Software glitch blamed for GMH's $2M billing error

by Mindy Aguon

Guam - At a time when the hospital's flatlining finances can use any cash infusion it can get, the hospital has discovered a $2 million billing error. While the software glitch may have been resolved, trying to get that two million paid may not be as easy.

As hospital management revamps its business practices, a major billing error was discovered.  Hospital chief financial officer Alan Ulrich says the inaccuracy was discovered during the intense scrutiny of pharmacy billing processes that revealed that 120,000 pharmaceutical charges were not billed, dating back to last May. "Unfortunately the provider of software didn't recognize the technology or the system that the hospital had," he explained, "and unfortunately charges clinical activity related to pharmaceuticals delivered to our patients didn't flow over with the business system for the submission of claims to insurers."

The hospital's software vendor, NTT Data, blamed the problem on a software upgrade that resulted in the charges staying in a sequestered file and never transferring over to the hospital's business system. The problem has since been rectified ensuring the hospital is now billing for pharmaceutical charges.

As a result, the hospital lost out on almost $2 million and is now working to go back and bill for those charges. "We are now in the process of correcting the claims," Ulrich continued. "For those who have already received a claim first with timely filing, if you will. we are doing things from October 1-January 15 and then from there we go from that month going back to the start of the problem."

But Ulrich confirms that based on agreements with two of the four insurance companies on the island, the hospital normally only has a 90 day filing window to submit billing.

Couple that with the fact that Medicare and Medicaid only reimburses the hospital on a fixed per diem rate, which means GMH isn't likely to get a single penny back from the pharmaceutical charges. But for those self-insured residents who were treated at the hospital between July 25 and January 15, you will likely get a bill as the hospital seeks to recover whatever it can.

Ulrich confirms a review continues to determine if there are any other glitches as well as any other areas where the hospital can improve on collections. "We are looking at getting more sophisticated processes and computerization in the revenue cycle, which is everything from registration through billing and collection," said the CFO.

The hospital had intended to convert to a new billing system, but that has been delayed until April but Ulrich says that delay is unrelated to the billing glitch.