DeKaye Consulting, Inc. Volume III Number 1

January 1997

The Newsletter of

DEKAYE Consulting, Inc.

231 Oakview Avenue
Oceanside, New York 11572
Phone / Fax: (516) 678-2754

On Target

A New Beginning

Vital Signs

A/R at Year-End:
Performance Appraisal and Goal Setting

1996 in Perspective

Regardless of fiscal year end filing, the calendar year end typically brings a time for reflection on the past year’s efforts, as well as a sense of renewal for the year ahead. The healthcare industry continues to pressure the departments that comprise the cash flow cycle in hospitals and physician practices. With a combination of Re-engineering, Outsourcing, Securitization and Privatization, coupled with mergers and acquisitions, the Accounts Receivable management team needs to evaluate two questions:

  1. How low can the A/R go?
  2. How much more efficiency can we obtain?

Perhaps the answer to the first question can be pegged to how close to plan did the department perform. This of course presumes the department had an A/R plan in the first place. Presuming it did, and if it made plan, then the department needs to decide what its new goals for the coming year will be. In fully assessing this past year’s performance, it should evaluate which aspects of the plan were met, how successful the various elements of the plan were, and the likelihood that these new performance levels can be sustained or further improved upon.

Not every facet of a plan will be successful. Sometimes, plans are met because of one-time allowances, adjustments or impact of unique conditions. Those elements should be identified, and where possible a "post-mortem" of why a strategy was not effective should be held. Sometimes these plans should be re-visited if unusual events (e.g., regulatory, organizational, etc.) interfered with implementation efforts. After taking into account these factors, new goals and objectives need to be formulated.

Setting Goals for 1997

There is a tendency to develop an air of over-confidence, especially when coming off a successful year. Simply rolling an old plan forward carries risks--most notably that changes in conditions (in the workplace or local environment) will be overlooked. A/R managers should take a play from sports champions--especially those that repeat! Even some minor changes and refinements can be indicated. It’s rare that a champion doesn’t tinker somewhere to make the team better. It’s a lesson we all could learn from.

While many A/R goals and objectives emanate from the top at the CEO, CFO level, it is not unusual for an aggressive patient accounting department to take the lead in initiating its plan. As is so often the case, in order to gain incremental operating efficiencies, there needs to be an investment in advancing technologies. Whether it is time to consider replacing an HIS (Hospital Information System) or practice management system, is but one of the many considerations. Continued emphasis on increasing the number of electronic claims produced, attaining electronic remittance posting and improving on electronic insurance verifications systems are but a few of the items that should be on patient accounting or practice manager’s holiday shopping lists.

There are still plenty of basic strategies that are overlooked. Increasing the number of claims paid on initial billing, increases in up-front collections, and in accounts closed before referral to collections should provide for a core set of goals to be achieved.

One New Year’s resolution that should be on everyone’s list is a commitment to better performance over last year. Formulating an A/R management plan is a "key ingredient" to ensuring continued success.

Good luck in 1997!

Emphasis on Education

Medical Record Coding and Risk

Medical Record Coding and Risk The hospital industry has faced it for some time, and now physicians are learning that they, too, can be subject to the extensive and often expensive record review process. The essential element of these record reviews centers around the documentation of services rendered in the medical record, what appears on the bill, and the diagnostic and procedural coding for the related services. With the growing reliance of "codes" to provide us with a shorthand suitable for translation into computerized programs that enable providers to utilize electronic media for claims submission, the industry has become focused on the accuracy, completeness and substantiation of the codes.

High Profile Cases, High Price Tag for Non-Compliance

The Office of the Inspector General (OIG) of the Department of Health and Human Services’ focus on identifying fraud and abuse in the healthcare industry has resulted in several prominent cases that have placed the nation’s teaching hospitals and academic medical centers on high alert. In the Hospital of the University of Pennsylvania case, the $30 million settlement addresses the issues of improper billing for the services of interns and residents, and the mis-coding of services deemed to be more basic and routine than the complex codes that were assigned.

As a result of this case, and its far-reaching implications, teaching facilities around the country are faced with potential liabilities associated with the treble damages, extensive fines and the threat of criminal prosecution. These facilities anxiously watch the daily mail, waiting to see if they will be the subject of a review.

Under the rules of these reviews, facilities may offer to settle audits based upon voluntary disclosure procedures. Penalties and fines are generally less severe under the voluntary approach than if a full audit and review method is elected and fault is then found. There are other national cases involving billing errors that have involved both hospitals and laboratories.

Hospital DRG Review

Hospitals have undergone DRG (Diagnostic Related Group) assignment review usually by the PRO (Peer Review Organization), which is contracted by the federal government primarily to perform Medicare and Medicaid case reviews. In some areas they sub-contract to perform reviews for other payors. The reviews generally center on supporting medical record documentation that allows a diagnostic and procedural coding assignment to be made. In addition to documentation, there are very specific coding guidelines and conventions that must be applied to the documented case. Generally as a result of the documented presence of "complications" and "co-morbidities," a different DRG, one which will carry a higher reimbursement, can be assigned.

Over the years, PROs watched for hospitals that showed a pattern referred to as "DRG Creep." This artificial raising of the code assignments can be met not only with lower reimbursement, but can result in a facility being placed on 100% review--that is each case must be reviewed before payment will be made. This type of penalty can place a strangle-hold on cash flow and becomes a very inefficient and costly way to do business.

Physician E/M Coding

"Evaluation and Management" coding provides a physician with a mechanism for assigning a weight to an office or hospital visit to determine the level of reimbursement to be paid. There are seven (7) components to consider in assigning the correct E/M code. They are: History, Examination, Medical Decision Making, Counseling, Coordination of Care, Nature of Presenting Problem, and Time. Each of these components have a defined criteria and scoring system to enable a physician to assign the proper code level.

The area of E/M coding is becoming particular sensitive in the Medicare claims review process. As part of its effort to curb fraud and abuse, these reviews have zeroed in on patient chart documentation to verify that the proper E/M code level was assigned. Although it would appear rather simple to most patients, who as consumers, generally receive a "super-bill" (those who are still covered by an indemnity plan), may not even realize that the type of office visit (e.g., basic, extended, etc.) also fixes the fee they are charged (e.g., $60, $75, $100, etc.). For Medicare patients, the provider (physician) completes the claim form, so they never see the charge, until they receive their EOMB (Explanation of Medicare Benefits). For patients covered under a managed care plan, they should no longer have the hassle of claim forms (at least while "in-network"), so it is up to the plan to be reviewing the E/M code assignments, which it usually does as part of its periodic re-credentialing process.

For physicians, like hospitals, the prospect of being put on 100% review can be both a fiscal and operational drain on resources. More important the scrutiny can be likened to an IRS audit. Once a part of the review system, it can take both a period of sustained compliance, and then some "red-tape" cutting to be removed from the review list.

Pro-Active and Preventive Actions

It’s not unlike New York City’s former mayor, Ed Koch, used to ask, "...So how am I doing...?" Unfortunately too many hospitals and physicians don’t ask the question nearly enough. While hospitals still undertake DRG reviews, many do it for the up-coding value they hope to achieve. For those hospitals that include chart reviews as part of a "Quality Assurance (QA)" program, they have also been able to focus on physician education and awareness, documentation issues and coder training programs to augment their QA program. When coupled with a review of clinical pathways and cost review, this multi-disciplinary approach can help a facility improve in more than one area.

A regular program of "chart-to-bill" audits can also be implemented for both hospitals and physicians. While hospitals are more apt to have some form of external review, physicians may not entertain it primarily for cost reasons. With the growth of MSOs (Management Services Organizations), this service may be more readily available to smaller physician practices. With the growth in mergers and affiliations, this type of QA review should be considered as a way to ensure an evaluation of risk, and sufficient time to develop and implement a pro-active approach to correct the problem.

Given today’s risks and penalties, the "ounce of prevention" is probably worth much more than the "pound of cure."


Please click here for more information about the DEKAYE Consulting Inc.
Emphasis on Education Course Curriculum.

The Contributor's Corner

Home Health Care Update

by Andrew Schulman
Carpenter & Onorato, P.C.


- For the second time in two months, a technical miscalculation of the budget neutrality factor has caused HCFA to correct and increase cost limits nationwide.

- Still much discussion and opinions concerning the proposed Prospective Payment Systems and whether it can succeed on a per episode payment system (what occurred in hospitals and untested in 1983) or maintain a per visit PPS Plan. Many in the industry believe that a per-visit plan will guarantee the incentive on providing care, not denying care.

- All fiscal Medicare intermediaries are now "live" as it pertains to the Florida Shared System for submission of Medicare claims with paper tools.

- Operation Restore Trust auditing teams have been visiting home health agencies as part of a project examining over 250 cases in 5 states. Audits have been fairly consistent with examinations of records/time sheets and contracts and auditors have been verifying agency referrals and how agency visits are made and verified.

Should you wish to discuss this topic further or need more information, please feel free to contact Andy Schulman at Carpenter & Onorato, P.C. at 516-745-0808 or through E-Mail at



by Allan P. DeKaye, MBA, CMPA

Patient registration can have a decided impact on the operational and financial bottom line for your organization. It is important for all providers of care, whether physicians, groups, hospitals, etc., to be certain that their front end patient registration staff are extremely attentive in their pursuit of proper demographic and financial data. Effective patient registration should not only be practiced at the initial visit, encounter or admission, but especially at time of revisit or subsequent admission. Here are several tasks that a practice/business office/registration station should be doing.

1. Verify insurance at each visit. Patients are changing insurance--especially with the growth in Medicare and Medicaid managed care plans in many states around the country. The new federal legislation that will make health insurance more portable will also make this an important step.

2. If the business office has an "account notes" capability, they should be recording claim rejections, insurance denials, past due balances, address errors, etc. Registration staff should view these notes when making appointments, when patients arrive, and when they leave--advising patients of any problems, and helping to initiate corrective action on the patient's behalf. Extra steps, yes! Worth it? Check you Accounts Receivable (A/R). It will certainly help you identify accounts like the one you mention in your inquiry, if you are reacting after the fact.

3. Most providers are very lax when it comes to recording and pursuing secondary coverages. They are leaving too much money on the table. Use of credit cards, especially features that now enable you to set up automatic, pre-authorized debits over a period of time will also help capture the increasing number of managed care co-pay amounts. Collection of time of service is a must, and when done within the context of a caring, customer service oriented program can produce effective results.


Reminded of sportscaster Jim McKay's "Spanning the Globe" quote, a look at some additional healthcare references on the net is in order. It appears that new ones crop up each day, which is, indeed, a great resource for us in the healthcare area. Here "spanning the globe" is only a click away. These are the URL's at presstime for the following:

Advisors for Healthcare-

American College of Healthcare Executives -

Blue Cross / Blue Shield Association -

E-Med News -

Joint Commission -

National Committee for Quality Assurance -

American Hospital Publishing -

Center for Health Administration Studies -

Community Health Management Information Systems Resource Center (CHMIS) -

HealthHippo -


Modern Healthcare -

For more information about our services, or Strategic Alliance Partners, please write to us at: or

Copyright 2011 DEKAYE Consulting, Inc.. All Rights Reserved.
No part of this web site, or the contents, and images contained herein may be used or reproduced
in any manner whatsoever without the prior written permission of DEKAYE Consulting, Inc.

D E K A Y E Consulting, Inc.
231 Oakview Avenue, Oceanside, NY 11572  Phone: (516) 678-2754   Fax: (516) 825-4458
URL: E-Mail: or