Confusion over a 3-year-old computer system, meant to boost insurance reimbursements at the Veterans Home of California in Yountville, has instead led to improper Medicare and insurance billing and also lower insurance reimbursements than in the years before the system was implemented, a state report says.

A state investigation, prompted by a whistleblower, found that Medicare was billed for $55,000 in services at the Home performed on a number of patients by an unnamed doctor -- although the doctor wasn't present when the services were performed.

The audit found the Yountville home was unable to use its new billing system that was installed in 1999 to make reimbursement practices more efficient.

The report, released this week by the California State Auditor, states that the home's billing system showed the same female doctor seeing patients 2,614 times between 1999 and 2001. However, by comparing insurance records with the doctor's clinic schedules, the auditor concluded that the doctor did not see patients in 1,792 of those instances.

As of January this year, the home had billed Medicare $131,000 for some of those visits; $55,000 was for patients the doctor didn't see, the report said.

"We are working with Medicare to sort this out," said Jaime Arteaga, spokesman for the Department of Veterans Affairs.

Investigators do not think that the errors were purposeful. In the report, they wrote that they "found no evidence that employees of the Home knowingly and intentionally entered incorrect data in the system to fraudulently obtain reimbursements from Medicare or other insurers."

"In fact, the services it lists may have been provided by other doctors or by nurses," the report states. "However, the Home does not have accurate records to support the claims it makes to Medicare or other insurers."




Errors not intentional, home says

Investigating the whistleblower's allegation took several hundred hours, said Steve Hendrickson, chief deputy state auditor. The Bureau of State Audits provides external, independent and nonpartisan evaluations of the state government's financial activities.

Arteaga said nothing was done wrong intentionally. The Department of Veterans Affairs is now upgrading its billing system and accountability procedures and resolving any improper charges and reimbursements, he said.

But the state report contains some unanswered questions.

"I don't think we entirely have all the answers," Hendrickson said. "We have a situation where a doctor appeared to have made patient visits, but in fact didn't and on top of that (the hospital) got paid for the visits that didn't occur."




Possible scenarios

The report detailed various ways in which administrators and staff at the home accounted for the discrepancies between number of times patients reportedly visited the doctor and actually visited the doctor.

Some staff said that when patients came in for unscheduled visits and were seen by nurses, the homes' information system would not accept nurses' names to bill for services, so scheduling staff used doctor's names.

Alternatively, the patients may have been seen by another doctor but been billed by their regular doctor, incorrect dates may have been entered on charge slips or the staff may have entered all charges under the doctor's name for the "sake of convenience."

Some of these possible scenarios could have been due to confusion over the new computer billing system, according to the audit.

Looking at three specific patients, investigators found that during a 182-day period, the computerized billing system showed that the doctor treated the patients 204 times when she actually wasn't there.

The skewed billing procedures violated state code and the Veterans Home is required to correct the mistakes promptly.

Progress must be reported to the audit bureau until the problems has been solved.

"Every 30-45 days, we expect a disposition report on what is being done to correct the problems," Hendrickson said.

Further investigation into the record-keeping practice of the doctor is at the discretion of the Veterans Home or the department, Hendrickson said.




Computer doesn't live up to billing

It isn't the first time that the state auditor has found faults with the Department of Veterans Affairs billing practices.

However, in the past, the opposite problem proved true. Underbilling and the inability to collect state and federal reimbursements for services provided to home members has plagued the department and the homes.

In December last year, a report by the state auditor stated that the department "has poorly managed its cash and that of its three veterans homes, and it has failed to pursue some reimbursements to which it is entitled."

That report, too, cited staff's lack of knowledge about the computerized billing system as a major cause of the problem.

A feasibility report conducted prior to installing the computer system in 1999 predicted that the new system would generate $1.5 million in increased revenues from federal funds and reimbursements in the first year, and $6.9 million in the second year.

According to state budget analysts, the home failed to use the new system effectively, and the promised increase in reimbursements did not occur.

In fact, Medicare payments to the home dropped in fiscal year 1999-2000 by more than $2 million from the prior year, and continued to drop another $2 million in fiscal year 2000-01.

"It was a rather challenging computer software," Veterans Home spokesman Lynn Scott said. Due to Y2K jitters, Scott said the new system might have been implemented too quickly.

"The problem has been in trying to fit the home's practice to the software," Scott said. "We tripped over ourselves."

But with the help of consultants and the more computer-savvy staff, Lynn said he is confident the entire staff will shortly be up to speed on how to correctly use the software that is being updated to tailor to the home's unique needs.

"We're mostly there," he said.

Napa News

-- Anonymous, November 18, 2002