Practical Magic

By Tina Maloney
April, 2001
for CSMIS

It is with utter amazement that I find many physicians turning over their entire billing and financial management responsibility to either a vendor or internal department without any substantial review.
Many doctors understand the returns on their stock holdings and investments better than they do their own businesses.
In times when the physician reimbursement is at such an all time low, we cannot afford to continue to leave money on the table for the services that we have legitimately performed.
On the heels of the CSIMS billing meetings, while the attention is appropriately focused on billings and collections, I would like to submit some practical tools for managing your billing team. You will be amazed at the results if you simply applying a little practical magic.

CHARGE WHAT IS RIGHT:
First of all, there is a basic premise that it is the physician's responsibility for correctly charging for services rendered. Try to avoid the common physician pitfall of "I am worth more". Learn the appropriate codes for your services and price them accordingly. Then, you can begin to manage the amount of collections actually expected.
Workers' Compensation vs. Private Insurance Plans (HMO/PPO/Medicare)
Clearly, there are two generally accepted fee schedules to understand. The California Workers' Compensation Fee Schedule is clean and simple. You should have a copy at your desk and understand how to use it. If you bill out at the stated fee schedule you can easily manage the collection percentage for your practice. Many physicians have an old "magic number" that they charge. Often, it has no relevance to what is allowed or expected as payment.
The reverse argument is true if you provide services outside of the workers' compensation system. So any groups that focus primarily on workers' compensation loose dollars because they don't keep up in the world of private insurance. Make it a priority for either you or your billing team to update and review your private insurance codes annually. HMO and PPO contracts often reflect a percentage of Medicare and Medicare reimbursement rates have increased in both 2000 and 2001.
The assumption is that workers' compensation pays better than any private insurance. Not True! Many codes (especially surgery) have a higher reimbursement at Medicare rates. Some codes are completely different and you need be sure that the correct coding is happening for each type of insurance. An annual update of your billing ticket and your fee schedule should manage this effectively.
Remember coding and reimbursement rates are a moving target. Have you kept up?

EOB REVIEW:
There is no better tool to use to determine your billing effectiveness than your Explanation of Benefits. An EOB is the document that is attached to the check to explain - in detail - what has been paid on each line item. It also gives the reason that a reduction has been made.
Many times, a billing team will take the write off as indicated on the EOB. They assume that if the code was addressed then it was paid appropriately. This is a false assumption. You will be amazed what you find in reviewing and EOB, specifically, review for the following:
Surgery:
Have they bundled or UN-bundled inappropriately?
Only you can help your billing team learn the details of your procedure coding.
How have they paid on a secondary surgical procedure?
Often if the secondary code is greatly reduced, the billing team does not re-bill it.
Reports:
Many adjustments happen because the billing team is glad to have received any payment at all on a report charge. This is especially true with billing teams that do not understand workers' compensation well.
As we know, the fee schedule is specific on the codes 99080 and 99081. It is incredibly common for an insurance carrier to reduce a report charge. This usually comes in one of three forms: zero payment on the report charge, 99080 reduced to 99081, or 99080 being reduced to a one-page reimbursement rate.
Often, a billing team taking a reduction without re-billing for the appropriate number of pages or fighting the downcode to 99081 loses money. By reviewing your EOB's along with the actual report sent, you can clearly direct your billing team.
If you can create an efficient system for your billing team to access your reports - preferably electronically - they will have a better understanding of what should be paid on each report.

REVIEW YOUR PPO CONTRACTS:
Several years ago, physicians were lined up to sign off on every PPO list that crossed their desk. These initial contracts were often at ten and even 15% discounts. As the workers' compensation market has continued to change, many of these original PPO contracts and lists have been purchased, re-named, and redefined multiple times. Many physicians don't even know whom they are contracted with and what reductions are being taken.
As the market has changed, many of your practices have as well. Take a good long look at your practice and determine what contracts you need to have. Of these contracts, determine a reasonable discount amount.
By looking at your EOB's, you can easily determine what discounts are currently being taken and which networks having you as a member. Based on the volume you receive and the referral patterns that prevail, you can then decide if your continued involvement is necessary.
Please understand that these discounts are often highly negotiable. If you have a strong working relationship with a high referral source, what better than a proven track record to speak to your worth in a network - at a lower discount? Mostly, you will find that these networks have no correlation to your practice referrals and you can negotiate or terminate them as indicated.

MEDICAL-LEGAL REPORTING:
So many CSIMS physicians spend a great deal of time understanding, and performing medical-legal evaluations. These evaluations are time and labor intensive and as the saying goes, "You are only as good as your last report". Well, I might add that you are only as good as your billing team's knowledge.
There are several practical things that can be done to greatly increase the amount of reimbursement on these evaluations and greatly decrease the amount of effort and time it takes to get them paid.
Anyone can get a ML102 paid for with a copy of the report. But, a billing team cannot effectively fight your battle for reimbursement on Med-Legal 103 and 104 codes without the appropriate documentation.
Your billing justification should be in the second paragraph - clearly stated. This allows your billing team to appeal any down codes by simply saying, "refer to paragraph two". CSIMS provides effective billing training. YOU must provide the information on why the report warrants the increased reimbursement.
Your billing team should clearly understand and effectively re-submit all reductions or denials except for those that are defined by you.

UNDERSTAND YOUR TEAMS STRENGTHS and WEAKNESSES:
As with any medical practice, it is impossible to be good at everything. Your billing team is no exception. Many billing teams are exceptionally good at electronic Medicare and HMO billing: they understand the laws, manage the changes, and generally keep up on what is going on in their world of reimbursement. Other companies are great at a particular specialty; orthopedics, spine, or podiatry. Another group better understands workers' compensation and med-legal billing but may not be great at Medicare.
Each group has its strengths and weaknesses. It is your job to know the difference.
Physician groups that provide a significant amount of Medicare and HMO/PPO billings are often happy with a collection percentage near 50%. Their billing teams manage their effectiveness by the number of money that is over 90 days old: less is better. This makes perfect sense in managed care. It should be paid for - quickly.
In workers' compensation the billing and collection percentage should be around 80%, in my opinion, or you are not paying attention. Penalty and Interest, Proof of Service, and Liens are all tools that help the money come in quickly. But realize that no one in workers' compensation can match the Medicare 14-day turn-around. There will be money over 90 days and it should not be written off simply to make the accounts receivables look good. It should be put on lien and fought or held until settlement.
Be sure that your billing team understands your practice and its goals. They should be clear on what you are going to use to evaluate their performance and what skills and specialization that you hold critical.
Take the time to communicate this often.

BE REASONABLE:
There are many physicians that chase the proverbial goose by looking to be reimbursed on a complicated, highly rejected code. Time is often wasted by not billing correctly and insisting on continuing to re-bill for these charges. The fee schedule is consistent. Try not to loose focus. There will be the minute little codes that are never paid.
There is consistently money left on the table and billing teams are glad to help you aggressively collect the fees that are due. But, be cautious is telling a billing team exactly how to do their job. This relationship should be inter-dependent and highly communicative. By sitting down with each other - monthly at first - and at least quarterly, you can continue to learn how to maximize the returns of your practice.
By looking closely at which billing issues to focus on each quarter, you can eliminate wasted time spent on chasing those codes that should have never been billed and allow intense focus on codes and reimbursement trends that will directly impact your bottom line.

SPEND THE TIME and THE MONEY:
Remember that it takes money to make money. You use this concept in many aspects of your practice. It is in the equipment you use the skills that you continue to develop and the staff that you invest in. Be sure to extend this to the people that are intimately involved in the profitability of your practice: your billing team.
If you have an internal team, spend the money on the training and the tools that they need. Buy the annual coding books, send them to the classes, and give them the staff they need to do the job well. Money is lost by not having the training, the tools, and the time to truly understand how to increase revenue.
If your team is an outside vendor don't buy on price alone. Understand what you get for your money and depending on your patient mix, spend the extra dollars to get someone who best understands the specific billing needs of your practice. If you have more than about 30% of your practice in workers' compensation, be sure that your vendor uses at least penalty and interest as a collection tool. If you need to - insist that they learn.
With either team, your time and focus is critical in the overall success of your billing. For the same reasons that you actively manage your stock portfolio, your focus will yield you a higher return on your investment.
It is not magic. It is the application of practical tools that will make the most difference in your bottom line.

  For more information, please e-mail MCS, LLC.