Turning to something other than reform, Senate Finance Committee Chairman Max Baucus (D-Mont.) last week focused on the Indian Health Service as he strongly advised the HHS agency to improve its collection of payments from private insurers.
IHS' billing under fire
Baucus urges changes in wake of GAO report
Baucus' comments followed the release of a Government Accountability Office report—which he had requested—that found the IHS has not updated its policies and procedures for billing and collecting revenue from private insurers to reflect its recent implementation of HHS' new Unified Financial Management Systems, or UFMS. “Right now, American Indians and Alaskan Natives are suffering because IHS lacks adequate resources to provide the quality of care they need, but these improvements will provide more dollars to deliver that care,” Baucus said in a statement.
The GAO's auditors also found that none of the area offices or service units they contacted had developed and implemented location-specific, debt-management plans. Without these plans, the report said, “area offices and service units may not be conducting debt-collection activities in compliance with IHS' policies and procedures or federal regulations and may not be maximizing collection of the amounts due from private insurers.”
To put this in context, the IHS reported that it collected about $795 million from all third-party payers for fiscal 2008. Of that amount, about $94 million, or 12%, came from private insurers, while 88% came from Medicare and Medicaid, according to the GAO report. The agency then used those funds to purchase new medical equipment and supplies, and also to provide compensation and benefits for IHS employees.
As part of its recommendations, the GAO suggested IHS develop and establish location-specific guidance for implementing the requirements of the Indian Health Manual related to debt-management programs, and also develop specific tools and reporting mechanisms to monitor and manage the business revenue cycle, including billing and collection and debt management. In response to the report, the IHS said it recognized that its policies and procedures must be updated.
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