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billing loophole

English translation: billing irregularity

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English term or phrase:billing loophole
English translation:billing irregularity
Entered by: Marian Greenfield
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16:06 Jan 21, 2003
English to English translations [PRO]
Bus/Financial / Fund reports
English term or phrase: billing loophole
The top detractor in the Fund was hospital management company Tenet Healthcare, whose share price tumbled after the company admitted that a significant portion of its profit growth last year was generated by employing a Medicare billing loophole.
Johanna Holmberg
Local time: 23:26
billing irregularity
A loophole is a means of escape or evasion (as with taxes). In this case there was some technality in Medicare billing that the hospital took advantage of to inflate it's profits, perhaps bunching billing or some such.
Selected response from:

Marian Greenfield
Local time: 17:26
Grading comment
Thanks very much!
4 KudoZ points were awarded for this answer

Summary of answers provided
5 +5billing irregularity
Marian Greenfield
5Overcharging Medicare
David Knowles
4 +1billing loophole examples
5 -1billing loophole
Gayle Wallimann



7 mins   confidence: Answerer confidence 5/5 peer agreement (net): +5
billing irregularity

A loophole is a means of escape or evasion (as with taxes). In this case there was some technality in Medicare billing that the hospital took advantage of to inflate it's profits, perhaps bunching billing or some such.

Marian Greenfield
Local time: 17:26
Native speaker of: Native in EnglishEnglish
PRO pts in pair: 732
Grading comment
Thanks very much!

Peer comments on this answer (and responses from the answerer)
agree  Peter Coles
10 mins

agree  Fuad Yahya
31 mins

agree  Momichi
2 hrs

agree  Rusinterp
8 hrs

agree  Dolly Xu
17 hrs
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10 mins   confidence: Answerer confidence 5/5 peer agreement (net): -1
billing loophole

It's something that is not being billed to customers. It's an omission, overlooked, something that just does not appear on the bill that should be paid. Customers have been getting something for free instead of paying for it.

Merriam Webster's Dictionary says:


A way of escaping a difficulty, especially an omission or ambiguity in the wording of a contract or law that provides a means of evading compliance.

    whirlpool.net.au/article.cfm/892 - 10k
    Reference: http://www.yourdictionary.com/
Gayle Wallimann
Local time: 23:26
Native speaker of: Native in EnglishEnglish
PRO pts in pair: 172

Peer comments on this answer (and responses from the answerer)
disagree  Peter Coles: In this context, billing loophole probably means the opposite of what you suggest. A loophole in the billing procedures at Medicare (has allowed Tenet to bill them inappropriately to inflate its profits, so the Medicare (the customer) is bei
7 mins
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21 mins   confidence: Answerer confidence 5/5
Overcharging Medicare

Hearing will probe Tenet's billing
Health care firm is accused of overcharging for hospital services
By Judy Silber

A state Senate committee will hold the first public hearing today investigating Tenet Healthcare Corp.'s questionable billing practices that were allegedly used to inflate earnings of the for-profit hospital chain.

The hearing in Sacramento will seek to clarify assertions by a nurses union that Tenet's workers' compensation claims are higher than those of other California hospitals.

The California Nurses Association in December said Tenet's bills to insurers are about double those of other hospitals for similar procedures. The hearing will also examine possible reimbursement loopholes that may have allowed the company to unduly profit from the system.

    Reference: http://www.bayarea.com/mld/bayarea/business/4951257.htm
David Knowles
Local time: 22:26
Native speaker of: Native in EnglishEnglish
PRO pts in pair: 612
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24 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +1
billing loophole examples

I'll get the text in a minute

Note added at 2003-01-21 16:38:31 (GMT)

More Scrutiny Before Entry

Home health agencies are now being asked about whether they have any \"related business interests\" before they are admitted into Medicare, to help determine if they have histories of fraud and abuse and to ferret out any future questionable billing patterns. This will also ensure that they do not use shaky financial transactions to exploit Medicare, such as billing through companies that do not exist or are unauthorized to bill Medicare for services (a loophole that allowed one home health agency to defraud Medicare of $16.5 million before being found and convicted);

As of Jan. 1, 1998, home health agencies must have provided quality care to at least 10 patients before being allowed to provide care to Medicare patients. At least seven of these patients must be receiving active care at the time the agency applies for entry into Medicare so that surveyors can assess the quality of the care they provide.

More Scrutiny Of Claims
The number of claims reviews is up 25 percent, and the number of cost report audits is being doubled with an additional $10 million set aside by Medicare;

Medical directors have been hired by every regional contractor processing Medicare home health claims to advise claims processors and educate providers about medically necessary care they can bill to Medicare.

Loopholes Closed
Home health care must now be billed based on where care is provided. Medicare in September, 1997 sent instructions to contractors processing home health claims to close a loophole which allowed agencies to provide care in low cost rural areas, but bill for it at higher urban rates where agency offices are based;

Patients who only need blood drawn will no longer automatically qualify for other home health services after February 5, 1998. This closes a loophole which allowed agencies to bill for services when they were not medically necessary.

.....Tenet specifically:

On Jan. 1, the Santa Barbara (Calif.) outfit stopped its much-criticized billing practices for Medicare \"outliers,\" or patients who undergo exceptionally risky and expensive procedures. The Centers for Medicare & Medicaid Services launched an investigation into Tenet\'s outlier strategy last fall, after an analyst revealed that these payments were 17% of Tenet\'s total Medicare payments, far greater than the national average of about 5%.

PROFIT PRESSURES. Revenues from outliers are expected to plummet from $65 million a month to $8 million, leading Tenet to lower earnings estimates for the year ending May 31, 2003, from $1.4 billion to less than $1.3 billion. For fiscal 2004, Tenet expects earnings to drop even further, to $950 million. Investors have pushed Tenet\'s stock down nearly 50% -- to around $16.80 on Jan. 10 -- since October, when the billing irregularities first came to light.

Tenet\'s profits are under pressure for other reasons, too. It plans to change the way it bills private insurers, making it less reliant on stop-loss payments, which provide a hospital\'s financial safety net when a patient\'s treatment costs exceed expectations, and more on fixed prices that it negotiates with insurers.

Barbakow believes Tenet will be able to raise prices enough to cover the most costly patients. But analysts say that\'s far from a sure bet. \"They could enter into a contract and then find that cost expectations were not correct,\" says Clifford Hewitt, an analyst for Legg Mason Wood Walker. Tenet might then end up swallowing more of the loss for expensive patients than it has in the past.

SYSTEM CHECKUP. On top of that, Tenet now faces relentless legal challenges. On Dec. 19, officials from the U.S. Attorney\'s Office raided Tenet\'s Alvarado Hospital Medical Center in San Diego, carting away 24 boxes of records related to Alvarado\'s physician-recruitment practices. On Jan. 2, the Justice Dept. subpoenaed Medicare billing records from 19 Tenet hospitals. And on Jan. 9, Justice filed suit on a separate issue involving Tenet\'s Medicare billing practices from 1992 to 1998. In addition, the company is facing an informal Securities & Exchange Commission investigation.

An already shell-shocked Wall Street barely flinched when Tenet announced the most recent inquiries. But some outsiders fear matters may be worse than they look -- especially the situation brewing in San Diego. Health-law experts say the Alvarado search warrant clearly shows that authorities are looking for potential violations of the federal antikickback and Stark laws, which prohibit financial rewards to doctors who refer patients to the hospitals at which they practice.

Plus, the investigation could spread beyond Alvarado. Among the documents requested in the warrants are \"records discussing strategies and/or plans for increasing patient admissions\" at any Tenet facility. The officials also demanded Tenet bank records and tax returns for the last six years. \"The government doesn\'t care about violations at just one hospital,\" says Michael Nolan, a health-care lawyer and partner with Lowenstein Sandler in Roseland, N.J. \"They\'re looking across the board at the whole Tenet system.\"

NO SO GREAT.Tenet spokesman Harry Anderson says no documents were requested from Tenet\'s corporate headquarters and that the investigation so far has not extended beyond Alvarado. Says Anderson: \"If they\'re looking deeper, we have not been informed or asked to supply any other information.\"

Still, the Alvarado mess can only add to Tenet\'s legal bills, and it may further crimp profit margins. Legg Mason (NYSE: LM - news) \'s Hewitt expects operating margins to drop from 20% in 2002 to 15% in 2004. \"You take away those outliers, and the margins aren\'t so great,\" Hewitt says. Determining how Tenet can improve its cost efficiency and get margins back on track, he adds, \"will be a several-year process.\"

Barbakow admits Tenet will have to cut costs. That infuriates many employees, who say Tenet is already too tight-fisted. For example, to save money, it has been slashing hospital cleaning staffs and outsourcing much of the janitorial work. Cleanliness has declined as a result, critics say. \"Our operating rooms weren\'t scrubbed down or sanitized often enough,\" says one former Tenet administrator, who asked not to be named. Responds Tenet\'s Anderson: \"We flatly and vehemently deny it. We meet all the federal and state guidelines for cleanliness and infection control.\"

\"INTENSE REVIEW.\" Analysts say Tenet will need to look at the corporate level, rather than the hospital level, for places to trim the fat. That may mean delaying new-technology purchases and other corporate initiatives. Tenet\'s Anderson says he doesn\'t know when investors can expect a plan to get profits back on track. \"For the past two months we\'ve been focused on the outlier situation,\" he says. \"Now, we\'re turning our attention to an intense review of operations.\"

With the government and investors breathing down Tenet\'s neck, Barbakow will have to work fast -- or Tenet\'s prognosis may continue to decline.

    Reference: http://cms.hhs.gov/media/press/release.asp?Counter=41
United Kingdom
Local time: 22:26
Native speaker of: Native in EnglishEnglish
PRO pts in pair: 773

Peer comments on this answer (and responses from the answerer)
agree  Rusinterp: quite a bit of research!
7 hrs
  -> Way too much!
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