Getting paid promptly and properly is never easy. However, this renowned expert offers insights that can help you improve office efficiency, navigate through the red tape of managed care and ultimately bolster incoming revenue streams. Way back when, in pre-managed care times, physicians could expect to be paid their fees in full. Unfortunately, with the advent of the managed care era, times have changed and certainly not for the better for DPMs. Physicians, who had previously maintained an “arm’s distance” from third party payers (preferring to deal directly with their patients), have become contractually bound to those same payers. Whether it was a result of economic extortion, a fear of losing existing and potential future patients or belief in the managed care “dream,” physicians, in mass, abandoned their traditional business models in their stampede to sign any and every managed care contract placed before them. Once the physician became directly dependent on the third party payer for reimbursement (the role previously held by the patient), the physician became the consumer … and not a very good one at that. The majority of physicians simply didn’t ask the right business questions: What is the plan fee schedule? Can my practice afford the contractual discount? What are the benefit limitations? What are the patient’s responsibilities in terms of copayments and deductibles? What hospitals, specialists, laboratories, ambulatory surgical centers, etc. are the patients restricted to? Is there a provision for reimbursement for services performed “out-of-network”? How can the managed care contract be terminated?, etc. Unfortunately, most physicians signed without reading their contracts, without seeking the advice of a healthcare attorney, without considering whether they could truly afford the terms of the contract. With this backdrop in mind, there are five key challenges that are essential to master if you want to minimize managed care headaches and help ensure timely and proper reimbursement. Stay Current On The Latest Rules 1. Don’t go into battle without your weapons. Third party medicine runs on systems that are defined by rules, guidelines, benefit structures and definitions. Any practice participating in third party medicine is bound to follow defined coding and billing rules, guidelines and definitions. You can access these via sources including, but not limited to CPT, ICD-9-CM, HCPCS, the Federal Register, Medicare, national and specialty associations and societies, healthcare consultants and the payers themselves. Applying CPT, ICD-9-CM or HCPCS coding within the billing process assumes a level of definitional understanding from both you and the payer. A breech of this definitional understanding leads to a misrepresentation which, in turn, can lead to reimbursement or denied reimbursement for the service or procedure claims. It is critical that you and your staff be wholly aware and follow reimbursement rules the best you can. In order to do this, you need to set aside a sufficient budget amount each year for acquiring: • the latest CPT, ICD-9-CM, HCPCS, National Correct Coding Initiative books and databases; • companion texts (e.g., reimbursement guidelines, specialty coding/billing manuals, etc.); • newsletters (e.g., CodinglinePRINT, AMA’s CPT Assistant, Part B News, etc.); • electronic reimbursement aids (e.g., AMA’s CodeManager 2002, Encoder Pro, UCG’s CorrectCodeChek, etc.); and • attending reimbursement seminars (e.g., Codingline Business of Medicine series, APMA, state and specialty association coding and billing meetings, etc.). Not having a complete and up-to-date library of standard reimbursement manuals and information puts you and your practice at risk. Skimping on the tools of the trade is like going to battle without your weapons. The key to any successful reimbursement challenge — a denied or modified or even unduly delayed claim — begins with the ability to lace any appeal with quoted text from recognized coding and billing manuals, specialty guidelines or other acknowledged sources. Without reasonable and recognized definition, rules or guideline support, you can lose the reimbursement battle before you even begin. Being knowledgeable and meeting the challenges when it comes to reimbursement can make all the difference in the success of your practice. Develop A First-Rate Process For Collecting Reimbursement 2. Should you bill and collect in-house or outsource reimbursement operations? While it may seem best to maintain a practice’s billing and collection operations “in-house,” this may not always be the best option for a medical practice. In order to appreciate the value of performing “in-house” reimbursement management versus outsourcing the operation, you should review and compare the costs of each option. While most practices traditionally perform their own billing and collections, very few consider the costs — direct or indirect — associated with those functions. In real terms, “in-house” reimbursement management costs include, but are not limited to: • the full time or part-time billing/collection staff salaries and benefits; • initial and continuing reimbursement education and training costs (i.e., staff-to-staff training, seminars, coding/billing/collecting-related newsletters and/or books); • practice management software licensing, training and maintenance; • computer hardware and peripherals, as well as maintenance and replacement; • disposable paper goods (i.e., HCFA 1500 claim forms, statements, and envelopes); and • stamps, Internet and telephone usage. When it comes down to it, most doctors don’t have a clue as to how much the aforementioned expenses contribute to their overall overhead. Obviously, it is critical to know “in-house” reimbursement percentage costs in order to appreciate, directly compare and value the costs of an outside billing service. In all fairness, you must take into account any “residual” reimbursement management costs that would be incurred by your practice even with outsourced billing and collection services. These costs can include: ongoing practice compliance, in-office patient collections costs, ultimate outsourcing supervision responsibilities, etc.. Once you’ve examined all the financial considerations, you’re faced with questions over control and commitment. In the case of outsourcing reimbursement management, regardless of whether the business decision is financially right for your practice, are you willing to give up your practice’s billing/collection functions to an outside source? If the answer is “no,” are you willing to commit the resources necessary to develop and maintain quality billing and collection operations within your practice? Remember, managing the reimbursement process is critical to the success of your practice, so having a second rate process simply isn’t acceptable for achieving and maintaining this goal. Stay Abreast Of The Guidelines Of Various Insurers 3. Ensure a thorough understanding of the rules of third-party payers (yes, all of them). If only they had the same rules, followed the same guidelines and used the same definitions, wouldn’t reimbursement management be much easier? Despite standard coding and billing guides, third party payers seem to pride themselves on marching to the beat of different drummers. It is not good enough that managed care companies attempt to control healthcare costs by capping physician fee schedules at levels a fraction of what was usual and customary 15 years ago. Payers individualize rules, guidelines and definitions without consideration to the impact on the medical practice. In order to keep up with individual payer demands, physicians and staff must divert valuable resources — resources that should be directed to patient care — in order to meet some non-clinical demand of the insurer. The result is a significant reimbursement challenge for your practice. Solutions are not easy, but they are also not impossible. When dealing with third party payers, it is essential that you obtain all relevant rules, guidelines and definitions early in the physician-patient relationship in order to establish a thorough understanding of the insurance plan and payer coding and billing requirements. Unfortunately, you must continuously repeat this process with each payer you encounter. Developing a patient-specific “insurance verification and benefits” form is the first step in the process of bolstering the efficiency of your practice. This form should contain all the data points necessary to initiate practice to insurer billing. The essential data should include: • patient demographic information; • deductible and copayment requirements; and • payer payment/non-payment policies directed to a listing of your practice’s most commonly performed services and procedures (e.g., foot orthotic devices, in-office surgery performance, in-office surgical trays and supplies, medial and lateral matrixectomies performed on the same great toe, dispensed DMEs including post-op shoes, etc.). Armed with a suitable form, you can now query the patient’s third party payer for information that is vital to the reimbursement process. You can also develop additional forms to expedite the management of such events as surgical scheduling. In this example, you would provide the specific CPT and ICD-9-CM codes, as well as consent wording, the pre-surgical testing you desire, the site of the surgery, whether you need an assistant for the procedures, etc. Do Whatever You Can To Maximize Efficiency On Your End Your staff can then take this batched information, contact the patient’s payer fully armed and obtain from the payer representative information on, confirmation to or modification of — from the reimbursement side — your surgical plans. When your staff has all the information they need to answer the payer’s comprehensive list of questions before making the phone call or e-mail, it maximizes their effectiveness. Always have your staff create a written log of the conversation, including such information as the conversation date, time, phone number (or e-mail address), full name of the payer representative, as well as, obviously, the information given. If your staff files the information in a manner that allows them to easily retrieve it, it will be invaluable not only in terms of focusing the coding/billing to meet the specific requirements of that particular payer, but also as supportive documentation if and when issues come into dispute and appeals are necessary. There’s no getting around the fact that third party payers will differ in their policies, guidelines and definitions. The non-conformity of payers results in reimbursement nightmares: inefficiency, waste and increased costs to your practice. Therefore, it is critical that you develop policies for coding and billing that are based on recognized standards (stated in CPT, published by Medicare, expounded by the APMA and specialty societies, etc.), and try to adhere to them as best as possible. When Should You Appeal? 4. Appeal it when you feel that you have been wronged. When you seem to have done everything right and the explanation of benefits returns all wrong, you have to appeal any unfairly denied or modified claims. But how do you know when you’re in the right? We have discussed the tools of the trade. We mentioned gathering additional coding and billing information through reference texts, seminars and from the payers themselves. Armed with ”standards,” you and your practice can tackle one of the most difficult of reimbursement challenges: the appeals process. The moment your practice devotes even a single second of time to appealing a modified or denied claim, the return on the original claim is diminished. It costs money to fight perceived reimbursement errors on the part of the third party payer. When a staff person is distracted from primary billing, collection and posting functions to appeal a claim, the ultimate return paid on that disputed service or procedure claim is diminished dollar for dollar by all the practice expenses you will need to fight the appeal. It is for this reason that you must have an office policy in place to identify when and how your practice will proceed in appealing claims. Appealing claims is an art as well as a science. First, you should carefully examine all the data included on the claim. Are all the required fields filled out properly? Is the information specific, accurate and logical? Are the ICD-9-CM codes prioritized and linked to the appropriate line item CPT or HCPCS code on the claim? If there was trauma or an injury involved, is the date of injury included? If outside services were ordered, have they been identified? Are codes that need modifiers modified? Also take this time to review the managed care contract you signed. You need to know the extent of your appeal rights and you need to know under what circumstances the patient is obligated to pay the claim if the payer denies any services. How To Enhance Support For A Claim Form That Was Correctly Submitted Once you have determined that the technical parts of the claim form are correct as submitted, you need to be able to state your case clearly and with sufficient qualifiers in order to be convincing to the payer. You should cite standard coding definitions as well as billing guidelines and rules within your letter of appeal or in a separate document attached to your letter of appeal. Quoting the payer’s own policies or submitting copies of previously paid claims involving the same codes from the same payer is perhaps the strongest support for your position. If this info is not available, then submitting example copies of “other payer” explanation of benefits — removing patient identifiers — to support payment under the same circumstances can also be compelling, especially if the denial was based on a lack of medical necessity or bundling/unbundling issues. Regardless of whether or not you have “historical” claims to reference in the appeal, you must be ready to quote chapter and verse from recognized coding and guideline texts like CPT, or from Medicare’s policies and guidelines on the same issues. Once you have wrapped up the main text of the appeal letter, be sure to ask the payer to provide any definition, policy and guideline documents it used to justify the denial or modification of the claim you submitted. Prodding the payer to give you written validation of its position can provide the basis for potentially continuing the appeals fight. Since patients are very much aware that a submitted claim has been denied or modified, it is very important that you copy patients on each letter of appeal you submit. Write your letters of appeal in a format which appears that you are doing this for them and you are their best advocate. Obviously, you should encourage your patients to join in the appeal process with personal letters to their employer and to the payer. For some reason, insurers seem to listen to them and their employers more than to physicians. Know When To Say When On Appeals Sooner or later, the appeal process must come to an end. Either you will win the appeal, at which time you should copy the findings and file them for future appeals, or you will get a partial victory, or you will get a confirmation of the original determination. Develop an office policy that tells you when to stop the appeal process. Hopefully, you will take into account the strength of your case and the cost of appeal. If you or your staff notice that certain payers always unfairly change codes or deny services or bundle procedures, if may be time to seriously review the need to continue with that contract. Collect Those Co-Payments At The Visit 5. If it’s not a covered benefit, bill the patient. One of the greatest reimbursement challenges facing medical practices is: who will pay if the insurance company won’t? The answer is: the patient. If there is no contractual obligation to avoid billing the patient for denied services, then the patient should expect to get a bill from your office. For some practices, there are several reasons why asking the patient for money is a very uncomfortable process. First, your staff may be so used to the notion of the third party payer being the banker that the patient’s obligation to pay has been eliminated — rightly or wrongly. There is no awkwardness between the physician and the patient because money does not change hands at that level. Second, the fees charged by the physician have no basis in reality and are meant for third party payer consumption only. Lastly, the physician may undervalue his or her worth. If your practice has a contract with an insurer to provide medical services to a pool of patients, in many cases, the only upfront financial obligation a patient may have is the residual deductible and the visit/service copayment. If a patient has a $5 or $10 co-payment that must be paid with each evaluation or treatment encounter with a physician, then your staff must collect the co-payment at the time of the visit. The moment your patient leaves the office without paying what essentially amounts to a “disincentive” cost, your practice has lost money. Chasing after a $5 or $10 copayment by billing and, possibly, re-billing the patient is expensive. If patients fail to pay the money at the time of the visit, they tend to forget that they own the money, or put it off when they get a statement because the mortgage and groceries come first. Emphasize to your staff to always get the deductible and co-payments at the time of the visit. You would be surprised how the five and ten dollars add up. Minimize Your Discomfort In Collecting From Patients Directly Some physicians have a very difficult time quoting a fee for their services knowing that the patient will have to pay out of pocket. Many podiatric practices have a certain comfort level saying that the orthotics are not covered benefits under the patient’s insurance plan and will be $xxx.xx. Unfortunately, they are not quite so comfortable when it comes to quoting a cash surgical procedure or letting patients know that the trimming of the nails and the two corns are not covered by Medicare, and their obligation is $xxx.xx. Remember, a service you bill to a third party payer at $100 does not change value when there is no third party payer involved. You should charge the fees that you feel your services are worth and those charges (regardless of the payer’s fee schedule) should not change regardless of whose obligation it will ultimately be to pay the bill. I do recommend that physicians create a form they can use within their office that informs patients that their insurance may not cover certain services, procedures or supply items either because there is no benefit allowance under the plan the patient has, or the payer does not feel that the services, procedures or supply items are not reasonable and/or necessary. Assuming there is no contractual requirement not to bill the patient, you can expect the patient to read and sign such an informed financial consent. And if the circumstances warrant it, the patient should expect to pay out of pocket for those services you performed. Conclusion Appreciating the reimbursement challenges and solving them is a natural part of what medical practice is all about. Don’t take the challenges lightly. Winning requires preparation, obligation and commitment. Successful practices handle these challenges day in and day out, and there is simply no reason not to succeed. n Dr. Goldsmith is the Chief Executive Officer of Codingline.com, a reimbursement and practice management Internet company. He is also the owner of Podiatric Medical Review Consultants, a coding and reimbursement consulting company.