Volume VI Number 2
|The Newsletter of
D E K A Y E Consulting, Inc.
231 Oakview Avenue
APCs: READY OR NOT!
by Allan P. DeKaye, MBA, FHFMA, President & CEO, D E K A Y E consulting, inc.
History Repeats Itself
The waiting appears to be over. After many months of delay, the long-awaited issuance of Final Rules calling for the implementation of APC’s (Ambulatory Patient Classifications) is expected (April 2000). It we take a page out of military history, we know to look at battles past to see how "war" was waged, and if it was "won" or "lost." If there are lessons to be learned, then perhaps we only need look back to the implementation of PPS for Inpatient services with the advent of another acronym: DRG’s (Diagnosis Related Groups).
There are parallels to be drawn. A new payment system, changing emphasis on workflow and data collection, introduction of new coding schema and modifications to our patient accounting information systems. Yet, there are differences, too. Where DRG’s were applied to an almost finite number of encounters (i.e., patient admissions), APC’s will be applied to a vastly larger volume of outpatient services including clinics, ER, ambulatory surgical procedures, and private ambulatory ancillary services.
At first blush, the impact appears overwhelming, the tasks Herculean. Yet, for many the assessment phase has long been underway, anticipating the inevitable reality that this change would finally come to pass. Unfortunately, many had adopted a "wait and see" attitude; for these providers, there would be much concern–and lots of catching up to do.
Preparing for Battle
The impact analysis should have addressed many of the following criterion (high level summary):
Identify and analyze the new regulations and provide an overview for senior and middle management;
Using this analysis, form a multi-disciplined "task force" to study in-depth impact on:
Financial impact (both revenue and expense side)
Operational impact on affected departments
Using the "impact analysis", develop an APC policy, procedure and operational scenario as it pertains to each of the following departments:
Appointment and Scheduling
Admitting and Registration
Ancillary and Clinical areas
Concurrently develop monitoring and measurement tools (involve: Administration, Finance and Nursing) and report
Prepare for implementation rollout
While this framework provides a general workplan model, many providers will have gone to greater levels of detail in preparing for this change.
The Three "C’s"
Winning at APC’s will come down to three operational sequences: coding, claims and co-payments! Will providers be able to easily adopt the new coding conventions, place them appropriately in a "clean claim (electronic)" format, and manage to collect co-payments. Providers who have gotten this far, know that it doesn’t get easier from this point forward.
Each of these criterion elements presents unique attributes and challenges. Some of these include:
Coding is already a challenge for most outpatient services. Because of the large volume, providers rely heavily on pre-formatted checklist or Superbill formats. Even where automated system prompts are available, staff familiarity with medical terminology, coding conventions (including modifiers, etc.) and lack of awareness about ABN’s or payer requirements may prove to be a delimiting factor, in addition to severe resource limitations.
Further complicating the picture is the decided shortage of credentialed medical records coding professionals. Even where the skill sets are available, these staff are usually found working on the inpatient (and perhaps ambulatory surgery) cases. Correct coding is an essential ingredient to ensuring compliance, but also financial correctness.
Systems supporting the new APC requirements have been slow to emerge, in part because of the delay in issuing the final regulations. IT vendors have been reluctant to invest R&D dollars until final regulatory issuance, an argument that is hard to refute–short of the contractual clause that most have regarding "their commitment to meet federal and state requirements."
Claims generation with all of the "i’s" dotted and "t’s" crossed will weigh on all patient accounts and finance departments. If a provider gets as far as properly encoding its APC qualifying claims, then the ability to generate a "clean electronic claim" will be the next sequential hurdle it must overcome.
"How many attempts will it take to succeed," will be a fair question to ask given most system platform’s past performance with regulatory compliance. Perhaps the fact that for most providers outpatient A/R is usually one that is already "too high," there will be some tolerance for additional slippage. However, if "crisis is opportunity," then the conversion to APC’s may be an opportunity to start over.
While Outsourcing isn’t always a correct solution for all providers, for some it may make sense to consider using this approach so that you free up manpower resources to allocate to the new APC processes, whether front-end or back-office. The outsource vendor can then extend your office operations by taking over the follow-up of aged and open outpatient A/R.
Co-Payments will not be as simple to calculate as before, although the challenge to collect may be more daunting. However, given the change necessitated by having to adopt national values to establish the co-payment amount, providers will have an unique opportunity to notify patients about the change. By using this opportunity to educate patients presents another occasion when you can look for time of service payment.
Again, assuming all of the prerequisite "billing" criteria has been met, a provider’s ability to augment the necessary table of co-payment values will allow residual billing (assuming it is not fully collected at time of service) to be generated on a timely basis. The growth in uncollected outpatient deductibles and co-payments has been an issue "pre-APC," and is likely to loom as an impediment on a "go forward" basis, if not addressed.
While these "Three C’s" have the potential to handicap an organization, the need for "S and T" also needs to be addressed.
DRG’s had been viewed as a major change worthy of a considerable investment in staff training and awareness. Not unlike our "commitment to compliance," where providers are also reported to have made sizable investments in staff in-servicing, APC’s should not be an "orphan regulation." Given the sheer volume alone, providers will need to not only create new and better ways to adhere to this new model, but will need to convey these procedural and regulatory changes to a large multi-disciplined cluster of personnel.
With anticipated shortage of qualified coding personnel, providers will no doubt be looking to systems technology to create "logical shortcuts" and/or pre-defined patterns of care or service delivery that can be taught. Expect to also see a lot of "80/20" rule applications by familiarizing staff with the most frequent clinical conditions that will likely occur. Providers should keep in mind that the end product, "a bill," will need to meet not only APC requirements, but compliance requirements to ensure adherence with the "False Claims Act."
Inspirational "Battle Cries," Sayings or Songs
Having started by noting the similarity with "wars," it may be fitting to close with a theme apropos of conflict. Perhaps you can gauge your own facility’s or department’s APC readiness by choosing from the following list of inspirational (or depression) comments (with apologies to the authors, songwriters, etc.).
"We’ve just begun to fight" [John Paul Jones]–for those just beginning to respond
"Give Me Liberty or Give Me Death" [Patrick Henry]–for those not wanting to take part in the process
"We’ve only just begun" [The Carpenters]–a refrain for those who just adopted "A" above
"Help...I (We) need somebody..." [Lennon and McCartney]–applicable to everybody
"It’s been a ‘Hard Day’s Night’..." [Lennon and McCartney]–applicable if you identify with any of the aforementioned
"Alas, poor Urick, I knew him well..." [Hamlet, Shakespeare]–applicable if you fail to succeed
"Let’s do it to them, before they do it to us..." [Stan Jablonski’s admonition to the officers on Hill Street Blues]–applicable if you take "B" above seriously, and try to opt out of APC’s
"If I could ‘Reach’...Higher" [Gloria Estefan]–for those who’ll go for it!
There may be no room for humor, especially if you are charged with analyzing or implementing APC’s. However, there is something to be said for creativity, and the need to draw from a variety of sources. The collective merging of ideas and thoughts often found in team-building approaches can be a helpful process. The lessons of history teach us that.
Perspectives and Commentary
Patient Access –
The Importance of Communication
by Hope M. Cassano, Cassano Consulting, LLC.
Inevitably, managed care companies and other third party payers continue to lower payment rates, increase denials and the time between billing and payment. As a result, hospitals are becoming more creative in their efforts to regain collection levels and cash flow. One way many are doing this is by paying more attention to the Patient Access areas. Historically, when hospital management wanted to improve receivable management, they turned to Patient Accounting. Patient Access is also certainly deserving of attention. As the entry point for patients, it can either provide the basis for clean claims and rapid (relatively) payment or cause high billing edits and denials and increased Patient Accounting clean-up effort.
However, often the initial focus of redesigning the Patient Access areas misses the crucial issue. The key to improvement is communication. Too often we spend a great deal of time trying to improve the process or the computer systems, and we forget the basics – we need to talk to each other. Don’t misunderstand – the policies and procedures and the information systems that support them are critical. But, without adequate interaction between staff members, they are not enough.
The staff in the Patient Access areas must talk to each other, to their department management, and to the staff and management in the other revenue cycle departments. The other revenue cycle departments include not only Patient Accounting, but also Medical Records and Case Management, and even Managed Care.
As consultants, we often uncover solutions to inefficient and ineffective operations by simply getting staff members from all revenue cycle areas in the same room. One reason this works so well is that in too many hospitals the departments do not normally speak with each other. To illustrate the problems arising from a lack of communication at critical points, the following are four actual scenarios:
Patient Accounting not communicating with Patient Access. Patient Accounting staff frequently corrects registration information, such as wrong plan type and incomplete address information. They also work billing edit reports with similar issues on a daily basis. These types of errors should be monitored and discussed with Patient Access so that registrars can be retrained.
Patient Access not communicating with Patient Accounting and Information Systems – Patient Access staff sees patients presenting with new insurance cards and new addresses for current insurance plans, and realizes that an additional financial class is needed or that current financial classes should be revised. This information should be given to staff responsible for maintaining the information system and for billing.
Patient Access not communicating with management – Patient Access staff receives physician orders/prescriptions/charge tickets for outpatient services without the diagnosis or diagnosis code indicated, usually from the same few physicians. Since the hospital cannot get paid without the diagnosis code, either additional work will be needed in Patient Accounting or the claim will be denied.
Managed care not communicating with Patient Access, Patient Accounting and Information Systems – Contracts are renegotiated and new contracts are developed between the hospital and managed care plans, without involving or at least informing Patient Access, Patient Accounting and Information Systems. Patient Access must be aware of the insurances cards patients will provide, and the correct financial classes to use when registering patients. Early involvement of Patient Accounting and Information Systems departments is desirable – it can prevent contracts that cannot be monitored by the billing system or processed by Patient Accounting. Also, both Patient Accounting and Information Systems must be aware of changes to rates and other provisions so that billing and account follow-up occur correctly.
Fortunately, solving the communication problem is not expensive and the change can be started quickly. It does require, however, a change in behavior and corporate culture. Permanent behavioral change is not easy, and can be quite difficult. Therefore, senior management support to change initially, and to maintain the changes on an ongoing basis, is critical. A few concrete ideas that can be part of the solution include:
Holding regularly scheduled management meetings, with department heads from all of the revenue cycle areas. Part of the agenda should include a review of monthly management reports and/or operating indicators, and a discussion on how to improve performance in a specific area. (A different area can be targeted during each meeting.)
Conducting periodic staff meetings that include staff from all revenue cycle departments.
Creating "suggestions boxes" for employees to recommend new and innovative ways of doing business; also, providing rewards for ideas that are implemented. Even small incentives, such as certificates, letters of commendation, and movie tickets, go a long way toward incentivizing staff.
Hope Cassano, Cassano Consulting, LLC, 2 Frost Lane, Berkeley Heights, NJ 07922, Tel: (908) 790-0999, E-Mail: email@example.com
: Ask The Expert
by Allan P. DeKaye, MBA, FHFMA
Q: How would you address the problems with improper or missing diagnoses for private ambulatory testing orders?
A: Laboratory, radiology and other providers are faced with operational difficulties related to justifying medical necessity for private ambulatory testing. The key difficulties include orders for tests that either have no diagnosis or reason for the test, or a non-relevant diagnosis or reason for the test.
It is most important for these service providers to have a clearly stated and communicated policy statement concerning the necessity of orders (prescriptions, etc.) to contain relevant diagnosis(es) or reason(s) for the test or procedure being performed. The policy statement needs to also include what will happen if the diagnosis/reason is either missing or non-relevant.
Since these tests for the most part will be elective and/or non-emergent, one alternative is for there to be a clear statement of the provider's intent to "defer" or "re-schedule" the ordered tests should be made until the diagnosis/reason is specified.
The use of ABN's (Advance Beneficiary Notification) is intended when it is not clear if a payor will cover that service. However, ABN's should not be used as a "blanket panacea" for test orders that have missing or non-relevant diagnosis/reasons. Indiscriminate use of ABN''s will not only produce poor customer service results (inquiries such as "why did I get a bill, I have insurance," etc.), but also have the potential to attract compliance problems with the False Claims Act.
Some of my clients have used or considered (1) contacting the physician's office to request clarification--including fax confirmation; (2) placing phones for patients to contact their doctors for clarification; (3) acquiring software to assist in relevance determinations; (4) training staff more extensively in medical terminology and coding awareness; (5) re-assigned medical records personnel to these areas to provide assistance.
Q: What guidelines could you suggest for Physicians who do not comply with facility policies and procedures relative to fraud, abuse, mistreatment of clients, neglect, documentation issues not supporting what is billed for, non-compliance with DOH Codes, etc.
A: The fraud and abuse, mistreatment, documentation and neglect issues carry with it identification of exposure issues, whether medical malpractice or OIG type violations.
Depending on your organizational structure (individual, group or faculty practice, MSO, other physician/hospital type organization, etc.), you should have some form of compliance structure in place. Such elements as a code of conduct, internal review and reporting, disciplinary action, etc., would be considered standard. Each of the risks identified should be checked against these guidelines. If the guidelines do not address what to do, or how it will be handled, you should keep in mind (1) the need to revise your plan because what you have identified is important, and (2) the government's policy on voluntary disclosure, and the implications associated with having and how and when to use the data.
Again, given your organizational structure, your access to legal counsel should also be considered as part of the process. Some of the studies or reporting of the incidents you discuss might be reported through your counsel to afford the "work product" the benefit of "attorney/client" privilege. Otherwise, your efforts may have additional impact. I hope I have given you some factors to consider.
Q: What do you think makes a Receivables Manager successful?
A: Here are some thoughts:
1.Strong analytic skills to understand how patient, paper and systems flow, and can be made more efficient; same skill sets should be used to analyze numerical measures to determine factors influencing increases (and decreases) in A/R, cash, denials, etc.
2. Effective communication skills to convey both the written word and the spoken word to staff, patients, and the heathcare community about policies and procedures.
3. Excellent inter-personal skills to motivate staff to their "personal best," as well as effectively lead with focused authority--that is--when to use "heavy hand," and when to add "kindness and thoughtfulness."
4.Technological proficiency is a needed ingredient in today's success formula.
5. Customer focus: "keeping your eye on the ball!" Patients are still the most important aspect of what we do: whether it's in registration, or following-up on a bill, etc. We shouldn't lose track of this important aspect of the job.
You may want to reference, The Patient Accounts Management Handbook (Aspen, 1997), specifically: Chapter 1: "So You Want to Be a (Better) Patient Accounts Manager, (DeKaye)" Chapters 2 & 3, two views of the position from the COO's perspective (Schwartz and Sperry), Chapter 23, "Attaining Departmental Goals (DeKaye)," Chapter 24, "Inservice Education: Critical Ingredient to Goal Attainment (DeKaye)," and Chapter 29, "Educating Future Patient Accounts Managers (Bolnick and Lazow).
Q: How can we better identify alternatives to eliminating mid-long term payment arranges and speed cash flow?
A: All Patient Financial Services departments are under constant pressure to increase collections, reduce A/R, and are often asked to do more with less.
A recent article in "The Health Care Collector" (Jan. 2000, Vol. 13, No. 8, pp. 3-4, Aspen Publishers) shows that 29.1% of patient's with balances never receive a call, while 33.3% indicate that they offer hospital financing with no interest. These two values offer a startling view that our investment in self-pay balances may be just that--"our investment!"
I've noted that over the years, there appears to be fewer staff devoted to the more traditional "credit and collection" function. That is the "hard-core" hospital based collector working self-pay balances. The reason: more staff devoted to insurance follow-up. Many will boast that they have "time of service" collections. Although many say they do, results vary widely. Hospitals (and physicians for that matter, too) cannot be in the "loan coupon book" business. Not only does it take resources to set them up (usually for monthly amounts that are generally small), but requires tracking and follow-up for broken promises. Although I have seen an interesting mechanism that allows the patient to sign up for an "automatic debit from checking or savings account." This way, the vendor facilitates an electronic payment to the provider for a nominal fee. If insufficient funds--agreement ends, and the account goes to collection.
In addition to formal collecting at time service program, complete with patient notices, signage, convenient payment locations and accurate statements, many have adopted health care specific financing credit cards (not VISA or Master Charge) so that the financing is between patient and card issuing company. Of course, bank notes and loans have been around for a while with varying degrees of success.
Effective time of service payment programs are especially important in areas with large managed care penetration, and/or where co-pay provisions have made patient responsible amounts more the norm. For more information on this subject, The Patient Accounts Management Handbook, (Aspen, 1997), and our videotape training film, "Improving Collections at Time of Service " will provide more information on this subject. You can visit our web site for more details on these training tools.
Q: How do we handle partial payments?
A: Generally, an "explanation of benefits" (EOB) accompanies a payment, particularly from insurance companies. The EOB should indicate if there were any reductions in payment (e.g., deductible, co-payment, non-covered service, UCR adjustment, etc.). If the payment is less than what is expected, and the deductions are not clearly stated, or if there is a disagreement over the reasons given, then the provider should contact the payor to determine the reason for the "short payment." Many provider systems will take any contractual allowance at the time of billing so that the amount due can be more easily matched to the actual payment. Even if there is an indication that the payment is "on account," or that it is a documented "partial payment," the provider should have a "Conditional Endorsement" stamp made up to endorse the back of the payment. The exact language of the endorsement should be checked with your legal department, bank or collection agency. Such an endorsement allows you to deposit the check, while preserving your rights to additional recourse from the payor for any amounts still due and owing. Some providers also elect to reject the payment, and return it with correspondence indicating the payor's error. Should you suspect that a payor is intentionally circumventing their obligation, your state health or insurance department, or attorney general may have jurisdiction, as well as information if any statutes or regulation have been broken. Hospital associations and physician trade or professional groups may also be able to put additional pressure on organizations to adhere to these rules.
Q: We are getting too many complaints about our self-pay patient statements being too hard to read. Any suggestions?
A: Self-pay statements and data mailers can be effective tools to collecting patient responsible amounts. However, several operational factors should also be considered essential to the process, and these occur prior to the mailing of statements.
1. Do you have a policy requiring payment of patient responsible amounts (e.g., deductibles, co-payments, non-covered charges) at the time of service? If yes, is it posted or written? Setting patient expectations about payment upfront reduces questions as to "why did I get a bill?"
2. When patients make follow-up appointments (on the phone or in person) have you checked to see whether they owe any amounts, and/or if their insurance has paid its portion in a timely manner?
3. Do you accept credit cards as a form of payment? If yes (and it should be "yes"), do you also include the credit card payment option on the data mailer/statement?
4. Statement/data mailers are usually sent on a regular cycle (30 days). I have found that many systems or services offer variable cycles with increasingly more severe collection/pre-collection messages. Be certain that if you set the interval to be "triggered" from an event, that the event actually occurs. Many providers have found themselves with unbilled self-pay accounts because the triggering event never occurred. If a service is sending out your bills, obtain a billing or postage report to verify mailing. You should try to have certain "test" accounts (mailed back to the provider) so you can verify that statements/data mailers are being sent regularly. Consider shortening intervals; we often elongate this cycle--and in effect--extend credit to our patients.
5. Make sure the statements carry the messages: ADDRESS CORRECTION REQUESTED and PLEASE FORWARD. You will pay for these services (nominal amounts per transaction), but the resulting information will help you reduce return mail.
For more information on this subject, you'll find The Patient Accounts Management Handbook (Aspen, 1997) to be of assistance. Several chapters in Part IV--"Where Cash is King: The Collection Cycle" will be of interest. Other articles are available in our OnTarget newsletter. An educational videotape on improving self-pay collections is also available. All of these material are described on our web site.
Q: We are in discussions concerning the the possibility of moving Patient Financial Services (PFS) under the Case Management (CM)/Utilization Review (UR) department. Is this a good or bad idea?
A: Traditionally, the PFS department has wanted all related areas of the cash flow cycle (e.g., Admitting, Medical Records, and yes, CM/UR) reporting to them (not always a "good move"). More recently, I have seen the Access areas (Admitting and Registration) be empowered to have PFS report to them in a reversal of traditional roles. Usually when this happens, the Access director has better management and organizational skills than the management team in PFS. Sometimes, these re-organizations are made to accommodate budgetary matters (e.g., consolidation, reorganization, etc.), or as a result of a re-engineering process or consolidation.
While I wouldn't rule out the CM/UR leadership role, there would have to be some compelling rationale. The one argument might be that the facility has an extensive managed care/HMO population, or where capitation is so high, that the traditional PFS roles may be far more limited because of the financial class mix.
However, the complexity of the PFS role and its integral role in the Finance division makes the CM/UR choice highly unlikely. There are two interesting perspectives presented in The Patient Accounts Management Handbook (Aspen, 1997). In Chapters 2 (Schwartz) and 3 (Sperry), two COO's present their view of the PFS director and department in the context of their hospital/health system environment. Chapters 21 on Reengineering (K. Smith) and 22 on Consolidation (Kurz) will also be of interest. For more information about the book, you can visit our web site and click on the icon for book.
Q: Who do you foresee taking the leadership and ownership roles re: APC's:
A: No doubt, the HIM department will play a major role in the APC process. The emphasis on coding will be of paramount importance. Aside from the newness and need to fully understand the mechanics of applying codes, the application to outpatient services will have a pronounced impact on both operations and finances.
If we think back to the advent of PPS for Inpatients (i.e., DRG's), both HIM and IS/MIS played important roles. But with a finite number of admissions (i.e., not likely vary that much from year to year), the volume and growth in Outpatient service areas will have an even greater impact on providers.
Right now "APC's" seem to be a "hot potato" as no one seems to want to take ownership. IS/MIS may be in a better position to overview the impact on systems (particularly in Integrated Delivery System environments). They may also be more familiar with implementing and managing a project with many different disciplines.
Depending on the organizational structure and governance issues, the leadership role may be in IS/MIS, but the ownership of the operations may reside in HIM. There would be a strong case for PFS (Patient Financial Services) to have a voice at the table as well, since they, too, will be impacted through the billing process. Try to avoid the "hot potato;" because if someone drops the ball, the costs and repercussions are likely to far exceed the territorial concerns of department heads.
Q: Where does coding belong? In the billing or medical records department?
A: Sometimes "billing people" think if they controlled everything, then the A/R would go down. I think they run the risk of the opposite occurring. Medical Records coding is both an art and a science. The coding function appropriately belongs in the Medical Records department, but should be staffed with qualified credentialed staff.
The biggest challenge is, of course, overcoming the inadequate numbers of available skilled personnel. This becomes especially difficult with increasing outpatient volumes. Most Medical Records department will, of necessity, use their most qualified coders for inpatient account accounts. This often leaves less experienced personnel taking on the most voluminous activity. Private ambulatory services have increased vulnerability given Medicare's requirement that a relevant diagnosis be provided when ordering laboratory and x-ray services.
With APC's looming on the horizon, coding will take on even more significance. If hospitals are prepared to invest in coding infra-structure, let the investment be in medical records. With this in mind, the HIM professionals will need to manage their resources. Billing (and for that matter, the A/R functions) certainly have enough open accounts of their own to devote their attention to lowering their investment in A/R, without the added worry of all the clinical and physician interaction that would likely occur with Coding in the Billing department.
Q: What is an acceptable of for A/R collection and collection agency performance?
A: While industry standards suggest that "60 days in A/R" is an acceptable level, I advise my clients that the target should be based on "what is the best they can attain?"
For example, if Medicare will pay a "clean (electronic) claim" after a 14 day hold, then "15 days" is the target (I allow at least 1 day for transmission and posting). Similarly, if a managed care contract calls for payment "within 45 days of receipt of a clean claim, then "days in A/R" for that specific payer > 45 days" represent a "target" for the provider. By using this strategy, you continue to work towards the optimum levels of what is attainable--not what isn't!
With regard to "aged A/R," 120 days is too late to begin benchmarking. Here again, standards suggest that no more than 25% of your A/R should be in the >90 days category. At 120 days, your investment in A/R is too long, and collectibility beginning to become doubtful.
Collection agency performance statistics vary. I've seen good agencies collect between 25-40% of the placed file. Keep in mind that the better the agency does, especially when it turns up new insurances, may be considered a poor reflection on your operations. Again, a very low collection rate may be indicative of either "the very worst accounts remaining, or simply poor agency performance." Remember: "statistics don't lie, but statisticians are liars!"
I devote several chapter in my book, The Patient Accounts Management Handbook (Aspen, 1997) to A/R performance, and collection agency evaluation. You can get more information about my book and A/R management by visiting our web site.
The Contributor's Corner
Time For Your Practice’s
by Jerrie K. Weith, FHFMA, Weith & Associates
The lifeblood of any business entity is cashflow. Having started two for-profit businesses and two not-for-profit businesses in the last ten years, I can testify. Cash flow is as important in a large multi-specialty practice as it is in a small practice. If you think your receipts are sluggish, give yourself a check-up on your accounts receivable (A/R) operations. You can get started by answering these questions.
How old is your third party A/R anyway? Anything over 60 days should be looked at and anything over 90 days is a problem. With electronic filing and automatic Medigap crossovers for Medicare claims, 60 days is already getting old. Have the claims not been responded to at all? Have you received remittance advices (RAs) indicating why the claims haven’t been paid? Has the staff worked the RAs?
How old is your self-pay A/R? One of the most difficult things for any physician to do is to send his patients to a collection agency. Who wants to be the bad guy? If you’ve sent three statements to your patients (given them 90 days) and they haven’t paid, face it – this is money you’re not going to see. If you just can’t bring yourself to send patients to a collection agency, don’t – but get that A/R off your accounts. It’s not real cash if it isn’t collectible. And don’t forget the basic collection rule: treat all patients the same.
Are you filing everything you can electronically? Electronic filing is easier and quicker than filing claims on paper. Typically, payers pay electronic claims more quickly than they do paper claims. And it has also become affordable for even the smallest of practices. Do you check your electronic transmission reports to make sure that all claims were actually submitted without errors? Who wants to be waiting for claims to be paid when they weren’t actually received in the first place?
Are you filing claims for secondary insurance? It may be surprising to some, but there continues to be practices who view filing of secondary insurance as "too much work" and therefore just let the A/R grow with these smaller balances. Secondary insurance is not difficult to file and every practice should be submitting these claims.
Are co-payments collected at time of service? Ten years ago patients may not have clearly understood what a co-pay is. But these days, patients know what a co-pay is and also know that it is due at time of service. The co-pay should be paid at time of service. In fact, many practices are moving toward collection of co-pay at the time the patient signs in, not after the patient has been seen. The patient is less likely to "forget his checkbook" when the co-pay is due upfront as opposed to after the services have been provided.
Have you reviewed your RAs to identify why claims are being denied? Talk about enlightening! Are your claims being denied for invalid procedure codes? Maybe your staff is correcting the claim when the denial is received, but not getting the charge master corrected. Are they being denied for invalid diagnosis codes? Again, your staff may be correcting the claim upon receipt of the denial, but not communicating the problem to the coder or asking that the superbill be updated. Would your claims be paid if you used a modifier on your E&M code in addition to the procedure that was also billed? Are your claims being denied for "medical review"? If so, contact the payer and get the specifics. Try to determine if they are "legitimately" under review, or if you feel this is a payment- stall tactic.
Are you getting paid according to contract terms? While this won’t affect your A/R balances, it will affect your cash. If your practice management system has the capacity to flag "underpayments" according to contracted fees, that’s a great tool to use to confirm you’re being paid correctly. If you don’t have this automated capacity, you can review the RAs of those contracted payers and compare the payments to your contract terms.
Does your cash posting balance to your cash receipts? In other words, when the deposits are made, is the A/R getting relieved? I once had a client whose cash was strong, and the A/R was climbing. It turns out that when the staff didn’t know how to post a payment to the A/R, the common practice was to make sure the payment was deposited, but not to post anything against the patient’s account. What a disaster! Make sure you have the internal controls in place to prevent this from occurring. Rule of thumb: if your cash is up, your A/R should be down.
When was the last time you spot-checked the claims filing and RA posting
of the wonderful policies and procedures in the world won’t make a bit of
difference if they aren’t followed. Periodically, pull remittance advices and
look up some patients on your practice management system. Were the RAs posted
correctly? According to procedure? Are the notes clear? This type of review
provides an excellent training forum for the staff as well as helps to clean up
any problems with how the work is being processed and payments and adjustments
Jerrie Weith, Weith & Associates, 816 Edenburgh Way, Belleville, IL 62221,Tel: (618)-277-7509, E-mail:JKWeith@aol.com
Home Health Care Update
by Andrew B. Shulman, Manager, Holtz Rubenstein & Co., LLP
HCFA staff has continuously stated that plans for implementing PPS on October 1, 2000 with a July 1, 2000 published final comment are on track. In the meantime, various associations continue to react and offer their respective recommendations to improve the PPS system over the long term by establishing a fair system that blends fixed episode payments and per-visit payments.
Among the highlighted items, still under much discussion and careful review, are the following:
ØConsideration being given to changing the 50-50 payment split for certified home health agencies released in proposed PPS regulations in October, 1999.
ÙModifying the outlier provision, possibly providing higher payments for fewer cases than in the proposed system.
ÚEliminating the 15% reduction all together in Medicare home health services. Scheduled to now go into effect on October 1, 2001. Critics have stated that even without implementation of the 15% mandatory reduction, the Balanced Budget Act of 1997 has already drastically reduced access to medicare home health services.
ÛRefinement of the Primary Diagnosis requirement: Under the proposed PPS regulation, only the primary diagnosis counts towards the high-paying orthopaedic or neurological categories. Secondary diagnoses are irrelevant to the case-mix system. Essentially, this could signify that some of the agency’s most expensive patients with severe secondary diagnosis could have the lowest rates.
Other Newsworthy Items
Hospice programs have also come under close scrutiny which triggers government investigation. While the returns of the hospice cost reports won’t directly affect your reimbursement, the data will definitely be used to adjust per diem rates. Freestanding hospices will be required to file cost reports for fiscal years ending on/after March 31, 2000. At some point, provider-based hospice programs will begin including the hospice cost reports as part of their own cost report.
Back in June 1999 when HCFA first re-issued the OASIS rule, it exempted HHAS from collecting or transmitting data for patients receiving personal care only. That also included a universe of patients receiving services that are not at all health care related, such as homemaker. However, for those patients, agencies should soon prepare once again to resume transmitting OASIS data for both non-Medicare and non-Medicaid patients. Only patients that aren’t receiving skilled care services might be totally exempt at this time of having information released about them.
A drastically changed home health care reimbursement system has seen a growing number of states nixing certificate of need application requirements. Under PPS, agencies will certainly need the ability to expand service areas and all referral sources, something that the individual states’ heavily regulated CON process might not have afforded an agency to push forward.
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