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Anne Arundel County to Sever Ties with Billing Company After Audit

Publish Date: 01/24/2014

County-Requested Audit Reveals Billing Errors, Undertrained Staff and Compliance Risks

 

Annapolis, MD (January 24, 2014) – Anne Arundel County Executive Laura Neuman today announced the results of an audit of Xerox State & Local Solutions, Inc., the medical billing company the County has had a contract with since 2009 to collect fees for ambulance transport services.  By County regulation, the fee for County citizens is limited to the amount paid by the citizens’ health benefits providers.

 

The audit, conducted by J.R. Henry Consulting, Inc., revealed Xerox errors in submitting claims to health benefits providers, undertrained and ill-equipped Xerox staff, and, in some instances, failure by Xerox to collect money due to the County from health benefits providers because its employees were unaware of coding regulations. 

 

“We are entrusted with taxpayer dollars, so we will scrutinize the services of every vendor doing business with our County,” said County Executive Neuman. “This company has provided billing services since 2009, but we’ve put them on notice that their services are no longer needed.” Xerox was paid a percentage based on the sums actually collected from the health benefit providers.

 

The audit of Xerox State & Local Solutions was prompted by an astute fire official who observed the company’s claims processing practices and determined that the company had not been properly submitting claims to patients’ insurance providers, resulting in lost revenue to the County.

 

Summary of Critical Findings Include:

  • 66 claims reviewed for the audit (67.3%) were not billed or processed properly and were defective for a variety of reasons;
  • 33 claims reviewed for the audit (33.7%) had incorrect or inappropriate insurance billing codes;
  • 22 claims reviewed for the audit (22.4%) were “undercoded,”  and the County could have been reimbursed at a higher rate;
  • 9 claims reviewed for the audit (9.1%) indicate that a refund to the health benefits provider was required;

o Many of the claims apparently did not receive proper follow-up activity by Xerox;

o It is reported that similar coding problems by Xerox which occurred in 2009-2010 resulted in $71,000 overpayment demand from Medicare;

o Due to a documented failure of Xerox’s internally developed software billing program, thousands of health benefits claims with dates of service during the last half of 2012 were not processed in a timely fashion and required significant follow-up activity to properly process.

 

The current term of the contract with Xerox State & Local Solutions was set to end  March 31, 2014, and the vendor has been advised that it will not be renewed. A new billing company is being identified, and Xerox State & Local Solutions will work with the new company to migrate its data.


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