Iowa College of Law Offering Free Internet Course on Health Care Reform Law

Law school may cost a pretty penny, but anyone interested in the legal side of health care reform can get such a deal from the University of Iowa College of Law. I just found out the school is offering its new course on health care reform law to the public for free via the university's Internet-based distance learning system.

People who want to participate in the course may do so live on Thursdays from 2:20 p.m. to 4:20 p.m. Otherwise, they can watch videos of the class and view PowerPoint presentations and documents online at their own convenience.

The course will last for 14 weeks. Each session will focus on a different topic, including constitutional concerns, insurance, costs, technology and Medicare. Classes will be taught by faculty from different academic colleges at the University of Iowa and experts from other law schools.

Check it out.

http://www.uiowa.edu/~ibl/HealthLawColloquium.shtml

 

September 2, 2010 in Healthcare Reform | Permalink | Comments (0) | TrackBack (0)

Are you monitoring managed care reimbursements?

How does a practice really know for sure it is receiving the correct reimbursement from its managed care payors? According to an informal polling of practitioners at a recent health care conference, over 50% of the participants indicated errors have been  found with regard to what the medical practice was contracted to receive as payment and what the managed care company actually paid for the service. For example, the practice was contracted to receive $44 for visit code 99213 from ABC Managed Care Company but the Explanation of Benefit (EOB) indicated only $38 was paid. This type of situation seems to be occurring with increasing frequency.

 

Managed care companies do make mistakes and it is up to the practice to catch these mistakes and file an appeal for the additional reimbursement. Catching reimbursement errors can be extremely difficult for many practices, especially smaller ones. Small practices often do not have the time nor the personnel to pay attention to this type of activity, as important as it is. A software system such as the one described above can help.

 

At a minimum, a practice should have a system in place to spot check managed care reimbursements. The easiest is a manual system whereby each week a sample of managed care reimbursements are reviewed. Here is the process for a manual system:

 

1.    Obtain reimbursement rates for the top 25 revenue producing CPT codes of the practice. Place them in a spreadsheet for easy access. These should be obtained from the top 10 to 15 managed care plans the practice generates revenues from.

2.    Each week, take a sample of reimbursements from these plans (the practice can decide which ones) and compare the reimbursement per the EOB to the spreadsheet.

3.    If an error is found, file an appeal immediately.

4.    If errors continue to be consistent for a particular payor, meet with payor representatives if possible to discuss why such mistakes are occurring and how they can get corrected.

 

A manual system of this type can be cumbersome so each practice will decide how to implement such a system. The point to be made is that managed care payors are making mistakes and practices must have a way to detect the errors so as to get paid correctly. Hopefully instead of a manual system, the practice's computer system will be able to detect the errors.

 

August 31, 2010 in Managed Care | Permalink | Comments (0) | TrackBack (0)

Want to retain valuable employees?

1.    Studies show rewards such as recognition and feedback are as important as pay, benefits, and status.

2.    Recognition ideas may include gift cards, a team lunch, and a posting on a “wall of fame.”

3.    Creating rewards for the entire staff when they reach a shared goal creates unity and community.

4.    To encourage staff independence, give them tools and resources they need; then stop micromanaging.

5.    Attaching salaries to positions rather than to individuals ensures fairness.

August 27, 2010 in Human Resources | Permalink | Comments (0) | TrackBack (0)

Has your physician practice fallen victim to the Silent PPO?

Physician practices are often deceived by a billing practice that creates payment discounts for payors who are not entitled to them. Under these arrangements, indemnity (i.e. commercial insurance) payors obtain PPO-type discounts without the health care provider’s consent. This is known as the “Silent PPO." Depending on patient volume, health care providers such as physicians and hospitals could be losing a significant amount of revenue dollars due to these inappropriately applied discounts.

 

A Silent PPO works this way: First, a PPO makes its roster of preferred providers and contracted rates available to other payors and brokers the list for a fee. The discounts typically are applied to patients who are covered by an employer or payor that has not contracted with the PPO. Next, let us suppose a patient is in a traditional indemnity plan that pays 80% of the usual and customary of a doctor’s fee. The patient visits the doctor for treatment and the office verifies the patient’s indemnity coverage. The office then submits a bill to the patient’s insurance company. At this point, the payor is obligated to pay 80% of the usual and customary fee with no discount. The payor would like to receive some sort of discount so it seeks one from a PPO or a broker. If the physician has signed a contract with any PPO, the indemnity payor will likely have gained access to this information. The payor usually pays a fee to the PPO for access to its physician roster and related discounted rates. If the indemnity payor has access to this information, it could then reprice the doctor’s billing, taking the discount the physician has agreed to with the PPO, and simply disclose the PPO discount (which the patient does not belong to) on the payor’s EOB form that accompanies the payment.

 

Once the Explanation of Benefit (EOB) has been received by the doctor’s office from the indemnity payor referencing the PPO discount, one of several things usually happen. First, the office staff may overlook the discrepancy, especially if the doctor has a contract with the PPO that is mentioned. Secondly, the staff may actually notice the discount and appeal directly with the indemnity carrier. This is when the indemnity payor may tell the staff it is “affiliated” with the PPO in question, and that it received a discount if one of its indemnity enrollees visits a doctor under contract with the PPO. Unless the doctor’s PPO contract states such, the doctor (or any other health care provider for that matter) is due back the incorrectly applied discount.

 

All health care providers should be on the look out for these types of illegal discounts. EOBs obviously should be scrutinized very carefully from this point forward. Finally, the American Hospital Association suggests the following clauses be in or added to managed care contracts: (1) That any discounts will be extended only to enrollees of the PPO who have cards identifying them as such; (2) That types of entities that can be added to the network are identified in advance, and that providers receive timely notice when payors or employers are added, and (3) That the sale or other unauthorized use of contract rate information is specifically prohibited.

August 26, 2010 in Managed Care | Permalink | Comments (0) | TrackBack (0)

The importance of measuring utilization and outcomes

In order to compete in a market that is moving toward managed care, doctors must be able to show that they are more effective clinically than their peers. In other words, mature managed care markets will reward doctors based upon cost effectiveness, rather than mere utilization under the old fee for service system. As such, the challenge for many medical practices will be to gather the information necessary to prove to a third party payer the practice is indeed cost effective. In other words, a practice must somehow gather utilization and outcomes data, usually by clinical episode or diagnosis code. This type of information will be critical when competing for contracts and can also be extremely valuable in the negotiation and renegotiation of managed care rates. Let us look at a simple example.

 

An Ob/Gyn group wants to negotiate rates with Aetna. It gathers and assembles the following limited practice data: (1) C-section rates, (2) VBAC rates, (3) Average length of stay in the hospital, (4) Rate of surgical complications, and (5) Length of stay and complication rates for laparscopic hysterectomies. At the same time, the group was able to obtain national utilization data for its specialty. It beat the national average in every category named above. Obviously this is an enviable situation for a medical practice since it can demonstrate with actual statistics that it is a cost effective provider. In this situation, Aetna will probably listen to proposed changes to its reimbursement schedule for this particular group. This is because payors want cost effective doctors in their network in order to contain related health care costs over a long period of time; They certainly do not want their economics hindered by doctors who overutilize services.

 

The problem encountered by most doctor offices is that most computer systems are incapable of providing utilization and outcomes information. These medical billing systems were designed for a traditional fee for service environment and not for a managed care environment. While many systems have come a long way towards adapting to a managed care environment, most have yet to progress to this level of output. Practices need to keep this issue in mind when selecting a new computer system, otherwise the practice runs the risk of having to replace the system within a relatively few number of years should managed care gain a strong foothold in a particular community and as such, the information needs of the practice change.

 

If the current software system cannot provide utilization and outcomes data, there are other ways to obtain it. Hospitals may have this information gathering capability; Other third party entities such as managed care plans may have this capability; or the practice may just have to track and accumulate this information manually. However, as the need for this information increases, most practices will have to commit to purchasing a much more expansive computer system. This is one reason why doctors are continuing their affiliation activities so they may have access to this type of data in the future. Large delivery systems have the capital to acquire and implement these systems.

 

The point should be clear: Either start thinking about tracking utilization and outcomes now or risk losing out in the future. Practices that fail to do this will not be able to compete for contracts nor convince a payor to increase its reimbursement payments to the practice. The end result will be a decline in practice revenues.

August 25, 2010 in Managed Care | Permalink | Comments (0) | TrackBack (0)

Physician practice collections

Monitor and analyze the gross collection percentage (dividing the practice’s collections by its gross production) on a monthly and year-to- date basis. The gross collection percentage is one of the most important statistics for the practice as it indicates how much of the office’s production is actually going into its bank account. Keep in mind that if the practice increases its gross collection percentage, its cash flow will increase accordingly. Thus, each month, you should determine if the percentage is reasonable, after taking into account the practice’s special characteristics.

 

Each medical practice has its own special characteristics that affect the gross collection percentage. Some characteristics have a direct impact on meeting the practice’s benchmark ranges. Where the practice will fall within these categories will depend on the practice’s payor mix (i.e., the breakdown of revenues between such payors as Medicare, Medicaid, commercial insurance, and managed care).

 

Also, the practice’s fee schedule directly impacts the collection percentages. These percentages assume a fee schedule that is at or near what is usual, customary, and reasonable. If the fee schedule is significantly low, the practice’s actual collection percentage may be artificially high when compared to the benchmarks. For example, if a practice has a high gross collection percentage, and the practice’s revenues mainly come from managed-care patients, the practice fee schedule probably is too low.

 

Another consideration, which impacts the collection percentage, is the payor mix.  If the practice derives most of its revenue from treating Medicare Patients, the practice would not be expected to have a gross collection percentage greater than 80%. A practice that has a large number of patients with indemnity Coverage should expect to have a higher gross collection rate.

 

Bottom Line:  As physicians, you have a responsibility to not only practice good medicine but also to have a basic understanding of the business side of our practices.  This can only be done if we measure and monitor our practices using benchmark numbers just like we do when you monitor a patient’s blood pressure levels for example.  

 

August 24, 2010 in Practice Management | Permalink | Comments (0) | TrackBack (0)

Numbers Don’t Lie-Using Sound Financial Principles to Manage Your Practice

Many physicians manage their practices from the gut and look at a paucity of numbers to evaluate the progress or lack of progress of their practices.  Now there are numbers that can give you a real handle of your practice and numerical indicators that can provide you with valuable information on how to fix issues and problems that may be affecting your bottom line. Your practice performance can be directly tied to the numbers it produces.  Useful information can be obtained from a practice statistical report, a balance sheet, and an income statement.  These reports should reviewed by the physician and the office manager at least once a month.  I strongly suggest you make an effort to benchmark your medical practices. This allows you to measure your practice against your peers and colleagues. 

 

As physicians you make use of goals to monitor patients’ progress.  For example you monitor the blood pressure of hypertensive patients.  You check lab tests and x-rays to evaluate the progress of your therapeutic interventions.  The same type of monitoring must be done on a regular basis so you can evaluate the financial health and progress of our medical practice. 

August 20, 2010 in Practice Management | Permalink | Comments (0) | TrackBack (0)

Goodwill in Sale of Dental Practice (or physician practice)

One way to reduce double taxation on a corporate liquidation following an asset sale was highlighted in William Norwalk [ TC Memo 1998-279 (1998) ], where the Tax Court held that goodwill was not owned by the corporation because it did not have noncompete agreements with the shareholder/employees. Accordingly, the goodwill (in the form of client relationships) attached to the employees. In this recent case, the corporation did have a noncompete agreement with the shareholder/employee. Under these facts, the District Court held that "even if the goodwill had belonged to Dr. Howard personally, it likely would have little value, because Dr. Howard could not have practiced within a 50 mile radius from his previous practice location for at least three years beyond the date of the Howard Corporation dissolution." Therefore, the goodwill was an asset of Dr. Howard's corporation. Howard v. U.S. , 106 AFTR 2d 2010-XXXX (DC Wash.).

August 19, 2010 in Taxes, Valuation | Permalink | Comments (0) | TrackBack (0)

Common difficulties & answers related to billing physician hospital charges

Problem	Solution
Waiting on Operative Notes	Generally not necessary to attach operative notes to a claim form for most payors; Exception: Using the -22 modifier or billing an unlisted procedure code; Develop proper communication system with doctor to bill charges without using the operative note.
Poor Communication Between Doctor and Billing Staff	Improve current communication methodology; Success will often depend on cooperation of physician; Consider using a scribe to follow doctor, having doctor carry miniature charge cards, or recording charges onto a hospital/surgical charge ticket when he or she arrives back in the office.
Personnel	Poor personnel can lead to billing problems; Knowledge of CPT, ICD-9, medical terminology, and billing rules requires a special individual; Be careful during the hiring process.
Delay in Doctor Dictation	Some offices just want to rely on a medical record to do their billing; Claims get delayed in these situations when the doctor is behind in his or her dictation; Best solution is tying financial figures to the problem-i.e. Showing the impact on cash flow due to doctor delays.
Holding Claim Forms	Some practices hold claim forms so the facility or possibly another health care provider will get assessed the patient’s deductible; Should not be necessary if proper patient communication tools and practice policies are in place; Attempt to collect at time of regular office visit or preoperative visit once insurance has been verified.

August 18, 2010 in Practice Management | Permalink | Comments (0) | TrackBack (0)

Identifying reasons your gross collection percentage is not up to par

A shift in the practice’s payor mix  In some areas, the demographics of patients can switch away from commercial insurance to managed care. Sometimes, this switch can be sudden. Some service areas have been known to go from 20% managed care penetration to 70% within 12-months. Because managed care plans pay less than the office’s normal indemnity fee schedule, the practice’s gross collection percentage should decline accordingly.

 

If a shift has occurred, the office manager or administrator should first try to pinpoint a breakdown of the practice’s current payor mix. Next, attempt to decide what percentage of the revenue is derived from managed care, commercial insurance, self-paying patients, Medicare, Medicaid, and other insurance programs? Depending on the internal systems of the practice, obtaining this type of information can be an easy task or next to impossible. This is especially true for any medical practice still on a pegboard (i.e. manual) type of system. If a practice has a good computer system it can probably provide a payor mix analysis. If it does not, the manager should at least have the physician or the billing staff give you their best guess estimates of what the payor mix might be.

 

After pinpointing the payor mix, determine how the practice can shift its payor mix to the type of patients for whom reimbursement is the highest. This generally is accomplished by designing marketing strategies that target a specific payor class. The success of this will depend largely on the demographics of the practice’s area and the willingness of the physician to participate in marketing activities. For example, if the practice has moved toward managed care, there may not be much of an opportunity to move the payor mix around. The physician is stuck with managed-care reimbursement simply because no other alternatives are available.

 

Office fails to follow up on unpaid insurance claim forms  If insurance claim forms are filed and not followed up on a timely basis, insurance companies may delay payment. In turn, the office will not get reimbursed quickly. This is a common systems breakdown in many medical offices and it effects cash flow. Generally it should only take 2-3 days to file claims for office visits and 5-7 days for hospital, surgery, and other charges.

 

Office fails to collect moneys from patients at the time of their office visit  For certain medical practices, such as family practice, pediatrics, and allergy, office collection should be a mandatory policy. If payments are not made by patients at the time of their office visit, insurance must be filed for these services and, consequently, the office must wait for its payment. Good examples are copayments and deductibles. As a result, the gross collection rate will not be as good as it could have been if these payments were secured at the time of the visit. Thus, if the collection rate declines, the problem could be at the front desk.

 

Office fails to send out patients’ statements on a timely basis  Patients who do not receive statements every month cannot pay on their accounts. If the statements are not mailed at the same time each month, cash flow could become erratic.

 

Change in insurance company reimbursement rates  Many insurance plans are changing the way they pay physicians. For example, many commercial insurance carriers and managed-care plans are adopting a resource-based relative value scale (RBRVS) system similar to the current Medicare payment system. There will be continuing pressure to reform the Medicare payment system and this could impact physician reimbursement Other insurance plans annually decrease reimbursement rates, often without notifying physicians.

 

Office manages patient receivables poorly  Poor collection activities include those in which patients are not called about their overdue accounts, collection letters are not used, or a collection agency is not used properly. The office may not follow up on unpaid insurance claims or does so too late. Patients may arrive at the physician’s office with an unpaid balance on their account. Many offices fail to collect this overdue amount when the patient is in the office. All of these factors could contribute to a poor gross collection percentage.

 

Office employs inexperienced personnel  Unfortunately, some employees working in a medical office are not skilled at medical billing and collection. Billing a physician’s services is not an easy task. This also could be said of front desk personnel, many of whom are inexperienced in front-desk collections, scheduling, and so on. Always remember that if the office has implemented the proper business systems to ensure a successful and efficient operation, then collection problems could be directly tied to the people who are employed to carry the billing and collection duties.

 

Possible embezzlement  If the practice has a good payor mix and all the right operational systems are in place and followed by the practice’s personnel, a poor gross collection rate could be the result of employee embezzlement. Instead of collected revenue ending up in the practice’s bank account, it is diverted to an employee’s own personal account

August 16, 2010 | Permalink | Comments (0) | TrackBack (0)