The days of plentiful allowances from health insurers, timely patient payments, and minimal medical necessity requirements are a fond memory. In Part 1 of this article (April 2010), we reviewed patient payments including coinsurance, deductibles, advanced beneficiary notices, and waivers of liability. In addition to patient payments, practices can streamline processes to protect oncology reimbursement.

Payment posting

Providers should audit their remittance advices and explanation of benefit documents every quarter. In doing so, many groups find and decipher their payment problems, and often discover hundreds of thousands of dollars of underpayments. In addition, providers should review payments posted on a regular basis to ensure that contractual adjustments are not applied in error for insurers where there is no contract or participation agreement.¹

Although each facility or practice may encounter different nonpayment situations, two common reasons charges are inappropriately reduced include the incorrect application of bundling guidelines and services that are downcoded.

Bundling occurs when a practice or facility submits a claim for two or more procedure codes for a single patient on a single date of service, but the payer considers these multiple procedures to be represented by one procedure code. According to the American Medical Association (AMA): “Bundling has become more widespread, because health insurers have increased their use of code-editing software. Health insurers not only integrate these code-editing software programs into their claims review cycle, but also add another layer of confusion by modifying the program’s standard code-pair edits to fit their own medical payment policies.”²

Another potential problem is downcoding, which can occur when a health insurer unilaterally reduces the level of complexity of a patient-visit service or a procedure. For example: code 99204 (level 4 new patient visit) was billed, but code 99203 (level 3 new patient visit) was paid by the insurer. The health insurer may base the downcoding on the diagnosis code(s) reported with the procedure code, or it may have specific documentation requirements for patient visits in addition to the AMA or Centers for Medicare & Medicaid Services guidelines.

Tracking denials for bundling, and ensuring that a modifier is applied when required, may improve practice reimbursement. In addition, monitoring payments to verify that insurer discounts were correctly applied and codes were not altered can also guarantee appropriate revenue.

Collections

Limit your patient statements to a maximum of two or three; sending more increases the practice’s cost and drags out the collection/bad debt cycle. History shows that more mailings won’t lead to better collections. In addition, make certain that the statement includes a due date for the payment, not just the date the bill was sent. Last, when the patient cannot pay the entire amount, avoid questions such as “When can you pay?” Instead, request that the patient provide full payment by a specific date or before the next treatment is provided.

E-mailing patient statements is known as “electronic presentment”; the telephone and credit card companies have been doing it for years. The patient will appreciate the cost reduction, and it may help further cement your patient relationships.¹

Also watch for “rubber checks.” During a tough financial time patients may bounce checks for copayments and deductibles. In addition to not receiving the money due, the bank may charge the practice a fee (such as $25) per bounced check. The medical practice may want to consider a policy that appends an extra charge to the patient account when checks are returned by the bank. According to the AMA, medical practices may also have an increased risk of receiving bad checks when there are high deductibles and healthcare savings accounts and when treating uninsured patients.³

Denials and appeals

Even when a practice codes claims correctly, health insurers may still inappropriately deny, delay, or significantly reduce payments.² Many practices lose revenue every day due to partially paid, delayed, and denied health insurance claims that the practice does not challenge or may not even notice. When the practice or facility receives a denial or rejection:

• It should not be processed as a writeoff unless it has been completely investigated.
  
• If the claim is denied because the patient is not enrolled in the insurance plan, investigate.


• Review for data entry errors, such as transposed digits in the group number or patient identification number. If the insurance card has been scanned or copied, ensure that all information is legible.


• Review the application of modifiers, procedure codes, and diagnosis codes, and compare with payer processing guidelines.


• Review for medical necessity denials. When responding to a medical necessity denial, make certain that the appeal letter includes specifics relating to the individual patient. Consider documentation that supports the patient’s current medical condition, chief complaint(s), physical examination findings, and any correlating diagnostic test results. Also include documentation of medical management options that were previously tried, but failed to adequately treat the patient’s medical condition.

Operational review

Now is the best time to evaluate overhead expenses, staffing levels, marketing practices, and the superbill. Evaluate current expenditures, including office supplies, kitchen supplies, and other routine purchases, and look for new ways to trim costs. It may also be prudent to consider outsourcing certain segments of the practice, such as human resource functions and benefit plans.

The silver lining to a cloudy economic forecast is the fact that there are plenty of new opportunities on the horizon. Although the superbill or charge capture document should be reviewed when diagnosis and procedure codes are updated, this is an excellent time to review all services performed by the practice. Are there services performed that are not being captured and billed? Are there services that the practice considered in the past that it should offer now? For example, tobacco cessation counseling (procedure codes 99406 and 99407) may be performed by the physician or a qualified nonphysician healthcare professional, but the practice may not have reviewed these codes to see if there is an opportunity to bill for this service.

Consider offering cash-only services that will benefit the patient population in your location. For oncology practices, this may mean installing a massage therapist in an empty examination room. This may provide an activity that patients and/or caregivers would enjoy (for a small charge) and could lead to other services such as the sale of spa products for skin care. The massage therapist need not be a practice employee, but can lease space on a daily or hourly basis.

Last, know your market today and be able to estimate tomorrow’s market. Assess your competition, determine what makes your practice different, and use that information to launch or redesign a marketing campaign. Work closely with referring physicians to ensure that they understand your commitment to patient care in addition to the services offered at your oncology practice. Position your practice to be their “partner” through an open house, fast and accurate updates on their patients, etc.

Reimbursement realized

It seems that we have already changed priorities, tightened our belts, stretched our budgets, and delayed implementing new technology. However, the current economic environment demands that we continue to become more efficient, even in areas where it seems impossible, and that we honestly address what we need and what we want for our practice.

References

1. Jakielo DF. It may not be the economy. HBMA Billing. Nov/Dec 2008.

2. American Medical Association. Appeal that claim. 2008. www.ama-assn.org/ama1/pub/upload/mm/368/appeal-that-claim.pdf. Accessed March 10, 2010.

3. Caffarini K. Keeping rubber checks from clogging revenue flow. January 26, 2009. www.ama-assn.org/amednews/2009/01/26/bica0126.htm. Accessed March 10, 2010.

About the Author

Cindy C. Parman, CPC, CPC-H, RCC

Principal, Coding Strategies, Inc, Powder Springs, Georgia