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Financial Disclosure
How to Avoid Billing
Department Hazards
Linda Georgian, COE
Administrator, Inland Eye Institute
Donna McCune, CCS-P, COE, CPMA
Vice President, Corcoran Consulting Group
Course Objective
• Describe the enrollment process and how to
credential providers
• Develop an assessment tool for the billing
g office
Linda Georgian is a practice administrator for
Inland Eye Institute Medical Group and
acknowledges a financial interest in the subject
matter of this presentation.
presentation
Donna McCune acknowledges a financial interest in
the subject matter of this presentation as an
employee of Corcoran Consulting Group.
Common Hazards
• Credentialing
• Monitoring
• Collecting
• List common mistakes made in the billing
department
Credentialing Changes
NPI
• National Provider Identifier
• NPI and PTAN
• Medicare Revalidation
• Ordering / Referring
• Internet enrollment PECOS
© 2000 Corcoran Consulting Group
• As of May 28, 2008 used exclusively on claims and
remittance advice
• Created to improve efficiency of electronic
transmission of health information and claims
submission
• Does not carry information about the providers such
as where they practice or type of service they
provide
PTANs
• PTAN – Formerly known as PIN
• Provider Transaction Access Number
• Established by individual payers, not portable
y
obtain a new ID for each carrier
• Physicians
• Not submitted on claims
• UPIN – Expired October 2007
Medicare Enrollment
• Required when something is new or changed
• Revalidation every 5 years
• Reactivation is required if no claims are submitted
for 4 consecutive quarters
• You can not file an application any sooner than 60
days prior to the provider’s start date.
• Applications take 60-180 days to process
Revalidation
Enrolling Ordering Provider
• Providers who order or refer Medicare services must
be enrolled
• Ordering/referring doctor must be enrolled for
service to be covered
• Enrollment can be obtained just for the purpose of
ordering and referring
• Extended deadline finally ended
• Performed every 5 years for providers and every 3
years for DMERC
• Fee is charged for DMERC and ASC, waived for
physicians and groups
• Both individual and group PTANS are being
revalidated
• You have 60 days to respond or your billing
privileges are deactivated
• Notices are sent to correspondence address on file
Internet Enrollment
• Provider Enrollment, Chain and Ownership System
(PECOS)
• Individuals use their NPPES user name and
password to access PECOS
• Groups must apply for an authorized user
• Faster, can upload attachments and sign
electronically
• https://pecos.cms.hhs.gov/
© 2000 Corcoran Consulting Group
Common Hazards
• Credentialing
• Monitoring
• Collecting
Tools for Monitoring
Know When to Expect Payment
• Keep end of month numbers in a spreadsheet to
track monthly changes
• Cash patients - the day
of the service
• Calculate average collections to measure and
project
• Medicare 14 days
y
• Blues about 20 days
• Benchmarks
• Medical Groups / IPAs
60 days
• Days in AR
• Aging bucket
• Net collection ratio
Tools for Monitoring
Monitoring-- Aging Buckets
Percent of Total A/R
•
•
•
•
•
Healthy Range
0 - 30 Days
y
31 - 60 Days
61 - 90 Days
91 - 120 Days
> 120 Days
40% - 60%
15% - 25%
5% - 10%
5% - 10%
10% - 25%
Days in AR
PAYMENTS
January-12 $
317,045.62
$
COLL.
AVG
10,227.28
$1,061,365.39
43%
• No pre-bill capabilities
Y
$
451,389.07
DAYS
44
February-12 $
360,097.72
$
11,616.06
$1,159,579.84
45%
$
519,375.97
45
March-12 $
467,721.37
$
15,087.79
$1,016,149.11
58%
$
591,708.87
39
April-12 $
415,544.49
$
13,404.66
$991,737.16
52%
$
515,676.53
38
May-12 $
418,706.66
$
13,506.67
$1,048,808.14
48%
$
504,992.75
37
June-12 $
406,007.78
$
13,097.03
$983,743.73
52%
$
514,963.70
39
July-12 $
421,850.40
$
13,608.08
$896,916.66
56%
$
499,281.56
37
August-12 $
396,069.38
$
12,776.43
$858,535.94
47%
$
401,866.11
31
September-12 $
411,460.18
$
13,272.91
$798,539.30
55%
$
438,085.61
33
© 2000 Corcoran Consulting Group
Divide the entire month’s receipts by 31 days = X
Multiply your AR balance by your collection average = Y
Divide Y by X = Days in AR
Healthy Range is 35 to 50 Days
Perform monthly
Case Study – AR in Trouble
AR BAL
X
Tools for Monitoring – Days in AR
• Data entry by inexperienced untrained staff member
• No feedback to other staff when problem discovered
• Understaffed
ff in billing department
• No logging of denials in PM
Case Study – AR in Trouble
Date
Sep-12
Benchmark
0-30
31-60
$198,526.03 $59,460.42
61-90
$45,972.38
90-120
$35,181.30
120+
Your Numbers
Total
$150,370.68 $489,510.81
40.56%
12.15%
9.39%
7.19%
30.72%
40-60%
15-25%
5-10%
5-10%
10-25%
• Is your practice’s net collection rate less than 97
percent? The benchmark is 95-99%.
• Formula: payments / (charges-adjustments)
• Run an average for the year,
year one month at a time is
not going to give you accurate data
• Is your denial rate less than 7%?
• Are you verifying insurance benefits and eligibility on
every visit?
Common Hazards
• Credentialing
• Monitoring
• Collecting
Collect at Time of Service
• Educate patients of your policy (posters, welcome
letters, website, patient statements, financial forms)
• Develop methods for DOS collections: CC; check;
cash; debit
• Create policies about billing for patient amounts
(e.g., refractions)
• Establish a systematic approach to turn over to
collections
Rate of Collectability
$1000 due from the Patient
•
•
•
•
•
30 days –
60 days –
90 days –
6 months –
1 year –
$899.00
$813.00
$696.00
$521.00
$228.00
- 89.9%
- 81.3%
- 69.6%
- 52.1%
- 89.9%
Source: Commercial Collection Agency Association
http://www.ccaacollect.com/10-18-04COLLECTABILITYCHART.pdf
© 2000 Corcoran Consulting Group
Sample Collection Policy
Day 1
Day 30
Day 60
Day 75
Day 90
First statement
Second statement with note that informs
patient that insurance has paid its portion
Collection letter with demand for payment
in 15 days
Phone call
Send to collection agency
Bad Sample Statement
Account Holder Name
Date
2/26/2010
Date
10/18/2012
Case Study – No Execution
• Practice sent multiple statements and dunning letters
Account Number
Description
Ophthalmological Medical Exam & Eval.
Comprehensive,
p
New Patient, 1+ Visits
We have been given 2 insurances that
have been incorrect. Claims have been
denied and ongoing almost a year.
Patient is now responsible for
Charge
Adj.
Paid Bal
$0.00 $150.00 $0.00 $150.00
• No phone call to patient
• Turned into Office Manager at 6 months
• Office Manager did nothing
• Up to 900 statements a month $.68 a claim = $612
• Audit showed some accounts received over 20
statements for $5
Sample Small Balance Policy
Successful Case Study
• Small patient balances less $25.00 but greater than
$5.00 will be billed twice.
• Practice sent multiple statements and dunning letters
• Small insurance balances $5.00 dollars or less will be
written off at the end of the month.
• No phone call to patient
• Credit balances on government program accounts
(Medicare) will be refunded, regardless of the
amount.
• Saw results within 3 months
• Implemented tighter follow-up and one phone call
• Small credit balances for all others may be written off
the system if the account balance is $5.00 dollars or
less.
Case Study
Successful Case Study
2005
Date
0-30 Days
31-60 Days
61-90Days
Over 120+
Total
6/12/08
$40,160
$21,231
$13,519
$70,785
$155,668
9/4/2008
$24,889
$10,036
$9,402
$48,396
$92,722
© 2000 Corcoran Consulting Group
Current
31 - 60
61 - 90
91 - 120
120 +
Balance
Ratio
Total
$369,517.42
$269,054.51
$186,856.20
$67,879.06
$333,292.07
$1,226,599.26
Ins.
$365,517.96
$256,327.33
$175,478.40
$61,040.80
$252,551.23
$1,110,915.72
91%
Pat.
$3,999.46
$12,727.18
$11,377.80
$6,838.26
$80,740.84
$115,683.54
9%
30%
22%
15%
6%
27%
61 - 90
91 - 120
Total
$554,378.01
$143,879.21
$38,771.48
$19,426.17
$42,084.43
$798,539.30
Ins.
$545,564.21
$135,814.75
$35,387.11
$16,184.62
$31,648.49
$764,599.18
96%
Pat.
$8,813.80
$8,064.46
$3,384.37
$3,241.55
$10,435.94
$33,940.12
4%
69%
18%
5%
2%
5%
2012
Current
31 - 60
120 +
Balance
Ratio
Know What to Expect
Identifying Problems
• Make a master fee schedule for every contract
• Appeal underpaid and wrongfully denied claims
• Use Patient Account Types or Insurance Carriers to
run aging reports
• Only 78.5% of all claims process without error
• First of the year deductibles
• Compare contracted rates against the EOB
• Errors include partial payments without explanation
• Transmission
T
i i problems
bl
• Underpayments
• Timely filing – Medicare 12 months
• Overpayments
• Denial follow up
• Erroneous denials
Source: 2007 Survey by National Healthcare Exchange Services on behalf
of the American Medical Association
Common Hazards
Common Billing Office Errors
•
•
•
•
•
Modifiers
• Indicates both a professional and technical
component
• More than one physician and/or location involved
• Increased or reduced service provided
• Only part of service performed
• An adjunctive service performed
• Bilateral
• Repeated
• Unusual events occurred
Source: AMA, CPT
© 2000 Corcoran Consulting Group
Incorrect modifiers
Diagnosis code errors
Misuse of waiver forms
Timely filing issues
Contractor errors
Case Study
Well--Intentioned Employee
Well
• Submitted claims based on CPT codes circled on
superbill
• Noticed combination of FA / FP / OCT
• Checked NCCI edits and determined FP / OCT are
mutually exclusive
• Added modifier -59 to all FP claims with OCT
• Did not ask about medical necessity or clinical support
to unbundle
• Substantial overpayment to Medicare owed
Medicare Expected Frequency
Changes to Practice Patterns
Modifiers – Ophthalmology (18)
• Modifier 54 use increased 69%
• 37% of cataract surgeries comanaged in 2011
• 22% of cataract surgeries comanaged in 2010
• Modifier 58 use increased 83%
•
•
•
•
Modifier -24
Modifier -25
Modifier -57
Modifier -59
2%
11%
1%
2%
• Based on Medicare paid claims for office visits
(920xx, 992xx)
• Considers all ophthalmologists
• Subspecialists’ utilization likely varies
• Requires supportive documentation
Source: CMS data 2010 vs. 2011, 18 – Ophthalmology
Source: CMS data (2011), 18 – Ophthalmology
Avoiding Hazards
Common Billing Office Errors
• Physician and staff training on proper modifier use
• Establish policy regarding who appends modifiers
• Conduct reviews specifically for appropriate
modifier use
• Monitor utilization of modifiers
ICD--9 Coding
ICD
• List first the ICD-9 code which is the reason for the
service
• Code the symptom if no definitive diagnosis is
determined
• Use most descriptive ICD
ICD-9
9 code (4 to 5 digits) and
avoid non-specific codes
• List chronic conditions or secondary diagnoses only if
pertinent to the visit
• Do not give patients a disease they do not have
• Do not use a code that no longer applies
© 2000 Corcoran Consulting Group
•
•
•
•
•
Incorrect modifiers
Diagnosis code errors
Misuse of waiver forms
Timely filing issues
Contractor errors
Office Visit - Established
Emmetropic Example
CC: Worried mom
Dx: Normal eye exam (V72.0)
Tx: No RX needed
Hx: Healthy
Exam: CE, DFE
Staff changed Dx
to conjunctivitis
to ensure coverage
so mom does not have
to pay
Compare and Contrast
Diagnosis Coding
ICD-10
ICD-9
Guidelines for using ICD-9-CM codes
• 17 Chapters
• 21 Chapters
“During a routine exam, should a diagnosis or
condition be discovered, it should be coded as an
additional code.
code ”
• 14,000 codes
• ~ 69,000 codes
• 3-5 digits
• 3-7 digits
• First digit is numeric or
alpha (E or V)
• Digit 1 is alpha
• Digits 2-5 are numeric
• Digits 3-7 are alpha or
numeric (alpha digits are not
• Digit 2 is numeric
case sensitive)
Source: ICD-9-CM Introduction
Avoiding Hazards
• Physician and staff training on assigning correct
diagnosis codes
• Physicians should “link” diagnosis codes
• Patient inquiries require chart review of chief
complaint and finding
• Establish policies regarding changing diagnosis
codes
Common Billing Office Errors
•
•
•
•
•
Incorrect modifiers
Diagnosis code errors
Misuse of waiver forms
Timely filing issues
Contractor errors
• Begin training for ICD-10
Case Study – ABN
MD discusses performing an anterior segment OCT
(92132) for the diagnosis of glaucoma suspect. The
patient is informed that this may not be covered by
Medicare as their Medicare contractor does not include
g
code as a covered indication for this test on
this diagnosis
their LCD. The patient signs a universal ABN that has
been customized by the practice for any beneficiary who
is financially responsible for an item or service.
Advance Beneficiary Notice of
Noncoverage (ABN)
• New form effective 3/1/11, required on or after 11/1/11
• Old form expired 3 years after implementation (3/08 –
3/11)
• Small changes in font and spacing
• No changes in instruction set for completion
• Form can be downloaded from:
http://www.cms.gov/BNI/02_ABN.asp
Is this reasonable?
Source: CMS-R-131 (03/11)
© 2000 Corcoran Consulting Group
When is an ABN required?
• Get an Advance Beneficiary Notice (ABN) when
• Beneficiary is financially responsible
• Not covered…
• No eligible diagnosis
• Normal findings
• Screening
• Standing orders for a test
• DME noncovered items
Form Completion
• Add your name, address, phone to the header
• Can customize “Items or Services”, “Reason
Medicare May Not Pay” and “Estimated Cost” boxes
• Use blue or black ink,, white paper
p p
• Must be one page, single-side, reverse side blank
Advance Beneficiary Notice of
Noncoverage (ABN)
● Option 1. I want the _____ listed above. You may ask
to be paid now, but I also want Medicare billed for an
official decision on payment…I can appeal to Medicare…
● Option 22. I want the _____ listed above
above, but do not
bill Medicare. You may ask to be paid now as I am
responsible for payment. I cannot appeal to Medicare…
● Option 3. I don’t want the _____ listed above. I
understand with this choice I am not responsible for
payment…I cannot appeal to Medicare…
Form Completion (continued)
• Fill in beneficiary’s name and your ID number (i.e.,
account #) at top of form
• Do not use patient’s Medicare # on the form
• Complete
p
the “Items or Services” section with
proposed service
• Complete “Reason Medicare May Not Pay” with
reason why denial expected
• Use language beneficiary understands
• “Estimated Cost” field required
Form Completion (continued)
• ABN must be signed before items or services
provided
• Beneficiary must personally choose option to sign
When is an ABN NOT required?
• No Advance Beneficiary Notice (ABN) required when
• Item or service is statutorily (by law) non-covered
• Not covered by statute…
• Patient must sign
g and date form
• Refractions
• Legible copy must be provided to the patient
• Routine eye exams
• Most refractive surgery
• Cosmetic surgery
• Non-covered portion of deluxe IOLs
• Eyeglasses or CLs outside of benefit
© 2000 Corcoran Consulting Group
Notice of Exclusion from
Medicare Benefits (NEMBs)
Claim Filing
• Option 1 – Claim must be filed
• Item or service excluded from Medicare benefits
• CMS-2007 (January 2003)
• Voluntary use
• May be customized and altered
• Available on-line (English and Spanish)
• Option 2 – Claim filing optional
• Utilize appropriate modifiers
Source: Medicare Claims Processing Manual Chapter 30, §90
Modifiers
• GA – Waiver of liability statement issued as required
by payer policy
• GX – Notice of liability issued, voluntary under payer
policy
• GY – Not a covered service
Avoiding Hazards
• Ensure proper version of ABN is in use
• Follow detailed instruction set for completion of
ABN
• Utilize appropriate modifiers when waivers are
used and claims are filed
• Educate on when ABNs are utilized
Source: MedLearn Matters JA6563, Feb 2010
Common Billing Office Errors
•
•
•
•
•
Incorrect modifiers
Diagnosis code errors
Misuse of waiver forms
Timely filing issues
Contractor errors
Clean Claims
“Clean claim” means a claim that does not contain a
defect requiring the Medicare contractor to
investigate or develop prior to adjudication. Clean
claims must be filed within the timely filing period.”
Source: http://www.cms.gov/Outreach-and-Education/MedicareLearning-Network-MLN/MLNMattersArticles/downloads/mm5355.pdf
© 2000 Corcoran Consulting Group
Timely Filing
“The time period for filing Medicare FFS claims is
specified in Sections 1814(a), 1835(a)(1), and
1842(b)(3) of the Social Security Act and in the Code
of Federal Regulations (CFR), 42 CFR Section
424 44 Section 6404 of the PPACA amended the
424.44.
timely filing requirements to reduce the maximum
time period for submission of all Medicare FFS
claims to one calendar year after the date of
service.”
Avoiding Hazards
• Develop spreadsheet with claim filing deadlines for
all payers
• Monitor and track “errors” that result in filing delays
• Incomplete information in computer
• Inaccurate data
• Develop policies and procedures to ensure timely
filing
Source: http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/ProspMedicareFeeSvcPmtGen/downloads/Health_Reform_Timely_Fili
ng_Provider_Notice.pdf
Underpayments
Common Billing Office Errors
•
•
•
•
•
Incorrect modifiers
Diagnosis code errors
Misuse of waiver forms
Timely filing issues
Contractor errors
“Keep a close eye on payments you’re receiving from
Medicare because at least one recovery auditor
(RAC) has spotted underpayments being made under
the wrong fee schedules. . . . Payments in 2009
could
cou
d be a ta
target
get because Medicare
ed ca e initially
ta y
implemented one fee schedule, then switched it after
Congress raised physician pay.”
Source: Part B News 2/28/13
More help…
Summary
• Properly enroll and re-credential providers with
Medicare and other third party payers
• Utilize benchmarks and regularly monitor activities in
billing office
• Educate and correct coding errors affecting claims
• Develop policies and procedures specifically
addressing billing office activity
© 2000 Corcoran Consulting Group
For additional assistance or confidential consultation,
please contact us at:
Linda Georgian – (951) 265-7714
or
Donna McCune – (800) 399-6565
www.CorcoranCCG.com