By Dorothy Steed, CPA, CPC-H, CPC-I, CEMC, CFPC, CPMA, CHCC, CPUM, CPUR, CPHM, CCS-P, RCC, RMC
Be ready if a hospital employment opportunity arises in a facility near you.
In our changing health care environment, there may come a time when you need to look beyond your physician practice and branch out in another direction. For example, based on the latest trend, your practice could be bought out by a hospital. If that happens, you’ll need to be able to prove you’re a viable candidate to hospital coding managers. However, many physician trained coders find hospital requirements very different and the transition difficult. You’ll have a much easier time if you are prepared, and a good place to start is by reviewing the hospital revenue cycle, which has significant differences from that of the physician office.
Review the Hospital Revenue Cycle
There will be differences between facilities in regards to the revenue cycle, depending on the size of the facility and whether they are for profit or not for profit. Typically, however, the chief financial officer looks at the hospital’s revenue producing departments and establishes certain monetary monthly goals for that department using service utilization, patient flow, and other data. The chief revenue officer typically determines a positive or negative outcome for each revenue-producing department using various reporting programs. If a department has an income deficit, this prompts a close look at why the deficit has occurred. There can be many reasons, but if the department does not produce expected revenue, particularly if the deficit occurs frequently, the department’s management must give an accounting of why and how he or she plans to improve the deficit.
The revenue cycle starts in Patient Access and moves to Benefits Verification. These are critical steps in obtaining correct demographic information, determining whether services will be covered, and calculating patient responsibility amounts. Errors in these steps usually have a ripple effect. If the patient is admitted as an inpatient or into observation, typically, case management is responsible for monitoring the stay and determining if the stay meets inpatient criteria and (if a Medicare patient) whether there is adequate inpatient days to cover the stay. If an observation patient is converted to inpatient status by the physician, this group will advise Benefits Verification that new authorization for inpatient services is necessary.
Understand Your Role in the Hospital Revenue Cycle
The next step in making yourself marketable in the hospital environment is to determine your role in the revenue cycle. The health information management (HIM) manager ensures that attending physicians complete the patient records in a timely manner and records are ready for the coders. Here is where a physician trained coder must be ready to shift gears. Regardless of what you are initially hired to do, you must realize that at some point, you will need to code inpatient records. This is where the money is for hospitals, so inpatient records take priority over outpatient encounters, even if outpatient coding is your normal assignment. To prepare for this new assignment and to stand out as a candidate for inpatient coding:
- Be proactive in showing an interest in learning inpatient coding.
- Take time to look at inpatient records coded by inpatient coders.
- Realize that inpatient and outpatient coding guidelines are somewhat different.
- Become very knowledgeable about coding conventions and guidelines in the front of your ICD-9-CM coding book. This is how hospital coders are expected to code the records. Encoders that are structured for hospital use will also assign codes based on these conventions. National Correct Coding Initiative (NCCI) edits are included in the encoder and generally flag the coder to look closely at two reported codes. Coding Clinic and CPT® Assistant are normally sources available within the encoder.
- Understand that CPT® is not reported on inpatient records. Procedures are coded using ICD-9-CM Volume 3, and there is not a direct crosswalk between CPT® and Volume 3. To assign codes from Volume 3, ask yourself: Is the procedure surgical in nature? Does it carry a surgical or anesthetic risk? Does it require specialized training to perform the service? If your answer is yes to any of these questions, a code is assigned. Using this information, take a look at some familiar CPT® codes and determine how the service might be reported using Volume 3. A reasonable rule of thumb is that if CPT® describes multiple steps, often more than one code from Volume 3 must be used to report the same service.
- Know that hospital coders report all conditions that the physician manages or affect the management of the patient. Inpatient records may require 10, 15, or even 20 diagnosis codes.
- Realize that sometimes there are different reporting protocols in CPT®, depending on whether you report for physician or facility services—infusions are a good example. Review the reporting hierarchy for facility infusions in your CPT® codebook to see how they differ from physician reporting.
- Be aware that facility evaluation and management (E/M) reporting is captured only in the emergency department and in facility clinics. History, exam, and medical decision making (MDM) are not factors in facility E/M; levels are determined based on use of resources and assigned based on a point system. Each facility typically determines their own point system; however, the service must be documented in the medical record, meet medical necessity, and be reasonable in the point assignments. Look at outpatient modifiers 73, 74, and 27, used by facilities, and know when these modifiers are applicable.
Understand How Charge Description Masters Are Used
In assessing your qualifications, hospitals may also look at your knowledge of charge description masters (CDM). Facilities establish services in the CDM that are charged to the patient’s financial record and are entered usually by the department performing the service. Hospital coders typically code for all diagnosis coding, surgical procedures, and infusions. They may code for other services, depending on if the service is already embedded in the CDM. Your coding manager will advise of these services, but typically drugs, supplies, laboratory, radiology, and anesthesia are not coded by the hospital coder. Some clinics, such as pain management, may charge through the CDM or be coded by a coder, depending on how the hospital handles these functions.
Another important thing to remember: The physician is not available to clarify documentation; and you will not be able to use charge tickets, encounter forms, or super bills for coding assistance.
Meet Productivity and Accuracy Standards
Accuracy and meeting quota also may factor into whether you are a good candidate for hospital coding. When the coding department experiences a backlog of records for coding, the manager must take action to bring the records current. This is a good example of when an outpatient coder may be asked to code inpatient records, and why hospital coders are held to productivity and accuracy standards. You will be held to these same productivity standards.
Although there may be slight differences, depending on expectations of the coding manager, typical coding time is approximately:
- Inpatient records: 18-20 minutes. This includes all diagnosis codes, Volume 3 codes, assigning the present on admission (POA) indicator, and abstraction of the record.
- Ambulatory surgery records: 7-10 per hour
- Emergency department records: 20 per hour
- Referral encounters (example: patients coming for lab, X-ray): 30 per hour
These numbers translate to three minutes for emergency department records and two minutes for referral encounters.
If you are given a pre-employment coding test, the coding manager will not only look at accuracy, but whether there is reasonable expectation you can reach these production standards by the end of the normal 90-day probationary period. When records are not coded quickly, the entire revenue cycle is affected, in billing, insurance follow up, and other collection efforts. Accounts receivable days are closely monitored by hospitals, and are a primary measure used to determine their financial health. Slowdowns and backlogs of the revenue cycle directly affect the revenue stream. Time spent collaborating with other coders must be kept to a minimum if you intend to meet your productivity requirements.
When I speak with physician coders about transitioning to hospitals I am asked, “Where can I obtain this type of training?” Here are some ideas that may be helpful:
- Invite someone from your hospital to present at a chapter meeting. If a coding professional is not available, use someone from the billing or revenue cycle department.
- If there is a community college in your area that has a HIM program, invite someone from that program to speak at a chapter meeting.
- Use Quality Improvement Organizations (QIO) as a resource. They review disputes between Medicare and hospitals about correct Medicare Severity Diagnosis Related Groups (MS-DRG) assignments and necessity of inpatient admissions. They may send coding disputes to a contracted coder for supporting opinions, but they have already done an in-house review prior to that step.
- If you have a hospital-based member in your chapter, ask that person to help you get training underway.
Interested in implementing physician-to-hospital coder training in your chapter? Based on the three-day workshops I present, training might begin with an overview of hospital coding and billing on day one. On days two and three, activities might include hands-on coding of sample hospital records—reviewing accuracy and looking at how quickly coders can determine codes and POA indicators. Consider holding sessions on three consecutive days or on three separate Saturdays. Something else to consider: This is a good opportunity to collaborate with another chapter to arrange a group session.
Sell Yourself Using Knowledge and Adaptability
Through my experience when speaking with hospital managers about an ideal candidate, they often mention the need for coders to be able to code multiple types of records, meet productivity standards, and be familiar with hospital encoders. You may not have an opportunity to use encoders unless you are actually in a hospital, but you can focus on building efficiency in multiple encounters, being open minded, and knowing that you will need to meet productivity standards.
Take advantage of opportunities to learn the facility side of coding. Realize hospitals provide many more services than physician offices. If general surgery is your specialty, it’s likely you’ll need to code for many other types of services. Hospitals in smaller towns may be more lenient when using a physician coder, but you should still sell yourself in an interview by showing you are ready for the challenge. If you welcome the opportunity and are proactive in learning about the facility world, doors that are not easily opened will open for you.
Dorothy Steed, CPA, CPC-H, CPC-I, CEMC, CFPC, CPMA, CHCC, CPUM, CPUR, CPHM, CCS-P, RCC, RMC , is a technical college instructor in Atlanta and an independent consultant, performing physician audits and education for the Quality Improvement Organization in Georgia. Her 34 years of experience in health care includes working as a Medicare specialist for a large hospital system, as well as contributing to various medical publications, presenting at health care conferences, and developing training classes on facility billing, coding, and reimbursement.
March 1st, 2013
Arm yourself with coding tips to withstand payer scrutiny AND get paid.
By David Peters, CPC, CPC-P
Whether you work in a hospital, physician office, or other health care setting, gone are the days when claims are processed, paid, and filed away. Instead, claims are dissected, scrubbed, and analyzed for numerous data systems. How does your coding measure up? Is it outstanding, or does it “stand out” in a bad way? Here are a few tips to ensure your claims can withstand the scrutiny they’re bound to receive.
Make Modifiers Matter
One of the most common errors reported by payers is the incorrect application of modifiers. Modifiers help tell the story of your coding. Make sure the story is fact, not fiction. The most frequently misused modifiers are 22, 24, 25, 59, and 79. Let’s go into a little detail for each.
Modifier 22 Unusual procedural service: Use this modifier judiciously, or you’ll throw up red flags with payers. To give you an idea of just how (un)common modifier 22 claims are, according to recent comments made by a Centers for Medicare & Medicaid Services (CMS) medical director for the Wisconsin Physician Services Corporation, only 2.5 percent of cases warranted use of this modifier to accurately denote increased work incurred.
Many coders have developed a habit of using modifier 22 whenever mention of “lysis of adhesions” is included in the operative report, for instance. But this is only appropriate when “extensive” or “significant” time was documented as spent freeing the organ due to adhesions.
Modifier 24 Unrelated evaluation and management service by the same physician or other qualified health care professional during a postoperative period: CPT® and CMS guidelines differ in the use of this modifier, so consider which payer will be processing the claim before you use it. CPT® guidelines state, “Follow-up care for therapeutic surgical procedures includes only that care which is usually a part of the surgical service. Complications, exacerbations, recurrence or the presence of other diseases or injuries requiring additional services should be separately reported.”
CMS guidelines, by contrast, state that Medicare’s global period includes any complications, unless they are significant enough to send a patient back to the operating room (in which case, you’d need to use modifier 78 Unplanned return to the operating/procedure room by the same physician or other qualified health care professional following initial procedure for a related procedure during the postoperative period).
Both CPT® and CMS guidelines agree that you should apply modifier 24 only on evaluation and management (E/M) codes when the examination is furnished by the same physician who performed the procedure. Note that “same physician” also refers to members of the same practice who are of the same specialty as the physician who performed the procedure.
Whoever the payer, you’re not getting paid unless the E/M visit is documented as unrelated to the surgery. When possible, assign a diagnosis code that is different from that used to report the procedure.
Modifier 25 Significant separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of the procedure or other service: Some offices that perform minor procedures in-house add an E/M code with modifier 25 to every claim. Any provider using modifier 25 statistically more than the national average will be under scrutiny for possible fraudulent billing practices.
Here are some guidelines to keep in mind:
- Modifier 25 is not the equivalent of modifier 57 Decision for surgery for minor procedures. For example, if a patient presents to your office specifically for the removal of skin tags (11200 Removal of skin tags, multiple fibrocutaneous tags, any area; up to and including 15 lesions), it isn’t appropriate to include a separate E/M code because a minimal evaluation is inherent to the removal procedure.
- It is unnecessary to apply modifier 25 to your E/M code when billed with diagnostic testing codes (i.e., lab or X-ray codes). For example, a patient presents with a finger injury and the provider performs an X-ray to check for bone injury (73140 Radiologic examination, finger(s), minimum of 2 views) and a hematocrit (85014 Blood count; hematocrit (Hct)) due to extensive bruising. In this case, it would not be necessary to append modifier 25 to the E/M code to describe the E/M of the patient.
- Ask your provider to separate his or her E/M notes from any procedure performed so it’s clear to the payer that it’s a significant, separately identifiable service.
Modifier 59 Distinct procedural service: This is the most frequently misused modifier—so much so that the misuse of modifier 59 has been a part of the Office of Inspector General’s (OIG’s) annual Work Plan for identifying fraudulent claims since 2007.
Although appending modifier 59 will allow claims for multiple procedures to bypass National Correct Coding Initiative (NCCI) bundling edits, using it for the sake of getting a higher payment will get you into big trouble. Here are some tips to keep in mind when billing multiple procedures:
- When billing procedures with a potential bundling relationship in the NCCI edit tables, always append modifier 59 to the lesser code (column 2 in the NCCI edit tables). For example, consider 38221 Bone marrow; biopsy, needle or trocar and 38220 Bone marrow; aspiration only. Code 38221 is a column one code, and 38220 is a column two code. If both were performed at the same site, it would be inappropriate to report both codes. If they were done as distinct procedures at two different anatomic sites, however, it would be appropriate to report both with modifier 59 appended to the column two code (e.g., 38220-59).
- Use modifier 59 only when a more descriptive modifier (e.g., a modifier that describes location) is not available. For instance, if a patient has a malignant lesion measuring 0.4 cm removed from the right arm (11600 Excision, malignant lesion including margins, trunk, arms, or legs; excised diameter 0.5 cm or less), and another lesion of the same size and type from the left arm, append modifiers RT Right side and LT Left side, rather than report the second code with modifier 59.
- Do not report modifiers 51 and 59 on the same code.
- In general, modifier 59 is used to denote: different session or patient encounter; different procedure or surgery; different site or organ system; separate incision, excision or lesion; or a separate injury not ordinarily encountered or performed on the same day by the same provider.
Modifier 79 Unrelated procedure or service by the same physician or other qualified health care professional during the postoperative period: Apply this modifier for a second surgery unrelated to a prior surgery. A common example is bilateral cataract surgery. This is usually done on each eye individually, several days apart. Report the second procedure with modifier 79 appended to the procedure code, as the global period for the first surgery is still in effect. Do not use modifier 79 for staged (modifier 58 Staged or related procedure or service by the same physician or other qualified health care professional during the postoperative period) or repeat (modifier 76 Repeat procedure or service by the same physician or other qualified health care professional) procedures.
Getting E/M Right
Now that we’ve addressed modifiers, let’s look at E/M services to make sure you’re coding at the correct level.
We’ve all been taught the “bean counter” method of adding up the key components of history and examination and scoring your code based on those numbers. But keep in mind: Medical decision-making (MDM) should be the primary component for selecting the correct level of care.
In these days of electronic health records (EHRs), it’s easy to document a comprehensive history and a comprehensive examination using templates and information from previous visits—but if the MDM is straightforward, that will be the determining factor of the visit. Per the Medicare Internet-Only Manual, pub. 100-4, chapter 12:
“Medical necessity of a service is the overarching criterion for payment in addition to the individual requirements of a CPT® code. It would not be medically necessary or appropriate to bill a higher level of evaluation and management service when a lower level of service is warranted. The volume of documentation should not be the primary influence upon which a specific level of service is billed.”
Remember also that time may be used as a factor in determining the correct level of service—but this should be the exception, not the rule. Some offices have taken up the habit of billing all E/M services based on time. Once again, with template phrases, it’s just too easy to tag, “Total time spent face to face with patient was 60 minutes and more than 50 percent of that time spent in counseling.” In an actual case, when an office was audited for consistently billing Level V services, it was discovered all patients were booked in 30-minute appointment slots, and there were no patient wait times reported (which would be impossible if each patient was receiving 60 minutes or more of service).
Other E/M practices that will raise red flags with payers are:
- Billing every patient visit at the same level of care
- Frequently submitting corrected or amended claims
- Splitting claims for the same day of service into multiple claims
When using EHRs, payers will become suspicious if multiple chart entries for office visits carry identical verbiage in the records.
The “Where” Matters
Another area under scrutiny by the OIG and others is reporting the incorrect place of service (POS) on claims. Because the POS can effect payment, accurate reporting is critical.
Services performed in an ambulatory surgery center (ASC) or hospital outpatient facility are paid at a lower rate than services performed in the office setting. Be accurate with all POS designations. Outpatient hospital (POS 22) and ASCs (POS 24) are not the same thing, just as skilled nursing (POS 31) and custodial care (POS 33) are different.
Speaking of hospital services: Always make certain the time element for both hospital discharge and critical care services is properly documented in the patient record. Time is the only descriptor of 99238 Hospital discharge day management; 30 minutes or less and 99239 Hospital discharge day management; more than 30 minutes, and includes face-to-face time as well as “floor time.”
Watch Out for Individual Payer Guidelines
Lastly, payers may have their own specific rules—be aware of them. Billing bilateral procedures is a prime example. Some payers expect the code to be submitted once with modifier 50 Bilateral procedure, which they pay at 150 percent of the allowable. Others may want the code submitted twice, once without a modifier and again with modifier 50, which will pay at 100 percent for the first line and 50 percent for the second line. Not knowing these rules could result in underpayment.
Here’s another example: Most payers say it isn’t necessary to use modifier 51 Multiple procedures for multiple surgery procedures because their systems will automatically reduce those services. Not all payers will resequence your coding order, however. It’s important to list the code with the highest relative value unit (RVU) as the first code, or run the risk of having a lesser code used as the primary procedure and a higher RVU code reduced by 50 percent under the multiple procedure guidelines.
David Peters, CPC, CPC-P, is contracts manager for Sutter Pacific Medical Foundation, Santa Rosa, Calif.
With each new year comes new codes. AAPC’s Director of Product Development Raemarie Jimenez, CPC, CPMA, CPC-I, CANPC, CRHC, recently published an article in Physicians Practice that outlined six steps to avoid claim denials due to the new 2013 codes and three tips to monitoring your medical practice’s denials.
“Denial resolution is an important step in the revenue management cycle that often gets overlooked,” she says. “Unless you have dedicated staff to work denials, money is being left behind.”
Read the full article.
February 7th, 2013
By Amy Lee Smith, MBA, CPC, CPC-H, CPMA, CIA, CRMA
Preparing for, and responding to, recovery audit contractor (RAC) reviews can be intimidating. You can lessen the pain, however, by understanding Medicare billing and coding rules and requirements, and being proactive in implementing controls to ensure compliance.
RACs Review Across the Nation
Section 302 of the Tax Relief and Health Care Act of 2006 made the Recovery Audit Program permanent, and required that it be expanded to all 50 states by 2010. The Recovery Audit Program’s mission is to reduce Medicare improper payments by detecting and recovering overpayments, identifying underpayments, and developing methods to prevent future improper payments. There are four RACs, each serving a specific region in the country (see next page for the regional split).
RACs review claims on a post-payment basis following Medicare policies. RACs are required to employ a staff consisting of nurses, therapists, certified coders, and a physician medical director. There are two types of reviews: automated and complex. Complex reviews require a medical record to complete the review. According to the Statement of Work for the Recovery Audit Program, “The Recovery Auditor shall not attempt to identify any overpayment or underpayment more than three years past the date of the initial determination made on the claim. The initial determination date is defined as the claim paid date.”
What to Watch
Each RAC publishes a list of improper coding issues approved by the Centers for Medicare & Medicaid Services (CMS) on its website. Each issue indicates which type of provider(s) is subject to review. Many of the inpatient issues relate to medical necessity for certain diagnostic-related groups (DRGs) and are considered to be “complex” reviews. For outpatient facility services and physician practices, many of the approved issues are automated. These issues test for Medicare billing and coding guideline compliance, which CMS publishes on its website.
Some examples of approved issues include:
- Once-in-a-lifetime procedures (e.g., “welcome to Medicare” exam)
- Medically-unlikely edits (expected units per encounter)
- Add-on codes without a primary code
- National Correct Coding Initiative (NCCI) column 1/column 2 edits
- Procedures with no corresponding device code
- Minor surgery and other treatments billed as an inpatient stay
- Outpatient services within 72 hours of admission
- Exact duplicate outpatient claims
- Outpatient claims billed within a prospective payment system (PPS) inpatient admission
- Skilled nursing facility (SNF) consolidated billing
Prepare to Prevail
Don’t wait for a RAC to knock on your door. Be proactive and follow these RAC review preparatory tips:
Research improper payments found by RACs, the Office of Inspector General (OIG), and comprehensive error rate testing (CERT).
- Review the RAC-approved issues on each contractor’s website.
- Peruse the OIG and CERT audit reports online.
Conduct an internal assessment to identify if you are in compliance with Medicare rules. For example:
- Take one RAC-approved issue per week and do your own random audit of claims to identify questionable areas of compliance.
- Use existing quality assurance/audit professionals to incorporate RAC-approved issues into your routine audit process.
- Review existing bill scrubber edits/rules to ensure edits are in place to capture claims with specific codes (or code pairs). For example, there should be a pre-billing edit to catch claims that have an implant procedure code, but no implantable device code.
Identify corrective actions to promote compliance.
- Educate charge entry (or coding) staff when trends of non-compliance are noted.
- Implement a quality assurance process (either human or automated) to review complex claims prior to claims release.
- Be sure to maintain the most updated provider manuals and CMS regulations, and disseminate the information to all appropriate parties.
- Review the RAC-approved issues periodically for changes.
- If issues are found, work with the billing office to determine whether it is appropriate to re-bill the noncompliant claims.
Prepare to respond quickly to RAC requests.
- Understand who receives RAC request letters and ensure he or she is educated about the importance of a timely response.
- Have a process in place to release records as requested within the appropriate time frame.
- Be sure whoever is releasing the information understands the components of the legal medical record and where to find all required information.
Appeal when necessary (within 120 days).
- There are specific steps to take when appealing decisions outlined in detail on the CMS and RAC websites.
- Appeal when you disagree with the decision; appeals must be completed in a timely manner.
Learn from past experiences; track denials and look for patterns.
- When a RAC repayment is made, correct the problem going forward. Educate the offending department(s) to ensure they understand how to charge and code correctly. If you have multiple facilities, share knowledge across all facilities.
- Work with your billing office to identify trends of billing denials prior to RAC reviews; follow the same mitigation steps to avoid future RAC findings.
- Review pre-billing edits to identify patterns of misuse and educate the departments accordingly.
Don’t Be Afraid to Appeal
Do not wait for RACs to request records or data before conducting these internal assessments. Keep in mind that RAC reviewers are not necessarily certified coders. Moreover, they are human, and they make mistakes. If you feel repayment is requested in error, appeal the decision. It is well worth the expended resources when you win an appeal.
Remember to be proactive—don’t wait for a RAC to appear. If one has not already visited you, it is only a matter of time. No provider is exempt from RAC review. Conduct internal assessments based on the published, approved issues. If your claims are submitted in compliance with Medicare regulations, you should not encounter any serious issues with a RAC.
Amy Lee Smith, MBA, CPC, CPC-H, CPMA, CIA, CRMA, is manager of internal audit at Bon Secours Health System, Inc., where she primarily performs coding and billing audits. She earned her bachelor’s and master’s degrees in business administration with a concentration in finance from The College of William and Mary in Virginia. Ms. Smith is also a Certified Internal Auditor and certified in risk management assurance.
December 1st, 2012
By Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CPC-I, CHCC, CENTC
Many practices enjoy the benefits of outsourcing their billing functions, such as the ability to concentrate on providing patient care. Choose the wrong billing company, however, and you may end up with even greater distractions and financial frustration.
Meet Your Billing Needs
To be sure you choose a billing company that meets your needs efficiently—and does so compliantly—do some homework to answer the questions below:
Q. What credentials/experience does the billing service have?
Find out how long the billing company has been in business and what sort of reputation they have. You’ll also want to know if they are registered or licensed by the state they are in (if their state requires it), and if they carry professional liability insurance. Ask if they provide a written contract for their services spelling out each party’s responsibilities in the business relationship. And don’t be afraid to ask how many clients they have, and if they have any clients similar in size and patient mix to your practice. Get references, too, so you can contact current and previous clients and ask for their opinions of the service’s performance.
Q. Does the billing company have experience in your specialty?
The billing company should understand the unique factors affecting your specialty; and they should have an appreciation for the issues surrounding your coding, reimbursement, denials, and appeals. If not, ask if they have the resources to get up to speed, to your satisfaction, so your revenue does not suffer.
Q. What kind of training does the staff have and receive?
Find out if the billing service’s management hold certification from a professional billing organization, and if there are billers and professionally certified coders on staff. If so, dig deeper to find out if the service provides ongoing education and guidance for these employees.
You have a right to know this information, as well as what resources the biller provides for its staff. Code books (CPT®, HCPCS Level II, etc.) should be up-to-date. The service also should have a written compliance plan. If it does (and you need to be sure), ask if you can you review the plan. Speaking of compliance …
Q. What is the procedure to protect the privacy of information?
Inquire into whether the service has a compliance officer, or someone who ensures the billing company provides secure (encrypted) email communications consistent with Health Insurance Portability and Accountability Act (HIPAA) requirements. You also should be aware of whether the billing company uses home-based employees and, if so, what precautions are taken to ensure HIPAA compliance.
Q. What are the company’s technical capabilities?
Do they electronically process and submit claims, either directly to Medicare or through a clearinghouse? Ask how often claims are submitted to the clearinghouse; what the process is for third-party payers; and if they use batch controls to minimize data entry and other errors. Make sure you know if the service will help your practice with forms, superbill design, office processes, etc.
Q. How does the biller handle claim changes?
Learn what the service’s protocol is for changing CPT® or ICD-9-CM codes if errors are discovered. What’s the protocol for missing information?
Q. What type of financial reporting does the billing company provide?
For instance, can the practice request ad-hoc reports? Ask whether the service can provide reports to determine physician compensation levels. If the practice is capitated, can the billing service report on capitated service utilization? Also inquire into whether your practice can access billing data at its office; and ask to see samples of their month-end reports to find out how robust they are.
Q. How is the billing company’s follow-up practices?
Specifically, how successful are they with appeals? Ask what parameters they use to determine if they will appeal a denial or underpayment. Find out the kind of accounts receivable (A/R) follow-up procedures they have. And ask how often the service follows up on payer accounts.
Q. How much will everything cost?
If the billing company’s fee is based on a percentage, find out if it is a percentage of charges, or a percentage of receipts (the latter is better). Also find out how refunds are handled. Are they netted out of receipts, so your practice is not paying the billing company for money returned to the payer? And don’t forget to ask if the billing service charges a start-up fee.
If the answers to any of these are not to your satisfaction, keep looking until you find a billing service that meets your expectations.
Remember: Even though you are outsourcing, the practice is ultimately responsible for its own claims. You need a billing company you can trust.
Experienced Staff Is Crucial
Even if the billing company is not coding for you, it’s a good idea for them to have at least one certified coder on staff. Appeals require the knowledge of a coder, and compliance also demands the increased knowledge that a certified coder can bring to the table. Even the billers need to know aspects of coding to do an excellent job in billing for your practice. Key areas of education include rules and regulations, where to find the information for Medicare, Medicaid, your private payers, modifiers, correct order of diagnoses, bundling and National Correct Coding Initiative (NCCI) edits, what separate procedures are, etc. You do not want a billing company that is just providing data entry.
Find a billing company with experience in your specialty, with a proven track record in compliantly optimizing practice revenue. I would not recommend entering into a billing company relationship without a written contract that very explicitly spells out each party’s responsibility.
Compliance is no longer an option. The Patient Protection and Affordable Care Act (ACA) mandates a compliance plan for all practices, with minimum requirements to be spelled out by the Office of Inspector General (OIG). A practice cannot afford to contract with a billing company that does not have a living, breathing, and operating compliance plan in place.
Check out the billing company’s recommendations. Talk to both current and past clients, if possible. Find out what the benefits of working with the billing company are, and what’s required of you to make the relationship function flawlessly. Clients should be able to confirm what the company has told you during the sales phase of your relationship.
Finally, do not expect to see your full income generated by the billing company for approximately four months. It takes about that long for them to get a full queue of your billing into the payers and a revenue stream to start flowing into the practice. Make sure you keep collecting on the A/R that was in process when you contracted with the billing company to keep the bank account healthy during this initial period.
Barbara J. Cobuzzi, MBA, CPC, CENTC, CPC-H, CPC-P, CPC-I, CHCC, is president of CRN Healthcare Solutions and senior coder and auditor for The Coding Network. She is consulting editor for Otolaryngology Coding Alert and has spoken, taught, and consulted widely on coding, reimbursement, compliance, and health care-related topics nationally.
November 1st, 2012