Auditors say investigations by hospital oversight office ‘not adequate’

The state Office of Health Care Access failed to collect nearly $47,000 in payments from hospitals and did not properly investigate consumer complaints about hospital billing, according to a report by state auditors released this week.

In comments included in the report, the office, known as OHCA, disputed the findings related to billing complaint investigations but acknowledged the failure to collect late payments and interest from hospitals. In some cases, the office said, hospitals had been allowed to make payments late without penalty after showing good cause.

The report covered the 2008 and 2009 fiscal years, during which OHCA was an independent agency. It is now part of the state Department of Public Health.

The disputed part of the report stems from a review of five consumer complaints about hospital billing that OHCA received. They represented 20 percent of all complaints received during the audit period.

Of the five cases reviewed, the report said, four were not adequately investigated. Complaints either lacked follow up or the information the patient submitted did not match the price the hospital had told OHCA it charged.

State law requires hospitals to file with OHCA a list of what they charge for each service, and they are subject to a $500 fine if the amount charged for a service on a patient’s bill does not match its price on the list.

“OHCA never adequately evaluated the complaints to establish whether a billing discrepancy occurred,” the report said. “Based on our review of the four complaints, only one had sufficient documentation to draw a conclusion and should have resulted in a civil penalty.”

But in that case, the penalty was never assessed, according to the report, which noted that OHCA did not have documented policies or procedures for handling the complaints.

The report also found that OHCA missed out on $46,980 in revenue because it did not collect assessments on hospitals and failed to consistently levy interest and penalties on late payments.

State law requires hospitals to pay quarterly assessments to OHCA. Those that pay late are subject to a $10 fine and interest. In the 2008 fiscal year, OHCA collected $3.6 million from hospitals, and in 2009, it collected $3.95 million.

But OCHA did not collect $37,403 in assessments, according to the report.

In addition, the auditors found that OHCA failed to collect $9,577 in penalties and late payments on the hospital assessments. The failure to collect interest and penalties wasn’t across the board; in some cases, OHCA collected them.

The auditors cited “a lack of administrative control,” and noted that OHCA does not reconcile its records in the state’s chief financial data processing system, Core-CT. The agency also did not prepare periodic accountability reports, as the state comptroller’s office requires, the report said.

OHCA agreed with that finding, attributing it to “an error which occurred that should have been rectified,” and noting that there was not a consistent checks and balances process in place at the time. The office said it would develop procedures to track its finances and pursue inaccuracies “more vigorously.”

The office also said it has improved the procedures for late fees and interest, and follows them more consistently.

But OHCA took issue with the report’s characterization of how it handled billing complaints.

“None of these five complaints involved OHCA finding a discrepancy as the result of a cross check of an itemized patient bill submitted to OHCA by the consumer against a hospital pricemaster on file at OHCA,” it said.

In the future, the office said, it will follow up with consumers who do not respond to a request for a copy of the bill, and will “communicate to find out if the consumer has resolved the issue with the hospital or is having difficulty obtaining the itemized bill.”

Department of Public Health spokesman William Gerrish said the office now has a formal policy and procedure for addressing hospital billing complaints.

He said that it appears that OHCA has never fined a hospital over a billing complaint. OHCA got the authority to issue fines in such cases in 2008.

State Healthcare Advocate Victoria Veltri said she could not comment on the auditors’ findings or OHCA’s response, but she suggested that complaints from consumers who believe they have been wrongfully billed by a hospital could be referred to her office. “We work routinely with consumers, providers and insurers to resolve billing disputes,” she said.