Alliance Decision Support System for Children’s Hospital of Pittsburgh

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Children’s Hospital of Pittsburgh identifies $1.5M in Underpayments using Alliance Decision Support^®

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Problem

Children’s Hospital of Pittsburgh (CHOP) – a 235 bed pediatric facility in the Northeast – had identified grossly inadequate DRG payments for a population of neonate patients treated in their Neonate Intensive Care Unit (NICU). Their goals: i) Identify the specific cases and research the details of the cases, ii) identify the “fix” needed to obtain appropriate reimbursement, and iii) develop a standard for going forward with future contracts negotiations.

Solution

CHOP utilized MedAssets' Alliance Decision Support system to provide detail about the population of inadequately paid NICU claims. The system’s ad-hoc reporting capabilities allowed them to select and analyze specific criteria, including DRG’s assigned to specific claims-encounters, the age of patients, and the admitting status. Reports indicated the underpayment issue was predominantly caused by patients who were birthed at a different facility, and then immediately transferred to CHOP’s facility for surgery and postop care. It became apparent that the Correct Coding Initiative and the CMS (HCFA) DRG’s inaccurately group newborn cases transferred to a facility to Surgical DRG’s, and not to the more appropriate Neonate DRG’s (385 to 390), where CHOP has more comprehensive outlier coverage with State and Commercial payors.

CHOP then petitioned the State for a variance, citing the intent of the State payment system and the inadequate payments that were being generated for this group of patients with the system as it stands. The State agreed to the “variance,” and allowed CHOP to report the affected claims as the more appropriate neonate DRG. CHOP has since also proposed and received acceptance from Commercial payors to report the affected claims in the same manner.

Results

Identified and collected over $1.5 million in retrospective “underpayments.”
Language added in all Commercial and State related contracts allowing appropriate cases to be paid per cost outlier methodology on an ongoing basis, to protect future revenue streams.

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