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Maintaining records and accurately billing cannot be passed onto a third party like a billing company.

Jamestown Regional Medical Center in Tennessee is in big trouble. Medicare and Medicaid were expected to cut off payments to the hospital Wednesday, with the agencies noting that the hospital currently does not meet the Conditions of Participation.

According to local media, the Centers for Medicare & Medicaid Services (CMS) has said that payments for inpatients admitted prior to June 12 will continue for a maximum of 30 days.

Rennova Health in West Palm Beach, Fla., the hospital’s parent company, blames the recent transition to a new billing company.

In a statement made to the Independent Herald last week, a Rennova spokesperson said Jamestown Regional “has sustained a significant decline in receipt of payments over recent months, caused in part by mistakes made at the facility during a transition to a new billing company in December 2018.”

On Monday, WBIR, the NBC affiliate in Knoxville, Tenn., reported that Rennova had announced layoffs of 20 people at the hospital, but that 120 were still employed. Concurrently, the hospital announced that it had appointed a new CEO on Monday, noting that Michael Alexander would take over in that role.

When reading Subchapter G of 42 CFR 482, “Hospital Conditions for Participation,” you may struggle to see how Jamestown could be in such a mess. 

I think the problem is that there is a general condition of participation requiring providers to maintain records supporting transactions with Medicare. This is the most likely culprit: either there are too many billing errors in recently submitted claims, or there is insufficient documentation to support the claims submitted.

I think this also may explain the fact that Rennova holds its billing company responsible for their woes. Providers need to remember that the False Claims Act includes claims that they submit or cause to be submitted.  The burden of maintaining records and accurately billing for services falls onto providers, and cannot be passed onto a third party like a billing company. 

What can providers do to protect themselves when selecting a billing company?

Start by making sure that the billing company you select has references with other clients. Look for a proven track record. 

Make sure that the billing company you select has not been fined or suspended from Medicare. You can start your search with the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) website.

Check and see if your billing company has a compliance plan and a compliance officer. Discuss with them how they handle compliance.

When contracting with a billing company, insert language into the contract that indemnifies you, in the case of negligence on their part. See if the billing company has the financial resources necessary to cover any such losses.

Finally, and maybe most importantly, have regular coding audits performed by certified coders. There are a lot of good firms out there. Ask around; our friends at the American Health Information Management Association (AHIMA) are a good place to start. Be active in your revenue cycle. Remember that no matter who does the billing, they are still your claims.



Timothy Powell, CPA

Timothy Powell is a nationally recognized expert on regulatory matters, including the False Claims Act, Zone Program Integrity Contractor (ZPIC) audits, and U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) compliance. He is a member of the RACmonitor editorial board and a national correspondent for Monitor Mondays.

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