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14 posts from November 2010

November 30, 2010

Insurance claim denial management

Medical claim denials cut right at the jugular of a practice's financial success. Today, a medical practice's operating expenses often exceed 50% of its total revenue. With thin margins defining the financial success of a group practice, an aggressive denial management strategy is critical. Adopting such a strategy may sound complex and time consuming, however, a streamlined plan can establish a more efficient billing and collections process resulting in huge dividends.  Here are six easy steps to managing the process in your practice: 

Put someone in charge - This will be the responsible party who knows what to look for, where to look for it, and how to address the individual issues while keeping tabs on the big picture. 

Standardize the way denials are posted - Denials are often posted in a practice's Practice Management system simply as contractual adjustments, limiting opportunity to trend and correct issues.  Standardized posting procedures offer specific tracking mechanisms and allow generation of meaningful management reports that assist in identifying specifics of denied items. 

Create a denied claims log - Logging claim denials provides the ability to track claim numbers, dollar values, dates of resolution and corrective measures. Some practice management system software products can automate this process.  Where automation is not an option, it can be done manually.  Either way, the bottom line is - it should be done. 

Track denial reason codes - Are claims denied due to timely filing limitations? Are patients out of network?  Were services considered not medically necessary or non-covered?  Tracking denial reason codes allows a practice to understand the root cause of each denial, providing the opportunity to reduce denial occurrences. 

Take corrective measures ("close the loop") - Many claim denials are a result of operational oversights.  Unbundling, inadequate documentation, or even a mismatched age with a procedure code are all denial types that can be remedied by educating staff in coding and billing guidelines.  For example, slight changes to the office registration process could significantly reduce patient eligibility denials. Or perhaps physicians are ordering services without completing the patient's carrier requirements resulting in authorization denials.  In this scenario, physician education and procedural tweaking would decrease future denials and expedite payment.

Embrace efficiency - If automation is available in the practice management system, use it.  Utilizing a paperless environment offers easier tracking and enhanced accountability options while reducing overhead.  Electronic tickler files can serve as an excellent denied claims log.  Also, most clearinghouses offer online access that allows monitoring of claims traffic.  In many cases, carriers provide electronic acknowledgement reports identifying receipt or rejection of claim batches.  In addition, claim scrubbing tools are frequently made available at the clearinghouse or payer level that identify denials and corresponding denial reasons.  Some clearinghouses offer "real time claims adjudication" where minor corrections can be made online (changes to an ICD-9 code or CPT code) for immediate resubmission of the rejected claim.

November 29, 2010

tark In-Office Ancillary Services Exception Disclosure Requirements Effective January 1, 2011

Effective January 1, 2011, the new Stark In-Office Ancillary Services Exception (the "IOASE") provisions will require physicians or group practices relying upon the IOASE (collectively, "Physician Practices") to furnish the following notice/disclosure to patients receiving MRI, CT, and PET (as identified on the Stark CPT/HCPCS Code list):

• Written notice at the time of the referral (not the time of the service)that the Medicare patient may receive the same services from another person or other supplier.

• The written notice must include a list of at least 5 (this was reduced from the original list of 10) suppliers that provide such services and which are located within a 25-mile radius of the referring physician's office location (depending upon the various office locations, a Physician Practice may be required to have different lists) at the time of the referral. (Note that so long as the requisite number of suppliers is listed, you can now also include a list of providers on the notice (e.g., hospitals) this was previously prohibited under the proposed rule).

• The notice must be written as to be understood by all patients and should include at a minimum, for each listed supplier the supplier's name, address, and telephone number. (Note that CMS removed the requirement that the practice obtain the patient's signature on the notice and maintain a copy in the patient's medical record. Also, note that CMS is no longer requiring the practice to list the mile radius for each listed supplier.) NOTE that although Physician Practices are no longer required to obtain and maintain the patient's signature, it may be prudent to otherwise document that the disclosure requirement was met such as having a physician in the Physician Practice document in the chart that the notice was given.

All Physician Practices nonetheless should begin working to identify the alternative list of suppliers that they will provide (including the name, address and number of each) on the notice. Physician Practices should also ensure that they have their notices ready by January 1, 2011 and have procedures established to ensure that their office staff is providing the notice to Medicare patients at the time the MR/CT/PET is ORDERED. Physician Practices should be mindful of the fact that the notice can be simple and only needs to merely provide notice. A Physician Practice is permitted to identify its own services on the notice and according to CMS, a Physician Practice can also include language on the notice which informs patients that the inclusion of the alternate suppliers is not intended to endorse or recommend those suppliers.

November 23, 2010

DOJ: Record-Breaking Year for False Claims Act Recoveries

The U.S. Justice Department recovered more than $5 billion under the False Claims Act since the beginning of 2009, the largest amount in any two-year period in history, a DOJ official said today.

In that time, health care fraud recovery accounted for $4.6 billion, Assistant Attorney General Tony West of the Civil Division told reporters. Most of the cases that resulted in a recovery of taxpayer money were brought through the whistleblower provision of the False Claims Act.

November 22, 2010

How to Handle Employee Theft Claims

Most health care professionals must trust their employees to handle the financial aspects of their practices and in almost all cases this trust is well-placed. However, there can be a bad apple in the barrel. What steps should you take when you discover that an employee is stealing from your practice? 

Conduct a Fair and Accurate Investigation 

When a theft is detected, you must move quickly to investigate and discipline the employee. If an employee is caught by direct observation, the "investigation" should be straightforward. However, more often than not, an employee theft is suspected based upon indirect or circumstantial evidence, such as another employee report or in the results of an audit. In such cases, an investigation is necessary. However, do not unnecessarily delay the investigation, since criminal and civil statutes of limitation will begin upon discovery of the loss. 

An investigation should follow certain guidelines: 

  1. It should be done by a management employee other than the supervisor who first noticed or reported the theft.
  2. Determine whether the employee should be immediately suspended or whether the theft would be best confirmed by monitoring the employee’s continued actions.
  3. Maintain strict confidentiality to avoid exposure to defamation or alerting any accomplices.
  4. If the theft is complex and substantial, retain an expert to assist you in the investigation, such as a CPA.
  5. Do not seize an employee’s property without consent.
  6. Interview all witnesses individually and for current employees, make a clear warning about their duty to maintain confidentiality.
  7. Document all interviews and obtain the signatures of the persons interviewed.
  8. Interview the employee suspected of the theft at the last stage of the investigation and have a witness present. Do not insist on a confession and do not make any promises. If the employee offers to return the stolen corporate property or make full or partial restitution for the loss, accept it but with no promises as to whether the practice or healthcare provider will pursue further remedy or take further action. It may be that the practice will drop the matter in a minor incident, but partial restitution may not lead to full voluntary restitution and you will want to think through the appropriate level of discipline before making any promises. Remember, it’s the practice’s property and you shouldn’t have to bargain to get it back.
  9. At the conclusion of the investigation, determine whether the practice has have evidence that the theft occurred and that it is attributable to the employee. If you do, determine the appropriate level of discipline. Often termination is the only alternative.

November 18, 2010

Internal controls for a physician practice - Part II

Monitor contractual adjustments for reasonableness Depend-ing on the practice’s payor mix, a high volume of contractual adjustments could indicate possible embezzlement. For example, an insurance claim for $1,000 is prepared and mailed to an insurance plan for services rendered by the practice. The plan approves 80 percent of the charge and subsequently sends a check in the amount of $800 to the practice. An employee in the practice takes the $800 check, deposits it into his or her own personal bank account, and then accesses the practice’s computer to write off the $1,000 patient account balance as a contractual adjustment. 

The best way to prevent embezzlement from occurring in this situation is to make sure the person who handles money is not responsible for posting it into the computer. Another method would be to establish passwords in the computer system and allow access only to authorized personnel. If possible, see if the practice’s computer can be programmed to prevent a patient’s entire balance from being written off without authorization. 

You should also make sure that contractual categories are specifically identified. A medical office should not have one catch-all category called credit adjustment or contractual adjustment. Establish a credit adjustment category for each of the practices’ major payors, for example, the categories could be credit adjustment—Medicare, credit adjustment—Medicaid, credit adjustment—Worker’s Compensation,  credit adjustment—Aetna, and so on. 

By specifically categorizing contractual write-offs, the CPA, consultant, or the practice manager can compare these adjustments to the practice’s actual payor mix to look for inconsistencies. For example, 75 percent of the practice’s revenues come from commercial insurance carriers. The computer records indicate that the practice is writing off 35 percent of its charges as contractual adjustments. This could indicate an embezzlement situation.  

A final internal control measurement you can take is to print out and review patients’ account ledgers periodically. You should look for and investigate any balance that has been written off in its entirety without approval. If possible,  use the practice’s computer to scan for files that have been written off. If the office’s computer does not have this capability, someone will have to go through each ledger to identify such charges. 

Encourage employees to take their vacation time in multiple days Having employees take extensive vacation leave may help uncover embezzlement tracks. When an employee is away from the office for an extended period, such as a week, the person who takes over the vacationing employee’s tasks could stumble across errors and embezzlement caused by the vacationing employee. For example, an employee who is responsible for billing and collection takes a one-week vacation. While the employee is away, a patient calls about his account statement. The statement shows a deductible balance due, although the patient says he already paid. Because the vacationing employee was not able to intercept this type of call, her embezzlement was exposed. 

Accounts Payable 

Accounts receivable is not the only area in which embezzlement occurs; controls for accounts payable should also exist in every medical practice. Accounts payable controls prevent a practice’s employee from preparing checks to an unauthorized vendor, which may in fact be in the employee’s control. For example, a check could be made out to a fake office supply company and mailed to a post office box controlled by the employee. 

The best internal controls for accounts payable are (a) to limit check-signing authority to the physician and (b) to attach a vendor invoice to each check when it is  signed. In situations in which a physician refuses to take the responsibility for signing checks,  make sure the endorsements on the back of the canceled checks are reviewed. Look specifically for third-party endorsements or endorsements that do not appear to match the payee on the check. Many times it is obvious when a business check is endorsed personally by someone other than the vendor. You should have the bank statement and canceled checks mailed directly to his office for reconciliation. 

As added protection, the physician may want to receive the bank statement and review it first, in which case the bank could send the statements directly to the physician’s home. Just by scanning the transactions, a physician can sometimes detect that something is wrong. 

November 17, 2010

Internal Controls in a Medical Practice - Part I

Every medical practice must implement specific internal controls to protect it from revenue loss and potential employee embezzlement. Although there will never be a guarantee that employee embezzlement, fraud, or similar defalcations will be caught, a practice can still minimize these activities by implementing and monitoring sound internal controls. One of the your duties is to make sure  these controls are in place. This article discusses the basic internal controls that should be found in most physcian practices. 

Controls detect and prevent embezzlements, such as an employee at the front desk who pockets the money from a patient’s office visit and then manipulates source documents so that the charge fails to get posted into the computer. Someone should review the computer-generated daily report to ensure that charges related to patients’ visits are actually recorded. Following are some controls that should be implemented to help detect and prevent embezzlements. 

Divide job duties Any individual should not be allowed to both open the mail (i.e., initially handle the money) and post payments to the computer. Dividing the two duties prevents an employee from stealing money from the practice and then manipulating patients’ accounts in the computer, usually by writing off balances as contractual adjustments or bad debts. For example, an employee who is responsible for opening the mail and posting payments writes off an account as a bad debt after a patient’s account statement has been mailed. The employee knows this patient will pay within 30 days, so the employee waits for the check to come in the mail so she can intercept it and cash it. 

In an ideal situation, one person opens the mail, another person prepares the deposit slips, and a third person posts the payments to the patients’ individual accounts in the computer. However, most small medical practices do not have adequate personnel to carry this out. What usually happens is that the person who opens the mail also posts payments into the computer or onto the ledger cards. Every medical practice should bond all personnel who will or may come into contact with money. Bonding is a type of insurance that will reimburse the practice for embezzlement by office personnel. It is typically referred to as fidelity bond insurance. This type of insurance can also reimburse the practice if money is ever stolen by someone other than a practice employee. For example, a receptionist takes the daily deposit to the bank. On her way to make the deposit, she stops to run an errand. While she is away from the car, her car is broken into and the deposit money is stolen. 

Necessitate mandatory consent of the physician for write-offs A patient’s account balance should never be written off as a bad debt without the written consent of a physician. This avoids the situation in which monies can be diverted away from the practice without any kind of a trail. Write-offs are usually documented by printing out the patient’s detail account ledger and having the physician review and initial each ledger page as a way of approving the write-off. If this method is impractical, have the approval documented in the computer. The down side of this activity is that the physician has to become very active and hands-on in the receivable management process. Not all doctors have the inclination nor the time to become this involved. 

Reconcile office visit payments, received during the day from patients, to source documents Both the sign-in sheet and the appointment schedule should be reconciled to the computer-generated report of daily charges. In turn, the money from patients who paid for their office visits should be reconciled to the computer-generated report of daily payments. This may be a cumbersome daily task. You should make sure it is done at least two to three times a month. Also, practices with multiple offices may not make deposits daily, resulting in the inability to reconcile the bank deposit slip to the daily computer reports. Branch banking by each office and corresponding cash transfers to a central operating account may solve this problem.

From an internal control standpoint, the practice needs to make daily deposits, if it can, so that the related reconciliation can be performed and situations, such as the following, can be avoided. An office manager reviews daily reports of charges and compares them to the appointment book. The manager finds a visit without a corresponding charge and subsequently locates the related office charge ticket. The ticket indicates that payment was made, so the manager assumes an employee embezzled money. As soon as the manager discovers this, internal controls are put in place. However, if the charge ticket did not indicate payment, the office manager could either post the charge and send the patient a bill or contact the patient directly. In either case, lost money is found.

 

November 16, 2010

A strategic planning self-assessment for healthcare professionals

Following is an example of our strategic planning self-assessment. The purpose of these self-assessments is to give you a concise checklist of best practices in a clinical practice. This checklist follows the Pareto Principle of focusing on the 20% of business practices that get you 80% of the results. Therefore, I don’t claim that it covers EVERYTHING. But it does cover a good percentage of the most important things.

Strategic Planning Checklist

  • We do a strategic planning process at least annually.
  • This process gathers input from key stakeholders and data about our practice and marketplace.
  • We review our mission and vision for the practice.
  • We assess the size and growth of the market for our services.
  • We compare our own “penetration” to the size of the market.
  • We assess trends in managed care and payments and analyze our contracts.
  • We evaluate competitors’ strengths and weaknesses, and how we can gain an edge.
  • We assess the strengths and weaknesses of our referral network.
  • We evaluate the depth and breadth of our overall service offerings. We assess the strengths and weaknesses of our marketing.
  • We assess our payers, including our payer mix.
  • We evaluate our clinical utilization rates and quality or care outcomes.
  • We evaluate our internal controls.
  • We evaluate our cost structure and financial ratios.
  • We review our technology.
  • We take a hard look at the patient’s experience, and how to improve it.
  • We assess the capabilities of our clinicians and staff and identify any gaps to fill.
  • We review physician and staff compensation.
  • We assess our risks, compliance, and malpractice insurance.
  • We evaluate our relationship with local hospital(s).
  • We analyze our financial strength, including capacity for debt, days receivables, trends in aging of receivables, collection ratios, and profitability by services.
  • We assess our facility and location, including whether we are located in the optimal zip code/area to serve our desired patient base.
  • We do an overall “Strength, Weaknesses, Opportunities, and Threats” or SWOT analysis about our practice.
  • We determine which services and programs to expand, which to defend, and which to exit.
  • We identify the top issues we need to address, and then identify key priorities to address these issues, achieve our vision, and be more competitive and profitable.
  • We set annual performance/financial goals for our practice and develop a plan to achieve those goals.
  • We assign specific accountability to achieve these initiatives, and a communication plan to follow up on them.

November 15, 2010

Need an overview of physician compliance issues?

Most physicians strive to work ethically, render high-quality medical care to their patients, and submit proper claims for payment. Society places enormous trust in physicians, and rightly so. Trust is at the core of the physician-patient relationship. When our health is at its most vulnerable, we rely on physicians to use their expert medical training to put us on the road to a healthy recovery.

The Federal Government also places enormous trust in physicians. Medicare, Medicaid, and other Federal health care programs rely on physicians’ medical judgment to treat beneficiaries with appropriate services. When reimbursing physicians and hospitals for services provided to program beneficiaries, the Federal Government relies on physicians to submit accurate and truthful claims information.

The presence of some dishonest health care providers who exploit the health care system for illegal personal gain has created the need for laws that combat fraud and abuse and ensure appropriate quality medical care. This brochure assists physicians in understanding how to comply with these Federal laws by identifying “red flags” that could lead to potential liability in law enforcement and administrative actions. The information is organized around three types of relationships that physicians frequently encounter in their careers:

  1. Relationships with payers,
  2. Relationships with fellow physicians and other providers, and
  3. Relationships with vendors.

The key issues addressed in this brochure are relevant to all physicians, regardless of
specialty or practice setting.

Follow this link for access to the brochure:

http://oig.hhs.gov/fraud/PhysicianEducation/roadmap_web_version.pdf

November 10, 2010

The IRS and Quickbooks

Does your medical practice use Quickbooks to keep its accounting records? Then you'll be interested in this: The IRS noted that it recently completed training for revenue agents (the auditors) on QuickBooks® Premier Accountant Edition 2010 software. Approximately 1,100 agents were trained and are now being encouraged to request and accept taxpayers' QuickBooks files, as appropriate. The IRS said during a tax audit, electronic files could be provided on a CD, DVD, or flash/jump drive to ensure their security. However, email cannot be used to transmit the electronic records to the IRS during the audit. 

November 08, 2010

Simple medical practice billing errors

As we call know, billing mistakes can cost your practice money, frustrate your patients and even put your relationship with insurance providers at risk; however, the vast majority of billing mistakes can be avoided.  Here are three of the most common billing mistakes operations can make and what you can do to avoid them:

1) Simple Data Entry Errors. In many cases, billing mistakes can be chalked up to data entry errors.  Over the years, missed or incorrect keystrokes can cost a practice thousands of dollars.  Data entry errors are also the most difficult type to catch.  Making sure your staff are proficient with office equipment and software will help. One of the best ways to avoid billing errors due to incorrect data entry is to utilize a front end claims scrubber to identify potential key entry errors prior to submission into your practice management system.  In the event scrubbing software is not an option, a audit process of reviewing data entry should be considered.

2) Incorrect Coding. Your billing staff should be highly trained professionals with an expertise in coding. With the rapid changes that occur in medicine, medical billing becomes increasingly complex as services are added and removed.  The best solution to solving incorrect coding issues is use of a front end scrubbing software coupled with continuing education for employees.  The “scrubber” would identify potential coding errors prior to submission into your practice management system. Although coding expertise is paramount, many practices have an insufficient training budget.  An investment in the training budget will more than pay for itself through saved revenue.

3) Duplicate Billing.  While the billing applications used by medical practices have made great strides in the past decade, the submission of duplicate billings still occur. An example of a duplicate billing error is one service that may have been keyed or coded two separate ways, producing two billings for the same service.  System stability issues and human error are two of the most common reasons for this error.  Scrubbing software could be utilized to identify this error type. If scrubbing software is not available, the best way to avoid duplicate billing is through the audit process. The same audit process that protects you from simple data entry errors can help you identify and flag duplicate billing.

A key part of running a successful practice is educating your staff about potential billing errors.  Continuing to provide your billing staff with as much information and training as possible will surely result in billing mistake reductions.