1.How to fight back with data
How to fight Back with Data Your practice has recently completed a contract with the largest payer in your market. This was accomplished in spite of extreme pressure (and not much support) from your hospital’s administration. Not only did you obtain that much-needed fee increase for your group, but you also tightened the language to further restrict payers on their ability to deny. Or so you thought.To ensure that your hard-won battle with managed care is yielding what you expect, your contract must be monitored daily for accuracies and to produce data necessary to document any inappropriate behavior or oversights relative to managed care companies, and in particular, rejections. Are managed care rejections a problem with your practice? If so, ask yourself what carriers are the biggest violators and why are they rejecting your services? Your billing system should have the data to enable you to systematically identify these carriers that constantly do not pay and under pay your claims. The billing system should also track why these carriers are rejecting your claims. What is missing from your billing operation most likely is the management reporting expertise needed to extract the data in a concise and meaningful manner. Nonpayment and underpayment of claims generally fall into one of four categories:
- No response to your claims submission;
- Outright rejections;
- Requests for additional information;
- Or noncompliance to negotiated fee schedule (under payment).
2.Collecting the easy Money
Collecting the easy Money There are many ways to determine how well your billing service is performing: Revenue generated, the number of patient complaints, accounts receivables turnover, and poor response time from management are but a few. Unfortunately, no single number or statistic will tell you how your billing company is performing. The proper way to evaluate a billing company’s performance is with specific financial statistics that, when evaluated simultaneously, clearly reveal what is happening with your practice from a collections effort perspective. One of the most persistent problems that groups encounter is dealing with a billing company that has adopted the Marginal Approach philosophy. Below is a discussion of this problem. When reading through all of the statistical comparisons in the following two paragraphs, keep in mind the assumption is very basic revenue is increasing at a much slower rate than procedure volume. This exercise identifies a billing company using the marginal approach to collections. This common practice used by some billing companies maximizes profits of the billing company at the expense of the group’s practice revenues. The outcome of the marginal approach is contained in the above charts. Exhibits 1 & 2 show charges and the increasing number of procedures. Exhibit 1 Exhibit 2 Exhibit 1 shows payments are increasing, but at a much slower rate than are charges and procedures. This phenomenon should cause concern because if procedures were flat, collections and physician income would decline. The growth in the practice is masking poor billing performance. Exhibit 3 substantiates the marginal approach. The average charge per procedure has increased and is most likely due to a shift within the practice to more expensive tests. But the average payment per procedure and the accounts receivable turnover have both declined. Remember, the cost of carrying accounts receivable is borne by the billing company not by the practice. The billing company uses this approach by fixing their profit margin at a predetermined rate. They then adjust or cut costs to achieve the goal. Any ramifications of the cost cutting, such as poor collections, are blamed on the payers or other external factors. Exhibit 3 For example, if a billing company is charging 8.5% of collections and wants to achieve a net profit of 15%, then for a procedure potentially worth $40, the billing company would be willing to spend only $2.89 to collect for that procedure. They collect revenues for the practice that are easily obtained and are not costly to collect. They will then write off the more difficult and costly-to-collect dollars. This is evident by the declining accounts receivable turnover ratio without a corresponding increase in receipts. When evaluating a billing company with declining accounts receivables, the total adjudicated claims will need to be determined to calculate the billing performance. In todays environment of high managed care penetration, it takes more resources and time, not less, to force managed care to abide by the contracts that they have entered into with your practice. This means it takes more work (cost) in order for the billing service to collect each dollar of client revenue. The Marginal Approach dictates that these billing companies not pursue the harder dollars and only collect the easy ones. The remainder is written off as contractual adjustments. The proper way to approach billing is with a macro approach. This approach looks at the total practice and determines, based on the mix of procedures, payer mix and geographic location, what the practice should generate in total revenue. This revenue number converts to a revenue per procedure – a key number to any billing company since all revenue and costs are measured by procedure. A billing company knows what it costs to collect, on average, each procedure. Instead of looking at the billing process in micro and determining how much effort will be spent per procedure, the macro approach looks at the practice in aggregate to determine the proper level of collection effort to be applied to all procedures. This means that, in the macro method, there will be some procedures pursued that the billing company has lost money collecting. Based on this expected revenue and the practice specific factors listed above, a billing company can generate a fee that will ensure the proper collection level and know that they will remain profitable. This radical approach has consistently generated higher levels of collections. This is CMPM’s philosophy. In today’s employment market everything must be done to maintain a competitive compensation package to retain and hire new physicians. In that regard, the marginal approach is not a viable long-term strategy for any practice. By leaving dollars on the table, the practice loses its competitive edge when it comes to recruitment, retention of physicians and pursuing other profitable ventures. Let us review your billing reports to determine if your practice is yielding all that it should. CMPM is a contract management firm engaged in the administration of the business and financial affairs of independent physician groups. The information contained in this publication is of a general nature and should be reviewed with the reader’s legal counsel, accountant and business manager before implemented. CMPM is not engaged in rendering legal , investment, or independent personal accounting services.
3.Who Gets Paid?
Who Gets Paid? Are you being paid for that telerad case sent to you in the middle of the night? You may be surprised to find out that the payer to whom you submit your bill may think that your interpretation is a QA function only. Why? Because another physician has already submitted a bill for the same procedure! As you know, Medicare generally pays for only one interpretation of a radiological procedure. Further, when multiple claims are submitted, Medicare (and other third-party payers) no longer takes physician specialty into account in determining whom to pay. If you are not specifically monitoring your practice’s rejections, you are undoubtedly losing some revenue to the ER physicians and to other medical specialties. The rejections are usually described as paid to another provider on your explanation of benefits. With payers other than Medicare, CMPM has had success in obtaining language in contracts that prohibit payment for radiology services to a specialty other than radiology. However, Medicare, non-compliant managed care companies, and other payors routinely pay other specialties for radiology services. It is not uncommon for ER physicians to submit claims for professional services when related billing requirements have not been met. CMS distinguishes between the professional component and a review of the procedure. CMS points out that a review, without a written report, does not meet the conditions for separate payment of the services since the review is already included in the emergency room visit payment. In explaining what is required to qualify as professional services, CMS states, the professional component of a diagnostic procedure furnished to a beneficiary in a hospital includes an interpretation and a written report for inclusion in beneficiary’s medical record maintained by the hospital. CMS clarifies this by example, stating a notation in the medical record saying fx-tibia or EKG normal would not suffice as a separately payable interpretation…. Further, CMS says that to be sufficient,the report should address the findings, relevant clinical issues and comparative data (when available). Emergency room physicians should be made aware of these requirements to avoid future confusion and possible false claims allegations. When the ER physician satisfies the requirements for billing the professional component for a procedure and a radiologist performs a contemporaneous interpretation, (whether oral or written, in person or via teleradiology) the ER physician should not bill for the interpretation and the radiologist is the physician to be paid (See, 60 FR 63132). To determine if the radiologist’s interpretation is contemporaneous,CMS has directed us to consider whether the interpretation was furnished in time to be used in the diagnosis and treatment of the patient (See, 60 FR 63132). On the other hand, a radiologist should not bill for an interpretation when the service is provided for quality assurance purposes. CMPM routinely monitors payment information to identify when an insurer pays an ER physician. We also provide the practice with concise quantification and full reporting on these occurrences. With this information, management can either stop the practice of non- radiologist billing for imaging studies either through the hospital administration and the group’s exclusive contract or through managed care with contract negotiations. With CMPM’s professional management staff, we have all but eliminated those types of rejections. Radiologists provide the highest level of interpretation services and do not provide 24-hour charge or night call as a quality assurance function. CMPM is a contract managemet firm engaged in the administration of the business and financial affairs of independent physician groups. The information contained in this publication is of a general nature and should be reviewed with the reader’s legal counsel, accountant and business manager before implemented. CMPM is not engaged in rendering legal, investment, or independent personal accounting services.
CMPM : 3769 Columbus Pike, Suite 220, Delaware, OH 43015 Ph.(614) 717-9840