JCAHO 1999 Random Unannounced Surveys

The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) conducts random unannounced surveys at the midpoint of a hospital's accreditation cycle. The surprise visits occur at 5% of hospitals surveyed each year. Technically, surveyors can evaluate any standard during the visit, but they generally limit the one-day evaluation to published survey topics.

The JCAHO's Accreditation Committee of the Board of Commissioners approved the following grid elements for random unannounced topics in 1999:

• Medical staff--credentialing (particularly standards MS.5.5.1 and MS.5.5.2)
• Patient assessment--Medication use (one of the top problem areas in 1998)
• Management of the environment of care--design (one of the top problem areas in 1998)
• Improving organizational performance--aggregation and analysis
• Human resource planning

This final version is slightly different than the tentative list announced at the JCAHO's Executive Briefing seminar last August. At that time, the grid elements mirrored the 1998 list: design/Life Safety CodeĻ (EC.1), adequate staffing (HR.2), intensive assessment (PI.4), restraint use (TX.3 and TX.3.5), and competence (HR.5). The 1999 list doesn't reflect the Joint Commission's typical criteria for random unannounced grid elements. Historically, the JCAHO selects the most problematic areas from the previous year's surveys as random unannounced survey topics. Yet, only medication use and management of the environment of care-design were top problem areas in 1998, according to JCAHO survey data for the first six months of 1998.

Aetna Prudential Merger Touches Arkansas

Aetna Inc's recent purchase of the Prudential Insurance Company of America should have an impact on Arkansas' managed care market. With the $1 billion transaction, Aetna will insure 22.4 million Americans, about 9% of the U.S. population. In Arkansas, the company reports 63,700 individuals covered under its point-of-service and traditional insurance plans and preferred provider organization. About 51,000 of those are in Prudential's managed care programs.

Overall, Prudential was the state's second largest healthcare insurer, behind Arkansas Blue Cross and Blue Shield; although, Prudential HealthCare HMO is the smallest of the state's four active health maintenance organizations, having only 17,500 members. Nevertheless, an Aetna official termed acquisition of the HMO in Arkansas "very attractive," and said the newly enlarged company will likely expand in Arkansas and elsewhere.

Arkansas Medical Board Meetings

On September 11, officials of the Arkansas State Medical Board met with the Arkansas Hospital Association (AHA) Board of Directors to discuss several physician licensure issues concerning the state's hospitals. During the meeting, the board expressed its opinion that quarterly meetings of the Medical Board may be too infrequent to review licensure requests, particularly in cases where a physician is awaiting a license to be able to practice in an area where his services are needed immediately.

The AHA has been informed that the Medical Board has decided to meet bi-monthly rather than quarterly. Medical Board chairman Dr. Ray Jouett said the decision to increase the frequency of meetings was made in direct response to the AHA's concerns.

Cost Report Compliance Under Scrutiny

As a healthcare provider, do you view the annual Medicare and/or Medicaid cost report filing requirements as:

1. A paperwork burden?
2. An opportunity to learn about the costs of services compared to reimbursement?
3. An opportunity to receive a cash settlement if interim rates have been set too low?
4. A risk to repay amounts received when interim rates have been set too high?
5. An opportunity to be accused of committing Medicare fraud?

Increasingly, with more and more providers and services becoming subject to prospective payment and/or increasingly restrictive cost limits, #3 and #4 are becoming less relevant. Despite this, in the government's eyes, #5 may be a more common result of the cost report filing process if providers do not take appropriate steps to prepare accurate and complete cost reports.

Several recent examples point to the government's increasingly aggressive view of provider cost reporting issues. For example, the U.S. Justice Department recently joined a federal whistleblower lawsuit against Columbia/HCA and Quorum Health Group alleging fraud in the preparation of Medicare cost reports for more than 200 hospitals across the country. The government alleges the hospitals maintained "two sets of books" by filing an aggressively prepared cost report with Medicare while preparing a more conservative "reserve cost report" to record Medicare reimbursement on the financial statements.

As another example, in a July 1998 report, the Office of Inspector General (OIG) alleges the skilled nursing prospective payment rates established by HCFA are overstated. Among its reasons for the allegation are several billing and/or coverage issues but also the inclusion of improper or unreasonable costs on provider cost reports.

While the OIG doesn't recommend reopening the base-year cost reports used to establish the prospective payment rates, the recommendation is made to significantly reduce the rates. A specific example relates to occupational and speech therapy costs claimed in the base year that exceeded the recently finalized salary equivalency guidelines.

OIG Compliance Recommendations

There are a variety of other reports and/or investigations alleging problems with provider cost reports. In this environment, it is important providers consider cost report compliance issues. The OIG addressed cost report compliance in its compliance program guidance for hospitals, published in February 1998. While the guidance was directed at hospitals, most of the recommendations apply to other providers as well. The OIG's recommendations include:

• documentation should be available for all costs claimed, including exceptions to applicable cost limits;
• documentation should be available for all cost-finding statistics;
• unallowable costs should not be claimed for reimbursement;
• accounts containing allowable and unallowable costs should be analyzed to remove the unallowable costs;
• costs should be properly classified by cost center;
• prior year intermediary adjustments should be appropriately handled in the current year cost report and not claimed for reimbursement unless identified as protested amounts;
• all related parties should be appropriately identified, with costs adjusted to the related parties' costs, including home office allocations;
• procedures for claiming reimbursable bad debts should be in accordance with applicable regulations and other guidelines; and,
• procedures should be in place for notifying the Medicare and/or Medicaid program of errors discovered after submission of the cost report.

Good documentation and accurate reporting are more important than ever. Costs must be properly documented to prove they are allowable, properly classified based on the appropriate departments to which they belong, and properly allocated to the respective cost centers using their services.

Reprinted from Health Care News,
BKD Health Care Group of Baird, Kurtz & Dobson

New Arkansas HMO

HealthLink Inc., a St. Louis-based health maintenance organization owned by a unit of Alliance Blue Cross and Blue Shield of Missouri, is the newest player in Arkansas' managed care arena. The company began operating in the state late last year, and had obtained about 4,000 enrollees in 24 Arkansas counties for its preferred provider organization. HealthLink arranges coverage for about 1.3 million people in seven states, including Arkansas, but does not underwrite policies itself. Thus far, the new organization, called HealthLink of Arkansas, has inked contracts with 32 hospitals and 2,000 physicians. It joins Phoenix Healthcare Corp. of Tennessee as the newest arrivals in the state managed care market. American Health Care Providers Inc., one of the older managed care organizations doing business in the state, announced in November it will cease its Arkansas operations early next year because of competitive pressure.

Internet Hospital Report Card

A new hospital report card that claims to give consumers and payer organizations data on quality of care has caused the American Hospital Association to raise a warning flag about the usefulness of the information. The report card was posted on the Internet in late October and can be accessed at www.HealthCareReportCards.com. The free online service touts that it accurately and objectively grades the performance of virtually all U.S. hospitals that provide specialty services such as cardiology and cardiac surgery. Orthopedic and other specialty services are to be added soon to the list.

The American Hospital Association has cautioned members to be wary of the report card, which is based on hospitals' Medicare mortality data. The data can be misleading and easily misinterpreted, according to the AHA. The federal government stopped using mortality data several years ago as an indicator of quality for those reasons. AHA has urged the public not to rely solely on this data to select a hospital or physician, but to consult the many different publicly available data sources to help make those decisions.

The Web site is a product of Health Care Report Cards, a wholly-owned subsidiary of Specialty Care Network, Inc., a Lakewood, CO, physician practice management and healthcare consulting firm. The company is expected to profit from the data by selling sponsorships to hospitals it rates as high-quality providers. AHA urges its member hospitals to refrain from using these ratings in their public communications because of its incomplete and misleading nature.

Transplant Survival Rates Improve

The Robert Wood Johnson Foundation of Princeton, N.J. has awarded Arkansas Advocates for Children and Families a $643,417 grant to help enroll poor families in health insurance programs for their children. The foundation said it would distribute $47 million to child welfare advocacy groups in Arkansas and 19 other states under its "Covering Kids: A National Health Access Initiative for Low-Income, Uninsured Children" program. The money is to help state officials, physicians, and others find and enroll families who qualify for health insurance for their children through Medicaid or other programs.

In Arkansas, officials estimate that between 90,000 and 100,000 children are eligible for but are not benefiting from government-assisted health insurance programs, said Amy Rossi, executive director of Arkansas Advocates for Children and Families.

About 35,000 families are enrolled in Medicaid or ARKids First, a new health insurance program for children, Rossi said. The programs receive a mix of federal and state funds and target families living near the poverty line as defined by the federal government. In Arkansas, for example, a family of four with an annual income of $16,450 is listed at the poverty line.

The Robert Wood Johnson Foundation grant will fund a three year, statewide effort to take information about health insurance programs directly to the community, Rossi said.

St. Bernard's Among "Fastest Fifty"

St. Bernard's Regional Medical Center in Jonesboro is included in a list of the "Fastest Fifty," a study ranking hospitals and health systems based on net patient revenue growth from 1991 to 1996. The study was performed by Abendshien & Grube, a Northbrook, Ill.-based healthcare consulting firm, in conjunction with the Center for Healthcare Industry Performance Studies (CHIPS), headquartered in Columbus, Ohio. It ranked St. Bernard's as the 32nd fastest growing system in the country for the period, with an 81% growth in net patient revenues. Mercy Health System of Janesville, Wisconsin was the fastest growing system, registering a 177% growth rate. Good Shepherd Medical Center of Longview, Texas ranked as No. 50, with a 70% growth in net revenues.

The study looked only at net patient revenues reported under single Medicare provider numbers, eliminating some of the nation's larger health systems from qualifying. It also includes only those organizations with at least $100 million in revenues in 1996, and excludes hospital mergers as a source of growth. Hospitals on the list had a median annual compounded revenue growth rate of 13% for the five years. Comparable hospitals had median growth rates averaging 6%.

Arkansas Hospital Administrators Forum
Arkansas Health Executives Forum
Summer Management Conference
June 9-11
Red Apple Inn
Heber Springs, Arkansas

Arkansas Hospital Association
69th Annual Meeting and Trade Show
October 3-6
Arkansas' Excelsior Hotel and Statehouse Convention Center
Little Rock

Arkansas Hospitals Quiz
(answers below)

1. When is the Arkansas Hospital Association annual meeting and trade show?
2. Who is the new director of the Arkansas Department of Health?
3. Washington Regional Medical Center won what award during the American Hospital Association annual meeting in February?
4. John Lloyd will be the presenter for what meeting?
5. True or False: The Arkansas Department of Health has revised the Rules and Regulations for Hospitals and Related Institutions.
6. CARTI has opened a new facility on the ___________ campus.
7. How long has the Arkansas Hospital Association been in existence?
8. A recent survey indicates a ____ vacancy rate among budgeted RN positions in Arkansas hospitals.
9. What program received a $296,660 grant for an existing telehealth system?
10. The Arkansas State Medical Board will now meet _________.

Answers:

1. October 3-6
2. Dr. Fay Boozman
3. NOVA Award
4. Arkansas Association of Hospital Trustees regional dinner meetings
5. True
6. Baptist Medical Center
7. Almost 70 years
8. 6.2%
9. University of Arkansas for Medical Sciences Rural Hospital Program
10. bi-monthly

Arkansas' ConnectCare Patients Satisfied

The Arkansas Department of Human Services' Division of Medical Services has released the results of a survey of state Medicaid recipients enrolled in the ConnectCare program showing they are very satisfied. ConnectCare is Medicaid's primary care case management program. The survey was conducted last spring by Medicaid Managed Care Services (MMCS), a division of the Arkansas Foundation for Medical Care. In the ConnectCare study, MMCS randomly selected and mailed surveys to 1,500 adults (age 21 and over) and the parents or guardians of 1,500 children (under age 21) who had been enrolled in the program for at least six months. The survey examined the level of satisfaction in the areas of patient perception of quality and satisfaction; interpersonal aspects of care; communications and information given by primary care physicians; timeliness of services; accessibility and availability of services; recipient understanding of the program; and patient satisfaction with outcomes.

More than 62% of adults and 45% of children surveyed responded. Highlights of the findings include:

• 86% of the adults (89% of children) gave their primary care physician a favorable rating;
• 85% in both groups gave their specialist favorable ratings;
• 82% of adults (88% of children) rated the quality of care received as favorable;
• 79% of parents/guardians felt they were usually or always satisfied with the healthcare their child received;
• 70% said it was easy to get a referral from their primary care physician to see a specialist.

The lowest marks on the survey related to key preventive care areas. A only 29% of the respondents said they were encouraged by their doctors to make sure their children eat healthy foods, use car seats, and bicycle helmets. Forty-nine percent of the adults responded their doctors stressed the importance of diet and exercise for good health.