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Dome - An eye on regulations

February 2012

An eye on regulations

Date: February 9, 2012

Q & A with Laura Callahan Mezan, chief compliance officer for Johns Hopkins Health System

Laura Callahan Mezan

As the chief compliance officer for the Johns Hopkins Health System, Laura Callahan Mezan runs a department that helps the health system’s member organizations and its employees follow regulations and policies to avoid billing errors to federal payers—specifically Medicare and Medicaid. During the past few years, as the health system has expanded to include Suburban, Sibley Memorial and All Children’s hospitals, the scope of her job has also broadened.

A former nurse at The Johns Hopkins Hospital, Mezan worked as a reimbursement attorney in the health law department of Ober, Kaler, Grimes & Shriver before joining the Compliance Department in 2005. Last year she replaced Tom Staffa, who will continue to consult for the Compliance Department through March.

Dome asked Mezan to talk about her work.

What is your department’s main goal?

Health care organizations have become a prime target of government audit programs and the federal and state False Claims Acts. Improper billing can result in large overpayments and even penalties, so it is important to bill Medicare and Medicaid properly. Our goal is to audit, educate and monitor our organization’s compliance with these regulations.  

Do our health system’s hospitals have similar Medicare and Medicaid populations?

It varies. Some of our hospitals have a significant Medicare population while others do not. The same goes for Medicaid. The payer mix often depends on the location of the hospital and the patient demographics of the area, especially with respect to age.

How does your department monitor so many hospitals?

We have very skilled compliance professionals who work with our affiliates by conducting audits and investigations, documentation and coverage guidance, and compliance training. We try to staff each hospital with a dedicated auditor. However, because it’s impossible for one person to cover all the departments in a hospital, we also have compliance liaisons in each affiliate as go-to people in case we need help with a governmental request or if we’re conducting an audit ourselves. In the past few years, some of the billing errors we have found through this process have resulted in substantial refunds to governmental payers.

What do you consider your greatest challenge?

Because the government estimates that 1 in every 10 health care dollars it spends is on potentially fraudulent or noncovered services, its auditing and oversight of health care organizations is growing by leaps and bounds. The Recovery Audit Contractor (RAC) program of Medicare—and now Medicaid—is charged specifically with identifying overpayments and underpayments owed to one of these federal programs

We try to stay ahead of what they are looking into with our own auditing. We want to make any corrections beforehand because the RAC auditors are incentivized to go after the least error.

What kinds of services do federal auditors review?

Perhaps the largest and ongoing issue hospitals have been dealing with are “one-day stays.” For example, rather than admitting a patient for a 24-hour inpatient stay, the government believes it’s less costly to put somebody who has chest pain, for example, in what is called an outpatient, observation level of care. Despite the fact that the Medicare and Medicaid rules say that physicians can ultimately decide whether or not to admit a patient to the hospital, that judgment is consistently questioned.

In addition, physicians at Hopkins often develop innovative treatments and procedures that may not yet be covered by Medicare and Medicaid. Our department is part of the process in place to make sure that any new drug or device that is not yet covered is not incorrectly billed by the hospital and to help facilitate a positive coverage determination.

How does the government determine if a billing error is an honest mistake?

To a great extent, this depends on the compliance safeguards an institution has in place. The tighter these safeguards are, the more likely the government is to regard errors as honest mistakes, rather than evidence of more widespread wrongdoing. Therefore, our organizational ethics position is really geared to what the government expects from a robust compliance program. We have written policies and procedures, knowledgeable compliance professionals, effective training and education, effective communication that includes the ability for anonymous reporting, internal monitoring and auditing, disciplinary enforcement and response, and prevention.

Acting in a responsible, compliant manner can help mitigate the consequences if an audit discovers erroneous billing. That’s a reason it has become particularly important over the past decade for hospitals to have compliance programs that demonstrate their intent at preventing bad conduct before it occurs. We want all of our employees to do the right thing.  Anyone may contact the Compliance Hotline anonymously at 1-800-WE-COMPLY.

—Linell Smith