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Inspector general: Cook County hospitals lost roughly $165 million due to widespread errors

Tuesday, May 15, 2018
Chicago Tribune
by Gregory Pratt

The Cook County Health and Hospitals System lost an estimated $165 million or more in potential revenue over the past three years due to lax clerical procedures and employee errors, records and interviews show.

Cook County Inspector General Patrick Blanchard attributed the hospitals’ losses to widespread issues in the system’s bureaucracy — from mistakes during patient scheduling and registration to billing lapses. In a 10-page report, Blanchard said hisoffice interviewed hospital staffers who suggested there are “a significant number of registration clerks, coders, and billers who do not possess adequate self-motivation or the required skill sets and knowledge base” to do their jobs.

Cook County Commissioner Richard Boykin, D-Oak Park, called Blanchard’s report “shocking” and said it’s important for the taxpayer-funded hospitals to recover as much money as possible.

“The reason it’s not being captured is they don’t care,” Boykin said. “They do not care. They have this culture that ‘Everything is free, it’s OK ’cause we’re county.’ ”

The Health and Hospitals System, which receives a portion of its funding through county government, lost the money during a tumultuous financial period that included the cash-strapped county’s controversial pop tax, which was passed then repealed, and massive county employee layoffs due to financial woes. The system also receives state and federal funding.

Cook County hospital officials dispute the exact amount the system, which oversees Stroger Hospital and other county-run health care centers, has lost. Complicating the calculation is that, in the medical world, a dollar figure charged isn’t necessarily what gets reimbursed.

Both sides, however, agree: The hospital system lost out on many millions of dollars it otherwise could have collected.

While the hospitals said the loss is fairly estimated at between $79.5 million and $132.5 million, Blanchard said the mistakes cost the hospitals at least $165 million.

Part of the problem, both sides agree, is sweeping changes in the health insurance landscape. Before the Affordable Care Act, the hospitals took in “very few insured patients” and were largely paid on a fee-for-service basis by Medicaid, the hospitals said.

Caryn Stancik, the hospitals’ spokeswoman, said other hospitals always had “more robust billing infrastructures in place” because they saw commercially insured patients. But the county has been building its process “practically from the ground up,” she said.

Blanchard echoed the point in an interview, noting “it’s been difficult for the hospital to develop a culture where billing means something.”

Commissioner Sean Morrison, R-Palos Park, said Blanchard’s findings are troubling because they’re “100 percent preventable.” Morrison criticized the hospitals’ senior management, which he blamed for the problem.

“It shows a lack of concern and a lack of training from the time of entry into the hospital system all the way to the point of discharge,” Morrison said.

Two clicks

Many of the system’s problems, according to the report, start with scheduling patient appointments. Various hospital department heads and managers said “the failure to properly schedule patient appointments” was a “central operational inefficiency resulting in a significant number of claim denials,” according to Blanchard’s report.

Patients receive a unique “financial identification number” with each visit, numbers that are similar to unique invoices, one site manager for patient registration told the inspector general. If the patient doesn’t get a new number with each visit, the employee said, “the insurer will not pay the invoice.”

Clerks, however, routinely use outdated financial identification numbers when scheduling new appointments, the report said. One director, who is responsible for managing the center that receives calls for health appointments, said there is a screen during scheduling where the employee selects an old appointment or a new one.

“It makes a scheduler’s life easier to use an old encounter,” the director told the inspector general. “The scheduler has to click two more buttons to use a new encounter.”

A lack of accountability

In interviews with the inspector general, staff members said poor training and a lack of accountability contribute to the hospitals’ problem, the report said.

One manager said clerks aren’t putting information into the system accurately and some employees can’t identify the correct information. Employees must be trained repeatedly, the manager said, and they are not disciplined for mistakes.

There also aren’t enough trainers to meet the hospitals’ current demands, the report said.

Stancik, however, said the hospitals “train and retrain where we identify common mistakes.”

Referencing Blanchard’s report, Boykin said the staff members need better training, as these are things that “can be easily corrected.”

Morrison connected the reported lack of accountability to “the whole county system.”

“It’s up to senior management to create a culture of accountability,” Morrison said. “Right now, the evidence is that it doesn’t exist.”

Coding and physicians

Some failures stem from poor coding practices that lack the specificity required for insurance reimbursement. Doctors who treat a broken bone, for example, must identify the specific bone for the claim to be paid. Wrong or incomplete coding will always result in insurance denials, the report said.

Some medical professionals also have improperly scheduled patient appointments, and the hospitals have had “large revenue losses” due to doctors’ untimely completion of medical files, Blanchard said.

CEO John Jay Shannon sent Blanchard a letter that said the hospitals’ collection problems aren’t unique to Cook County. The hospitals also have added 15 positions to help, Shannon wrote. He also said he expects improvement this year, noting that the hospitals adopted a strategic plan that resulted in less of a loss in 2017 than 2016.

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