MEDICAL BILLING BLOG

I am taking a brief respite from the previously mentioned outline for the series of posts on allowables and fee schedules to mention a key point about allowables - they are often ignored by insurance companies. If you are not systematically comparing your payments to your contracted allowables you are losing thousands of dollars. Most likely, your revenue is 7% lower than it should be - that is right 7%!

A recent National Health Insurer Report Card compiled by the American Medical Association measured payment accuracy of seven major payers: Aetna, Anthem BCBS, Cigna, Coventry, Human, United Healthcare and Medicare.

All of these payers to some degree strayed from contracted payment rate.   The worst offender was United (did not pay contracted rate in 38.4% of cases), followed by Cigna (did not pay contracted rate in 33.8% of cases), Aetna (did not pay contracted rate in 29.2% of cases), Anthem BCBS (did not pay contracted rate in 27.9% of cases), Humana (did not pay contracted rate in 15.8% of cases) and Coventry (did not pay contracted rate in 13.3% of cases).  Even Medicare missed contracted payment rates in almost 2% of cases.

It is hard to methodically track these underpayments.  From our experience at ClaimCare Medical Billing Services, as we look across multiple clients we will see the exact same CPTs being underpaid by the same amount by the same payer in a given month across all of our clients. The following month we will see the same payer switch to underpaying a different set of CPTs. These under payments are not huge but they add up quickly to big dollars for a medical practice. The combination of switching the codes being underpaid from month-to-month and keeping the underpayment amount "under the radar" can make this difficult for an individual practice to spot. It is also difficult for a billing office to spot if they are not comparing your payments to your contracted rates (and dealing with multiple procedure complexities properly).

At ClaimCare Medical Billing Services we have found that comparison of payments to allowables can increase a medical practice's collections by 5 to 10 percent.    This of course requires a strong process, powerful reporting technology and the ability to track complex procedures methodically-in the end, it can however add thousands of dollars to your bottom line.

Copyright 2009 by ClaimCare Inc and the ClaimCare Medical Billing Company

In my last article I discussed why fee schedules are set at levels above what a practice would expect to collect. In this article I will discuss some of the principles and best practices to consider when setting a practice's fee schedules. Before I start let me point out that this article is not about negotiating your contracts with payers. Doing that requires many steps, including obtaining a strong understanding of your cost structure. I am focusing only on setting the overall fee schedule for the practice once you know your allowables.

The main goals or principles to consider when setting a fee schedule are:

1. Be consistent: One key element of a fee schedule is not allowing inconsistencies in how the fees were set to make it hard to understand the true value of your AR at any point in time. If some codes are set at 300 percent of Medicare and others are set at 150 percent of Medicare and still others are legacy fees that are a random multiple of Medicare then it becomes difficult to look at your AR and quickly understand how much it should yield in terms of your collections. On the other hand, if a fee schedule is set in a consistent manner then some simple calculations will provide you with a yield which can be easily applied to you AR to provide you with a quick estimate of what you should collect. In a future article I will outline how to calculate your practice's yield.
2. Don't leave money uncollected: One of the key ideas to keep in mind is that no matter what an insurance plan is willing to pay for a claim, they will never pay more than you bill them. So, if BCBS is willing to pay $150 for a level 3 office visit but you bill them $125, they will only pay you $125. In addition, some plans pay a percentage of billed charges. Not many do this and typically they represent a small percentage of the practice's charges, but there is no reason to leave any money uncollected. Finally, payer allowables can change throughout the year. If you are charging BCBS $150 (from our previous example) and at some point the allowable goes up to $165, you will only receive $150 unless you increase your fees. So, you need to set you fee schedule high enough that you never bill a contracted payer less than they are willing to pay and high enough that you can reasonable take full advantage of plans that pay a percentage of billed charges. Finally, you want to set fees high enough that you have "wiggle" room and are not caught off guard by unexpected shifts in your allowables (like the BCBS example I provided earlier).
3. Don't scare away patients: So, given the two principles above why not simply charge 10 times Medicare and be done with it? Well, there are two ideas to keep in mind here. First, many self-pay patients (or those with high deductible insurance plans) will call a doctor's office and ask what about the charge for an office visit or procedure. If the patient hears that your office visit cost $1,500 they will likely move on to the next practice.  The second idea that you need to keep in mind is that patients will see on their Explanation of Benefits (EOBs) that you charged $1,500 for your office visit. Even though the EOB shows you may only have been paid $150, the idea that you charged so much can easily lead patients to view the practice as greedy and unreasonable.

So, given the ideas above you want to set the fee schedule consistently high enough not to leave legitimate money uncollected but not so high that you risk alienating patients when they receive an EOB or are told the charges for the day.

An easy way to achieve this balance is to set the fees at a reasonable percentage of Medicare. Often family practices will use 150 to 200 percent of Medicare and specialist will use 300 percent of Medicare. The percentage you select should be informed by practices in your area and your own payer contracts, but you will typically be quite safe with 200 to 300 percent of Medicare. Before finalizing your fee schedule you should always make sure that none of your payer contracts have carve outs or allowables that exceed (or even come within 25 percent) of your fees. One safety net you should always have in place is a report that identifies any claims that paid at 100 percent of billed charges. If you see this, then your charges for the codes on that claim are too low and you need to revisit your fee schedule.

Now that we have discussed why fees are set above expected collections and how to think about setting fee levels, it is time to discuss how your allowables and fee schedules interact to impact the reports and explanation of benefits that are seen in a practice each day. This will be the subject of the next article.

Copyright 2009, Carl Mays II and the ClaimCare Medical Billing Company

 Have you reviewed your compliance plan since the OIG released its 2009 workplan in October of 2008? If not, this is a good time to spend a little time reviewing your compliance plan - particularly in regards to how it applies to the areas that are receiving special interest from the OIG this year.

A significant thrust for the OIG this year is durable medical equipment (DME). This often maligned and misunderstood area will receive plenty of attention this year. In particular:

• power mobility devices,
• hospital beds and accessories,
• oxygen concentrators, and
• enteral nutrition therapy (tube feeding).

In addition, the OIG is revisiting how the DME error rates are calculated by Medicare. 

Key initiatives outside of DME that need to be kept at the forefront of your compliance checkup are:

• Physician expenses versus Medicare reimbursements for office visits, consultations and surgeries.
• "Incident to" services billed to Medicare. In particular, the OIG will be examining the qualifications of the non-physician providers providing incident to services to determine if they are truly qualified to provide the services.
• Independent Diagnostic Testing Facilities (IDTF) continue to receive special attention from the OIG. If you are an IDTF in an area with a large concentration of IDTFs then you will be at high risk of close Medicare scrutiny.
• The use of remote patient care in situations where Medicare requires face-to-face care.
• The OIG will also review the appropriateness of Medicare payments for sleep studies because there has been a sharp increase in sleep study payments in recent years.

If you are in a high risk group (such as an IDTF, DME supplier, a sleep study provider or a heavy user or remote/web-based patient consultations) then you should dig into the details of the OIG workplan and perform a thorough scrub of your compliance plan.

To view the full 2009 OIG Work Plan, please visit: http://www.oig.hhs.gov/.

I have had several questions submitted about how to design a good medical billing bonus system. To help folks that are considering implementing such a system I thought I would share a few key elements of any good billing bonus system. An effective medical billing bonus system is...

• Significant enough that people care about whether they achieve the bonus (a good bonus system will increase the base pay by between 15 and 20% for outstanding performers);
• Paid monthly - less frequently than that and people tend to discount the value;
• Differentiates between up front processes (getting claims out clean) and back end follow-up (dealing with claims that have denied);
• Based upon objective and not subjective measures;
• Outcome driven and not effort driven (i.e., based upon how many claims resolved within 60 days not how quickly claims are submitted);
• OIG compliant (primarily gives no incentive for up coding);
• Not easily gamed through tactics such as writing off hard to collect claims; and
• Balances the individual and the team. Success in medical billing is a team effort that includes the front desk, the data entry people, the insurance follow-up people and the patient follow-up people. Not everyone on the team, however, typically contributes equally. The bonus should reward the team but reward the stars a bit more than the rest.

A well designed bonus system for a medical billing department can be a challenge to design and implement, but it can pay huge dividends in terms of employee motivation and aligning their incentives with those of the practice.

Copyright 2009 by Carl Mays II, President, ClaimCare Inc

We are fast approaching the end of January and the point in the New Year when the majority of people's New Year's resolutions have already failed. This is, however, the time for renewed efforts to focus one's resources on achieving the desired goal. There are two keys to reaching your goals:

1. Treat your set backs as temporary failures and not total defeat (i.e., just because you broke down and smoked a cigarette does not mean you should just say I failed on my goal to quit smoking); and
2. Break your goal down into manageable pieces (i.e., I will lose 2 pounds in January; 2 lbs in February versus I will lose 25 pounds this year).

These ideas do not only apply to personal goals, but to business goals as well. If you are trying to improve your medical collections in 2009, you should build upon these concepts. So, given these two points what is the best way to achieve a New Year's resolution of improving your medical billing? The best place to start is with the goal of getting your claims out the door clean.  This is a great starting point because it does many wonderful things:

• It focuses you on the most critical aspect of billing. If the claims go out the door clean you will find that all of the rest of the challenges start to become much more manageable;
• It allows you to focus on achievable, smaller goals (85% of claims go out clean in January, 87% go out clean in February, etc);
• Set backs position you for better performance tomorrow. How? You look at the claims that did not go out the door clean and learn what went wrong. Do you have a problem at the front desk with gathering demographics? Do you have a problem with training your data entry people? Do you have one physician that consistently codes incorrectly? Do you have one payer that really dislikes one of your common procedures?
• It lends itself to technology aids. Invest in a scrubber that will help you find coding problems before you submit the claims (see our blog entry on claim scrubbers). Invest in insurance verification tools that will make it easier to have clean demographics. Invest in coding tools that will help improve your data entry performance.

So, as we approach the end of January this is the time to double down:

• Measure your current performance level;
• Set your medical billing goals high (96% of all claims will be paid on first submission);
• Break them down into bite size pieces (I will improve clean claim submissions by 2% each month), and
• Adopt the mentality that you will learn from your mistakes.

With this approach you can make 2009 your best medical billing year ever.

Copyright 2009 by Carl Mays II, President, ClaimCare Inc

If you are not aware and prepared for the 2009 cardiology billing and coding changes you may be leaving a lot of money uncollected.

The 2009 cardiology coding and billing changes are the most significant that have been seen since the mid 1990s.

Cardiology practices were hit harder than the average physician by this year's changes (with a 2% reduction in Medicare fees instead of the 1% increase seen by the average physician) driven in large part by changes that will impact imaging performed in the office.

Keep in mind the 2% reduction is an average number. Some practices will be well above this (especially heavy users of echo services) and others will actually see fee increases.

Here are examples of some of the upcoming changes:

• Significant changes in the codes used for follow-up on implanted devices (all of the old codes have been replaced) and external devices. The updated codes include new codes for interrogation and reprogramming of ICM and ICD devices, Pacemaker and Loop recorders.
• Global periods related to device follow-up now include global periods of 30 or 90 days. The new codes are now service specific (i.e., either an interrogation evaluation of a programming evaluation).
• Wearable cardiac telemetry devices (for instance Cardionet type service) now have specific codes. You no longer bill with an unlisted code. These new codes include the complication of global periods.
• The echo services are also seeing new codes. When you do an echo with a Doppler and color flow you'll have a new code to submit that bundles these services into one code. The same is true for a new stress echo code that bundles the stress test code and stress echo into one code.

These changes are far greater than the normally "tweaking" that occurs at the beginning of each year. If you cardiology billing department is not fully aware of the changes and how to respond to these changes it could have a significant negative impact on your practice. Be sure to invest in the proper training, coding resources and billing system upgrades to be prepared for 2009 cardiology billing.

Copyright 2009 by Carl Mays II

ClaimCare Medical Billing Services has interviewed countless candidates that have just graduated from a medical billing school and coding school. As a rule, we find that the courses in medical billing school (and coding school) add little value or knowledge to the resume of an individual with no medical billing experience. Typically graduates we hire from medical billing school start in our apprenticeship program alongside individuals that have not enrolled or graduated from medical billing school (i.e., they start in the exact same role as folks that have not made the investment in money or time for medical billing school).

The terminology and concepts taught in medical billing school no more prepare a person to be a full fledged medical biller than reading a book on how to drive a car prepares one for the challenges of actually driving a car - it is practice behind the wheel that is required. The academic elements can be helpful - just like supplementing practice behind the wheel with a manual on safe driving makes sense. Unfortunately, however, this is only true if the academic material is accurate. Medical billing companies have found that often students have been damaged by medical billing schools that either teach incorrect medical billing concepts or leave the students with a sense that they have nothing left to learn.

Most individuals would be much better off saving their money and finding a medical billing company or medical practice that will let them join and start with basic medical billing work such as calling on claims to verify status or verifying patient insurance information before the visit. Both of these activities give individuals a solid base for launching a medical billing career.

If you approach organizations with this plan in mind it is quite likely that you can find an entry level opportunity. Such an opportunity will allow you to earn an income while learning medical billing and will look much better on your resume than medical billing school.

Once you have established skills as a medical biller, then it can be helpful to study for and take a certified coder exam. A certified coder with no medical billing experience, however, is not in great demand.

So, if you want to break into the field of medical billing please consider pursuing an apprenticeship model it will serve you (and your future employer) much better than a medical billing school education.

Copyright 2008 by ClaimCare Inc.

Outsourcing medical billing to the correct medical billing company can insure that they have the same incentives as you do.

Almost all medical billing companies are paid a percentage of what they collect. This means they are only paid when you are paid. It also means the more they collect for your practice, the more they are paid. Internal medical billers, on the other hand, are almost always hourly employees. They are paid based on showing up in your office, not based upon how well they perform your medical billing or how much money they collect for your practice. This is not an alignment of incentives.

This issue, however, is often not fully understood or appreciated by many providers.  These providers frequently say: "the staff works directly for me in my office-- they are more loyal and will do a better job and I can see what they are doing".  Experience has shown, however, that this is often not true.   

I recently spoke with a partner at a busy cardiology practice.  While one of the billers was out sick, some paperwork was required and the supervisor went looking for it.  When the supervisor opened the missing biller's desk, a stack of unfiled, old claims was discovered.  It turned out about $40,000 of them were past timely filling deadlines.  They were lost.  I repeat-the practice lost $40,000!  When the biller returned from her leave, she was "sternly" reprimanded.   Let me say it one more time-she was reprimanded.  Not fired, but reprimanded.  Either way, the practice lost $40,000 in just this one instance alone. 

Why wasn't more severe action taken? Because of concerns with upsetting the billing staff and exacerbating a staffing problem that existed. The biller was moved from follow-up to the front desk where she is now being trusted to collect the critical demographic information required to properly bill claims.

This volume of missing charges should not have gone unnoticed. There should have been multiple reports that could have identified such a problem. The practice, unfortunately, did not know how to properly utilize the capabilities of the billing system and so, the required reports were never run. Proper use of a billing system requires much investment in time and training, an investment that hourly employees often do not make. This $40,000 in unbilled charges is likely a proverbial roach of this practice - in other words, for the one you see there are likely hundreds you do not.

If you select the correct billing company you can avoid nightmare situations like this. Here are some of the key elements you should seek when looking for a medical billing company:

• A fully integrated tracking system (charges by locations/provider and payments by source - lock box, office, PO Box) should be in place and you should have full visibility into the system at all times.
• Your medical billing company should reimburse your practice for what you would have been paid by the payers based on your allowable for any claims that go past timely filing for reasons within the medical billing company's control.  What this means is that you never suffer financially if the billing company drops the ball.  Try to have your billers reimburse you if they drop the ball.
• The practice should always (24 hours a day, 7 days a week) have access to the medical billing companies system. This allows the practice to see at any time exactly what is happening with their account.

Physicians are working harder for less as costs rise and reimbursements fall. This is exacerbated by selecting a medical billing approach that does not have the proper alignment of incentives to prevent disasters (such as $40,000 in unbilled charges) from occurring.

It has been said that the definition of insanity is doing things the same way and expecting different results. This certainly applies in the story outlined above. The biller that left $40,000 in charges unbilled will likely continue to cost the practice money. Just because she works for the practice does not mean she represents their best medical billing solution.

Selecting a world-class medical billing service that provides total visibility into their process and has incentives that are fully aligned with those of the practice is the most reliable road to outstanding medical billing and financial excellence.

Copyright 2008 by ClaimCare Medical Billing Services

The path from deciding to outsource medical billing to selecting your medical billing company requires a well planned selection strategy. A cornerstone of this strategy is well thought out and executed reference checks.

There are many critical stops to make in the journey towards your medical billing company selection. Reference checking is one of the most important stops along the road. There are several steps that must be taken to ensure through reference checking.

Although today's write-up is geared towards creating an effective interview guide, this is far from the only ingredient of a successful medical billing services company selection. Other critical ingredients include outlining the minimum requirements of an acceptable reference (e.g., does it need to be in your state, what specialties are acceptable, etc), deciding if you want to speak with a former client, outlining the roles of the people with whom your wish to speak (e.g., lead partner, practice administrator, day-to-day billing contact, etc), creating the interview guide, call the references, and making the final go/no-go decision.

Your interview guide will allow you and not the references to determine what topics are addressed in the reference calls. If you do not drive the calls, you may well end the process still unsure about your final decision. To kick-off the interview guide creation think about the worst things and the best things that could happen as a result of outsourcing medical billing. Keeping your mind on these best and worst cases develop questions that will help you determine where between these two extremes your potential medical billing company operates.

Narrow questions are typically much better than broad questions for reference checks. Broad questions such as "Did you billing improve after you outsourced?" will not give you specific enough data to make an informed decision when your reference checks are completed.

To insure you have the information you need at the end of the interview process use narrow questions such as "What were you days in AR before you outsourced and how did they change 3 months after you outsourced?" This gives you specific and actionable data.

Have you ever taken notes during a call and afterwards had trouble deciphering them? If you have you are not alone. A good way to combat this is to leave about a quarter of a page after each question (and sub question) to make sure you can write the answers on the same page with the questions. You have one final to-do before you start making calls. Review your questions with the following thought in mind "Will I be able to make a go no-go decision after these calls?" If not, what questions are you missing? Once you know that you have all your questions in order start scheduling your reference checks.

It is critical not to allow a good meaning but talkative reference to keep you from getting all of your questions answered. Make sure they know you have a pre-determined list of questions you need to address. Find out how long they have to speak with you and keep an eye on the clock to make sure you get all of the information you need. You should leave the door open for call backs by letting references know you may need to speak with them again.

You may find that one of your references brings up a point you had not considered. If they do, add the relevant question to the end of your interview guide and call back any individuals with whom you have already spoken to get this additional information.

Following the process outlined above will insure that you gather the factual information required to make an informed decision about your medical billing service.

Copyright 2008 by ClaimCare Medical Billing Services

Medical practices lose money every single day (often over 20 percent of their realizable income) because they are not utilizing medical billing specialists, technologies, processes and management that can compete with insurance companies.

As physicians are taking into consideration the use of medical billing services to stop the hemorrhaging of cash from their practices, they are faced with a broad range of options. On the diminutive end of the spectrum are home-based medical billers. On the opposite end of the spectrum are medical billing companies that employ hundreds of medical billers and have thousands of clients.

In thinking through the billing options available, it is essential to understand that medical billing is complicated and requires deep expertise and expansive experience. When a specialty is involved, such as cardiology billing, the requirements for success become even harder to realize. Success requires that the medical billing company have a team that is knowledgeable in the complex rules utilized by insurance companies to judge cardiologists' medical claims.

With cardiologists facing ever increasing costs they must insure that money is not being left on the table because they have a billing company that is not a cardiac billing expert. Cardiologists must also be aware that that many billing companies that claim cardio billing expertise actually outsource their cardiovascular billing work to at home billers. Situations like this are fraught with risk since the remote workers are not working in a controlled and monitored environment.

A key battle ground in the struggle to collect all of the money due a cardiologist is appealing denied claims and answering extremely specific and technical questions about procedures and diagnoses. Success In this arena requires significant experience, the kind that is only gained from serving many cardiologists for many years.

A company that does not encompass a wide range of cardiovascular billing experience will find it difficult to track underpayments since multiple procedure rules and cardiovascular procedures have significantly more complicated contractual adjustments than a typical family doctor or internist's claims. In addition, the billing software and system design of a generalist billing company will often be insufficient for the more complicated requirements of reporting and insurance follow-up required in billing for cardiovascular practices.

The cardiology-driven difficulties of medical billing encompass patient billing also. A cardiologist's patient balance process is more challenging because most of the balances are quite sizeable. Coupling this with the difficulties of explaining to a patient their complicated Explanation Of Benefits and the cardiovascular terminology on their bills drives the need for patient collection specialists that have a strong expertise in cardiac billing.  If patients are not handles with care then cardiologists will see their patient collections fall and their patient complains rise - not a good combination.

To avoid all these billing related pitfalls cardiologists need to utilize specialized cardiovascular billing services. It is not advisable for an internist to perform heart surgery, similarly someone without training in surgical coding and surgical billing is not qualified to offer reliable billing services for cardiologists.

Copyright 2008 by ClaimCare Medical Billing Services