how to improve billing and collections
DESCRIPTION
HOW TO IMPROVE BILLING AND COLLECTIONS. CASE STUDIES. PRESENTED BY. CARYL A. SERBIN, RN, BSN, LHRM PRESIDENT AND FOUNDER SERBIN SURGERY CENTER BILLING, LLC. 2. CASE STUDY #1 ABC SURGERY CENTER. 3. Case Study reflects financial findings/recommendations only – - PowerPoint PPT PresentationTRANSCRIPT
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3Case Study reflects financial findings/recommendations only – additional clinical findings/ recommendations are not presented
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• 14 month old ambulatory surgery center evaluated because not meeting projected revenue• Semi-rural area• Joint-venture – 7 physicians/ local hospital• Average case volume - 350 month
ABC Surgery Center
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• Specialties - ENT - GI - Ophthalmology - Orthopedics - Podiatry - Pain Management
• Payor Mix - Medicare - Medicaid - BCBS - W/C - PPOs - HMOs - Indemnity
ABC Surgery Center
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•Number of reasons for negative cash flow: - Fee schedule far lower than normally seen in an ASC - Managed care contracts low with unfavorable terms - Improper billing/coding practices - Managers with no ASC experience - Inefficient use of staff - Appropriate structure and policies and procedures not in place
ABC Surgery Center
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Findings • Evaluation of the fee schedule revealed that most fees were exceptionally low low compared to Medicare/BCBS ASC fees for this geographic locality• Many fees were actually less than
Medicare allowable• Fee schedule had been based on physician DRGs• No consistency in fees – similar procedures had wide variances
ABC Surgery Center
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Recommendations • Develop fee schedule based on percentage of Medicare group rates• Carve-outs for higher ticket procedures• Decide on additional procedure discount• Sample fee schedule given to Board -
recommended 500% of current Medicare rates
ABC Surgery Center
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Findings• Low rates for an area with little
managed care penetration• Some reimbursement methodologies
varied from market standard• Unfavorable terms in contracts• Most carriers require accreditation• Some contracts were invalid as not
voted on by BoardABC Surgery Center
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Recommendations• Join local PHO and have them assist in
recontracting for ASC• Cancel five major contracts whose
reimbursement is based on Medicare rate• Great managed care market – suggest
renegotiate for reimbursement based on percentage of billed charges
• Move toward becoming accredited – mark applications as “Accreditation Pending”
ABC Surgery Center
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Findings• Coder with no ASC or surgical coding experience• Coding errors included: - not coding for bilateral procedures - not coding for multiple procedures - lack of sufficient modifiers - improper or no billing of toe implants - wrong anatomical part - coding from title – not from body of op note - no copy of coding history in patient chart - no cross check to ensure coded all cases
ABC Surgery Center
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Recommendations• Hire or outsource to certified coder, or• Immediate coding certification training for
current coder• Code from body of operative note – use
additional information when necessary
ABC Surgery Center
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Recommendations (continued)• Rebilling of all claims with coding
errors that result in differences in reimbursement
• Utilize coding form• Utilize schedule to make sure all
patients have been coded
ABC Surgery Center
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Findings• Biller had no ASC/surgical billing
experience• No electronic filing – all paper claims• All business office uses same printer• Billing for non-ASC services in same
module – cannot separate in reports• No cross-check between coded cases and
batch reportABC Surgery Center
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Recommendations• Hire experienced biller, or• Immediate training for current biller
including the following:
• Electronic submission of all claims where possible
ABC Surgery Center
CPT codes ICD-9 Dx CodesSx Procedures Modifiers
Medicare Guidelines
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Recommendations (continued)• Additional printer near biller to run
claim forms• Purchase separate software module to
bill for non-ASC services• Balance billing batch report to coding
forms/schedule to ensure no unbilled revenue
ABC Surgery Center
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Findings• Payment poster not knowledgeable
regarding managed care contract allowances – no copy of contracts
• Accepts what payor allows – write-offs are adjusted to match what is paid and not pre-approved
• Not checking to determine if refund due• Not balancing to deposit
ABC Surgery Center
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Recommendations• Hire experienced payment poster, or• Provide payment poster with copy of
contracts and ASC fee schedule• If payment correct, transfer amount to be
billed to secondary insurance or patient and send
• If not paid correctly or denied, start denial process
• If overpaid, begin refund process• Balance payment batch to deposit log
ABC Surgery Center
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Findings• Collections not being done regularly
due to lack of business office staff• No system in place to determine oldest
accounts and when to place with collection agency
• High dollar amount over 150 days old - investigate to determine how much collectible
ABC Surgery Center
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Recommendations – Insurance Carriers• Use Aging by Carrier report to develop
collection schedule• Check all outstanding balances with each
carrier, oldest first • Remind carrier of state prompt payment
regulation• Resubmit bill and/or additional
documentation, if applicable
ABC Surgery Center
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Recommendations – Insurance Carriers (cont)• Develop tickler system to follow-up on
promised payments• Future collections – follow-up in 15 days to
make sure carrier received claim• Follow-up at 30 days to determine if carrier is
following prompt payment rule• Document in patient’s account
ABC Surgery Center
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Recommendations – Patient Accounts• Collect deductibles and copays up-front• Perform patient financial counseling prior to
DOS• Bill patients monthly• Add notes that increase in language as
account ages• Contact patients by phone to determine
status and offer payment alternatives, i.e., credit card, payment schedule, etc.
ABC Surgery Center
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Findings • Unbilled revenue due to: - bilateral procedures–second side not billed - billing from operative note title only• Sample coding review - 61 charts revealed 27 errors - estimated loss of allowable net revenue – $33,396• Review of accounts over 1 year old which received no payment and were never rebilled - $79,124 gross
ABC Surgery Center
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Findings (continued) • 12 patient accounts not paid or rebilled ($21,338) – few days short of 12 months – rebilled immediately to avoid timely filing• Balances never transferred nor billed to secondary insurance and/or patient responsibility• Coding and billing are non-compliant due to: - inequity of charges - inequity of balance billing - errors
ABC Surgery Center
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Recommendations • Check all accounts over one year old to determine if can be rebilled• Assess all accounts over 150 days to determine need for collection, adjustments, before exceed statute of limitations• It may be more cost effective to outsource coding/billing/collections than to retrain and oversee current employees while trying remain current and recoup old revenue
ABC Surgery Center
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POSITIONS* DIRECTLY AFFECTING REIMBURSEMENT (Not Including Mgmt)• Scheduler • Admitting clerk (receptionist)• Insurance verification specialist• Patient financial counselor• Coder/biller• Payment poster/collector
* Number of employees per position dependent on caseload
ABC Surgery Center
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Recommendations/Findings – Business Office• Currently whoever answers main phone line
schedules patient• Suggest dedicated phone line for scheduling• Suggest one employee be assigned to schedule
– others can be back-up• Have Business Office Manager learn all business
office positions and act as back-up• Develop business office policies and procedures
ABC Surgery Center
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Recommendations/Findings – Business Office• If maintain billing in-house: - Add one FTE to business office staff – best choice – receptionist (lower salary and less training required) - Move current receptionist/biller to full time biller - Change current coder/biller to coding and collections• If outsource billing – no additional staff
neededABC Surgery Center
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Recommendations - Business Office Manager • Hire experienced ASC Business Office Manager, or• Educate current BOM in following areas: - write-offs - adjustments - checking for errors - collection agency - refunds - audits
ABC Surgery Center
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Findings • No counter-check of deposits• No auditing of coding/billing• Reports invalid as reflect another business as well as ASC
ABC Surgery Center
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Recommendations• Utilize bank lock-box if available• If doing deposit in-house: - utilize and balance to deposit log - separate payment posting and deposits - BOM should check deposit for accuracy - BOM or designee make daily deposit• Weekly audits of coding and billing• Move other business billing functions into separate module
ABC Surgery Center
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• Governing Body approved and adopted recommendations
• Hired outside management to institute changes
• Outsourced coding and billing functions
• Discontinued secondary business in ASC
• Made other clinical changes not discussed in this report
ABC Surgery Center
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• Within 3 months surgery center in the black for first time
• Gross charges tripled• Average gross charges per case doubled• Collections increased more than 250%• Profit increased more than 400%• Net income/case increased more than 300%
ABC Surgery Center
34Case Study reflects financial findings/recommendations only – additional clinical findings/ recommendations are not presented
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• 10 month old ambulatory surgery center evaluated to determine compliance and efficiency and evaluate billing process • Semi-rural area• Solely owned by physician and non-physician partners• Average case volume – 80-100 month
XYZ Surgery Center 35
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• Specialties - Orthopedics – 50% - Ophthalmology – 25% - Pain Management – 13% - Urology – 6% - Podiatry – 6%
XYZ Surgery Center 36
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• Payor Mix - Medicare - Medicaid - BCBS - W/C - PPOs - Indemnity• Contract reimbursement is based on a mixture of: - percentage of Medicare groups - discount off billed charges
XYZ Surgery Center 37
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Findings• Sharing practice management software
with clinic• Software does not allow loading of
contracts• Shared schedule with clinic• Software does not have place for
Medicare groups nor APCs• Clearinghouse (part of software) reports
not accurateXYZ Surgery Center
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Recommendations• Consider purchasing ASC-specific
software – need to be able to schedule separately and load contracts
• Suggest changing to independent clearinghouse
XYZ Surgery Center 39
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Findings• Evaluation of fee schedule revealed
that many fees were less than some contracts would reimburse
• No minimum fee – some fees as low as $200 - $300
XYZ Surgery Center 40
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Recommendations• May want to review entire fee
schedule based on evaluation and comparison to reimbursement, as well as case cost
• Suggest minimum fee of $1200 to $1500
XYZ Surgery Center 41
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XYZ Surgery Center
Findings • ASC does not have copy of most contracts• Contracts not loaded in computer• No insurance matrix available to determine accuracy of payments
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XYZ Surgery Center
Recommendations • Request copies of all contracts• If change software, load contracts and adjust contractual allowances at time of billing• Develop insurance matrix and provide to appropriate billing personnel
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XYZ Surgery Center
Findings • Physicians doing procedure coding - diagnosis coding done by clinic coder• Back-up coder has no formal coding or ASC experience – also does billing, payment posting, collections for both ASC and clinic• No substantiation with operative note• Not being done daily• Most implant invoices and pathology reports not provided to biller
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XYZ Surgery Center
Findings (continued) • Current coding books present – no CCI or other unbundling references• No coding audits being performed• 50 charts provided for coding review - 24 charts had errors - additional charts had insufficient back-up support for implants - $4,328 unbilled revenue - $5,558 over-billed revenue 45
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XYZ Surgery Center
Recommendations• Utilize certified coder• Code from operative note• Track pathology reports and provide to coder• Code daily and balance to schedule• Subscribe to CCI edits to prevent unbundling
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XYZ Surgery Center
Recommendations (continued)• Separate coding/billing from payment posting/collections• Audit to check for unbilled revenue or over-billed amounts needing refund• Continued monthly audits to remain compliant• Provide information to physicians regarding detailed dictation
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XYZ Surgery Center
Findings• Claims are not being sent until at least 7-10 days post surgery• Batches are not closed daily therefore not able to balance to schedule to prevent unbilled revenue• Payments and charges are combined in same batches
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XYZ Surgery Center
Findings (continued)• Contract profiles added based on what is being paid • ASC staff members unaware of upcoming 2008 Medicare changes • No out-of-network policy in place and no advance notification to payors • Contractual adjustments not done at time of billing
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XYZ Surgery Center
Recommendations• Separate payment and charge batches• Keep necessary back-up of all charges• Bill electronically wherever possible• Develop tracking system to ensure billing for all implants
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XYZ Surgery Center
Recommendations (continued)• Run clearinghouse reports – verify claim on file with payor• Process all claims within 48-72 hours from DOS• Notify all carriers of OON status on claim• Correct all errors/unsubmitted claims found on coding review and rebill
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XYZ Surgery Center
Findings• Payment poster wears all billing hats for clinic and ASC – insufficient time• A/R is increasing – one week ago hired additional collector• Payment poster does not have knowledge of managed care contract allowances – does not have copies• Accepts what payor allows – write-offs are adjusted to match what is paid
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XYZ Surgery Center
Findings (continued)• Some secondaries have not been billed – assigned to patient responsibility in error• Undetermined whether OON payments going to patient – no attempt to collect yet• No way to balance to deposit as payments and charges are in same batch• Not starting proceedings with denials or incorrect payments in timely manner
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XYZ Surgery Center
Recommendations• Provide payment poster with copy of all managed care contracts and/or contract matrix• Payments should be posted daily • Bank deposits should be made daily• Keep necessary back-up of all payments received
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XYZ Surgery Center
Recommendations (continued)• Review EOBs and promptly start denial process for erroneous payment or no payment• When posting, compare payment to original claim to determine accuracy• Credit balances to be reviewed and promptly refunded, where applicable
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XYZ Surgery Center
Findings• Collections not being done regularly due to lack of business office staff• No upfront collections• No brochure for patients to outline financial policy• No policies/procedures on billing or related issues • No accounts have been placed with collection as no follow-ups done yet
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XYZ Surgery Center
Findings (continued)• No training in Fair Debt Collection standards• Medicare claims not crossing over to secondaries• 30 day prompt payment law• Days in A/R 79• Over 120 – 22% (mostly insurance)
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XYZ Surgery Center
Recommendations• Review accounts that were denied or paid in error and rebill where applicable– timely filing may become an issue• Follow up on OON claims – determine which paid to patient and send statements• Need to audit Medicare and insurance payments to detect overpayments – correct and issue refunds where necessary
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XYZ Surgery Center
Recommendations • Use aging reports to aid in collections• Use tickler files• Evaluate/correct problem with Medicare secondaries • Enforce prompt payment rule• Institute upfront collection of deductible and copays• Establish financial policies/procedures
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XYZ Surgery Center
Findings • Administrator has no previous ASC experience• No business office manager• Only two FT business office employees• Billing staff leased part time from clinic• Few business office policies/procedures• Vague job descriptions – no real accountability
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XYZ Surgery Center
Recommendations• Separate clinic and ASC staff if possible• If billing remains in-house, recommend hiring full time experienced coder/biller for ASC• Suggested some changes in positions to cover all tasks• When caseload increases, recommend hiring working business office coordinator who can fill any position as needed
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XYZ Surgery Center
Findings and Recommendations - STAFFING
• Information flow is fragmented between clinic and ASC – recommend evaluation and change
• Need specific business office policies and procedures and job descriptions
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XYZ Surgery Center
Findings/Recommendations – COMPLIANCE• Not enough separation between Clinic & ASC• Billing and payment posting should be separate and done by different employees• Three members of business office staff should review deposits• No Business Associate or confidentiality agreements• No financial policy information available to patients
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XYZ Surgery Center
Findings and Recommendations – 2008 MEDICARE CHANGES• Administrator attended educational seminar on 2008 Medicare changes• Suggest share information with key personnel and billing staff• Evaluation team provided copy of proposed reimbursement to ASC
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XYZ Surgery Center
• Governing body approved and adopted recommendations
• Outsourced coding and billing functions
• Made other clinical changes not discussed in this report
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XYZ Surgery Center
• Outsource date - January 1, 2008• Average caseload 100/month• Accounts receivable decreased 25% • Over 120 decreased from 22% to 8%• Average Collections increased from $160,000 to $250,000 per month• Average Gross Charges increased from $353,860 to $584,055 • Days in A/R decreased from 79 to 44
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• Inadequate fee schedule• Poor managed care contracts• No copies of managed care contracts• Insufficient staff• Wrong staff• No good policies/procedures in place• Compliance issues• No consistency in billing practices• Not billing for implants regularly