POC Glucose: More Hospitals Choose to Bill
January 2003 Anne Paxton
“We lose money on every test—but we make up for it in volume.”
For laboratory managers, that line used to be a joke. But it’s oddly close
to the truth when it comes to billing for point-of-care glucose tests.
The majority of hospitals indeed lose money on their point-of-care testing programs
because they still don’t bill insurers for those tests, says POC testing
consultant Christopher Fetters. That’s largely because, for inpatients,
Medicare won’t cover them separately from the diagnosis-related group,
or DRG, payment.
Yet with the huge volume of glucose testing conducted at most medical centers,
even a small amount of income on a portion of the tests would add up to significant
revenue. “There has to be a sea change to help laboratory managers, nursing
administrators, and finance people understand what kind of volumes are at stake
here,” says Fetters, who is president of Nextivity in York, Pa.
POC glucose testing is unique, says consultant Joan Logue, president of Health
Systems Concepts/Clinical Laboratory Concepts Inc., Longwood, Fla. “I
know of no other specific ancillary service that is included with the cost of
the room rate.”
Why don’t most hospitals take advantage of the opportunity to bill separately?
It’s partly a case of the Medicare tail wagging the hospital dog.
“The Medicare rule is, you don’t get to bill different payers different
amounts or use different billing methods,”Fetters says. “Every charge
has to be the same regardless of the payer or status of the patient. The only
exception is between inpatients and outpatients—and some people even challenge
that. But certainly for the inpatients, you must charge all payers the same.”
As a result, Medicare’s nonpayment policy leads directly to the nonbilling
of the whole payer mix—even those that would pay.
Concerns about compliance in recent years have unfortunately
overshadowed the need to bill appropriately, Fetters believes. “Billing
is where people are falling short. They’re worried about meeting
regulatory requirements and end up saying, ‘We’ll decide
about billing later,’” he says. Lost opportunities to
bill are not unique to point-of-care testing. Fetters worked at
a health care system only a few years ago that was billing out large
numbers of Pap tests at around $14—but getting reimbursed
for only a fraction of them. “Our billing department would
not resubmit a bill for anything under $50 because it was not considered
worth the effort,” he recalls. “We were losing hundreds
of thousands of dollars because if the payer was rejecting it the
first time, they were getting away without paying.” This,
he adds, is the “plight of the modern-day, high-volume laboratory.”
Originally, nurses didn’t consider POC glucose tests laboratory
tests, and POC glucose more or less slipped under the laboratory’s
radar. “It wasn’t until CAP and the Joint Commission
really started inspecting hospitals under CLIA. Then the nurses
went to the laboratory, saying, ‘They’re telling us
this is a laboratory test,’” Fetters says.
People forget, however, that the whole patient population is not
Medicare and not covered by DRGs. “The national average is
probably 15 percent to 20 percent that is fee-for-service. Those
are people who will actually pay for virtually everything you invoice
them for. So even if you can only get a small amount of income,
multiply that by hundreds of thousands of glucose tests,”
Fetters points out.
Further, he argues, hospitals cheat themselves out of future DRG
increases by not billing for POC glucose testing. “If you’re
not billing Medicare, then you’re devaluing the DRG, because
Medicare doesn’t know what it actually costs to treat Medicare
patients in this country. If you just put it in the overhead, Medicare
never sees it, so our average DRG payment is not rising at the rate
that true costs are increasing.”
Every year there is a “settling up” process that hospitals
go through with Medicare, and either the hospital owes Medicare
or Medicare owes the hospital, says Diana Voorhees, principal of
DV & Associates Inc., Salt Lake City. “On the outpatient
side, these procedures may be billed with CPT codes and reimbursed
under the clinical laboratory fee schedule,” she says. “But
on the inpatient side, there are costs for supplies, personnel,
salaries, benefits, and they all go in the cost report. So the costs
are likely reported as part of the year-end settlement. You just
aren’t immediately reimbursed throughout the year, so it’s
not as transparent as outpatient billing.”
Room charge rate increases also cannot keep pace with the steep
rise in use of POC glucose, Fetters says. “When a nurse administrator
or finance person says we just include POC glucose in the room charge,
I believe they’re just doing some calculation based on the
hospital’s overhead—operating costs divided by patient
days. I don’t think they’re discretely adding in POC
glucose costs,” he says. “The problem is, the way they
increase room charges is usually commensurate with the inflation
rate, say, three percent per year. So if POC testing is growing
at 12 to 15 percent per year, five years from now you’re way
out of whack.”
“Unfortunately,” he adds, “the stumbling block
for implementing POC glucose billing is, if you don’t have
data management, you’re kind of stuck.”
Based on Fetters’ visits with hundreds of hospitals during
the year, he estimates that five to 10 percent are billing for glucose
already. “Another 25 percent are working very seriously on
it. They’re working with the finance and information technology
people on how to do this, and they’re waiting for data management
to come in so it’s easier.”
All of the larger hospitals have some kind of data management, and
the glucose POC vendors are good at making sure there is a computer
to capture their data. “Unfortunately,” Fetters says,
“it’s often a laptop you have to walk around with in
a lot of institutions, or a modem download to a PC not interfaced
with the laboratory information system.” He estimates that
this restrictive level of data management still exists in 4,500
to 5,000 of the nation’s 6,000 hospitals. “We need a
fully interfaced system you can download and pass on to the LIS.
It’s really hard to meet regulatory concerns if you’re
walking around once a month with a laptop and not getting the final
results to patients’ records. And it means you probably aren’t
going to be able to drop a bill.”
Smaller facilities like community hospitals are less likely to have
a connectivity interface. “I don’t think it’s
a top priority for a lot of facilities,” Voorhees says. “When
they’re faced with HIPAA [Health Insurance Portability and
Accountability Act] and general compliance and other state and national
regulations, tracking POC testing when it doesn’t mean any
more reimbursement on the inpatient side isn’t something they
want to do.”
Yet many hospital departments are disappointed in their productivity
statistics because they know they do more than the statistics show,
she says. “Most professionals, whether in the laboratory or
radiology or pharmacy or physical therapy, really aren’t familiar
with cost reporting. If they actually billed line-item services
using the Charge Master, then they would at least have accurate
data, and they probably could—if nothing else—track
productivity.” Budgetary assignments for departments are partly
based on productivity, she says. So if you need to hire more staff
and replace more instruments, this kind of line-item billing could
have the added benefit of helping you make your case to the hospital
management.
While the hospital’s finance staff is frequently cited as
the obstacle, the staff generally grasps the value of POC billing
quickly, Fetters says. “A POC coordinator can sit in presentations
and say ‘I have a history as a laboratorian and I hear what
you’re saying, but I still don’t have the authority
in the hospital.’ So I encourage them to bring along the finance
people, and 80 to 90 percent of the time the finance people see
the point. The trouble is convincing them it’s a laboratory
test—and letting them know the volume of testing actually
being done.”
It’s worth the trouble, however, says Voorhees. She suggests
there’s a serious management problem because of not billing
for POC glucose. “Because POC glucose is still not routinely
billed on the inpatient side in the hospital, I don’t think
a lot of hospitals even know how many are performed,” she
says. At a recent seminar she conducted, a manager said that the
laboratory had just spent many hours trying to get a handle on how
many inpatient glucose tests were being done. “I asked, if
you track on your Charge Master by billing line items, could you
not have on your revenue and usage report that distinction between
inpatient and outpatient and how many times per year they are performed,
and would that not save a lot of time and effort?” she says.
The prevailing argument, of course, is that routine POC glucoses
are a nursing department expense. But Voorhees says in many hospitals
the laboratory carries most responsibility for the entire procedure.
“That means in some facilities it actually purchases the test
strips and supplies, then sends them to the floors where the service
is provided,” she says. “So while the nurses actually
do the fingerstick and test, it’s the laboratory that does
the training, provides the supplies, and conducts all the quality
control and followup related to quality assessment.”
Nevertheless, billing for inpatient POC glucose is not completely
clear sailing, warns Logue. Although she supports billing, she understands
why many hospitals hesitate: Medicare’s program memorandum
requiring each test to have documented medical necessity. “Do
they have the ability to fulfill the requirements of the program
memorandum to have a specific glucose order for each test and to
validate that those results are reported to the physician?”
Logue asks. “The reality is, I think, with the limitations
on nursing staff in today’s world, nurses just do not have
the time to fulfill those requirements. So with something as frequent
as POC glucose testing, it’s just easier to spread the cost
across all patients.”
“It appears when you look at Medicare’s cost report
instructions that it’s not appropriate to include POC glucose
in the cost of the room,” she adds. “But if a diabetic
comes in and we do a POC glucose, say, every four hours, or every
six hours, it’s cheaper for us to spread that cost across
all the patients than to try to chase down the physician each time
to order the test. The medical necessity issue is what makes it
not worthwhile. ‘Specifically ordered’ means specifically
by the physician—not just as part of a nursing protocol.”
Fetters questions this rationale. “I don’t think it’s
easier to spread the costs,” he says. “If a physician
calls in with a verbal order, then you’d better be getting
them to sign that order when they come in and see the patient next
time, and your hospital should have policies to back that up. I
think it’s a shame if we say nurses are too busy to do what
they’re required to do.”
He maintains the physician-order argument is a red herring. “You’re
not allowed to do laboratory tests in this country in a JCAHO-approved
institution without a physician order. So it’s not a billing
issue. It’s a compliance issue for any institution that’s
accredited,” he says.
The hospital has to be careful of sliding scales and standing orders,
to make sure orders are reviewed every three days, and to rescind
and rewrite orders when appropriate. “That keeps you in compliance
with both the Joint Commission and Medicare,” Fetters notes.
“Anybody who says they’re not doing POC billing because
of Medicare medical necessity requirements is also saying they’re
not going to meet JCAHO standards.”
The billing regimen at Rush Presbyterian-St. Luke’s Medical Center
in Chicago started changing about six months ago when Abbott Diagnostics’
Medisense product, Precision PCx, was installed, and billing for POC testing
has become part of the routine. “Before this system, as at most hospitals,
if the patient needed a glucose, it was done and written on a flow sheet,”
says the director of laboratories, Robert DeCresce, MD, MBA. “Now we order
it, document that it was done, document who did it and the result, and with
that system in place those are the ones we are billing for. We’re treating
POC glucose like any other laboratory test.” At this point, everyone is
using the new glucose meters and about a third are using the entire system,
he says.
The potential revenue is significant. “We did a quarter of a million glucoses
last year, so that was a quarter of a million tests no one paid anything for
built into the costs of the medical center,” Dr. DeCresce notes.
But Rush Presbyterian’s approach was not to view the system as a money-making
scheme. “The medical center is going to make money, but we believe the
proper management of these tests requires an order, the identification of the
result, the time of day, and where it’s done, and it belongs in the medical
record. And because we document who and when, we have a charge for that as a
glucose. Now if the insurance company chooses not to pay, that’s okay.
I’m using it as documentation,” says Dr. DeCresce.
The patient records at Rush Presbyterian-St. Luke’s Medical Center may
not be any more electronic than those of most hospitals, but some areas at Rush,
such as the emergency room, are fully electronic. “In terms of laboratory
records, we want to be 100 percent electronic,” Dr. DeCresce says. Toward
that end, all nurses and patients are bar-coded, and those codes go into the
laboratory results.
Patients have worn the bar-coded wristbands, in fact, for 10 years, but the
bands haven’t been fully exploited. “We tried a variety of systems,
but the technology just was not there,” Dr. DeCresce says. “The
scanners were heavy and bulky. It’s only been in the last couple of years
that the equipment has really become miniaturized.”
Despite the inevitable difficulties of integration, the new system has bar codes
that the glucose system can read and medical records administrators can use.
“I don’t want to pretend we’re there,” he cautions.
“This is an incremental process. But from a laboratory standpoint, I’ve
always felt POC testing has had a lot of potential, but there have been a lot
of barriers to making it practical. I believe this system actually addresses
all of them.”
Using medical necessity as an excuse not to bill for POC glucose is a stretch,
Dr. DeCresce says. “Think of it another way. I don’t think Medicare
asks hospitals if every urine dipstick or blood glucose strip used is medically
necessary when they look at the cost report. You could argue that some insurance
companies are not going to pay for these because they consider them part of
the routine room-and-board charge. But that doesn’t change the need for
having some kind of computerized system to record results.”
Indeed, Rush Presbyterian’s laboratories are choosing to bill not to make
money but because it’s an appropriate way to treat patients. Says Dr.
DeCresce: “I think that’s far more important than charging someone
for the test. So my thrust on this is, it’s a medical issue and a management
issue. I’ve taken responsibility for these tests. I want to know who did
them, if the training was done, if the machine was working properly. If, later
down the road, someone asks why a decision was made, I can point to this.”
This documentation benefit alone makes the system worthwhile, he contends. “Whether
you collect a dime doesn’t really matter because you’re preventing
a lot of problems. If you collect money, great. But it’s more important
that you have the result in the chart. To say no, you won’t bill POC glucose
because it’s built into the room rate is fine—but you still have
poor documentation. I elected to do this whether or not a charge was going to
be assessed because the real issue is better patient care.”
Dr. DeCresce does not yet know how many of the POC glucose bills are being paid.
But Fetters suggests that hospitals like Rush Presbyterian stand to bring in
more revenue than they might expect. He says some areas of the country may have
a larger geriatric population and are more subject to Medicare, while others
have more private-pay patients. “Let’s say you have a really high
population of geriatric patients,” Fetters says. “Under the 2003
fee schedule, Medicare pays $3.27 per glucose. If you do 100,000 outpatient
glucoses that are Medicare, you’re getting $327,000 just from that, and
that doesn’t include the $15 per glucose from fee-for-service patients.”
Volume is the key, he emphasizes, not any one glucose test. “You’re
already sending out a bill to the patient’s payer, and you’re already
spending money on gloves and gauze and strips and the time to do the POC tests,”
Fetters explains. “With data management, the process becomes seamless,
and because you have a whole bunch of tests, you are talking hundreds of thousands
of dollars.
“The finance people don’t know you’re doing a quarter of a
million glucoses and they don’t see it as a huge revenue opportunity.
To them, it’s an inconsequential task done by some nurses on the floor.
But when you look at some little thing done 250,000 times, that’s when
they sit up and take notice,” he says.
More hospital laboratories should take advantage of that law of large numbers
by billing for POC glucose tests. Says Dr. DeCresce: “I don’t know
why people aren’t doing it. It’s a lot of work; it’s a hassle.
But once it’s going, it’s great.”
Anne Paxton is a writer in Seattle.
|
|
|