Claims denied

United Medical Center had seen its share of struggles even before the economy took a turn for the worse.

The Washington-based hospital, troubled in the past by safety violations and multiple changes of ownership, underwent what it says was a Herculean effort to overhaul its physical building and medical services since being acquired by Specialty Hospitals of America in November 2007. Because of its work, United Medical last week was successful in regaining its Joint Commission accreditation.

View the list of hospitals that didn’t qualify for their inpatient Medicare update

View the list of hospitals that lost the most Medicare inpatient revenue

View the list of hospitals that didn’t qualify for their outpatient update

As part of that restructuring, United Medical went through a “record-breaking effort” to get its data-collection system in place so it could submit quality results to Medicare, which would allow it to receive the full payment update in fiscal 2009, said Frank DeLisi, chief executive officer of the 303-bed facility.

So when the CMS informed United Medical that because it had not properly submitted its quality data last year the hospital would not get that full update—estimated by Modern Healthcare using American Hospital Directory data to be $368,656—hospital officials were crestfallen.

“We have been fully participating since January 2008. The last thing we want is any perception that we’re not focused on quality,” DeLisi said.

But because of the ownership change, the hospital missed a submission deadline and lost out on the update. United Medical has appealed the CMS’ decision. “We’re trying to get respite from CMS,” DeLisi said.

United Medical is not alone. More than 60 hospitals stand to lose nearly $5 million this year because Medicare determined they did not properly submit quality data reports. But the hospitals say that the decision is unfair and want the federal agency to reconsider.

The hospitals were denied 2% of their annual payment update for fiscal 2009 because of problems with their inpatient quality data reports submitted through the agency’s hospital quality data reporting program. According to Medicare instructions, the reports did not meet the qualification if they were submitted after deadline or were missing certain data elements, or if the hospital did not have a designated staff member working with the CMS’ online reporting system known as QualityNet. Medicare’s official list includes 78 hospitals, but some were missing data or were on the list mistakenly. Modern Healthcare’s estimated figures do not include those facilities.

The hospitals who lost out on the inpatient update aren’t the only ones losing money. This month, the CMS released a list of 26 hospitals that did not receive the full outpatient payment update because they did not report outpatient quality data for calendar year 2008, the first year of the outpatient reporting program. That list includes two hospitals that also didn’t get the inpatient update.

Medicare uses the inpatient quality data collected through the program in part to populate its Hospital Compare Web site. The site provides quality measures in various categories such as cardiac and pneumonia care and scores hospitals on how well they are performing. Patient-satisfaction survey data were added to the site last year, and the inpatient data collection program requires hospitals to also submit satisfaction data to receive the payment update.

But the hospitals that lost money this year say the entire data-reporting process can be confusing and that Medicare is unhelpful when it comes to technical difficulties. Pacific Alliance Medical Center attributed its loss of an estimated $595,937 to a “glitch.” “We collect and submit all quality data,” said Gloria Ruiz, executive director of quality and professional services for the 138-bed, Los Angeles-based facility. According to Ruiz, a technical error occurred when its data vendor, Thomson Reuters, tried to submit its core quality data for one quarter. Before and after that quarter there have been no problems, but once was enough to cause the hospital to lose the update.

Pacific Alliance submitted a reconsideration form asking Medicare to reverse its decision and has not heard anything yet, Ruiz said. “We’re just on pins and needles.”

The CMS expects to respond to the hospitals that filed reconsideration requests by the end of the month, said a CMS official who spoke on the condition of anonymity. During the reconsideration process the agency looks at the extenuating circumstances around missed deadlines or missing information and the attempts the hospital made to communicate with its data vendor or the agency itself, the official said. In the three years of having a reconsideration process for quality data reporting, the CMS has received between 50 and 75 requests and has overturned its decision in about half the cases, the official said.

Some of the technical errors in the latest payment update cycle came from hospitals that merged facilities or retired provider numbers and Medicare hasn’t caught up with the paperwork yet. The list indicates that Springfield (Ohio) Regional Medical Center lost out on more than $600,000 by not submitting data, but that’s not what occurred, said hospital spokesman Jim Senese. The hospital consolidated and dropped one of its provider numbers that should have been considered canceled by Medicare. Under the new provider number, Springfield received its full update, he said.

The same happened with Saints Mary and Elizabeth Medical Center, Chicago. The center’s system, Resurrection Health Care, is in the process of changing provider numbers to reflect consolidation and didn’t lose money, despite the center’s presence on the list, said system spokesman Brian Crawford. “These kind of weird things happen,” he said.

Still, the quirks in the system indicate how challenging it can be for hospitals to wade through the CMS’ instructions and technical requirements. Providers must first fill out a notice of participation, complete registration with QualityNet, then submit data on quality measures by specific deadlines. The detailed instructions require specific data submitted to exacting standards, and the manuals that outline all the technical guidelines can change every six months.

It’s no wonder that such instructions can be complex, especially for smaller facilities with fewer resources, according to Dennis Coleman, CEO of 157-bed Community and Mission Hospital of Huntington Park (Calif.). The facility lost an estimated $192,552 because it was unaware of a notification that the CMS sent alerting it to the program, he said. “It’s one of those things when you have a new ownership and you’re trying to do a million things.”

While last year slipped through the cracks, the hospital is on target to participate this year, Coleman added. Still, finding the resources to ensure the hospital is collecting data the right way and submitting it by deadline has been a challenge, he said. “I am an advocate of what’s best for patients,” he said. But “there is so much that we’re asked to do that’s on our nickel, not theirs. We’re not getting any more money from payers” for complying with all the reporting requirements.

That frustration about rigid deadlines was echoed by 112-bed Columbia Memorial Hospital, Hudson, N.Y., which lost an estimated $395,360 because it missed a deadline by about two days. The hospital experienced a computer crash just as it was about to submit the final required report for a quarter last year, said Columbia’s Chief Financial Officer Vincent Dingman. “We were at a loss.” The hospital tried to ask for help from the CMS and resubmit the report, but the agency denied it, Dingman said. “We were gathering the data all along; it was just the final report to go in.”

Columbia is waiting for a response on the reconsideration request it filed, but the CMS has not made a decision yet, he said.

Hospital representatives say they are working with the CMS and with providers to reduce headaches in the quality-reporting process. There are lots of “hoops” hospitals have to go through to ensure all the reports are accurate, said Wanda Marvel, vice president of performance measurement at the Missouri Hospital Association. The association’s subsidiary, MHA Management Services Corp., is a commercial vendor that contracts with hospitals in the state to conduct data collection.

There are many ways for hospitals to submit their quality data, and nuances in those methods can affect whether the CMS considers reports to be accurate and complete, Marvel said.

To combat that, the hospital association provides education about the paperwork involved and how to extract patient-level data from medical records to the CMS’ technical standards. “The hospital may have made every effort to do everything correctly and still made a mistake,” she said.

Some of the requirements seem counterproductive to ensuring that providers are giving the right care to the right patients—which is the objective of reporting quality data, Marvel said. Hospital associations continue to push the CMS to make changes about data elements that don’t directly affect patient care. “These are the things we’ve been hitting them on—hard.”

The CMS is listening to some of those requests, said Nancy Foster, vice president of quality and patient safety for the American Hospital Association. The AHA is a partner in the Hospital Quality Alliance, a co-participant in maintaining the Hospital Compare Web site with the CMS.

The federal agency is working on ways to simplify its submission process and it does try to restore payment if it finds that data errors had no significant impact on quality information that appears on Hospital Compare, Foster said. In the meantime, the hospital association reaches out to hospitals if they want help with reporting. “It’s clear that the smaller hospitals indeed are struggling,” Foster said.

The AHA, among others, has asked the CMS in comment letters to consider changes in the validation process, Foster said. In addition, the CMS recognizes that it can make changes to address common complaints received through the appeals process. New procedures designed to lift some of the collection burden off smaller and specialty hospitals are reflected in the final inpatient payment perspective rule for fiscal 2010, which goes into effect Oct. 1, 2009.

Some of the problems with data submission aren’t even the hospitals’ fault, but they are the ones who lose money. Montclair (Calif.) Hospital Medical Center, which lost an estimated $134,955, said it was frustrated because the CMS’ data warehouse rejected its report submitted by its third-party vendor. “We really dotted our I’s and crossed our T’s,” said Marie Falcis, corporate director of performance improvement for the 102-bed hospital’s owner, Prime Healthcare. The problem came from an old provider number, not from the vendor, Falcis said. The facility is appealing the decision. Losing that money “would be very significant to Montclair,” Falcis said.

Vendor-related problems also snagged 127-bed OakBend Medical Center, Richmond, Texas. The facility lost an estimated $332,350. “Unfortunately, there was no way for the hospital to verify the data had been submitted, nor a notification process when CMS did not receive the data,” Chief Operating Officer Jody Jones Noirot said in an e-mail.

Terry Cameron, executive vice president of Thomson Reuters’ healthcare business, said that the company works closely with its clients to create processes that are more manageable. Cameron declined to discuss specific clients on the CMS’ list of hospitals that were denied the payment update, but said it is discussing with the CMS ways to streamline requirements.

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