Should You Outsource Your Medical Billing

This post was originally published by Chris Thorman. He blogs about medical billing programs at Software Advice. You can read the full post here: Should You Outsource Your Medical Billing?

One of the many business questions physicians face is whether to outsource their medical billing to third-party medical billing services or do it in-house with medical billing software. Some physicians want to outsourcing billing to a medical billing service. Others might want to maintain control of collections and do it all in-house.

Both methods of revenue cycle management have benefits and drawbacks. It's up to the individual practice to weigh the pros and cons before deciding which approach is best. We've seen many examples of when a physician group needs to outsource and when they do not. A cost analysis is one of the best things to preform when looking at taking action to outsource your medical billing. While cost is a major factor is not the only one.

Software Advice has broken down in-house billing and outsourced billing in terms of cost and qualitative factors. You'll need to weigh the differences carefully when assessing the needs of your practice and decide if outsourcing makes sense.

You can read the rest of the post here and feel free to contact us for a cost analysis of your practice.

Managing Insurance Carrier Denials in Physician Groups

 Medical claim denials cut right at the jugular of a practice's financial success. The 2009 American Medical Association's (AMA) Heath Insurer Report Card indicated Medicare denials at 4% of all submitted claim lines, with private insurers averaging a 2.8% denial rate.

Sound like small potatoes? Let's look at the numbers: A group practice has 10 physicians, each generating $250,000 in net revenue per year. Accepting a loss of 3% is equivalent to slashing $75,000, assuming all claim line items have an equal value. In reality, higher dollar line items are denied most frequently which further inflates the total loss to the medical group.

 

Today, a medical practice's operating expenses often exceed 50% of its total revenue. With thin margins defining the financial success of a group practice, an aggressive denial management strategy is critical. Adopting such a strategy may sound complex and time consuming, however, a streamlined plan can establish a more efficient billing and collections process resulting in huge dividends.  Here are six easy steps to managing the process in your practice:

 

• Put someone in charge - This will be the responsible party who knows what to look for, where to look for it, and how to address the individual issues while keeping tabs on the big picture.

 

• Standardize the way denials are posted - Denials are often posted in a practice's Practice Management system simply as contractual adjustments, limiting opportunity to trend and correct issues.  Standardized posting procedures offer specific tracking mechanisms and allow generation of meaningful management reports that assist in identifying specifics of denied items.

 

• Create a denied claims log - Logging claim denials provides the ability to track claim numbers, dollar values, dates of resolution and corrective measures. Some practice management system software products can automate this process.  Where automation is not an option, it can be done manually.  Either way, the bottom line is - it should be done.

 

• Track denial reason codes - Are claims denied due to timely filing limitations? Are patients out of network?  Were services considered not medically necessary or non-covered?  Tracking denial reason codes allows a practice to understand the root cause of each denial, providing the opportunity to reduce denial occurrences.

 

• Take corrective measures ("close the loop") - Many claim denials are a result of operational oversights.  Unbundling, inadequate documentation, or even a mismatched age with a procedure code are all denial types that can be remedied by educating staff in coding and billing guidelines.  For example, slight changes to the office registration process could significantly reduce patient eligibility denials. Or perhaps physicians are ordering services without completing the patient's carrier requirements resulting in authorization denials.  In this scenario, physician education and procedural tweaking would decrease future denials and expedite payment.

 

• Embrace efficiency - If automation is available in the practice management system, use it.  Utilizing a paperless environment offers easier tracking and enhanced accountability options while reducing overhead.  Electronic tickler files can serve as an excellent denied claims log.  Also, most clearinghouses offer online access that allows monitoring of claims traffic.  In many cases, carriers provide electronic acknowledgement reports identifying receipt or rejection of claim batches.  In addition, claim scrubbing tools are frequently made available at the clearinghouse or payer level that identify denials and corresponding denial reasons.  Some clearinghouses offer "real time claims adjudication" where minor corrections can be made online (changes to an ICD-9 code or CPT code) for immediate resubmission of the rejected claim.

 

Unaddressed claim denials are as serious as the holes in the hull of a ship. Over time, revenue leakage will sink the entire vessel. By utilizing these easy steps, practices can increase the level of clean claim submissions resulting in elevated collection rates that assist in keeping the practice financially viable for many years to come.

CDHC Consumer - Directed Healthcare - Medical Billing News

ARE YOU READY?

(Part 1 of 2)

The burden of healthcare costs is clearly shifting away from contractual payers resulting in increased patient out of pocket expenses. Under Consumer-Directed Healthcare (CDHC), patients are held to higher deductibles and co-insurance amounts. . According to the Department of Treasury, an increasing number of employers are offering a CDHC plan option for their employees.

http://www.treas.gov/offices/public-affairs/hsa/pdf/fact-sheet-dramatic-growth.pdf 

This growth is already proving evident in increased account receivables in patient responsibility for many practices. Now is the time to consider this impact and address how CDHC is changing the billing and collections best pra ctices used to manage physician practices. Although practices vary by specialty, region, etc., there are some basics to consider as part of every action plan. These include but are not limited to, payer contracts, patient education, time-of-service (TOS) collection processes, and staff education.

Understanding the concept of High Deductible Health Plans (HDHPs) normally offered in conjunction with Health Savings Accounts (HSAs) is critical to the physician practice expecting to maintain strong cash flow and minimize bad dept. Participants in qualified HDHPs are incentivized by lower premiums as well as the ability to participate in tax-free HSAs. Proponents are hopeful this will cause consumers to manage their own healthcare budget dollars. If they are able to control their expenditures throughout the year, HSA funds are allowed to "roll-over," creating a build-up of monies to cover the higher deductibles, out-of-pocket expenses, and future medical costs during retirement. In general, an HSA account is treated much like a 401k with regard to penalties, i.e. withdrawal for non-medical expenses, increasing maximum tax-free contributions, and risk.

Treas.gov is a reliable source of basic information on HDHPs and HSAs as well as the statutory requirements under which they are administered.

http://www.treas.gov/offices/public-affairs/hsa/faq_basics.shtml#hsa2

Ten Steps to a Successful Medical Billing Process

Medical insurance billing can be an overwhelming and complex process, even for those who are involved with it daily.  The effectiveness of the billing process can significantly impact the finances of a practice.  Following these 10 steps can assist a practice in achieving prompt and accurate payment for services.

 Download The 10 Steps Of A
Successful Billing Process

CMS PROPOSES PAYMENT, POLICY CHANGES FOR PHYSICIANS SERVICES TO MEDICARE BENEFICIARIES IN 2010

 The Centers for Medicare & Medicaid Services (CMS) announced today proposed changes to policies and payment rates for services to be furnished during calendar year (CY 2010) by over 1 million physicians and nonphysician practitioners who are paid under the Medicare Physician Fee Schedule (MPFS).  The MPFS sets payment rates for more than 7,000 types of services in physician offices, hospitals, and other settings.

CMS is making several proposals to refine Medicare payments to physicians, which are expected to increase payment rates for primary care services.  The proposals include an update to the practice expense component of physician fees.  For 2010, CMS is proposing to include data about physicians' practice costs from a new survey, the Physician Practice Information Survey (PPIS), designed and conducted by the American Medical Association. 

The Medicare law requires CMS to adjust the MPFS payment rates annually based on an update formula which includes application of the Sustainable Growth Rate or SGR that was adopted in the Balanced Budget Act of 1997.  This formula has yielded negative updates every year beginning in CY 2002, although CMS was able to take administrative steps to avert a reduction in CY 2003, and Congress has taken a series of legislative actions to prevent reductions in CYs 2004-2009.  Based on current data, CMS is projecting a rate reduction of -21.5 percent for CY 2010. 

As part of health care reform, the Administration supports comprehensive, but fiscally responsible, reforms to the physician payment formula. Consistent with this goal, the Administration announced in the FY 2010 President's Budget that it would explore the breadth of options available under current authority to facilitate such reforms, including an assessment of whether the cost of physician-administered drugs should continue to be included in the payment formula.  Thus, while working with Congress to develop a more appropriate mechanism for updating physician payment rates, CMS is proposing to remove physician-administered drugs from the definition of "physician services" for purposes of computing the physician update formula in anticipation of enactment of legislation to provide fundamental reforms to Medicare physician payments.  While the proposal will not change the projected update for services during CY 2010, CMS projects that it would reduce the number of years in which physicians are projected to experience a negative update.

CMS is also proposing to stop making payment for consultation codes, which are typically billed by specialists and are paid at a higher rate than equivalent evaluation and management (E/M) services.   Practitioners will use existing E/M service codes when providing these services instead.  Resulting savings would be redistributed to increase payments for the existing E/M services.  

CMS is proposing to increase the payment rates for the Initial Preventive Physical Exam (IPPE), also called the "Welcome to Medicare" visit to be more in line with payment rates for higher complexity services.  The IPPE benefit was mandated by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 to pay for an initial assessment of key elements of a beneficiary's health status within six months of the beneficiary's enrollment in Medicare Part B.  Subsequently, Congress extended the time period for the IPPE benefit to within one year of the beneficiary's enrollment in Part B.

 

In addition, CMS is proposing to refine how Medicare recognizes the cost of professional liability insurance in its payment system.  While these changes would have a modest impact, they will promote payment equity by redirecting the portion of Medicare's payment for professional liability insurance to those physicians that have the highest malpractice costs.

 

Taken together, refining the practice expenses, eliminating payment for the consultation codes and revising the treatment of malpractice premiums would increase payments to general practitioners, family physicians, internists, and geriatric specialists by between 6 and 8 percent (before taking into account the proposed update and other proposed changes to the fee schedule).

 

The proposed rule would also implement provisions in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) that added new Medicare benefit categories for cardiac and pulmonary rehabilitation services, and for chronic kidney disease (CKD) education, beginning January 1, 2010.  The proposed rule outlines what these programs would entail, how they would be paid under the MPFS, and the criteria for covering these services.

CMS is proposing two changes to address concerns from the Medicare Payment Advisory Commission (MedPAC) and the U.S. Government Accountability Office (GAO) about rapid growth in high cost imaging services.  First, CMS is proposing to reduce payment for services that require the use of expensive equipment which would produce a redistribution of the resulting savings to increase payments for other services, including primary care services.  The current payment rates assume that a physician who owns this type of equipment will use it about 50 percent of the time, but recent survey data suggest this expensive equipment is being used more frequently.  As the use of this type of equipment increases, the per-treatment costs for purchasing, maintaining and operating the expensive equipment declines, making a reduction in payment appropriate.

 

Second, CMS is proposing to implement a requirement in the MIPPA that suppliers of the technical component of advanced imaging services be accredited beginning January 1, 2012 by designating accrediting organizations (AOs) for these suppliers and utilizing the imaging quality standards that have been developed by the AOs.  The accreditation requirement would apply to mobile units, physicians' offices, and independent diagnostic testing facilities that create the images, but would not apply to the physician who interprets them.  According to the GAO, spending on advanced imaging services, such as computed tomography (CT), magnetic resonance imaging (MRI), and positron emission tomography (PET), is growing almost twice as fast as spending on other types of imaging services, and is a significant contributor to the rapid growth in health care spending in recent years, but there is little administrative oversight to ensure the quality of care.  In a separate regulatory action, CMS will address suppliers' accountability, business integrity, physician and technician training, service quality, and performance management. 

 

The proposed rule contains a number of provisions to promote improvement in quality of care and patient outcomes through revisions to the Electronic Prescribing Incentive Program (e-Prescribing Program) and the Physician Quality Reporting Initiative (PQRI).  Eligible professionals or group practices that meet the requirements of each program in CY 2010 will be eligible for incentive payments for each program equal to 2.0 percent of their total estimated allowed charges for the reporting periods.  CMS is proposing to simplify the reporting requirements for the electronic prescribing measure and to provide eligible professionals with more reporting options.  CMS is also proposing a new process for group practices to be considered successful electronic prescribers. 

 

In addition, CMS is proposing to add more measures and more measures groups for eligible professionals to report under the PQRI, to provide a mechanism for participants to submit quality measure data from a qualified electronic health record and to create a process for group practices to use for reporting the quality measures.

CMS will accept comments on the proposed rule until August 31, and will respond to all comments in a final rule to be issued by November 1, 2009.  Unless otherwise specified, the new payment rates and policies will apply to services furnished to Medicare beneficiaries on or after January 1, 2010.

 

For more information on the proposed rule, please see:

www.federalregister.gov/inspection.aspx#special or

http://www.archives.gov/federal-register/public-inspection/index.html

 

A Fact Sheet providing more information about the e-Prescribing Program and PQRI proposals can be found at:

www.cms.hhs.gov/apps/media/fact_sheets.asp

Where Is My PQRI Bonus Check?

Are you waiting for a bonus check for PQRI 2008?

CMS announced the incentive payments for the 2008 reporting period will be paid to the holder of the TIN in fall 2009.   Successful participating providers can expect 1.5 percent of total allowed charges for covered Medicare Part B services billed.  You should register your security official for an IACS account at http://www.qualitynet.org/ to view your analysis report. 

Are you continuing to report in 2009?  MIPPA (Medicare Improvements for Patients and Providers Act of 2008) established PQRI as a permanent program and increased the incentive payment to 2.0 percent of total allowed Part B Physician Fee Schedule charges for the 2009 program.  To review additional detailed information about PQRI go to www.cms.hhs.gov/pqri.