The hospital
rescinded the discounts, if the claim was not paid in 30 days and Acordia refunded the
discounts.
D1. The initial audit dated May 27,2003 identified an overpayment of claims based on an
outdated fee schedule. Acordia recalculated the claims and determined the
overpayment to be $134,729.77. The physicians have been notified and $36,666.22
has been received.
D2. The initial audit included incorrect discounts for durable medical equipment in the
amount of $10,424.01. It has been determined that KPHA Case Management
negotiates the charges and the standard discount is not applied to these claims.
D3. The initial audit included a physician administering cancer drugs that are not subject
to the comparison per an agreement between the County and KPHA. The provider
was incorrectly reported by Acordia as having an overpayment of$25,357.03.
E. Numerous providers are billing with more than one federal tax identification number.
The claims were paid as out of network claims. A provider can only be matched to a
specific network if they bill their claims with the tax identification number provided
to Acordia by the network. Numerous providers also have multiple suffixes added to
their tax identification number. This can be a result of a change of address, data entry
error, or multiple locations or as a result of being in a Group-Base as well as providing
individual services and the provider may not be updated to the appropriate network.
4
F. Group Insurance Management should perform regular audits of Acordia claims and
reports.
G. Group Insurance Management has changed health care benefits passing substantial
cost to the employee. With proper information and education employees will have the
ability to scrutinize claims and potentially assist in the reduction of health care cost.
5
A. Network Providers Paid Incorrectly
The auditors reviewed Referral Analysis reports, Single Provider Payment Listings and
Acordia's schedule of overpayments from the May 27,2003 audit and found additional
claim processing errors. The breakdown of the claims in the supplemental audit are as
follows:
Dimenision Providers
KPHA Providers
Dentists
Total
(938 Claims)
(223 Claims)
(2,144 Claims)
$83,997.72
$3,774.68
$22,685.90
$110,458.30
1. Dimension provider claims paid as referrals
Finding:
Numerous Dimension provider claims were paid as referrals, but the providers are
actually participants in the Dimension Network. This was determined by review of
the Referral Analysis Report. Providers paid as referrals were paid at the in network
rate of 80% or 100%. A laboratory that joined the Dimension Network on January 1,
1999 had claims paid as referrals and the claims should have been paid based on the
Dimension Fee Schedule. For example, one procedure code (82784) had a charge of
$359.42 and Acordia paid $288.00. The Dimension Fee Schedule amount was
$27.60. Therefore, Acordia should have only paid $22.08 (80% of $27.60). The
overpayment for Monroe County's 80% portion on this one CPT code was $208.32.
A claim should only be processed as a referral if it is not a network provider.
Acordia's management produced computer reports to determine the extent of the
overpayment.
For the period January 1, 1999 through August 18,2003, five Dimension providers
were overpaid a total of $83,997.72. Acordia is in the process of recouping the
overpayments. Acordia has received payment from one Dimension provider in the
amount of$7,058.19.
Recommendation( s ):
1. Group Insurance Management should establish a program of audits and inquiries
on a periodic basis to ensure that the plan is functioning as intended.
2. Group Insurance Management should monitor the collection process of the
overpayment due the County.
County Administrator's Response:
1. Management believes claims should always be processed as network provider and
if no network shows up, the system should check for referral before decision to
assess penalty. The referrals are generally lab tests and the quantity of them
should not be prohibitive for checking. The processing of lab tests on a referral
basis was implemented because management believed it was unfair to the
6
participants to have them responsible for finding a network lab. Group Insurance
Management is reviewing the Referral Analysis Report to prevent this from
. .
occumng agaIn.
2. Group Insurance Management is aware that the collection process is taking a
significant amount of time. Providers are very upset that we can go back for a
longer period of time than they have been allowed to bill claims. They believe the
process has been unfair to them. KPHA has received numerous complaints; and
as of March 1,2004, we have had eight providers opt out of the network.
3. As identified above by the auditors, Acordia is already in the process of recouping
the overpayments. Management will be sure that this continues. In the future,
management will establish a periodic review of claims by the County's insurance
consultant for the purpose of identifying and resolving problems.
7
2. KPHA provider claims paid as referrals
Findin~:
Numerous KPHA provider claims were paid as referrals, but the providers are
actually participants in the KPHA Network. This was determined by review of the
Referral Analysis Report. Providers paid as referrals were paid at the in network rate
of 80% or 100%. A claim should only be processed as a referral if it is not a network
provider. Acordia' s management produced computer reports to determine the extent
of the overpayment.
For the period January 1, 1999 through August 18, 2003, the KPHA providers were
overpaid a total of $3,774.68.
Recommendation(s):
1. Group Insurance Management should establish a program of audits and inquiries
on a periodic basis to ensure that the plan is functioning as intended.
2. Group Insurance Management should monitor the collection process of the
overpayment due the County.
County Administrator's Response:
1. Management believes claims should always be processed as network provider and
if no network shows up, the system should check for referral before decision to
assess penalty. The referrals are generally lab tests and the quantity of them
should not be prohibitive for checking. The processing of lab tests on a referral
basis was implemented because management believed it was unfair to the
participants to have them responsible for finding a network lab. Group Insurance
Management is reviewing the Referral Analysis Report to prevent this from
. .
occumng agam.
2. Group Insurance Management is aware that the collection process is taking a
significant amount of time. Providers are very upset that we can go back for a
longer period of time than they have been allowed to bill claims. They believe the
process has been unfair to them. KPHA has received numerous complaints; and
as of March 1,2004, we have had eight providers opt out of the network.
3. This is a similar situation to the previous finding. Management will be sure that
this continues. In the future, management will establish a periodic review of
claims by the County's insurance consultant for the purpose of identifying and
resolving problems
8
3. KPHA dental providers added to Acordia's system incorrectly
Finding:
Five dental providers in KPHA were added to Acordia's system incorrectly or not
properly updated. Acordia provided the auditors a report correctly calculating the
discounts and an overpayment of $22,685.90 was made to the providers. Acordia
corrected the discounts and notified the providers of the overpayments and $5,715.18
has been received.
Incorrect payments would have continued indefinitely since the set-up did not contain
accurate information. Acardia should fumish KPHA a provider listing with tax
identification numbers and discount percentages allowed to review and correct on a
periodic basis.
Recommendation( s):
1. Group Insurance Management should monitor the collection process of the
overpayment due the County.
2. Group Insurance Management should establish guidelines to ensure Acordia's
listing of network providers is accurate.
County Administrator's Response:
2. Group Insurance Management will continue the collection process.
3. Effective January 1, 2004, Monroe County has ceased being a self-insured provider
of Dental Services. Employees are paying for their own insurance through
American General.
4. Group Insurance Management will utilize the services of the insurance consultant
far the purpose of monitoring Acordia's listing of all KPHA Network Providers to
be sure that it is accurate.
9
B. Payment Method Employed for Surgical Procedures
Fin din e:
Group Insurance stated that payment for surgical procedures should be calculated
according to Medicare's Multiple Surgery Guidelines and was under the assumption
that Acordia was using this method. This assumption was based on a letter sent to
Acordia from Group Insurance requesting Medicare guidelines be used for
unbundling. See Exhibit A - Letter to Acordia, June 18,2001.
Acordia states unbundling of charges and multiple surgeries guidelines are two
different issues. See Exhibit B - E-mail from Acordia, August 26, 2003. Their
system, Code Review, already bundles and unbundles procedure codes including
surgeries. The multiple surgery guidelines are applied after the procedure codes have
been bundled or unbundled. The following claim is an example of unbundling:
CPT Code 43750 and 43246 were combined into one code 43246. There
was also another procedure code 36533 for $1,200. Acordia stated, our
Nurses have indicated that this procedure was not performed through the
same incision as the primary procedure, therefore, we did not reduce to
50% of the Medicode Fee. However, based on Medicare's Multiple
Surgery, which differs from ours, this would have been reduced to 50%
regardless and should have been limited to 50% of $1,200 or $600.
The auditors requested Acordia to reprice all surgery claims from October 1, 2001
through June 30, 2003 and Acardia informed the auditors this was unrealistic and not
feasible. See Exhibit B - E-mail from Acordia, August 26, 2003. The auditors were
unable to determine the extent of overpayment resulting from the miscommunication
between Acordia, KPHA and Group Insurance Management.
Acordia is able to amend the plan with written instructions based on the e-mail of
August 26, 2003 from Acordia. See Exhibit B -E-mail from Acordia, August 26,
2003. There has been no correspondence between the County and Acordia clarifying
the guidelines to be implemented.
Recommendation(s):
1. Group Insurance Management should discuss the consequences of usmg
Medicare's Multiple Surgery Guidelines with KPHA.
2. Group Insurance Management should also consider including an acknowledgment
form to be signed by Acordia Management that states the change has been made
and the date it was implemented.
County Administrator's Response:
1. Group Insurance Management has discussed both Multiple Surgery Guidelines
and Unbundling with KPHA. Weare satisfied with the procedure being used by
Acordia on unbundling. After much discussion and research, we have agreed to
10
the following Multiple Surgical Procedures that will be included in the next plan
reVISIOn:
Surgery includes the medically necessary preoperative and post operative
care, when performed by a Physician. If two (2) or more operations or
procedures are performed on the same day, on the same patient, by the same
Physician, benefits are described in the Schedule of Benefits and subject to
the usual, customary, and reasonable charges (or network fee schedule) for
the first procedure, and 50% of usual, customary, and reasonable charges (or
network fee schedule) for any additional procedures performed.
2. Group Insurance Management will develop an acknowledgment form to be signed
by Acordia stating the appropriate changes have been made and the date of the
implementation.
11
C. Discounts Rescinded by Providers
Findine:
The auditors reviewed Single Provider Payment Listing reports for the network
hospitals and requested a sample of claims that did not have the appropriate discount
applied. The review identified Fishennan's Hospital rescinding discounts on claims
that were not paid within 30 days by Acordia. Acordia informed the auditors if
additional information is requested the 30 days begins after receipt of all
documentation necessary to analyze the claim and process appropriately. Acordia
paid the original billed charges less the provider discount and if the claim was paid
past the 30 day period the hospital would request the discount be paid. See Exhibit C
- Sample Letter from Fisherman's Hospital. The sample of 6 claims revealed a total
of$33,716.48 paid to Fisherman's Hospital based on discounts rescinded.
The KPHA contract provides the following definition for provider compensation:
Participatini: Provider Compensation: All claims for covered services,
whether payable by the Employer or a Covered Person will receive a discount
off of provider billed charges as specified in Attachment A. This discount will
be rescinded if an appropriately documented and non-contested claim is not paid
to the Participating Provider within thirty (30) days of being received by the
claims administrator (Acordia National).
Group Insurance Management is working with KPHA to revise the contract language
to define clean claims and disputed claims. See Exhibit D - Email from KPHA.
Recommendation{s):
1. Group Insurance Management should ensure that Acordia calculates prompt pay
discounts according to the terms of the KPHA Proposal and Agreement.
2. Group Insurance Management should review Refund and Reversal reports
provided by Acordia to monitor provider discounts that have been refunded.
County Administrator's Response:
1. The language in the KPHA contract was confusing as to what constituted a
'non-contested claim'. In the new contract with KPHA, effective March 1, 2004,
we have defined a "Clean Claim, " Notification of Claim Status" and" Disputed
Claims". This should prevent the discrepancy caused with the handling of
discounts such as those documented with Fisherman Hospital.
2. Group Insurance agrees with the recommendation to monitor the Refund and
Reversal Report.
3. Group Insurance Management will officially inform KPHA that the practice
identified for Fisherman's Hospital is not within the scope of the Contract between
the County and KPHA. KPHA will be asked to inform Fisherman's Hospital that
practice must be discontinued.
12
D. Overpayments Identified in May 2003 Health Benefit Program Audit
1. KPHA provider claims paid as referrals
Findine:
The initial audit dated May 27, 2003 identified physician claims for the KPHA
network using an outdated Medicode Fee Schedule for the usual and customary
comparison, which resulted in multiple claims being overpaid. The County requested
the claims be reprocessed on August 5, 2003. See Exhibit E - Letter to Acordia,
August 5, 2003. The total County adjustments calculated by Acordia resulted in an
overpayment amount of $134,729.77. The providers have been notified and
repayment of $36,666.22 has been received. As of February 12, 2004, the
outstanding balance is $98,063.55.
Recommendation(s):
1. Group Insurance Management should monitor the collection process of the
overpayment due the County.
2. Group Insurance Management needs to ensure procedures are in place to verify the
Medicode Fee Schedule is updated annually.
County Administrator's Response:
1. Group Insurance Management is aware that the collection process is taking a
significant amount of time. Providers are very upset that we can go back for a
longer period of time (15 months) than they have been allowed to bill claims.
They believe the process has been unfair to them. KPHA has received numerous
complaints; and as of March I, 2004, eight providers have left the network. As of
March 31, 2004 we have increased the repayment amount of $36,666.22 to
$70,379.81.
2. We were the only client of Acordia that was using Medicode. It created a very
cumbersome system for processing and updating. Effective March 1, 2004, our
contract with KPHA has started using P.H.C.S. (formerly HIAA) Fee Schedule.
All other Acordia Clients use P.H.C.S. This should make the processing and
updating easier and more efficient. Acordia will update their system and it will be
effective for all their providers. KPHA providers have agreed to this new system
in their contract with KPHA
3. Group Insurance Management will semi-annually confinn that the P.H.C.S. Fee
Schedule is being utilized appropriately.
13
2. Incorrect discounts for durable medical equipment
Findine:
The initial audit dated May 27, 2003 identified claims with incorrect discounts
totalling $47,529.39. Included in the amount was $10,424.01 for durable medical
equipment claims that did not have the standard KPHA discount of 15%. During the
supplemental audit it was discovered the rates for medical equipment are negotiated
by KPHA Case Management. The standard discount of 15% does not apply to
durable medical equipment claims, but a case management fee is billed to the
County. Subsequently, the auditors determined the overpayment identified as
"incorrect discounts for durable medical equipment" should not have been included
as an overpayment in the initial audit.
Group Insurance Management and KPHA agree the discount should not be applied to
durable medical equipment. However, the contract does not indicate durable medical
equipment is processed differently from other KPHA claims.
Recommendation( s ):
1. Group Insurance Management should document and include all processmg
conditions in the contract.
County Administrator's Response:
1. Group Insurance Management will document the processing for Durable Medical
Equipment in the next plan document. As much as Group Insurance Management
would like to be able to document all processing in our plan document, we
continue to find unique medical situations that have to handled administratively
based on what serves the patient as well as what keeps the cost as low as possible
for the plan.
14
3. 90th Percentile Medicode overpayment
Findine:
The initial audit dated May 27, 2003 identified claims being processed with the 1997
90th Percentile Medicode. Acordia ran preliminary reports identifying $52,877.70 as
the overpayment due to the outdated Medicode. Included in the amount was
$25,357.03 which was for one physician administrating prescription drugs. It had
been determined by the County and KPHA that the service the physician provided
would not be subject to the medicode comparison. However, the physician had
discrepancies in his billing procedures and gave the appearance of an overpayment in
the initial audit. For example, one claim was billed for 40 units at $30.09 with a total
charge of $904.00 and a total of $858.80 was paid. The payment was correct even
after being compared to the 90th Percentile of Medicode. The next claim billed 1
unit at $30.09 with a total charge of $904.00 and a total of $858.80 was paid, but the
spreadsheet calculation gave the appearance of the claim being overpaid $830.21.
The preliminary overpayment calculated by Acordia was prepared in a formula based
spreadsheet and did not take into account examiner overrides. The physician will not
be billed the calculated overpayment of $25,357.03 by Acordia.
Recommendation( s ):
1. Group Insurance Management should review all documentation provided by
Acordia to ensure calculations and procedures are accurate.
County Administrator's Response:
1. Group Insurance Management along with KPHA and Acordia are monitoring
processing to maintain the accuracy of the system. Medicode will no longer be
our basis; as of March 1,2004, we will be using P.H.C.S. (formerly HIAA).
15
E. Network Providers Billing with Multiple Tax Identification Numbers.
Findine:
Numerous providers are billing with more than one federal tax identification number.
The claims were paid as out of network claims (70% coinsurance percentage and no
discount) because the tax identification number did not match the one provided to
Acordia by KPHA or Dimension. According to Acordia Management, this is a
common issue for all networks. Providers don't always notify the networks when
their tax identification numbers change and it ultimately results in claims being paid
out of network. A provider can only be matched to a specific network if they bill
their claims with the tax identification number provided to Acordia by the network.
KPHA plans to provide both social security numbers and tax identification numbers
to Acordia to update their claim system for all KPHA providers.
The auditors also discovered many network providers have multiple suffixes added to
their tax identification number. This can be a result of a change of address, data entry
error or multiple locations and the provider may not be updated to the appropriate
network. In addition, providers may be Group-Based and also provide services on an
individual basis, therefore creating new suffixes and the potential of inaccurate
processIng.
Recommendation(s):
1. Group Insurance Management should establish a program of audits and inquiries
on a periodic basis to ensure that the plan is functioning as intended.
2. Group Insurance Management should establish guidelines to ensure Acordia's
listing of network providers is accurate.
3. Group Insurance Management should check the referral report on a monthly basis.
County Administrator's Response:
1. Group Insurance Management is aware that some providers bill under more than
one federal tax identification number. This is done for a variety of reasons
including their affiliation with other providers and location for providing the
service. Some physicians are affiliated with a network in one location and not
while practicing in another. When the provider supplies different federal tax
identification numbers for these reasons, they can actually not be part of a
network. Participants who believe they used a network doctor and were penalized
for using a non-network provider should contact Acordia or the Group Insurance
Office for assistance. Networks change on a frequent basis and it is the
responsibility ofthe participant to verify network status before seeking treatment.
2. Group Insurance Management will establish guidelines to insure Acordia's listing
of network providers is accurate and will utilize the services of the County's
insurance consultant on a periodic basis to check the system.
16
F. Group Insurance Management Should Perform Regular Audits of Acordia
Claims and Reports
Findin~:
Group Insurance Management has been provided the ability to access Acordia's Host
On Demand online claim system to allow audit and inquiries of claims. Numerous
monthly reports from Acordia were provided to the auditors. The auditors reviewed
the reports and found they had substantial benefits in identifying potential claim
miscalculations. The following reports can provide Group Insurance Management
information to monitor claims processed by Acardia:
1. Referral Report By Authorizing Provider - Monthly analysis of the report
can quickly discover network providers paid as referrals and claims can be
adjusted to properly reflect provider discounts.
2. Refund and Reversal Analysis - Monthly analysis of the report may help
identify discounts rescinded and refunded to the provider. Timely review
could provide the County the ability to document and correct discounts
rescinded.
3. Single Payment Provider Listings - Monthly review may identify billed
charges paid with an incorrect discount and can also provide claims to be
selected for audit and inquiries.
4. Monroe County Employer Liaison Committee Agenda's - KPHA informs
Group Insurance Management of provider additions and deletions. The
changes need to be verified with Acordia to determine updates were
completed accurately.
Recommendation(s):
1. Group Insurance Management should establish a program of audits and inquiries
on a periodic basis to ensure that the plan is functioning as intended.
2. Group Insurance Management should establish guidelines to ensure Acordia's
listing of network providers is accurate.
County Administrator's Response:
1. The above findings basically reflect a finding found throughout the audit.
Management will be sure to develop ongoing monitoring and auditing ability so
that these issues can be appropriately controlled.
2. Group Insurance Management is working with the consultant to establish a
suitable method of audits and inquiries.
3. Group Insurance Management is concerned about proper listing of providers in the
appropriate networks. However, the participant is the best source for insuring the
proper accounting for network providers. The penalty for using an out-of-network
provider is greater than many of our discounts. When an employee seeks medical
treatment they should confirm that they are using a network provider. When
17
precertifications are done, KPHA informs the participant when they have selected
an out-of-network provider and will offer in-network alternatives to the
paliicipant. Group Insurance Management will continue to work on the accuracy
of the network providers with Acardia.
18
G. Group Insurance Management Should Provide Employee Education Regarding
Health Care Claims
Findin2:
Monroe County has established an employee benefit plan for the purpose of
providing medical, prescription, dental, vision, utilization review and Cobra benefits
for its employees. Increasing health care cost has forced the County to implement
changes that will financially impact the employees, dependents and retirees with the
intent of decreasing the cost of health care for the County. As of January 1, 2004, the
benefit plan was modified and resulted in an increased cost of dependent coverage,
increased coinsurance payments, increased prescription copayments and provided the
employee the option of paying a premium for elective dental and vision coverage.
Employee participation is an integral part of controlling health care cost. With proper
information and education employees will have the ability to assist in reducing the
overall cost of benefits.
The direct impact of increasing health care cost and decreasing employee benefits has
provided employees an increasing awareness in monitoring their own claims. For
example, an employee brought to the attention of the auditors they had received a
check from Acordia for services that had not been rendered. The provider was
requesting preauthorization, but submitted the request on a claim form and a check
was issued to the employee. The check was subsequently returned. In another
instance, the employee had surgery and scmtinized the billing upon receipt. The
employee discovered a charge of an additional hour of surgery time that was not
performed. The employee has pursued the issue and the billing is being adjusted.
Recommendation(s):
1. Group Insurance Management should establish a regular program to educate
employees on health care benefits and provide the information necessary to
scmtinize claims to protect the employee and the County from overpayments.
County Administrator's Response:
1. Group Insurance Training is done at all New Employee Orientation with BOCC
employees. All items that could cause discussion of the Group Insurance Program
at a BOCC meeting are noticed to all active and retired participants in the
insurance program. Changes to the Plan as adopted by the BOCC are noticed to
all active and retired participants. In January 2002, Worker's Comp and Group
began a county-wide program of training on those two programs. They were done
in Plantation Key, Marathon, & Key West in January, Febmary, March, April,
June, and September, 2002 and January 2003. These training sessions were
conducted with the various constitutional officers. Our Resource Link (newsletter
for Board employees) notified employees that changes were to be voted on at the
September 17, 2003 meeting of the BOCC and advising them that if they had not
received the memo (that went to all employees and retirees) of the proposed
19
changes, to contact the Group Insurance Office for a copy. Open enrollment was
held in November outlining all changes to the program. American General did
presentations on November 20, 2003 in Key Largo and Marathon and on
November 21, 2003 in Key West on the Dental and Vision Programs. Group
Insurance Management works diligently to keep all employees informed of the
program requirements. Group Insurance will establish a new set of orientation
sessions for employees throughout the Keys.
20
VI. Exhibits
Exhibit A
Letter to Acordia
June 18, 2001
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A~~f!~t!ye~~~~ces I),rI?~~\9n,t;.,
5100 College Road . .
Key West, FL 33040
(305) 292-4537
~onday,June 18,2001
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Acordia National
602 Virginill Street. East
P.O.Box3043 .
Charleston, WV 25331-3043
Attention: Richard H. Legg
It. .... _, .
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Dear Mr. Legg:
On March 13,2001, the Monroe County Board of County Conunissioners passed some changes to the our health
plan. The changes affecting processing our claims are:
Proposal Nwnber 2 - Implementation of Emergency Room Visit deductible of $75 per visit. Implemeatation
date is October 1, 2001.
Proposal Nwnber 7 - Increase out 0 f N e!work disincentive from 10% to 30%. This will be implemented when
proposal Number 6 (securing network) is implemented.
Proposal Number 8 - Limit Chiropractic visits per calendar year from 60 to 30. Implement January 1,2002.
Proposal Number 9 - Limit Massage Therapy visits per calendar year to 15. Implement January 1,2002.
Proposa I N wnber 10 - Li mi t Acupuncture Treatments per calendar year to 15. Imp lement! MUary 1, 2002.
Proposal II - Vision Benefits - retom to "no more than one complete visual examination, includirtg refraction,
during any two calendar years. Impfement January 1, 2002. '
Au~ 07 03 03:2410
M' !"oe Count~ GrQup Ins
3052924452
(
10.2
MEMORANDUM
TO:
Rick Legg
Lora Denny
FROM:
Connie Raines
RE:
County of Monroe plan changes
DATE:
July 16, 2001
Ouestions on olan chamres:
1) Proposal # 7 - increase out of Network disincentive from 10% to 30% - this will be
implemented when proposal #6 (securing network - ???) is implemented.
a) What is proposal 6? I have no info on proposals 3 thru 6.
b) When is proposal # 7 effective?
DISREGARD PROPOSAL #7
Ouestions on the 10/01/2001 Dlan ch~nQ:es:
1) Proposal # 2: ER deductible of$75. - does the $75. apply to the out of pocket? - YES
a) Does the $75. deductible still apply once the out of pocket is met? - YES,
DEDUCTIBLE PER VISIT.
b) Once the $75. is taken, how are the balance of charges to be paid? 800/0 IN-
NETWORK; 70% OUT OF NETWORK.
c) Does the $75. deductible apply to both PPO & Non-PPO charges? - YES
d) Does the $75. deductible apply to both medical emergencies & non-emergency
treatment in the ER? - YES, ONLY TIME DEDUCTIBLE IS WAIVE
IS IF ER VISIT BECOME AN INPATIENT STAY.
2) Proposal # 14: What are the Medicare guidelines regarding Wlbundling of costs? Will
these be manual for the examiner? Does anybody have this info? - THIS
RECOMMENDATION WAS MADE TO US BY KPHA AS A COST
SAVINGS. THEY ARE CURRENTLY OBTAINING TIDS
INFORMATION. WE WILL FORWARD CRITERIA.
Rue'; 07 03 03:25p
M ~oe Count~ G~QUP Ins
3052924452
p.3
Rick Legg
Lora Denny
Page 2
July 16, 2001
Questions on the 01/01/2002 nlan chanlles:
1) Proposal #9: What types of providers are covered to render massage therapy?
a) Any guidelines for massag~ therapy (when or why it would be covered?)?
PLEASE CHECK WITH LORA DENNY REGARDING HOW
OUR PLAN CURRENTLY PROCESSES MASSAGE THERAPY
CLAIMS. ONLY CHANGE TO PLAN IS LIMITATION OF
VISITS TO 15 PER CALENDAR YEAR.
2) Proposal #11: Is there a dollar maximum for the eye exam? - YES, $50.00
HAS AL WAYS BEEN THE DOLLAR MAXIMUM PAID
UNDER OUR VISION PLAN FOR CORRECTION OF VISION.
3) Proposal #13: VeritY please: Individual out of pocket will be $2,200. plus deductible
($2,500. individual maximum ~ out of pocket plus deductible). - CORRECT.
Exhibit B
E-Mail from Acordia
August 26, 2003
Page 1 of
Sandra Mathena
From:
To:
Cc:
Sent:
Subject:
<Beverly _Burdette@AcordiaNational.com>
<smathena@monroe-clerk.com>
<Melanie _ Slater@AcordiaNational.com>
Tuesday, August 26, 2003 3:57 PM
Monroe County Surgeries
Hey, I'm back and digging through my piles that accumulated while I was
gone.
We need to discuss one of the requests you made while I was out. You asked
me to "reprice" all surgery claims paid from Oct 1,2001 through June 30,
2003. As you know, we have spent a tremendous amount of time reviewing
all claim history for the past 3 years to assist you with your audit, and
we are committed to doing everything possible to assist you and to fix any
issues identified. However, you have asked me to tell you when your
requests are unrealistic or not feasible. . . this request is not possible
within any reasonable period of time. I'm not sure you understand what
would be involved, but it is not something that can be done electronically
or programmatically. Every claim over this period would have to be pulled
and recalculated manually---we are talking hundreds of hours of review. My
offer to set you up with a PC and system access here in WV is still open if
you want to review all of these claims.
"Further, I am concerned that the County is asking for surgery claims to be
reviewed for this period when we have never received any written
instructions to change our processing procedures. You and I have talked
about this for at least 3-4 months, yet we have never received any written
instructions to change our processing procedures, nor have we recieved any
instructions to amend the plan. As of today, we are still not using
"Medicare's multiple surgery guidelines for processing surgery claims. If
the County wants these changes made to the plan, they really need to notify
us of this in writing.
I\.gain, "unbundling" and "multiple surgeries" are two different issues.
<")lease review the fax you sent to me on August 8th. This memo is a list of
luestions we asked of Monroe County regarding their 10/112001 plan changes.
In question number 2 we asked for clarification of what was meant by
.!lMedicare guidelines of unbundling of costs". The answer provided on
his memo was, " THIS RECOMMENDATION WAS MADE TO US BY KPHA AS A COST
SAVINGS. THEY ARE CURRENTL Y OBTAINING THIS INFORMATION. WE WILL FORWARD
r.:RITERIA." We have no record of receiving anything further from the County
Ir KPHA.
,everly Burdette
rice President, Operations
Acordia National
!.1:'elephone: (304) 353-8781
'ax: (304) 353-8759
8/28/2003
Exhibit C
Sample Letter from Fisherman's Hospital
~~1lb7.: ~~GEciH~e.Pliri.W1.
C~IIn-'15&537.. -.. - 'P~ JBQf-5
- 305 ~~0361'
-ro'
.P.02
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June 19, 2002
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Loi$ Wellrl
Acordilllnsuranee
VIA FAX: (304)353-8773
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RE:~
Dear Lois:
The KPHA contrl&C't allows for a twenty-five percent (2S%giscount from the total cba"lel on Our claims.
The contract states that the discount "will be rescinded ifaOppropriate)y documented &Dei noa-c:ootested
claim is 1101 paid ro the Participating Provider with.in thirty.Q'O) days of being received by lhe claims .
administrator".
The above referenced claim was electronically transnU'ted m- N.E1C to.you on 413102. Pamal pll}'rncnt OD
this claim was received on 5/21/02. We appealed the discodfJt taken on tbat claim. The remainder of this
payment was not received until tS/18/02 - seventy-seven <7.4r days after claim receipt. 1111. discount ~not
valid either. ..::
Please reprocess rhe ineligible discount taken of$8,642.25:.
-
You can Teach me at (305) 289-6425 .should you have any lDlesriOI1l. Thank you for your time.
~'D II: ~A)~ c,;f &~C.A.~ ':.__
G L.~cnla~'~ ..'
M ged cire Coordinator .
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330J OVtmDS Hwy.
Marathon, FL 33050
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(305) 743.5533
Fox (305) 743.3962
www.fishermenshospilaf.com
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Exhibit D
E-mail from KPHA
Jan-28-04 11:24 Monroe County hrd
305 295 4320
P.02
Barker-Sheila
Page 1 of
From: loweWatler, Meylen [MeYlan.LoweWatler@Ikmc.hma_corp.comJ
Sent: Monday, January 12,20044:21 PM
To: Barker-Sheil a@MonroeCounty_FL. Go,,; Fernandez-Marla@Monroecounty_f=l.Gov
Subject: Clean ClaIm. NotificatIon of Claim Status, and Disputed Claims La nguage
Sheila:
I.." pmviding Some language Ihat may be helpful in decreasing lhe confusion in claim. Proccssing with <cspect to
the application of the discounts as follows:
Clean .Claim
^ "Clean Claim" means a Claim SUbmitled by the Provider/Hospilaf that has been properly and accurately completed
on the appropriate paper or electronic claim form, HCF A 1500 and/or VB nlogether with any infonna'ion thai was
req uested in writing by Acord ia N ati onal within I 5 days 0 r A cordi. National's receipt of a claim.
N()tificatio~ ofCfaim Status
PayorlPlan shan nOlify ProviderlHospital within IS day. of receipt ofa claim that said claim is not considered
"Clean" and reason. therefore. Failure 10 do so shan deem the claim being considered "Clean" and set for timely
payment.
Disputed CI.alm$
r f the PayorlPlnn docs nOI obj eet in writing to a claim within I 5 days of receipt by Ihe PayorlPlan, the claim will be
..-Considered clean and enmplete. Ifthe PayorlPla" disputes any portion of the billing for Services rendered,
payorlPlan will promplly seek 10 resolve the dispute and relam the claim to the ....gular processing StatUR. Should Lbe
claim remain in dispule for more than 30 daya, PayorlPlan will pay the PtoviderlHospitaJ 90% of the fees as oUtlined
in the "Provider Agreemeot Amendment! Reimbursemenl Addendum" within 7 days with paymenl far the
"."emai ning I 0% sub j eetto Ihe outcome of the dispute. Those items requiring further resolution prior 10 the remain jng
,'ayment shan be reconciled by the Payor/Plan and the ProviderlHospilal and the appropriate payments or
adjustments made within 60 days.
'lease let me know in can add Ihi. language to our KPHAlMC Contract and r win aloo need to add the language as
an addendom to the individual provider conlfllcts. As Soon as you let me know ( ean get the addendums which
'~-'1cJude the amended reimbursement amounts out to the providers.
Meylan Lowe-WaVer
'-;slstant Administrator
)wer Keys MediCal Center
5900 College Road
Key West. FlOrida 33040
:5-294-5531, extension 3382
The information contained in this e"mail is eonlidenlial WId/or privileged. This e-mail is intended to be reviewed by
:--Iy the individual(.) oamed above, or the employcc or agent responsible 10 deliver it 10 tbe individual(s) named
' ove. If you are nol the intended recipicuI, you arc hereby notwed that any dis""minalian, distribution or copying
,flhis infonualion is striclly prohibited. If you have recc;ved thio ,,"mail in error, please notify me immediale/y and
f~troy the cm"il. 'nlanks,
~,.,/04
Exhibit E
Letter to Acordia
August 5, 2003
O~~~~O~!:~E
r~'''---
!
U!.&. . j) Of COUNTY COMMISSIONI!R~
Mayor Dixie M. Spehar, DlstJ1ct 1
Mayor Pro Tern Murray E. Nelson, DiStrict 5
George Neugent District 2
Charles "Sonny- McCoy, District 3
David P. Rice, District 4
County Administrator
1100 Simonton Street
Key West. FL 33040
August 5, 2003
Richard H. Le99
Managing Senior VIce Presldent & Chief Operating OffIcer
Acordia National
602 Virginia Street. East
P. O. Box 3043
Charleston, WV 25331.3013
Dear Mr. Legg:
It has been several months since we met on the Issue of dalms being processed Incorrectly as to usual and customary and With out-or-date
Medlcode rates. It was detennlned very early In the audit that the elTOl'S began OCCUrring In late 2000. To estimate the extent of the error,
daims have been rerun by your staff using the correct code and applying the usual ancJ C1Jstomary guidelines. Based on the lnformallon of this
rerun, there has been an overpayment of $156.534.03. This overpayment Is broken clown in to the fonowlng;
examiner Error
Employee Portion
90lh Pen::entile Medlcode
not updated
Employee Portlon
Total
$82,362.+1
14,686.26
52,Sn.70
6.607.~~
$156,534.03
These daims should be reprocessed immediately. Please advise when this has occurred.
Another Issue that has been brought to our attention Is Our direction to you of June 18, 2001(copy attached). On Proposal 14, we directed you to
process dalms under Medicare guidelines regarding unbundling of costs. It Is our understanding the you are not using these guidelines, but
another guide for unbundling costs. Could you please darlfy what you are uslng and how It differs from Medicare. .
Attached you will find a copy of the audit produced by the Oerlc of the Court. Some ,areas of the audit are stlll being revIewed by the Internal
auditor and a report will have to be made to the board on the process of COITectlng errors discovered In the audll
Your prompt reply to this letter will be appreciated.
~() .
James~~
County Administrator
CC Danny Kolhage, Oerk of the Court
G'd
irir9ir-G6Z-S0E
U~WPH oJ 5.~eqo~ 1 sewe~
e;:on:~n "n T~ 9...."
VII. Auditee
Responses
O,~~,rY d":~~~!!.~E
(305) 294-4641
County Administrator
1100 Simonton
Key West, FL 33040
BOARD OF COUNTY COMMISSIONERS
Mayor Murray E. Nelson, District 5
Mayor Pro Tern David Rice, District 4
Dixie Spehar, District I
George Neugent, District 2
Charles "Sonny" :vtcCoy, District 3
MEMORANDUM
Date:
Tuesday, April 13, 2004
To:
Danny Kolhage
Clerk of the Court
From:
James L. Roberts ./?r
County Administrato// <-
Supplement Audit Report of Monroe County Health Benefit Program
Subject:
..................................................................................
The Administrator has reviewed the comments by the Internal Audit Department regarding the
Monroe County Health Benefit Program. The following are our comments in reference to the
report:
A. Network Providers Paid Incorrectly
The auditors reviewed Referral Analysis reports, Single Provider Payment Listings and
Acordia's schedule of overpayments from the May 27, 2003 audit and found additional claim
processing errors. The breakdown of the claims in the supplemental audit are as follows:
Dimension Providers (938 Claims)
KPHA Providers (223 Claims)
Dentists (2,144
Claims )
$83,997.72
$3,774.68
$22,685.90
Total
$110,458.30
1. Dimension provider claims paid as referrals
Findine::
Numerous Dimension provider claims were paid as referrals, but the providers are actually
participants in the Dimension Network. This was determined by review of the Referral Analysis
Report. Providers paid as referrals were paid at the in network rate of 80% or 100%. A
laboratory that joined the Dimension Network on January 1, 1999 had claims paid as referrals
and the claims should have been paid based on the Dimension Fee Schedule. For example, one
procedure code (82784) had a charge of$359.42 and Acordia paid $288.00. The Dimension Fee
Schedule amount was $27.60. Therefore, Acordia should have only paid $22.08 (80% of
$27.60). The overpayment for Monroe County's 80% portion on this one CPT code was
$208.32. A claim should only be processed as a referral if it is not a network provider
Acordia's management produced computer reports to detetmine the extent of the overpayment
For the period January 1, 1999 through August 18, 2003, five Dimension providers were
overpaid a total of $83,997.72. Acordia is in the process of recouping the overpayments.
Acordia has received payment from one Dimension provider in the amount of$7,058.19.
Recommendation( s):
1. Group Insurance Management should establish a program of audits and inquiries on a
periodic basis to ensure that the plan is functioning as intended.
2. Group Insurance Management should monitor the collection process of the overpayment due
the County.
County Administrator's ResDonse:
1. Management believes claims should always be processed as network provider and if
no network shows up, the system should check for referral before decision to assess
penalty. The referrals are generally lab tests and the quantity of them should not
be prohibitive for checking. The processing of lab tests on a referral basis was
implemented because management believed it was unfair to the participants to have
them responsible for rmding a network lab. Group Insurance Management is
reviewing the Referral Analysis Report to prevent this from occurring again.
2. Group Insurance Management is aware that the collection process is taking a
significant amount of time. Providers are very upset that we can go back for a
longer period of time than they have been allowed to bill claims. They believe the
process has been unfair to them. KPHA has received numerous complaints; and as
of March 1, 2004, we have had eight providers opt out of the network.
3. As identified above by the auditors, Acordia is already in the process of recouping
the overpayments. Management will be sure that this continues. In the future,
management will establish a periodic review of claims by the County's insurance
consultant for the purpose of identifying and resolving problems.
2. KPHA provider claims paid as referrals
Findine::
Numerous KPHA provider claims were paid as referrals, but the providers are actually
participants in the KPHA Network. This was determined by review of the Referral Analysis
Report. Providers paid as referrals were paid at the in network rate of 80% or 100%. A claim
should only be processed as a referral if it is not a network provider. Acordia's management
produced computer reports to detennine the extent of the overpayment.
For the period January 1, 1999 through August 18,2003, the KPHA providers were overpaid
a total of $3,774.68.
2
Recommendation( s):
1. Group Insurance Management should establish a program of audits and inquiries on a
periodic basis to ensure that the plan is functioning as intended.
2. Group Insurance Management should monitor the collection process of the overpayment due
the County.
Countv Administrator's ResDonse:
1. Management believes claims should always be processed as network provider and if
no network shows up, the system should check for referral before decision to assess
penalty. The referrals are general lab tests and the quantity of them should not be
prohibitive for checking. The processing of lab tests on a referral basis was
implemented because management believed it was unfair to the participants to have
them responsible for rmding a network lab. Group Insurance Management is
reviewing the Referral Analysis Report to prevent this from occurring again.
2. Group Insurance Management is aware that the collection process is taking a
significant amount of time. Providers are very upset that we can go back for a
longer period of time than they have been allowed to bill claims. They believe the
process has been unfair to them. KPHA has received numerous complaints; and as
of March 1, 2004, eight providers have left the network.
3. This is a similar situation to the previous finding. Management will be sure that this
continues. In the future, management will establish a periodic review of claims by
the County's insurance consultant for the purpose of identifying and resolving
problems.
4.
3. KPHA dental providers added to Acordia's system incorrectly
Findine::
Five dental providers in KPHA were added to Acordia's system incorrectly or not properly
updated. Acordia provided the auditors a report correctly calculating the discounts and an
overpayment of $22,685.90 was made to the providers. Acordia corrected the discounts and
notified the providers of the overpayments and $5,715.18 has been received.
Incorrect payments would have continued indefinitely since the set-up did not contain
accurate information. Acordia should furnish KPHA a provider listing with tax identification
numbers and discount percentages allowed to review and correct on a periodic basis.
Recommendation(s):
1. Group Insurance Management should monitor the collection process of the overpayment due
the County.
3
2. Group Insurance Management should establish guidelines to ensure Acordia's listing of
network providers is accurate.
Countv Administrator's ResDonse:
1. Group Insurance Management will continue the collection process.
2. Effective January 1, 2004, Monroe County has ceased being a self-insured provider
of Dental services. Employees are paying for their own insurance through
American General.
3. Group Insurance Management will utilize the services of the insurance consultant
for the purpose of monitoring Acordia's listing of all KPHA Network Providers to
be sure that it is accurate.
B. Payment Method Employed for Surgical Procedures
Findin1!:
Group Insurance stated that payment for surgical procedures should be calculated according
to Medicare's Multiple Surgery Guidelines and was under the assumption that Acordia was using
this method. This assumption was based on a letter sent to Acordia from Group Insurance
requesting Medicare guidelines be used for unbundling. See Exhibit A - Letter to Acordia, June
] 8, 2001.
Acordia states unbundling of charges and multiple surgeries guidelines are two different
issues. See Exhibit B - E-mail from Acordia, August 26, 2003. Their system, Code Review,
already bundles and unbundles procedure codes including surgeries. The multiple surgery
guidelines are applied after the procedure codes have been bundled or unbundled. The following
claim is an example of unbundling:
CPT Code 43750 and 43246 were combined into one code 43246. There was also
another procedure code 36533 for $1,200. Acordia stated, our Nurses have indicated that
this procedure was not performed through the same incision as the primary procedure,
therefore, we did not reduce to 50% of the Medicode Fee. However, based on
Medicare's Multiple Surgery, which differs from ours, this would have been reduced to
50% regardless and should have been limited to 50% of$1,200 or $600.
The auditors requested Acordia to reprice all surgery claims from October 1, 2001 through
June 30, 2003 and Acordia informed the auditors this was unrealistic and not feasible. See
Exhibit B - E-mail from Acordia, August 26, 2003. The auditors were unable to determine the
extent of overpayment resulting from the miscommunication between Acordia, KPHA and
Group Insurance Management.
Acordia is able to amend the plan with written instructions based on the e-mail of August 26,
2003 from Acordia. See Exhibit B -E-mail from Acordia, August 26, 2003. There has been no
correspondence between the County and Acordia clarifying the guidelines to be implemented.
4
Recommendation(s):
1. Group Insurance Management should discuss the consequences of using Medicare's Multiple
Surgery Guidelines with KPHA.
2. Group Insurance Management should also consider including an acknowledgment form
to be signed by Acordia Management that states the change has been made and the date it was
implemented.
Countv Administrator's ResDonse:
1. Group Insurance Management has discussed both Multiple Surgery Guidelines and
Unbundling with KPHA. We are satisfied with the procedure being used by Acordia on
unbundling. After much discussion and research, we have agreed to the following
Multiple Surgical Procedures that will be included in the next plan revision:
Surgery includes the medically necessary preoperative and post operative care, when
performed by a Physician. If two (2) or more operations or procedures are performed on
the same day, on the same patient, by the same Physician, benefits are described in the
Schedule of Benefits and subject to the usual, customary, and reasonable charges (or
network fee schedule) for the first procedure, and 50% of usual, customary, and reasonable
charges (or network fee schedule) for any additional procedures performed.
2. Group Insurance Management will develop an acknowledgement form to be signed
by Acordia stating the appropriate changes have been made and the date of the
implementation.
C. Discounts Rescinded by Providers
Findinl!::
The auditors reviewed Single Provider Payment Listing reports for the network hospitals and
requested a sample of claims that did not have the appropriate discount applied. The review
identified Fisherman's Hospital rescinding discounts on claims that were not paid within 30 days
by Acordia. Acordia informed the auditors if additional information is requested the 30 days
begins after receipt of all documentation necessary to analyze the claim and process
appropriately. Acordia paid the original billed charges less the provider discount and if the claim
was paid past the 30 day period the hospital would request the discount be paid. See Exhibit C _
Sample Letter from Fisherman's Hospital. The sample of6 claims revealed a total of$33,716.48
paid to Fisherman's Hospital based on discounts rescinded.
The KPHA contract provides the following definition for provider compensation:
ParticiDatinl!: Provider ComDensation: All claims for covered services, whether payable
by the Employer or a Covered Person will receive a discount off of provider billed charges as
specified in Attachment A. This discount will be rescinded if an appropriately documented and
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non-contested claim is not paid to the Participating Provider within thirty (30) days of being
received by the claims administrator (Acordia National).
Group Insurance Management is working with KPHA to revise the contract language to
define clean claims and disputed claims. See Exhibit D - Email from KPHA.
Recommendation( s):
1. Group Insurance Management should ensure that Acordia calculates prompt pay
discounts according to the teffilS of the KPHA Proposal and Agreement.
2. Group Insurance Management should review Refund and Reversal reports provided
by Acardia to monitor provider discounts that have been refunded.
Countv Administrator's ResDonse:
1. The language in the KPHA contract was confusing as to what constituted a 'non-
contested claim'. In the new contract with KPHA, effective March 1, 2004, we
have defined a "Clean Claim, "Notification of Claim Status" and "Disputed
Claims". This should prevent the discrepancy caused with the handling of
discounts such as those documented with Fisherman Hospital.
2. Group Insurance Management agrees with the recommendation to monitor the
Refund and Reversal Report.
3. Group Insurance Management will officially inform KPHA that the practice
identified for Fisherman's Hosptial is not within the scope of the Contract
between the County and KPHA. KPHA will be asked to inform Fisherman's
Hospital that practice must be discontinued.
D. Overpayments Identified in May 2003 Health Benefit Program Audit
1. KPHA provider claims paid as referrals
Findin!!:
The initial audit dated May 27,2003 identified physician claims for the KPHA network using
an outdated Medicode Fee Schedule for the usual and customary comparison, which resulted in
multiple claims being overpaid. The County requested the claims be reprocessed on August 5,
2003. See Exhibit E - Letter to Acordia, August 5, 2003. The total County adjustments
calculated by Acordia resulted in an overpayment amount of $134,729.77. The providers have
been notified and repayment of $36,666.22 has been received. As of February 12, 2004, the
outstanding balance is $98,063.55.
Recommendation( s):
1. Group Insurance Management should monitor the collection process of the
overpayment due the County.
2. Group Insurance Management needs to ensure procedures are in place to verify the
Medicode Fee Schedule is updated annually.
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County Administrator's ResDonse:
1. Group Insurance Management is aware that the collection process is taking a
significant amount of time. Providers are very upset that we can go back for a
longer period of time (15 months) than they have been allowed to bill claims.
They believe the process has been unfair to them. KPHA has received
numerous complaints; and as of March 1, 2004, eight providers have left the
network. As of March 31, 2004 we have increased the repayment amount of
$36,666.22 to $70,379.81:
2. We were the only client of Acordia that was using Medicode. It created a very
cumbersome system for processing and updating. Effective March 1, 2004, our
contract with KPHA has started using P.H.C.S. (formerly ffiAA) Fee Schedule.
All other Acordia Clients use P.H.C.S. This should make the processing and
updating easier and more efficient. Acordia will update their system and it will
be effective for all their providers. KPHA providers have agreed to this new
system in their contract with KPHA.
3. Group Insurance Management will semi-annually confirm that the P.H.C.S. Fee
Schedule is being utilized appropriately.
2. Incorrect discounts for durable medical equipment
Findine::
The initial audit dated May 27, 2003 identified claims with incorrect discounts totalling
$47,529.39. Included in the amount was $10,424.01 for durable medical equipment claims that
did not have the standard KPHA discount of 15%. During the supplemental audit it was
discovered the rates for medical equipment are negotiated by KPHA Case Management. The
standard discount of 15% does not apply to durable medical equipment claims, but a case
management fee is billed to the County. Subsequently, the auditors determined the overpayment
identified as "incorrect discounts for durable medical equipment" should not have been included
as an overpayment in the initial audit.
Group Insurance Management and KPHA agree the discount should not be applied to durable
medical equipment. However, the contract does not indicate durable medical equipment is
processed differently from other KPHA claims.
Recommendation( s):
1. Group Insurance Management should document and include all processing conditions in the
contract.
County Administrator's ResDonse:
1. Group Insurance Management will document the processing for Durable Medical
Equipment in the next plan document. As much as Group Insurance Management
would like to be able to document all processing in our plan document, we continue
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to find unique medical situations that have to be handled administratively based on
what serves the patient as well as what keeps the cost as low as possible for the plan.
2. 90th Percentile Medicode overpayment
Findine::
The initial audit dated May 27, 2003 identified claims being processed with the 1997 90th
Percentile Medicode. Acordia ran preliminary reports identifying $52,877.70 as the
overpayment due to the outdated Medicode. Included in the amount was $25,357.03 which was
for one physician administrating prescription drugs. It had been determined by the County and
KPHA that the service the physician provided would not be subject to the medicode comparison.
However, the physician had discrepancies in his billing procedures and gave the appearance of
an overpayment in the initial audit. For example, one claim was billed for 40 units at $30.09
with a total charge of $904.00 and a total of $858.80 was paid. The payment was correct even
after being compared to the 90th Percentile of Medicode. The next claim billed 1 unit at $30.09
with a total charge of $904.00 and a total of $858.80 was paid, but the spreadsheet calculation
gave the appearance of the claim being overpaid $830.21. The preliminary overpayment
calculated by Acordia was prepared in a formula based spreadsheet and did not take into account
examiner overrides. The physician will not be billed the calculated overpayment of $25,357.03
by Acordia.
Recommendation( s):
1. Group Insurance Management should review all documentation provided by Acordia to
ensure calculations and procedures are accurate.
County Administrator's ResDonse:
1. Group Insurance Management along with KPHA and Acordia are monitoring
processing to maintain the accuracy of the system. Medicode will no longer be our basis; as
of March 1, 2004, we will be using P.H.C.S. (formerly IDAA).
E. Network Providers Billing with Multiple Tax Identification Numbers.
Findine::
Numerous providers are billing with more than one federal tax identification number. The
claims were paid as out of network claims (70% coinsurance percentage and no discount)
because the tax identification number did not match the one provided to Acordia by KPHA or
Dimension. According to Acordia Management, this is a common issue for all networks.
Providers don't always notify the networks when their tax identification numbers change and it
ultimately results in claims being paid out of network. A provider can only be matched to a
specific network if they bill their claims with the tax identification number provided to Acordia
by the network. KPHA plans to provide both social security numbers and tax identification
numbers to Acordia to update their claim system for all KPHA providers.
The auditors also discovered many network providers have multiple suffixes added to their
tax identification number. This can be a result of a change of address, data entry error or
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multiple locations and the provider may not be updated to the appropriate network. In addition,
providers may be Group-Based and also provide services on an individual basis, therefore
creating new suffixes and the potential of inaccurate processing.
Recommendation( s):
1. Group Insurance Management should establish a program of audits and inquiries on a
periodic basis to ensure that the plan is functioning as intended.
2. Group Insurance Management should establish guidelines to ensure Acordia's listing of
network providers is accurate.
3. Group Insurance Management should check the referral report on a monthly basis.
County Administrator's Response:
1. Group Insurance Management is aware that some providers bill under more than
one federal tax identification number. This is done for a variety of reasons including their
affiliation with other providers and location for providing the service. Some physicians
are affiliated with a network in one location and not while practicing in another. When
the provider supplies different federal tax identification numbers for these reasons, they
can actually not be part of a network. Participants who believe they used a network
doctor and were penalized for using a non-network provider should contact Acordia or the
Group Insurance Office for assistance. Networks change on a frequent basis and it is the
responsibility of the participant to verify network status before seeking treatment.
2. Group Insurance Management will establish guidelines to insure Acordia's listing of
network providers is accurate and will utilize the services of the County's insurance
consultant on a periodic basis to check the system.
F. Group Insurance Management Should Perform Regular Audits of Acordia Claims
and Reports
Findine:
Group Insurance Management has been provided the ability to access Acardia's Host On
Demand online claim system to allow audit and inquiries of claims. Numerous monthly reports
from Acordia were provided to the auditors. The auditors reviewed the reports and found they
had substantial benefits in identifying potential claim miscalculations. The following reports can
provide Group Insurance Management information to monitor claims processed by Acordia:
1. Referral Report By Authorizing Provider - Monthly analysis of the report can quickly
discover network providers paid as referrals and claims can be adjusted to properly reflect
provider discounts.
2. Refund and Reversal Analysis - Monthly analysis of the report may help identify discounts
rescinded and refunded to the provider. Timely review could provide the County the ability to
document and correct discounts rescinded.
3. Single Payment Provider Listings - Monthly review may identify billed charges paid with an
incorrect discount and can also provide claims to be selected for audit and inquiries.
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4. Monroe County Employer Liaison Committee Agenda's - KPHA informs Group Insurance
Management of provider additions and deletions. The changes need to be verified with Acordia
to determine updates were completed accurately.
Recommendation( s):
1. Group Insurance Management should establish a program of audits and inquiries on a
periodic basis to ensure that the plan is functioning as intended.
2. Group Insurance Management should establish guidelines to ensure Acordia's listing of
network providers is accurate.
County Administrator's Response:
1. The above fmdings basically reflect a finding found throughout the audit.
Management will be sure to develop ongoing monitoring and auditing ability so that
these issues can be appropriately controlled.
2. Group Insurance Management is working with the consultant to establish a suitable
method of audits and inquiries.
3. Group Insurance Management is concerned about proper listing of providers in the
appropriate networks. However, the participant is the best source for insuring the
proper accounting for network providers. The penalty for using an out-of-network
provider is greater than many of our discounts. When an employee seeks medical
treatment they should confIrm that they are using a network provider. When
precertifications are done, KPHA informs the participant when they have selected an
out-of-network provider and will offer in-network alternatives to the participant.
Group Insurance Management will continue to work on the accuracy of the network
providers with Acordia.
G. Group Insurance Management Should Provide Employee Education Regarding
Health Care Claims
Findine:
Monroe County has established an employee benefit plan for the purpose of providing
medical, prescription, dental, vision, utilization review and Cobra benefits for its employees.
Increasing health care cost has forced the County to implement changes that will financially
impact the employees, dependents and retirees with the intent of decreasing the cost of health
care for the County. As of January I, 2004, the benefit plan was modified and resulted in an
increased cost of dependent coverage, increased coinsurance payments, increased prescription
copayments and provided the employee the option of paying a premium for elective dental and
vIsIon coverage.
Employee participation is an integral part of controlling health care cost. With proper
information and education employees will have the ability to assist in reducing the overall cost of
benefits.
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The direct impact of increasing health care cost and decreasing employee benefits has
provided employees an increasing awareness in monitoring their own claims. For example, an
employee brought to the attention of the auditors they had received a check from Acordia for
services that had not been rendered. The provider was requesting preauthorization, but
submitted the request on a claim form and a check was issued to the employee. The check was
subsequently returned. In another instance, the employee had surgery and scrutinized the billing
upon receipt. The employee discovered a charge of an additional hour of surgery time that was
not performed. The employee has pursued the issue and the billing is being adjusted.
Recommendation(s):
1. Group Insurance Management should establish a regular program to educate employees on
health care benefits and provide the information necessary to scrutinize claims to protect the
employee and the County from overpayments.
County Administrator's Response:
1. Group Insurance Training is done at all New Employee Orientation with BOCC
employees. All items that could cause discussion of the Group Health Insurance
Program at a BOCC meeting are noticed to all active and retired participants in the
insurance program. Changes to the Plan as adopted by the BOCC are noticed to
all active and retired participants. In January 2002, Workers' Comp and Group
began a county-wide program of training on those two programs. They were done
in Plantation Key, Marathon, & Key West in January, February, March, April,
June, and September, 2002 and January 2003. These training sessions were
conducted with the various constitutional officers. Our Resource Link (newsletter
for Board employees) notified employees that changes were to be voted on at the
September 17' 2003 meeting of the BOCC and advising them that if they had not
received the memo (that went to all employees and retirees) of the proposed
changes, to contact the Group Insurance Office for a copy. Open enrollment was
held in November outlining all changes to the program. American General did
presentations on November 20.2003 in Key Largo and Marathon and on November
21, 2003 in Key West on the Dental and Vision Programs. Group Insurance
Management works diligently to keep all employees informed of the program
requirements. Group Insurance will establish a new set of orientation sessions for
employees throughout the Keys.
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