Glen Rose Medical Center not getting reiumbursed for outside lab work- Why? Somervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas


Glen Rose Medical Center not getting reiumbursed for outside lab work- Why?

12 May 2019 at 1:02:40 PM

Back on July 31, 2016, I attended and video recorded a meeting of the Somervell County Hospital District in which the board, along with Ray Reynolds and Michael Honea, discussed signing a contract with Medical Management Professionals to bring in outside labs tests from other places to be processed by Glen Rose Medical Center as an opportunity for additional revenue. (See video and a rough transcript of that meeting here)  Over time, I noticed that for some reason Glen Rose Medical Center wasn't being paid back, specifically by Blue Cross Blue Shield Texas, for at least some labs done by GRMC. And the amounts not being reimbursed were significant. So this post includes following along with meetings over the last two years in which this has been discussed, along with some supplementary articles. 


Rough Transcript

Reynolds: Medical Management Professionals, Michael give us a report 

Honea: We're up and going, done a little more than a million dollars worth of billable charges, total collections of a little over $160,000. We had little issues in billing, but we're working on bringing those in-house so we can turn those around faster. It's moving along, we're on-board with a bunch of stuff... hopefully by next week we'll have, we're bringing in about 25 new tests. We;ll have all those inhouse so we can turn them around faster. ... we got 22 yesterday, creep up in volume 

Reynolds: We have a meeting with them Monday by the way.

Lab also discussed at the Nov 17 2016, Dec 29, 2016 and Feb 23 2017 meetings. 

August 31 2017 About a year later, the labs are coming from two different outfits, Medical Management Professionals and also Star

Rough transcript: 

Honea: It's been a pretty good month. Last month we totalled collections of 1.8 million, right now we are 2.1 so we've already exceeded last month by a fair amount ... still coming in as they close out the month. Today.. it was a little slower earlier in the week, some of the clinic issues, some of the clinics haven't.. some are located down along the coast so... they're all open today, we got 120. Kind of an update on Star, we've received probably 35 or 40 samples from them so far, we're kind of taking it slow, small batches, making sure we get all the ... basically the outflow of lab results going properly, making sure we're getting all the information we need to bill properly. .. now we're getting into 4 or 5 a day. ... hematology lab. 

Bruce: Is there any opportunity of coming out of Houston for that machine, for us? 

Honea: As far as volume? .. No one of them that we picked up yesterday was actually the DFW police force. 

Bruce: No, I mean from hurricane

Honea: Not really .. I'm sure they're going to be working some of those... we've got clinics in Brownsville, in Corpus, and kind of working up into Austin, San Antonio, 

Hankins: That's in MMP's control .. marketing

Honea: Right now we're tapped out... 120 in a day 

Still good on Dec 28 2017 through 4/26/2018

Blue Cross started delaying payments on July 7, 2018 according to Reynolds in the 8/23/2018 meeting.

July 26, 2018

Rough transcript:

Reynolds: on the lab outsource, I need to say that we're having some billing issues. ... they started requesting a lot of records... which is entirely their right. It slowed the collections process down considerably. We're still doing significant volume on the front end, billing is Blue Cross primarily delaying their payment. We're working with them trying to get that resolved, working with MMP to figure out what the issues are and get it paid, but you just need to be aware of that. 

August 23 2018

Rough Transcript

Sep 27 2018

Rough Transcript

Reynolds: We've made a little bit of progress with Blue Cross. We met with them 2-3 weeks ago. We sent 4 claims in last week to get what they're calling clean claims. They're telling us that our claims are not meeting their editing specifications. So we sent those in, we probably have about a dozen issues that they brought up, some of which we agreed with we'll correct. Example on the top line it says name and date of birth, they want that on two separate lines. Thats a preference not a requirement so we're fussing with them on that. We reviewed four or five claims today and we got one that we physically went down the edit list, we think that is a clean claim so we're going to sent that to them, we process it tonight and we send that to them... and see if we can get that approved as a clean claim. Template... send them a larger group next week. Knox is doing the same thing, they're about the same place as we are, move on to whatever the next issues are, hopefully start getting our lab outsource bill. They've removed the locks and we are getting some Blue Cross payments daily. That's on the (unintellible) lab, we still have a lock on the lab outsource and any other lab, if you come in and you have a lab drawn they're doing to request medical records for that ... still have about 1.4 million that's non-lab outsource that we're trying to collect off. There was a hearing last week with the committee about the Blue Cross issue as far as the smaller hospitals are concerned and the pressure that Blue Cross is bringing on smaller hospitals to renegotiate their contracts. There was a discussion about lab outsource, the chairman of TORCH was there and he said he said about 15 percent of the hospitals are doing lab outsource and we know that some of that 15 percent is doing it right and it's not a violation of the Blue Cross contract .. Torch taking a stand not only for the hospitals that are dealing with Blue Cross contracts but also the facilities that are doing lab outreach and are working very hard to do it properly. We still have not received, we met with Blue Cross, they promised us a new contract within 10 days, I followed up with them by email 10 days later, still have not received a contract, I contacted Diane Carr by phone today and left her a voice message, waiting on new contract... we continue to work through it. We'll get the clean claims issue resolved, then we'll move to whatever the next issue is. Our volume has not dropped off significantly, off campus is not really sending any samples right now but we're still doing the same amount of MMP work which is generating revenue but we're not collecting any money on that. We talked to (unintelligible) and they're still on board for us to continue to do the billing. We;ll get the payment issue resolved somewhere along the line. It's a good thing we got reserves.

Oct 26 2018

Jan 31 2019 

Rough Transcript

Honea: Today we only got two samples which is good and bad. Our volume's down a little bit because Knox is actually ...being paid in full by Blue Cross. They've negotiated and Blue Cross is planning on paying them in full. We hope the end of the week that we're not far behind. Along with that, KNox has a meeting tomorrow with Blue Cross in Dallas so that's moving forward on their end. We're represented by the same individual so we're not going to be far behind. In a couple of weeks there's a meeting at the Texas legislature, TORCH, that we'll be attending and hopefully get some face time with our local representatives ....

Reynolds: Knox understands there's been no decision or settlement on their back pay but they are paying them from this day forward both their hospital and their lab outsource. They have about 1.7 million that they're holding of our hospital of our 22 million so that's gross. Little optimistic what's happening with Knox because Knox is the same situation we are. Another piece of that there's another hospital that was doing passthrough billing, we're doing all the tests inhouse, they filed a complaint with TDA, TDI. TDI refused to accept their complaint. ... Blue Cross has acknowledged that we're doing it right. Our complaint has been received by Blue Cross and Blue Cross has been in contact with our attorney on this. We'll see. Our hope is that they'll start paying us for our lab outsource, and then some sort of negotiation for all the back pay they owe us. 

Blue Cross contact. We received proposal from Blue Cross, nowwhere we need to be, lowball offer to us, we did not respond to it, we've engaged a consultant (through Kevin Reed's office). Email between Diane Carr and Jim McCoy about whether we had a counter proposal ready. WE don't expect a speedy settlement to that. There's a Senator Perry who is going to file a bill which would allow all the TORCH hospitals to negotiate with Blue Cross as one entity. In the past, the Lege has been more sympathetic to the insurance carriers, that's no longer the case. All small TORCH hospitals are being approached by Blue Cross for new contacts. Blue Cross is paying us for our therapy.

Looks to me that that is SB170  the bill that looks specifically about negotiating with rural hospitals, on the House side is HB3934

February 28 2019

March 28 2019

Rough Transcript

Honea: We're still kind of waiting, status quo, TDI says a month out, First or second week  of April should hear. They submitted questions to Blue Cross, gave them 15 days. Along that same note, two senate bills, one clarying lab outreach legally when you do testing in house and second bill allow all TORCH hospitals to collectively negotiate an agreement with insurance payments (160 rural hospitals). To be heard in committee next Tuesday. 

Vasik: Anyone from our area on the committee? Frank is in Knox's region and he's the one carrying that bill, also Perry has signed on. Have informed Birdwell and Sheffield. .... 

Drake: Had that bill already been passed, how would that change our interaction with BCBS. 

Honea: We're a rural hospital that BCBS can do without so not a lot of reason to give us better pricing. Tehre are other hospitals within close driving range, if we were out of network wouldn't bother them. 

? Our broker is trying to see what kind of rate we can get at Blue Cross. Employees use BC. 

Honea; Even if it doesn't pass, sign that legislators are starting to look at their practices. 

Drake: WE're still probably chump change. 

Honea: 170 hospitals not so much chump change anymore. 

Vasik : Political issue, hospitals still ahve to be supporter and if commercial insurance pulls out, comes back to the state. 

Honea: 73 percent cut if that held true at some point the tax rate would be increased to offset, putting the burden back on the community. All rural hospitals. Torch survey.. all of them similar to us. 1-5 scale in difficulty dealing 4.65 with 5 being the worst. these are hospitals that don't do lab outsourcing. ....We're number 48 in Medicare reiumbursement, there are some bills that would potentially help with that, bring up to market. Senate Bill that would limit (from LT Gov) amount we could raise our tax rate to 2 percent. For us that's some interest because of fluidity of nuclear power plant. Can't raise the tax rate enough. We'd have to do a rollback to get back to effective tax rate.  The big thing is school reform, rural hospitals happen to be caught up in the crossfire. 

Blue Cross contract still status quo. Expecting a counter proposal in the next couple of days.

April 25 2019

Rough Transcript

Reynolds: I think Blue Cross, still going to be a tougher negotiation with them on the back stuff. At some point in the pretty near future, we're going to start getting paid for our current stuff, went down that way with Knox. 

Vasick: WE're in better financial shape so we don't have to feel pressured to negotiate with them right now. 

Honea: We have a contract in place and .. we haven't violated our contract, so ...

...Reynolds: We're still getting paid. We're not getting paid for our lab but we're still getting paid for all of our other services that we bill through Blue Cross. 

This article from Modern Healthcare seems to be talking about the same problem. 

"These labs came to us and said, 'Would you do them? You could make some money on it,' " Davis said. "If somebody's going to do it, it might as well be us." DeFoore declined to comment on the lab contract.

The situation fits a trend that's cropped up in recent years: exploding lab charges by some rural hospitals. Insurers have accused them of breaching contracts by billing for tests performed elsewhere and on out-of-state patients. The issue is now the subject of lawsuits and a congressional inquiry. The Stamford hospital has not been the target of such accusations, at least not publicly.

An analysis of Medicare cost report data identified 21 hospitals whose outpatient lab charges exceeded 30% of the hospital's total charges in their most recent reports, either 2016 or 2017. In some cases, lab charges—billed mostly to private insurers but also to government payers—accounted for more than 80% of hospitals' total charges in a single year, according to an analysis by Modern Healthcare Metrics and the analytics firm Franklin Trust Ratings. Insurers typically pay only a portion of charges.

For comparison, the average outpatient lab-to-total charges ratio among all of the nearly 5,000 hospitals that filed cost reports was less than 9% in 2016 and about 12% so far for 2017.

Rural hospitals are being invited into such arrangements by what are usually out-of-state management companies seeking a way to tap into the typically higher rural hospital lab reimbursement rates. The hospitals agree to bill insurers for lab tests that in some cases were performed at outside labs and on patients with no connection to the hospitals. Such deals can be lucrative for the companies because insurers frequently pay rural hospitals much more for the tests than they do large labs like Quest Diagnostics or LabCorp.....

Rural hospitals across Texas, have been inundated by sales pitches for such lab arrangements, said Kevin Reed, general counsel for the Texas Organization of Rural & Community Hospitals. The arrangements typically bill commercial insurers, so as not to draw attention from the CMS. They also favor the use of management services agreements involving physicians, which Reed said seem to exist solely to pay the doctors. The agreements allow the management company to collect up to 80% of the lab test revenue, he said.

"In those cases, the physicians are obviously being paid to refer to the lab," Reed said. "To say they're highly suspect is to be kind. I think they're nothing but kickback arrangements."

Medicare rules allow rural hospitals to bill for lab tests performed on patients from other facilities and by outside labs, but there's disagreement over whether such arrangements comply with contracts between the hospitals and commercial insurers. "We know that these operators that do this are very coy," Morrow said. "They work right up to the edge of the law."


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