Reed Tinsley, CPA

Initial HIPAA audit results released

Earlier this month, OCR revealed some preliminary results of these pilot audits at a National Institute of Standards and Technology conference. OCR presented audit results for 20 covered entities. The audits revealed a number of common issues, including the following:

- Lack of written policies and procedures
- Missing business associate contracts
- Improper use and disclosure of information concerning deceased patients
- Failure to verify the identity of the person requesting health information
- Improper disclosures in response to judicial subpoenas and administrative requests
- Denials of patients’ access to their own records
- Lack of ongoing privacy training
- Minimal monitoring of employees’ access to electronic patient records
- Lack of contingency plans in cases of emergencies in order to access electronic records

http://www.garfunkelwild.com/ClientAlerts/AlertPDF/2012/OCRHIPAAAuditResults-OCRpdf.pdf

Have a plan for identifying and appealing denied charges in your physician practice

In my last blog post, I talked about actions that could result in denied claims by third party payers. It is very important you have a system in place to review why certain claims are getting denied. In many PM systems, you can set up denial codes - when an EOB shows a denial, the poster/reviewer logs the reason for the denial in the system. This way you can simply print a report weekly to see why claims are being denied. If your system does not support this set up, then you are going to have to have a manual system whereby EOBs showing a denied charge are copied and placed in a central location for review.

It doesn't take a rocket scientist to figure out how important it is to review why charges are getting denied and fixing the problem(s) sooner than later.

However, did you know the MGMA says that only 35 percent of providers appeal denied claims? Why are the other 65% leaving money on the table? Your billing staff must start the appeal process as soon as you receive a denial. To better prepare your practice to handle denials, try the following:

-Create a list of payers’ appeal deadlines. Each payer may have a different timeframe for denial appeals, ranging from 45 days to a year. From there, organize denials by deadline.

-Develop an appeal letter template for the most common denial reasons. Where possible, use the specific wording from the payer’s written and electronic publications.

-Consider appeals software tools. This software allows you to streamline denials and appeals, track the progress of a denial and create reports for denial prevention. Look for software that is compatible with your current practice management system.

Insurance payment denials - common mistakes in a physician office

Here are the most common mistakes I see made in physician medical practices that result in insurance payment denials; are these common in your office?

Registration Errors  Denials often occur because of an error in the patient registration process; usually from outdated demographic or insurance information. When a patient calls for an appointment, verify insurance coverage and benefits eligibility over the phone. If front office staff can’t gather that information before the appointment, ask for it as soon as the patient arrives and obtain any necessary referrals or authorizations as soon as possible. After verifying eligibility and benefits, a waiver form may be needed so patients understand their financial responsibility if a claim isn’t completely covered. Billing staff should regularly communicate registration errors with the front-office staff, as well as provide reports containing denied claims patterns.

Diagnosis not coded to the highest level of specificity  Your claim may be denied because your providers diagnosis needed to be more specific. Set up electronic prompts into your charge capture system that alert the user when there is a more detailed code available.

Patient’s subscriber number is incorrect or missing  This is caused by staff not entering complete registration information into your practice management system, or not confirming information with the patient. To prevent this denial, set up an alert or flag in your practice management system to ensure that information is filled out before the patient leaves the practice.

Protecting your physician practice from Silent PPOs

Continuing efforts to identify and stop Silent PPO arrangements is essential. At a minimum, physicians signing PPO contracts should ensure the following:

1. That discounts will be extended only to enrollees of the PPO who have cards identifying them as such;
2. That all PPO members eligible for discounts will be subject to steerage rnechanisms; contract language that promises "best efforts” by the PPO to steer enrollees usually is of minimal value under most state law;
3. That the 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;
4. That all members added to the PPO be subject to the same steerage mechanisms;
5. That any discounts applicable to a PPO enrollee be disclosed at the time coverage is verified; and
6. That the sale or other unauthorized use of contract rate information is specifically prohibited.

Physicians and the new Medicare "Resource Use" Reports

Twenty-thousand physicians in four Midwest states received a glimpse into their financial future this past March. Landing in their e-mail inboxes were links to reports from Medicare showing the amount their patients cost on average as well as the quality of the care they provided. The reports also showed how Medicare spending on each doctor’s patients compared with their peers in Kansas, Iowa, Missouri and Nebraska.

The “Quality and Resource Use” reports, which Medicare plans to eventually provide to doctors nationwide, are one of the most visible phases of the government’s effort to figure out how to enact a complex, delicate and little-noticed provision of the 2010 health-care law: paying more to doctors who provide quality care at lower cost to Medicare, and reducing payments to physicians who run up Medicare’s costs without better results.

According to CMS, making providers routinely pay attention to cost and quality is widely viewed as crucial if the country is going to rein in its health-care spending, which amounts to more than $2.5 trillion a year. It’s also key to keeping Medicare solvent. Efforts have begun to change the way Medicare pays hospitals, doctors and other providers who agree to work together in new alliances known as “accountable care organizations.” This fall, the federal health program for 47 million seniors and disabled people also is adjusting hospital payments based on quality of care, and it plans to take cost into account as early as next year.

But applying these same precepts to physicians is much more difficult - physicians see far fewer patients than do hospitals, so making statistically accurate assessments of doctors’ care is much harder. Comparing specialists is tricky, since some focus on particular kinds of patients that tend to be more costly.

“It may be the most difficult measurement challenge in the whole world of value-based purchasing,” said Dr. Donald Berwick, former administrator of the federal Centers for Medicare and Medicaid Services, or CMS. “We do have to be cautious in this case. It could lead to levels of gaming and misunderstanding and incorrect signals to physicians that might not be best for everyone.”

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/downloads/2010_individual_qrur_template.pdf

Don’t forget the small things when scrutinizing physician practice overhead

The physician practice manager’s effort to control operating overhead never ends. It’s not easy to hold overhead in line year to year - But monitoring a few aspects of practice operations and making changes to them can bolster the effort.

To assess overhead, first complete a financial analysis that compares it as a percentage of collections. Next, compare it to prior-year statements (total expenditures and per area expenditures) and benchmarks.  Once a comparison is complete, look for areas that can be reduced. Following are tips to reduce your overhead in specific areas.

Supplies

Here are several moves to reduce overhead in regard to supplies. First, centralize purchasing. If one office runs out of supplies, a designated employee should first call the other office to secure additional supplies. Under no circumstances should an office be allowed to order more supplies.

Scrutinize exclusive relationships with vendors because they often do not offer competitive prices. Develop a list of needed supplies and costs, then request bids from various vendors. Use Internet vendors, too.

Use an existing individual practice association (IPA) or managaement services organization (MSO) to create group purchasing power and leverage. Aside from supplies, these entities often group purchase malpractice insurance, and other operating costs.

Lease agreements

Verify that the operating stop provision of the lease contains charges related only to building operations. In typical leases, landlords allocates to tenants excess costs associated with operating a building. Sometimes operating stop provisions contain unrelated costs such as payroll and management fees. Inspect the provision every year.

Also, sometimes landlords require tenants to purchase insurance. Check if the insurance is necessary, and whether inexpensive alternatives exist.

Other costs

Numerous and often small costs can add up. They must be evaluated regularly. They include

Small fees – i.e., bank charges and penalties. No practice should incur these. Review statements to ensure this.

Advertising – compare the benefits of advertising with its costs, particularly telephone directory advertising. Practices that have half- or full-page ads might consider reducing or eliminating them.

Outside billing – determine a potential collection rate, minus expenses, for internal billing and compare it with the same figures for the external billing agency.

Postage costs – are they practice’s postage costs or employees’ personal postage costs? Develop a system to determine and track postage cots.

Telephone costs – monitor long-distance calling to make sure they are business-related and ensure that the practice is not paying for lines and services it doesn’t use.

Professional fees – fees for various services, such as accounting, often can be reduced by seeking service providers that offer lower fees.

Ancillary costs – can work related to these services be handled internally for less money?

Three common elements generally present in physician theft and embezzlement cases

Opportunity. The opportunity to steal is just too great for some people to resist. Situations that increase this opportunity include physicians not engaged in the dayto-day business, large amount of daily transactions (including cash), or practices that tend to have a “trusted, loyal” employee whom no one would suspect. Perhaps the biggest opportunity to steal involves a weakness in internal controls.

Pressure. Mounting debt or living beyond one’s means can add pressure to steal. Maybe a spouse has lost a job. Also, drug, gambling, and other addictions can be a factor in someone deciding to steal.

Rationalization. People generally will rationalize their reasons for theft. An employee may think, “I deserve a raise, so I am going to give myself one!” or “I am only borrowing the money, and I’ll pay it back.”

Compliance risk areas for physician medical practices

The following are identified compliance risk areas for physicians:

- Unbundling;

- soliciting, offering, or receiving a kickback, bribe or rebate;

- routine waiver of copays and deductibles, regardless of need;

- billing for services not rendered;

- upcoding;

- double billing;

- billing for physician services rendered by non physicians/teaching physician requirements;

- medical necessity;

- misrepresenting diagnosis to justify services;

- completing certificates of medical necessity for patients not personally and professionally known by the physician;

- billing Medicare/Medicaid for investigation research, medications, and procedures without proper authorization; and

- billing for a non covered service as if covered.

Rarely do I find "intentional" compliance errors; most "unintentional" errors are the result of carelessness, a lack of monitoring, a lack of checks and balances, a lack of education, poor billing staff, etc. etc. etc.........you get the point. Just make sure this isn't happening within your physician medical practice.

Managing physician accounts receivable

With current economic instability and looming decreases in payer reimbursement, your practice needs to retain the maximum amount of each dollar earned. But because the struggling economy is also affecting your patients, collecting payments has likely become an expensive and frustrating burden.

Patient bad debt is becoming a serious threat to profitability for healthcare providers nationwide, representing an estimated $65 billion in uncollected revenues in 2010i. While self-pay patients do account for some of this debt, insured patients who neglect to pay post-insurance balances represents the fastest growing segment of individuals with outstanding medical bills. In a 2009 McKinsey survey of retail healthcare consumers, more than 74% of insured consumers are both willing and able to pay their out-of-pocket medical expenses for liabilities of less than $1,000 a year. Yet collection rates lag well behind these levels, even for lesser charges.

On average, a staggering 50% of every dollar billed to patients goes uncollected, even after sending as many as three billing statements; a costly process to any practice that yields little in return.

What steps can your practice take to increase patient collections in light of these changing dynamics?

Managing accounts receivable begins with:

• Good financial controls, including written financial policies and a  process for holding staff accountable
• Using systems that support best practices
• Adoption of payment strategies and technology geared toward increasing patient collections at the point of care and minimizing the time and expense associated with capturing outstanding balances
   
• Effective patient communication that maintains positive relations with patients.

When Was The Last Time You Reviewed Your Personnel Manual From A Legal Standpoint?

While not intended as a legal document, did you know your personnel manual may have the force of an employment contract? If you haven’t done so in a while, or not at all, review it to be sure it won't cause unintended problems. Like many other physician contracts, personnel manuals often do not get an annual review; they get stuck in a drawer never to be looked at again until an employee leaves the practice and a problem arises.

Perhaps you think your personnel manual as some sort of low-key presentation booklet that describes policies and benefits for your staff. Unfortunately, it's often loaded with dynamite. A variety of court decisions have made this apparent.

If you haven’t reviewed your manual recently, I strongly suggest having it reviewed by your legal counsel - make sure it’s legally correct, comprehensive, clear and relatively bulletproof. As I mentioned before, many manuals in existence today are ticking time bombs waiting to go off. You certainly don’t want to create any undue problems for yourself and your medical practice. This issue not only applies to medical practices, but any healthcare organization that issues an employee manual to its workforce.