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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
Health System
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DATE:
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June 9, 2010
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BOARD MEETING DATE:
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July 27, 2010
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Jean S. Fraser, Chief, Health System
Susan Ehrlich, MD, MPP, Chief Executive Officer
San Mateo Medical Center
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SUBJECT:
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Agreement with Triage Consulting Group
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RECOMMENDATION:
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Adopt a Resolution authorizing the:
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A)
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President of the Board to execute an Agreement with Triage Consulting Group to provide aged account receivable and zero balance payment review services to San Mateo Medical Center for the term August 1, 2010 through July 31, 2013, for a maximum obligation of $2,000,000; and
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B)
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Chief of the Health System or designee to execute contract amendments which modify the County’s maximum fiscal obligation by no more than $25,000 (in aggregate), and/or modify the contract term and/or services so long as the modified term or services is/are within the current or revised fiscal provisions.
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BACKGROUND:
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San Mateo Medical Center (SMMC) is working very hard to improve its revenue cycle process to increase revenue. Your board approved a contract with Dell Perot to collect on old accounts that are still open and assist SMMC in improving the timeliness of collections. Now, SMMC is seeking expert assistance in collecting on claims that are denied or underpaid by insurance companies and government payers such as Medi-Cal and Medicare. Having such an external “paid claims” reviewer is a standard practice in the hospital industry, as such companies not only increase collections, but also effectively serve as auditors of the internal billing practices by identifying errors or compliance issues. SMMC has not had such an external reviewer, nor were denied or underpaid claims being reviewed by staff members. To bring SMMC up to industry practice, in May 2010 a Request for Proposals (RFP) was issued for paid claim reviews.
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DISCUSSION:
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Two responses were received as a result of the RFP. Triage Consulting Group (Triage) was selected by the RFP evaluation committee based on references, experience in paid claims review and ability to work on-site. Triage has agreed to be paid on a contingency basis, receiving 30% of any fees actually recovered. In addition, Triage will be paid certain hourly fees for specific services designed to improve SMMC’s billing practices by giving SMMC feedback on billing errors. All such hourly services must be authorized by SMMC in advance and are subject to the overall maximum in the contract.
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Triage has recovered nearly $1.5 billion for over 400 hospitals since 1994. They specialize in underpayment review and recovery across all payers including managed care, non-contracted, Medicaid, Medicare, and workers’ compensation. Triage will provide aged account receivable and zero balance payment review services to SMMC. This will result in an increase in collections of Accounts Receivables.
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The Contractor has assured compliance with the County’s Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination and equal benefits.
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County Counsel has reviewed and approved the Agreement and Resolution as to form. The Contractor’s insurance has been approved by Risk Management.
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This Agreement contributes to the Shared Vision 2025 outcome of a Healthy Community by improving fiscal accountability used in support of the care giving activities of SMMC. It is anticipated that there will be an increase in annual cash received by SMMC and that the denial ratio will decrease to less than 5%. This is a measure of the overall success of improved billing efforts at SMMC.
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Performance Measure:
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Measure
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FY 2009-10
Estimate
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FY 2010-11
Projected
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Denial Ratio on billed claims
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24%
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<5%
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FISCAL IMPACT:
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The term of this Agreement is August 1, 2010 through July 31, 2013. The maximum fiscal obligation is $2,000,000. Triage will be paid primarily on a contingency basis. Reimbursement is based on the amount collected from paid claim reviews. Based on the amount of successful performance, SMMC will return to your Board with an Appropriation Transfer Request which will recognize the unanticipated revenue and associate contingency payments.
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Expenses at SMMC are covered by fees for services or third-party payers whenever possible. The portions of expenses for services provided to the medically indigent or to those covered by programs that do not meet the full costs of care are covered by the County’s General Fund contribution to SMMC.
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