County medical officials must fix billing mess
Oakland Tribune
Article Last Updated: Saturday, April 10, 2004 - 6:35:04 AM PST

ALL we can say is Alameda County medical officials lucked out on the timing of the news that the county's medical facilities lose $10 million a year because of inept billing procedures. If the news had come out before March 2, it's unlikely voters would have approved a half-cent sales-tax increase to keep the facilities open.

Considering they lose $10 million a year, it's a wonder they're only $73 million in the red.

Cambio Health Solutions, a turnaround firm with a $3.2 million contract with the county, discovered a billing system that is so inept it is beyond broken. In fact, in one instance the facilities are actually in violation of federal law. Focusing on inpatient billing at Highland Hospital in Oakland and Fairmont Hospital in San Leandro, Cambio's report found that in almost one-fourth of the accounts billed, the facility did not receive payment for 180 days. The norm is four days.

A huge number of claims is rejected by Medi-Cal, Medicare and other public health insurance programs. A whopping 48 percent of the pharmacy claims submitted to Medi-Cal are declined.

Patients covered by the Alameda Alliance for Health get lab tests at the facilities even though the county doesn't have a contract with the group. As a result, the medical center gets stuck with the bill.

The emergency room, one of the region's busiest, collects only about $5,000 a month for its services. That's a ridiculous return on the ER services.

The list goes on. The center doesn't have the software to generate Advance Beneficiary Notices, required by federal law, that inform Medicare patients certain services aren't covered ahead of time.

Incredibly, the medical center pays 37 cents to mail each bill instead of getting a bulk rate. Can the people running the system really be that clueless?

And county officials can't fall back on the perennial excuse of understaffing. In fact, the report found the accounts office was "significantly overstaffed" with 74 full-time employees. However, there are no formal training programs or competency tests for them. Again, we can only call the finding incredible.

Reflecting a problem that plagues many public agencies, nine financial counselors, or 37.5 percent, are out on extended leave; some of them have been out for several years.

The inefficiencies are inexcusable and, as we often comment on public ineptness, would never be tolerated in the private sector. We have never understood why people assume they can squander money because it is in the public coffers; it should be just the opposite. Public dollars need to be guarded with greater scrutiny than private funds.

The system is so broken, Cambio recommends the center hire an outside contractor to handle the billing services. It also suggests financial counselors be re-deployed to bedsides so eligible patients can be signed up for subsidized programs. If we ever questioned the $3.2 million contract with Cambio, its first report indicates the firm is earning its money.

The center needs to follow Cambio's suggestions and take a more aggressive approach toward collecting revenues. We have to question how the county supervisors and medical center officials could have missed inefficiencies of this magnitude.

They'd better fix the system because voters aren't likely to tax themselves in the future knowing the center loses $10 million a year because of gross ineptness.