An Omaha company that saves the government money is about to grow, in part because of Obamacare.
StrategicHealthSolutions has moved its 136 Omaha staff members into TD Ameritrade's former office at 4211 S. 102nd St. to make room for the growth. Over the next six to eight months, its expanded Medicare and Medicaid contracts will require adding 100 or more new employees.
Most will focus on reviewing claims from hospitals, doctors and other care providers to make sure they properly meet rules for payment.
The federal General Accounting Office has estimated Medicare's improper payments — fraud, waste and errors — at $48 billion a year, nearly 10 percent of Medicare's annual spending on health benefits.
Obamacare, known officially as the Patient Protection and Affordable Care Act, aims to reduce those improper payments to help balance out the cost of other features of the law aimed at extending coverage to millions of uninsured.
Workers at Medicare contractors like Strategic are the ground troops charged with that job.
“We have found significant costs,” said Peg Stessman, Strategic's owner. “We have found millions of dollars.”
Last year, the General Accounting Office, which oversees federal spending, recommended that Medicare strengthen its use of payment review, including adding incentives for contractors to prevent improper payments.
The Affordable Care Act, passed in 2010, enhanced Medicare's authority and increased its budget for fighting fraud, abuse and inappropriate billing, said GAO spokeswoman Kathleen King. That stepped-up responsibility is the key element in the law's effort to stop improper payments, both after payments are made and before.
“You're paying out more money than you should have, and the chance of collecting it again are not that great,” King said. “It's better to stop the payments before they're made.”
Medical contractors send out more than a million requests each year to health care providers for records to be checked for proper billing on behalf of Medicare and Medicaid.
StrategicHealthSolutions, in federal parlance, is known as a supplemental medical review/specialty contractor for the Centers for Medicare & Medicaid Services. The company holds several different health care-related contracts with the government.
Stessman, who has nursing and business degrees from the University of Iowa, started Strategic in 1997. She later served as president of IntegriGuard LLC, which won a federal contract to monitor Medicare's prescription drug discount program during its infancy.
Nine years ago, she returned to Strategic and began bidding on new government contracts to do similar work for Medicare and Medicaid. The firm has a satellite office in Columbia, Md., with a staff of about 30, and 20 other people who work from their homes.
As a small woman-owned business, Strategic qualifies to bid on contracts set aside for businesses that are underrepresented among federal contractors.
Strategic has a Mission Oriented Business Integrated Services Contract, which is an umbrella contract with the federal General Services Administration. “It's like a ticket to the party,” Stessman said. “Once you get in, you get to bid.”
Many of the contracts are with the Centers for Medicare & Medicaid Services, which oversees those programs within the U.S. Department of Health and Human Services. The Omaha company is one of several carrying out the work on a nationwide basis.
Stessman's twin daughters, Ashley and Adrian, started working for the company as college students, answering telephones and doing other routine chores. Today Adrian is a research analyst and Ashley is in the company's marketing and communications division.
Bringing her daughters into the company was a good opportunity, Stessman said. “As they were growing up, they had no idea what Mom did. Now that they're in it, they can see what it entails. It's been a real eye-opening experience.”
Strategic doesn't handle fraud cases, although its staffers have turned some suspect information over to the proper authorities.
Instead, the company concentrates on errors and disagreements that can arise in the complex system of federal payments for health care, as well as on finding ways to make the payment system more efficient and improve its quality.
A hospital might put the wrong payment code on a patient's bill, for example. Or in the course of a complex medical case, two providers might bill for the same service. Or someone might be enrolled in a Medicare program who isn't truly qualified.
“We see blips in data,” Stessman said. By analyzing the information that comes in, the office can spot problems and fix them. If patients or medical providers disagree with government payment decisions, Strategic can handle appeals.
“The desire is that they will bill appropriately,” she said. “Honest mistakes occur, and those types of errors are the things that we find. When they make billing errors, we also hope that they learn from those errors.”
Strategic also helps educate care providers and patients on proper procedures — how to qualify for prescription drug coverage, for example. And it helps find ways that the federal offices can implement new programs more efficiently.
The latest contract calls for a significant increase in spending in 2014 and beyond, with an expected higher level of cost savings as well. “That is really driving the need for additional staff,” Stessman said.
Nearly all the new hires will have college degrees, many of them nurses with experience in medical records reviewing and related skills. The company also hires lawyers, doctors, pharmacists and other professionals.
The Affordable Care Act's emphasis on switching to electronic medical records will help with the work, she said. Strategic already receives some information electronically, although many providers email digital images of paper records or send paper copies.
“We still get a lot of paper records,” she said.
Electronic data provide more usable information: It can be searched electronically and analyzed to turn up problem trends and spot ways to improve efficiency.
Stessman said her company also helps the Centers for Medicare & Medicaid Services tackle new problems that come up, sometimes before the centers realize there's a problem. “It's a very difficult job to manage all of Medicare and Medicaid. We assist in devising strategy.”
For example, the company helped find ways to avoid waste in Medicare's managed care and drug assistance programs, “helping them identify what might be potential vulnerabilities. We try to come up with solutions to minimize those risks or eliminate them altogether,” Stessman said.
“Sometimes the rules are complex,” she said. “Part of it is helping the government recognize where training would be appropriate. We collaboratively advise them on things we see from our perspective.”
The government wants its services to be accessible, Stessman said, “but that can make it easy for individuals who are not the most ethical, easy for them to defraud the government.”
For example, she said, the Affordable Care Act added “special needs plans” under Medicare for long-term care and drug benefits. But the initial enrollment process ended up qualifying people who should not have been enrolled. Strategic helped put tighter rules in place.
“We helped streamline and strengthen the enrollment process so there was better evaluation of candidates before they got enrolled,” Stessman said.