9/13/2018

Honkamp Krueger & Co., P.C.  1

Filling the Payer Gap

Jon Thoms, CPAPartner

Steve Swanson, CPAAccounting Supervisor

Top 100CPA and business

consulting firm in the U.S.

(62nd out of 53,000+ firms!)

LargestIowa-based

CPA firm*Accounting Today, March 2018

50 states and thousands of U.S. cities served

Top 100CPA and business

consulting firm in the U.S.

(62nd out of 53,000+ firms!)

LargestIowa-based

CPA firm*Accounting Today, March 2018

50 states and thousands of U.S. cities served

Jon Thoms, CPAPartner

Over 20 years of experience assisting independent medical groups in maximizing profits, analyzing and improving practice productivity and revenue cycle management

Works with various medical groups to review, modify or create compensation structures for physicians and staff

Creates internal accounting and reporting procedures

Establishes enhanced financial reports specific to client needs

Review efficiencies within the financial data to ensure accurate and timely reporting

Steve Swanson, CPAAccounting Supervisor

Extensive experience in the following industries: health care, retail, service, nonprofit, manufacturing, agriculture, warehousing operations, construction and trucking

Specializes in accounting, auditing, general business consulting, management advisory services, corporate, partnership, individual and farm tax returns, financial planning, and internal auditing

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Today’s objective

Use your own data to:

1. Identify areas of improvement based on chargemaster

2. Identify key revenue lines to target in contract negotiations for higher reimbursement rates or other competitive advantages

3. Monitor billing and collections from third party payers

4. Understand how chart audits can improve your collections

5. Understand why patient collections at access point is critical

What is payer gap?

Shortfalls in practice receipts as a result of…

1. Insufficient charges

2. Improper reimbursements

3. Insufficient contract terms

4. Incorrect billings and codings

5. Patient collection problems (Weak controls at patient access point)

What is payer gap?

Data analysis will fill the gap.

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What tools are needed?

You will need… One motivated employee

One practice management system

One license to Microsoft Excel

Basic Excel knowledge or ability to learn

One supportive owner or boss

Time to pull, analyze and report on data within your practice

What is data analysis?

“Data is useless without analysis. Analysis is

impossible without data.”- Anonymous

“Data is useless without analysis. Analysis is

impossible without data.”- Anonymous

“It’s never too late to learn a new skill. That is, unless your employer needs

someone who possesses that skill in your position right now.”

- Anonymous

Report Running vs. DataMining

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Report running vs. data mining

It takes little skill to run a report and print

It takes thoughtful skill to extract report, test the data, archive the information for future use

Printed reports are static and are difficult to cross-check

Extracted data can be tested and tied to other reports electronically

Report running vs. data mining

Printed reports are difficult to archive and retrieve

Extracted data can be archived easily and retrieved instantaneously

Printed reports are usually “canned” and based on what someone else thinks you need

When extracted as data, reports can be manipulated and specified to your needs

Report running vs. data mining

04-2016

05-201606-2016

07-2016

08-201609-2016

10-201611-2016

12-2016

01-201702-2017

03-2017

04-2017

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Report running vs. data mining

04-2016

05-2016

06-2016

07-2016

08-2016

09-2016

10-2016

11-2016

12-2016

01-2017

02-2017

03-2017

04-2017

Starting with the basics

This table tells a story, but not the whole story

Which report or reports were run to obtain these numbers?

Are charges based on date of service or accounting date?

Are payments based on date of service or accounting date?

Are the variations in charges based on variations in volumes?

Medical Practice Charges and Payments

Oct‐16 Nov‐16 Dec‐16 Jan‐17 Feb‐17 Mar‐17 Apr‐17

Charges $288,225  $228,605  $268,934  $260,916  $257,680  $268,425  $288,345 

Payments $86,954  $83,214  $145,526  $250,818  $180,170  $181,070  $153,742 

Starting with the basics

Written, step-by-step documentation to include reporting specs

Addition of kept visits and a mathematical control measure automatically enhances the value of this report

Medical Practice Charges and Payments

Oct‐16 Nov‐16 Dec‐16 Jan‐17 Feb‐17 Mar‐17 Apr‐17

Charges $288,225  $228,605  $268,934  $260,916  $257,680  $268,425  $288,345 

Payments $86,954  $83,214  $145,526  $250,818  $180,170  $181,070  $153,742 

Kept Visits 1,478  1,166  1,358  1,352  1,328  1,398  1,491 

Charges per Kept Visit $195  $196  $198  $193  $194  $192  $193 

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Drilling Down

Drilling down / mining the data

Dt of Svc Proc Dt Name Pat Type Sv It Sv It Desc Unit Price Count Chg Amt Payer Name

01/03/2017 01/03/2017 Patient, Ima 99499O Chart Copy $0.00 1.00 $35.00 Self Pay

12/23/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 SISCO

12/23/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Medicare Iowa

12/23/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Blue Card Of Iowa

12/23/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Iowa XIX AmeriHealth Caritas

12/23/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 Iowa XIX UHC Community Plan

12/23/2016 01/03/2017 Patient, Ima Standard 95811 POLYSOMNOGRAPHY W/CPAP, BILEVEL VENTILATION,  $2,024.00 1.00 $2,024.00 Blue Card  Iowa

12/27/2016 01/03/2017 Patient, Ima Standard 95800 HOME SLEEP STUDY, UNATTENDED W/SLEEP TIME $497.00 1.00 $497.00 John Deere Choice

12/27/2016 01/03/2017 Patient, Ima Standard 95800 HOME SLEEP STUDY, UNATTENDED W/SLEEP TIME $497.00 1.00 $497.00 Blue Card  Iowa

12/28/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 BCBS Iowa

12/28/2016 01/03/2017 Patient, Ima Standard 99244 OFFICE CONSULTATION $452.00 1.00 $452.00 United Medical Resource

12/28/2016 01/03/2017 Patient, Ima Standard 95886 MUSCLE TEST, EACH EXT., COMPLETE W/NCV $236.00 2.00 $472.00 United Healthcare

12/28/2016 01/03/2017 Patient, Ima Standard 95911 NCV Studies, 9‐10 $825.00 1.00 $825.00 United Healthcare

12/28/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Medicare Iowa

12/28/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 BCBS Iowa

12/28/2016 01/03/2017 Patient, Ima Standard 95886 MUSCLE TEST, EACH EXT., COMPLETE W/NCV $236.00 1.00 $236.00 GWH Cigna

12/28/2016 01/03/2017 Patient, Ima Standard 95910 NCV Studies, 7‐8 $700.00 1.00 $700.00 GWH Cigna

12/28/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 Medicare Iowa

12/28/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 BCBS Iowa

12/28/2016 01/03/2017 Patient, Ima Standard 95885 MUSCLE TEST, EACH EXT., LIMITED W/NCV $151.00 1.00 $151.00 Iowa XIX UHC Community Plan

12/28/2016 01/03/2017 Patient, Ima Standard 95909 NCV Studies, 5‐6 $550.00 1.00 $550.00 Iowa XIX UHC Community Plan

12/28/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 BCBS Iowa

12/28/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Medicare Iowa

12/28/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Iowa XIX Amerigroup Inc

Plans are part of networks

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% Total Charges Network Charges

31.57% Medicare 3,974,117.22 

29.10% Wellmark 3,663,168.50 

17.91% United 2,254,237.20 

4.32% UHC Medicaid 543,470.00 

3.57% Amerihealth 449,498.00 

3.19% Amerigroup 401,663.00 

2.21% Aetna 278,561.00 

1.22% Iowa Wellness 154,014.00 

1.03% Iowa Medicaid 129,926.00 

0.86% Patient Pay 108,202.45 

0.71% Humana 89,533.00 

0.56% CIGNA 70,055.00 

0.49% Tri‐Care 61,889.00 

0.44% QCCH 55,398.00 

0.32% Health Alliance 39,907.00 

0.21% Health Partners 26,173.00 

0.18% Midland's Choice 22,176.00 

0.16% BC/BS OOS 20,386.00 

0.13% VA 15,800.00 

1.82% Other 229,150.00 

100.00% 12,587,324.37 

Plans are part of networks

Total ties to summary report of charges for the year, also if you report gross charges on financial statements, should tie back. Doing so indicates you have a valid data set.

78.58% $9,891,523

Plans are part of networks

Total charges summarized by CPT code agrees to charges by network on previous page

6 of top 24 codes are E&M $3,651,623 29%

CPT Charges % of Charges

99213 $1,298,240 10.3%

J0585 $1,237,347 9.8%

95810 $1,231,285 9.8%

99214 $845,040 6.7%

99204 $844,130 6.7%

95811 $781,264 6.2%

96116 $705,900 5.6%

95909 $457,050 3.6%

99244 $399,116 3.2%

95886 $396,480 3.1%

70553TC $307,671 2.4%

64615 $281,849 2.2%

95910 $250,600 2.0%

95911 $224,400 1.8%

95811SN $182,160 1.4%

J0475g $163,150 1.3%

99215 $160,531 1.3%

95819Off $152,625 1.2%

95810 OUT $148,630 1.2%

70553G $131,098 1.0%

95885 $120,649 1.0%

95908 $117,900 0.9%

95912 $112,320 0.9%

99205 $104,566 0.8%

All Others $1,933,323 15.4%

Total $12,587,324 100.0%

Utilizing your information for contract negotiations

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Putting It All Together

Pay attention to your chargemaster

Code Dollars Charge

Medicare($1,068,355)

Wellmark($1,256,865)

United HC PPO

($681,064)

United HC HMO

($227,021)

Aetna PPO ($192,968)

Aetna (Coventry) ($578,904)

Midland's Choice

($656,091)

99285 $1,964,466 $398 $208 $343 $270 $250 $281 $291 $304

99284 $1,669,796 $192 $142 $234 $184 $170 $191 $199 $207 (Summarized)

99283 $1,085,368 $163 $74 $122 $96 $89 $100 $104 $108 Network

99291 $705,489 $582 $338 $557 $439 $405 $456 $473 $493 Charges

99282 $458,568 $73 $50 $82 $64 $60 $67 $69 $72 $1,256,865

93010 $298,069 $25 $13 $22 $17 $16 $18 $18 $19 $1,068,335

12001 $193,745 $263 $152 $251 $198 $183 $206 $213 $222 $908,085

12002 $199,888 $317 $184 $303 $239 $220 $248 $257 $268 $771,872

12011 $129,927 $320 $185 $306 $241 $222 $250 $259 $271 $656,091

25600 $100,255 $956 $554 $914 $720 $665 $748 $776 $809 $557,678

23650 $98,111 $734 $530 $874 $689 $636 $715 $742 $774 $474,026

10061 $70,544 $590 $342 $564 $444 $410 $462 $479 $499 $402,922

92950 $45,854 $872 $505 $834 $657 $607 $682 $708 $738 $342,484

31500 $29,805 $316 $180 $297 $234 $216 $243 $252 $263 $291,111

99292 $19,373 $272 $150 $247 $195 $180 $202 $209 $218 $247,445

23500 $12,593 $636 $369 $609 $480 $443 $498 $516 $539 $210,328

26600 $8,185 $857 $497 $820 $646 $596 $671 $695 $725 $178,779

92960 $5,320 $582 $338 $557 $439 $405 $456 $473 $493 $7,366,021

27786 $3,458 $696 $536 $884 $697 $643 $723 $750 $782

Pay attention to your chargemaster

Code Dollars Charge

Medicare($1,068,355)

Wellmark($1,256,865)

United HC PPO

($681,064)

United HC HMO($227,021)

Aetna PPO ($192,968)

Aetna (Coventry) ($578,904)

Midland's Choice

($656,091)

99285 $1,964,466 $398 $208 $343 $270 $250 $281 $291 $304

99284 $1,669,796 $192 $142 $234 $184 $170 $191 $199 $207 (Summarized)

99283 $1,085,368 $163 $74 $122 $96 $89 $100 $104 $108 Network

99291 $705,489 $582 $338 $557 $439 $405 $456 $473 $493 Charges

99282 $458,568 $73 $50 $82 $64 $60 $67 $69 $72 $1,256,865

93010 $298,069 $25 $13 $22 $17 $16 $18 $18 $19 $1,068,335

12001 $193,745 $263 $152 $251 $198 $183 $206 $213 $222 $908,085

12002 $199,888 $317 $184 $303 $239 $220 $248 $257 $268 $771,872

12011 $129,927 $320 $185 $306 $241 $222 $250 $259 $271 $656,091

25600 $100,255 $956 $554 $914 $720 $665 $748 $776 $809 $557,678

23650 $98,111 $734 $530 $874 $689 $636 $715 $742 $774 $474,026

10061 $70,544 $590 $342 $564 $444 $410 $462 $479 $499 $402,922

92950 $45,854 $872 $505 $834 $657 $607 $682 $708 $738 $342,484

31500 $29,805 $316 $180 $297 $234 $216 $243 $252 $263 $291,111

99292 $19,373 $272 $150 $247 $195 $180 $202 $209 $218 $247,445

23500 $12,593 $636 $369 $609 $480 $443 $498 $516 $539 $210,328

26600 $8,185 $857 $497 $820 $646 $596 $671 $695 $725 $178,779

92960 $5,320 $582 $338 $557 $439 $405 $456 $473 $493 $7,366,021

27786 $3,458 $696 $536 $884 $697 $643 $723 $750 $782

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What’s the value?

Update and Monitor Your Chargemaster

Total Charges for this practice $7,366,020.00

Code 99284

Value of Charges Code 99284 1,669,796 Share of total Charges 22.7%

Wellmark Aetna (Coventry) Midland's ChoiceTotal Charges to $1,256,865.00 $578,904.00 $656,091.00

x 22.7% x 22.7% x 22.7%Estimated Dollar Value of Charges $284,917.52 $131,231.19 $148,728.64

Charge per Chargemaster $192.00 $192.00 $192.00Estimated encounters 1,484 683 775

Allowed per contract $234.00 $199.00 $207.00

Differential - "left on the table" [$42.00] [$7.00] [$15.00]

"Cost" of underbilled charges $62,325.71 $4,784.47 $11,619.42

above is 9 months - need to annualize $83,100.94 $6,379.29 $15,492.57

Total Value - 1 code affecting 3 networks $104,972.80

Charging 300% of Medicare reimbursement rate of $142 would be $426 and would easily capture full reimbursement value of each.

What’s the value?

Negotiating a Better Deal

Total Charges $7,366,020.00

Dollar Value of Charges of Top Code 99285 1,964,466

Representative percentage 26.7%

Charge for Code - Per Chargemaster $398 $398.00

Wellmark Reimbursement $343.00

UHC PPO Reimbursement $270.00

Difference Between Wellmark and UHC $73.00

Increase of $73 as a percent 27%

What’s the value?

However, what if you can negotiate an increase of $30 to $300?

This represents an increase of 11% $300.00

Total UHC PPO charges $681,064.00

Code 99285 share of total charges x 26.7%

Estimated dollar value UHC PPO charges for 99285 $181,635.00

Divide by charge per chargemaster $398.00

Estimated encounters 456

Value at current rate of reimbursement ($270 x 456) $123,219.73

Value at higher negotiated rate ($300 x 456) $136,910.81

Increase in receipts 1 code, 1 company $13,691.08

Again need to extrapolate to 1 year $18,254.77

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Filling in the gap

Reviewing and updating chargemaster $ 104,973(1 CPT Code 99284, 3 networks)

Negotiate reimbursements for largest volume codes $ 18,255(Negotiate with UHC for an increase for 1 code)

Document, document, document

Perform Chart Audits

The 2017 National Physician Fee Schedule Database lists nearly 15,000 codes

<1% of all codes are for E&M

Make up 18% of what is reported to Medicare

28.4% of payments from Part B

Document, document, document

2017 findings from Part B say, even still today, 9-11% of claims are in error:– 64% due to insufficient documentation

– 13% from coding errors

– ONLY .3% IS FROM UNDER-CODING

And most of those were under-coded…due to under-documenting!

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Document, document, document

Major types of errors reported in chart audits:– No documentation

– Insufficient documentation

– Medically unnecessary

– Incorrect coding

Don’t have the time?

– Hire third party chart audit every year/other year – economical

– Consider cost, energy, and time spent to defeat Medicare and insurance audits

Improve collections at patient access point

Higher deductibles

Larger co-pays

HDHPs shifting the burden of payment

Your patient is quickly becoming your largest payer.

Network Payments

Medicare 1,091,326.89 18.00%

Wellmark 1,989,930.73 32.83%

United 865,111.81 14.27%

UHC Medicaid 202,762.16 3.35%

Amerihealth 170,989.18 2.82%

Amerigroup 140,419.14 2.32%

Aetna 61,378.66 1.01%

Iowa Wellness 61,584.38 1.02%

Iowa Medicaid 77,987.17 1.29%

Patient Pay 1,074,391.06 17.72%

Humana 13,336.56 0.22%

CIGNA 39,056.10 0.64%

Tri-Care 28,191.27 0.47%

QCCH 21,383.81 0.35%

Health Alliance 14,256.86 0.24%

Health Partners 12,473.35 0.21%

Midland's Choice 4,596.36 0.08%

BC/BS OOS 9,730.33 0.16%

VA 8,260.30 0.14%

Other 174,382.03 2.88%

6,061,548.15 100.00%

Patient collections and AR

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Improve collections at patient access point

Practices and policies that can be corrected before or at the time the patient arrives at your reception desk:– Failure to verify insurance and check for eligibility

– Failure to secure preauthorization AND FOLLOW-UP CONFIRMATION

– Failure to collect copays/coinsurance at the time of arrival

– Inadequate focus on patient collections

– Failure to satisfy demands of patient consumerism –the Modern Experience

• “Give me a convenient way to pay”

Improve collections at patient access point

Work patient collections – collection realization of receivables reaching the 90-day mark is only about 30%

Check on patient deductibles, if deductible is not met, insist on the payment up front

By not properly collecting patient responsibility and working AR, on average, 40% of physicians fail to collect $31,700*

*Athenahealth 2016

Filling in the gap – adding it up

Reviewing and updating chargemaster $104,973(1 CPT Code 99284, 3 networks)

Negotiate reimbursements for largest volume codes $ 18,255(Negotiate with UHC for an increase for 1 code)

Chart audits (they were confident charts correct) $ 0

Patient access point – average from study $ 31,700

Value of the Payer Gap: $154,928

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What tools are needed?

You will need… One motivated employee

One practice management system

One license to Microsoft Excel

Basic Excel knowledge or ability to learn

One supportive owner or boss

Time to pull, analyze and report on data within your practice

Patience and PERSEVERENCE

Questions?

Thank you.

Jon ThomsPartner I jthoms@honkamp.com

Steve SwansonAccounting Supervisor I sswanson@honkamp.com

P: 888.556.0123