Tuesday, July 17, 2012

Hemorrhaging Hospitals: Open Letter to Kenneth Raske

“Hemorrhaging  Hospitals Toxic Money Waste Syndrome”
-- Was St. Vincent’s an accident waiting to happen?

An Open Letter to Kenneth Raske, President and C.E.O. of the Greater New York Hospital Association

In the Oct 25, 2010 New Yorker “News and Features” column entitled “St. Vincent’s Is the Lehman Brothers of Hospitals”,  Kenneth Raske,  president and C.E.O. of the Greater New York Hospital Association, was quoted as saying  “Its demise was only the beginning. An alarming number of New York’s major medical institutions are teetering on the financial edge.  Indeed, it may turn out that profound problems with the ways health care is paid for, combined with the inherent disadvantages of doing business in New York, will make it virtually impossible for all but a small number of the city’s hospitals to stay afloat.”  Mr. Raske affirms, “We’ve got a lot of hospitals in trouble”.

Trouble? This is an understatement. It is a little known fact that most New York hospitals are losing hundreds of millions of dollars annually because they do not regularly appeal concurrent or retrospective adverse determinations for health care service payments from insurance carriers. However, in New York State alone, HMO providers and patients win over 47% of internally appealed claims and 40% of externally appealed claims!  

Inasmuch as only 5,543 internal and 542 external claims were appealed in 2010 (according to New York Consumer Guide to Health Insurers) it is hard to imagine that St. Vincent’s appealed very many claims on a regular basis --if at all. Thus, my theory remains valid that toxic money waste was a feasible culprit in our city’s loss of a very important institution.

With success rates of way over 40%, why aren't  ALL hospitals and other providers implementing the resources available to them?

While many provisions of Health Care Reform regulate insurance companies’ dealings, surprisingly, waste practices by hospitals have gone unaddressed thus far. We are not talking about toxic medical waste here. No, instead we are addressing Toxic Money Waste:  un-appealed, unclaimed money for covered claims! Sounds like a tongue twister, but this is no funny riddle. Toxic money waste is real, and it is happening all across America, and in a New York hospital near you. This unhealthy medical practice has devastating far-reaching effects on Americans in areas such as personal bankruptcies, hospital closings, job losses, government spending, and increased medical care expense to patients.

Simply put, the fewer and lower the payments that hospitals receive from insurance companies, the worse off we all are.

Many healthcare reforms mean more money for hospitals  -- but New York hospitals are not using resources to go and get it. Is it hubris on their part?  When I contacted a well known Upper East Side hospital that had only recently begun participating in networks other than Empire Blue, the C.F.O. rudely announced that his hospital was “quite capable of doing their job”  

Funny, I thought the hospital’s job was to make people well  -- not to be insurance experts. I wanted to remind him of that proverb which speaks to pride coming before a fall. I wanted to beg him to reconsider taking a better look at the systems his hospital does NOT have in place because most Utilization Managers need to stay more “medically minded” than financially aggressive, and sadly they do not have enough resources to deal with concurrent claim denials  --  let alone retrospective ones. I wanted to tell him that his billing clerks  do not have the time, means or sophistication to take the initiatives required for dealing with C.E.O.’s of insurance companies and Sate Insurance  Commissioners.  I wanted to tell him that bill collection agencies focus on collecting money from the patients  (many of whom are too sick  to appeal their claims)  instead of focusing on the insurance companies who have the means to pay appealed claims. I wanted to tell him that consultants work on a contingency basis so that there is no risk or up front expense to the providers.  I wanted to tell him all this, but he hung up the telephone rather abruptly after he told me that he "had ripped up not only mine, but all the letters he receives which offer to help him on a contingency basis."

If hospitals administrators would please think outside the proverbial box, they will  increase revenue by millions of dollars and possibly head off this disaster before it is too late. 

Mr. Raske is correct:  
 "profound problems with the ways health care is paid for... will make it virtually impossible for all but a small number of the city’s hospitals to stay afloat.” 

In light of ever-increasing costs to providers in malpractice insurance and lower reimbursement levels, it is unconscionable that hospitals do not take full advantage of their rights to submit first and second level appeals as well as External Review appeals and complaints.

And so my personal appeal, and I mean this with the utmost respect, is that Hospital administrators would stop complaining about insurance company reimbursements, and begin complaining to them and to the State, without delay. Unless providers make use of healthcare benefit reforms right now, health reform may be too little, too late, for all of us.

These are extenuating circumstances. Please: step up the plate and stop the hemorrhaging!

There is no need to blame this hemorrhaging on "disadvantages of doing business in New York"  -- we are the greatest city in the world and we love our great hospitals! We want to keep them here -- and financially healthy.  

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