Larry M. Graham

May 14, 2015

The Honorable Charles Boustany, MD

United States House of Representatives

One Lakeshore Drive, Ste # 1775

Lake Charles, LA 70629

Dear Congressman Boustany,

In response to your inquiry regarding our hospital’s challenge in working with the VA, please accept the following:

Lake Charles Memorial Hospital (LCMH) has outsourced the billing and collection of VA claims to Alegis Revenue Group, LLC (Alegis) as a result of the difficulties in collecting amounts due from the VA.  Alegis currently handles the VA claims for 36 Non-VA facilities, covering 7 states in 6 different VA Regions (VISN5, VISN 8, VISN 9, VISN 16, VISN 17, and VISN 18).  According to Alegis, the cost in managing this VA inventory has been three times or greater than the cost to manage other payer inventories.  Additionally, many of the issues presented below with regard to the VISN16 claims processing are present in the other VISN claim processing units.  LCMH received the following synopsis from Alegis and at the present time is willing to share this information with you. 

Below is the current summary of Lake Charles Memorial Hospital’s VA inventory broken out by claim year:

Unresolved Claims

Highlighted in yellow are the “Unresolved Claims” that are still pending adjudication/resolution from the VA. The claims from 2014 and older have been billed, re-billed, resubmitted, and reconsiderations filed multiple times to no avail.  All initial billing done by Alegis is done electronic and a red & white Uniform Billing form (UB) is also printed and bundled with all supporting documentation and mailed via certified mail to the appropriate VA claims processing unit.  Alegis tracks and confirms delivery of all submissions to prevent any delays as well as prevent denials for missing medical records or no claim on file. According to Alegis however, 66% of the claims delays are for the following reasons that fall on the Central Fee Unit (CFU) side of the process:

·      Alegis has not been able to locate where the Preliminary Fee Remittance Advice Report (aka PFRAR or PFAR) letters (which provide the adjudication of submitted claims) are being sent or if they are in fact being sent to determine the ultimate resolution of the claim.  There does not appear to be an electronic methodology of obtaining PFAR letters.

·      Medical Records processing is still causing erroneous Electronic Data Interchange (EDI) claims rejections and claims delays. Alegis has shown the Veterans Integrated Service Network (VISN) proof of timely submission via Certified Mail of records delivered to the CFU yet the EDI claims are rejected and closed. Apparently, the submitted red & white UB claim form that is sent along with the supporting documentation is also not being scanned into any archive at all.                                                       

·      “Claim Not on File” denials continue despite our proof of paper billing via Certified Mail. Possible scanning delays or issues at the CFU may be the issue here.  It is our understanding that this may also be partially caused by CFU staff who have the ability to delete claims out of the system.

·      “EDI Re-Route” rejection issues generating from the initial claim verification process are causing processing delays from the start. The assignment of a claim to a VA Medical Center (VAMC) is based on the patient’s zip code listed on the claim. Alegis confirmed with VISN 16 that the zip codes on several claims with this rejection reason actually do belong to the VAMC that the VISN is having to re-route the claims to and not the VAMC that the EDI process assigns them to.  Alegis recommended to the VISN 16 that these Re-Routing issues should be escalated to the Fee Basis Claims System (FBCS) personnel who handle these types of issues to be researched and resolved to prevent future re-route issues and delays.

·      Many of the claims on our claims status spreadsheets end up with a status of “Approved; Reopen claim and sent for processing”.  This is a clear indication that the FBCS and the CFU staff are likely causing erroneous or premature rejections/denials.

                Overall, the communication and responsiveness from VISN16 has improved significantly over the last 5 months. They are also more willing to assist on getting problems not only identified, but also corrected. Although this represents great progress in communication, VISN16 has not produced a signification improvement in aged claims resolution or cash flow for LCMH.

There apparently remains significant staffing shortages at VISN16 that continue to delay the resolution of claims (payments or final denials), and in particular, each VISN lacks adequate staff to review and adjudicate Requests for Reconsideration.  

Sincerely,

Larry M. Graham

President & CEO

Lake Charles Memorial