Overcoming Challenges in Medical Billing: Avoiding Billing Errors

Kathy McCoy, MBA August 31st, 2010

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Avoiding Billing ErrorsBilling errors can cost your practice thousands every day, but finding the time to address them on an organized basis probably seems daunting. And yet, in reality it’s a simple process and one well worth the time you spend on it. Plus, with audits by Medicare looming large in everyone’s windshield, improving your processes now could prevent many headaches down the road.

Here’s a quick outline of a process you can follow to identify and correct billing issues:

1. Identify the Most Common Problems
The first step is to analyze your billing and coding to see what the most frequent problems are. You may be able to generate a report from your medical billing software to see where you’re getting the most frequent denials and rejections. Review this list or one compiled manually to insure that you understand where the bulk of the problems are. Fixing these issues will benefit you much more than focusing on unusual or uncommon problems. It’s the well-known “80/20 Rule”—80% of your problems will come from 20% of your coding.

2. Change Processes or Staff as Needed
Once you’ve identified your most common billing problems, decide how to fix them. Ask your billers and coders for suggestions—since they’re on the front lines, often they have ideas for solutions, and if they’re experienced, they may have encountered a similar problem before. If the problem is staff-oriented, consider what staffing changes need to be made. Is a staff member better suited to another task, either due to temperament, skills or burnout? Sometimes a job change can improve an employee’s outlook and their performance.

One key area to review is communication: Miscommunication can lead to charges being missed or to charges being billed when not required or medically necessary. Be sure physicians understand the importance of communicating correctly and exactly, and this includes their notes as well as any verbal communication with staff.

3. Train Effectively and Include All Staff Involved
If you decide to change processes to eliminate errors, be sure to effectively train staff on the change. Document the new process, review it with staff and let them ask questions. Often the medical school model of learning will help reinforce the behavior: “Learn one, do one, teach one.” When you teach your staff some of the more complicated new processes, have them try it with you present to help and answer questions, and then have them teach someone else on staff. This method has been demonstrated to improve retention.

Don’t forget to include medical staff in the training as well as office staff. Keep the training as concise as possible, but make sure the providers understand what changes they need to make to their daily routine.

4. Evaluate New Processes or Staff Changes
Set a period of time after which you will evaluate the changes you’ve made. While we’d all love to assume that a problem is fixed and we can move on to other things, it’s important to review the change after a reasonable amount of time and see whether you have actually addressed the problem and whether the improvement is at the level you were seeking, or whether additional changes are needed. Be critical so that you get the results you want—if you’re only partway to your goal, then repeat steps 2 & 3 above and decide what additional process changes are required. Keep in mind the time staff needs to adapt, but be demanding in achieving your goal of eliminating or reducing billing errors.

5. Repeat
Make this process a regular part of your operations, reviewing your billing for the most common errors on a regular basis. You may start out doing it quarterly and then after some time, you may be able to go to twice a year or even once a year. The key is to have a regular review, with frequency determined by the accuracy of your billing rather than by workload.

These types of internal audits and process improvements may seem daunting to some medical offices, or the physicians may feel it’s a distraction from patient care. But remind physicians that as the treating provider, they are on the hook for any mistakes that occur in coding. And with Medicare audits becoming a guarantee rather than a vague threat, they need to be invested in ensuring the billing process is as correct as possible and that procedures are in place for consistent improvement.

With a regular system in place for improving billing processes, a visit by the RAC may seem less intimidating and give you the confidence you need to get through an audit with less stress.

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Medical Billing Tip of the Month–August

Kathy McCoy, MBA August 4th, 2010

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August Billing Tip of the Month:

Pro-Active Notes Process Decreases Time to Payment on Elective Procedures

Many elective procedures require not only a preauthorization, but are frequently subject to review post- procedure. This review typically consists of sending documentation to the payer for their review. Examples of said documentation may include any diagnostic laboratory or radiology studies, the operative reports, and perhaps a Letter of Medical Necessity.

Waiting until the claim has processed and been denied with a request for notes can significantly delay payment. If these types of procedures are a large part of your practice, your accounts receivables have just increased by quite a number of days.

Our recommendation is to note which payers are typically requesting the aforementioned notes. Once that it is identified, we then begin to send notes in a proactive fashion. We submit the claim electronically through Kareo medical billing software. One week after the claim has been received by the payer, we send the notes (either fax or snail mail depending upon the payer) to the payer. When we receive the EOB stating notes are required/zero pay, we call the payer and indicate that notes should already be on file and ‘force’ them to reopen the claim right then.

This process has helped decrease the time to payment on these elective procedures.

AJ Riviezzo, MBA
CEO, American Physician Financial Solutions, LLC
719.233.0099

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Tips for Improving Productivity in Your Billing Process

Michelle Rimmer, CHI, CPMB August 3rd, 2010

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Apart from the patients, billing is the lifeline of the medical office. Whether your medical office’s billing is done in-house or you’ve outsourced it to a medical billing company, there are specific things you should do that are crucial in maintaining a smooth billing process.

Train the front desk staff. It is imperative that staff at the front desk has some type of introductory insurance and/or billing training. Make certain your staff is verifying insurance benefits prior to patients’ appointments. Be sure to train new employees on the various types of health insurance; indemnity plans, HMOs, PPOs, and POS plans. Educate the front desk on authorizations and referrals. Explain the difference between ‘Original Medicare’, ‘Medicare Advantage’, and ‘Medigap’ in order for the correct co-payment/co-insurance to be collected and the correct health insurance cards to be copied for billing purposes.

A thoroughly completed patient registration form is crucial in the billing process. Nothing frustrates a medical biller more than a missing insured’s date of birth, a suffix missing from a Medicare HIC number, or a missing home phone number. Train your front desk staff to keep a watchful eye on the registration form to make certain all fields are completed! This tip not only helps with initial claims submission, but also assists in future collection procedures.

A biller and only a biller! If your billing is done in-house, your billing should be designated to specific person/persons whose only job is billing. When the same person who is manning the front desk, putting patients in rooms, and answering all telephone calls is also the employee who is doing your billing—mistakes are bound to happen. These mistakes may be the very reason a provider will make the decision to outsource the practice’s billing.

Using a web-based application, such as Kareo, is especially helpful in improving billing productivity because it allows the provider and billing service to stay connected. For one thing, the medical office has access to patient accounts, which can be helpful in collecting outstanding patient balances during an encounter. On the other hand, the biller has real-time access to any patient demographics, diagnoses, insurance, or any other pertinent information needed to prepare claims for submission.

Maintain your accounts receivable. Many a provider would be shocked if they knew the dollar amount in their 90+ column on their insurance aging report! Each state has prompt payment statutes which give the timeframe in which both paper and electronic claims are to be paid. If your billing is done in-house, take the time to ask your biller to print an A/R report. If you are unhappy with what you see, find out the exact problem. Is it that your biller does not have enough time to post charges, post payments, submit claims, and maintain the A/R by themselves? Are you the owner of a billing service whose billers are in charge of their own accounts for the entire life cycle of the claims? In either scenario, listen to your biller(s) and if they need help, hire a separate employee whose only job is maintaining the accounts receivable.

Michelle Rimmer is the owner of the Professional Medical Billers Association and ABA Therapy Billing Services.  She has authored two textbooks: Medical Billing 101 and Coding Basics: Understanding Medical Collections and is currently working on her third textbook, which is due to be published in 2012. She also works with Kareo medical billing software to provide informative articles for Getting Paid.

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A Dozen Steps to Successfully Appeal Denied Claims

Elizabeth W. Woodcock, MBA, FACMPE, CPC August 3rd, 2010

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Appealing denied claims used to be a simple process. A biller working with a physician’s office would stamp “APPEAL” in big red letters on a photocopy of the claim, and mail it back to the insurance company. These days, you’d be wise to put the cost of that postage in the bank, and throw away both the APPEAL stamp and its red ink stamp pad. This sort of knee-jerk response won’t even make it past the insurance company’s initial computer screening; they’ll likely toss such “appeals” into the trash and you’ll never hear anything back from them.

To successfully appeal denied claims, you need to get your “A-game” on; otherwise, you won’t see a penny for your efforts.

Follow these steps to effectively appeal denied claims.

1. Recognize denials. Insurance companies don’t print the word “denied” in big letters across the top of the claim form. In fact, the word “denied” may never appear at all. The insurance company simply declares the reimbursement amount to be “$0” and enters an adjustment reason code next to the amount paid. The key is to identify it as separate and distinct from a contractual adjustment, which is – and should be – a write off.

2. Understand why the claim was denied. Before you pick up the phone and demand to speak to the claims representative, determine the root cause of the denial. You can’t effectively appeal until you know why payment for the service was denied. In addition to the reason code, there is a remark code. Look up the insurance company’s definition of that code to get details about the reason for the denial. WPC maintains a complete listing of standard reason and remark codes, available at www.wpc-edi.com/content/view/711/401/

3. Don’t procrastinate. There is often a timeframe in which you can resubmit a claim after it’s been denied. Pull the record, research the code, call the patient, etc., but don’t delay: most insurers only allow a few months to resubmit a claim for reconsideration.

4. Follow the insurance company’s rules. Each insurer has an appeal process. The Centers for Medicare and Medicaid Services (CMS), for example, has a form to complete when appealing the denial of a Medicare claim called the “Medicare Redetermination Request Form”. (See www.cms.gov/cmsforms/downloads/CMS20027.pdf) Get familiar with the insurer’s protocols to understand your options if your first appeal is turned down. Don’t give up; most insurers have multiple levels of appeals and even a grievance process if you disagree with the outcome after you’ve exhausted the appeals process.

5. Make a compelling case. An appeal means that you disagree with the insurance company’s decision, so put your debate cap on and gather supportive evidence to present your case. Perhaps the most important aspect of your claims letter is the content. The letter should go well beyond stating, “please pay my doctor.” Build a compelling case for why the claim should be paid:
• Develop a professional letter that begins by referencing the claim number, date of service and patient; then, briefly describe the particulars of the service in question.
• Use the insurer’s own language if possible. For example, to appeal a claim denied because the insurance company claims the treatment was experimental, quote from the insurer’s own marketing materials where it declares it seeks to provide the best medical care for its beneficiaries.
• When the insurer questions the necessity or separate payment for a distinct service, the physician should type or dictate a paragraph or two about the benefits of the service to the patient. Seek objective evidence to support your case from your specialty society and medical literature.
• Look to see if Medicare or Medicaid pays for the service; if they do, you can argue that even the government has determined that payment is appropriate.
• Copy and attach sections that support your case from coding manuals, including past issues of the American Medical Association (AMA) CPT Coding Assistant, a periodical that the AMA publishes to clarify CPT codes. (See http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/cpt.shtml)
• For appeals that concern clinical issues (for example, medical necessity), send the appeal to the medical director of the insurance company.
• Look at the class action settlements between several large physician organizations and a number of national insurance companies; review those settlements to see if anything in there can support your position. See http://www.hmosettlements.com/for an up-to-date compilation of the settlements, as well as a list of pending lawsuits.

6. Confirm receipt. Don’t just send the appeal and hope for the best. Review your submission online, or call the insurance company to confirm that they received your appeal, noting the name of the operator, extension number, date and time. Place a tickler in your practice management system or Microsoft Outlook to follow up in 30 days.

7. Set boundaries. Although it might make you feel better to fight for every dollar, it doesn’t pay to prepare a third-level appeal of a $2.41 service, particularly if you only perform it once a year. Establish protocols for dollar thresholds that you’ll appeal only once, twice, etc.

8. Don’t go overboard. Avoid fighting for a claim that should have never been submitted in the first place, such as an undocumented service. Your physician may have provided the service and feels there should be some way to get paid, but – as the saying goes – if it wasn’t documented, it wasn’t done.

9. Carbon copy stakeholders. Your appeal to reverse a denial is a matter between you and the insurance company, but sometimes pulling in other key stakeholders helps. Your first, and most important, advocate is the patient. Although patients may never be held responsible for payment if a denial is ultimately upheld, news of payment disputes certainly get their attention. And the patient’s attention is just want you want. Prompting the patient to contact the insurance company directly to encourage payment doesn’t guarantee payment, but it certainly helps.

10. Develop supportive language in your contract. Your contract establishes the relationship between you and the insurance company. Even though the insurer is the party that typically presents the contract to physicians for their signature, it’s every bit as much your physician’s contract as it is the insurer’s. Proactively negotiate the inclusion of language that supports your efforts to appeal claims. If you’re frustrated by the appeals process itself or if you keep running into certain problems, such as unfair bundling denials, seek to include clearer definitions of these processes in the contract.

11. Compile appeals. Appealing claims one-by-one may get the results you need, but it is laborious. If you’ve seen the same service denied for the same reason multiple times – or your insurer hasn’t paid in a timely manner, according to your state’s prompt payment law – compile your appeals and present them together for reconsideration.

12. Maintain a hassle folder for each insurance company. Keep a record of denied claims – by dollar and type. Measure and compare the data on a quarterly basis. If you negotiated a good reimbursement rate with an insurer, but all of your claims get denied, the “good” rate is meaningless. It pays to maintain a record of reimbursements and denials in order to effectively review your contract for its strategic contribution to the practice’s bottom line.

Preventing denied claims is a key skill of successful billers. But getting some denials will always be a fact of life in today’s complicated physician payment system. Appealing denials is your right: it pays to exercise it.

Elizabeth Woodcock, MBA, CPC, is an expert, author, speaker and trainer in practice management operations and revenue cycle management whose clients include Kareo medical billing software.

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