COUNTY OF SAN MATEO

Inter-Departmental Correspondence

San Mateo Medical Center

DATE:

December 3, 2002

BOARD MEETING DATE:

December 17, 2002

TO:

Honorable Board of Supervisors

FROM:

Nancy J. Steiger, Chief Executive Officer

SUBJECT:

Amendment to the Agreement with CHIS, Inc.

Recommendation

Adopt a resolution authorizing the President of the Board to execute an amendment to the agreement with CHIS, Inc.

Background

The Hospital utilizes outside coding services to complete coding for all discharges and to ensure appropriate payment for services. Billing regulations require that we apply ICD-9-CM/CPT codes to diagnoses activities and procedures in order to bill for services. In addition, new regulations for outpatient Medicare billing went into effect August 1, 2000. These stringent coding guidelines require that the Medical Records Department have access to the highest level of expertise in order to maximize the billing process and ensure that all state and federal regulations are met. Correct coding benefits the Hospital as it has a direct impact on the amount of reimbursement the Hospital receives for services.

On October 3, 2002, your Board approved an agreement with CHIS, Inc. The term of the agreement is September 1, 2000 through August 31, 2003, with a maximum amount of $240,000.

CHIS Inc. has provided high quality coding services to the Hospital since 1998. CHIS, Inc. codes San Mateo Medical Centers' medical record admissions and discharges using the ICD-9-CM coding system. CHIS, Inc. also provides clerical support for purging and screening of medical records.

Discussion

All Emergency Department (ED) visits are required to be coded for reimbursement. The ED of the hospital has approximately 500 visits to code weekly. The coding consists of abstracting medical information from the ED records and applying the correct ICD-9-CM codes according to Health Care Financing Agencies Guidelines (HCFA) and keying the codes into the SMS Core system for billing purposes. At the time the agreement with CHIS was negotiated the ED was coding these records. This practice was discontinued due to compliance issues and to optimize revenue.

For the last year there has been a part time extra-help coding position that has been responsible for ED coding. Over time the position was unable to keep the coding up to date and within coding guidelines for reimbursement. The coding expertise needed to accomplish the task would be difficult to recruit with a shortage of experienced coders. At this time we would like to recommend outsourcing the coding to amend our existing coding contract with CHIS, Inc.

Individual contractors were also queried about contracting to code for the ED visits. The rate charged was a per chart rate of $3.00/visit which would be at a higher cost. CHIS, Inc. has also worked with the Medical Center for several years and has provided quality coding and good availability to meet out needs.

CHIS, Inc. rate proposed is $120 per day. If we were able to hire an experienced coder in an extra-help position the pay at top step would be $178 per day. The ED coding is presently 50 days backlogged. It is recommended that the agreement be amended to allow CHIS to also provide this service.

Vision Alignment

This agreement with CHIS, Inc. reflects the County's commitment to Responsive, effective and collaborative government along with goal number 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain. This agreement contributes to this commitment and goal as coding has a direct impact on the amount of reimbursement San Mateo Medical Center receives and the agreement will maximize San Mateo Medical Center's billing process and ensure that all state and federal regulations are met.

Fiscal Impact

The term of this agreement remains the same, September 1, 2000 through August 31, 2003. The maximum amount is increased by $69,200 from $240,000 to $309,200. Funds are included in the Hospital and Clinics FY2002-03 Approved Budget and will be included in FY2003-04 budget request.