March2011 | Kareo

Give Your Medical Billing Software Permission to Work Harder

Kathy McCoy, MBA March 30th, 2011

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With or without medical billing software, collections is often challenging. And it’s made more difficult by a practice’s inability to leave pertinent details on patients’ answering machines. Let’s face it, “Please return our call” isn’t the collections specialist’s most useful tool. That’s why it’s so important to obtain written permission from every patient to leave detailed voicemails. Signed consent benefits your medical billing and maximizes the usefulness of your practice’s medical billing software by permitting staff to give details and use language that motivates compliance.

Make it easier to collect from patients who can and will pay

As you know, the reasons patients don’t pay on time are vast and various. They range from oversight and forgetfulness to competing financial interests and emergencies, prolonged joblessness and just plain poor handling of finances. So on any given day your billing staff are dealing with patients who can’t pay, some who would prefer not to, and others who simply haven’t yet.

Without a signed confidential communications request form, your medical billing staff has only the barest-minimum ability to motivate patients who, although delinquent, are otherwise willing and able to pay. For example, a person who is over-busy and under a great deal of stress may be unlikely to respond if your practice’s message is as limited as “important issue” and “please call.” But if your staffers are able to leave details that help the patient realize the importance or urgency, you have a better chance of receiving payment from this patient without expending additional labor.

Let missed calls still achieve most of their objectives

Of course, leaving detailed phone messages isn’t just a benefit for collecting from people who have forgotten to pay on time. It has a far more fundamental benefit: It makes it possible for outbound billing calls to still fulfill some of their goals even when patients don’t answer the phone.

The objectives of your outbound billing calls are to provide pertinent information, motivate the patient to comply and obtain the amount due. But if your billing staff member reaches a voicemail system, the practice fails to achieve all three of these goals if you don’t have written permission to leave HIPAA-protected information on voicemail. With signed consent, on the other hand, you can still inform and attempt to motivate compliance. Obviously, the potential value of the detailed message is greater than the value of expending roughly the same amount of labor to just request a return call.

Maximize the benefits of your medical billing software

Medical billing software is, in the simplest terms, a way of managing highly detailed financial information for the purpose of maximizing the practice’s ability to collect every earned dollar. It captures, maintains, collates and analyzes details — details that matter to the practice, the patient, insurance carriers and governing bodies. Billing software also makes it possible to communicate these details… and reduces the labor historically involved in this task. But phone calls are still part of the reality of medical billing and collections, and your billing software can’t make those calls. So staffers make them. It only makes sense to have patients’ written consent to leave important — and compelling — details on voicemail. That way, the practice gets more from both the labor expended and the information managed by your billing software.

Motivate with detail and more compelling messages

Being able to leave specific details is itself potentially motivating to some patients with delinquent accounts. One example: A patient who thinks he owes $500 may be less likely to “please call us back as soon as possible” than to mail a check after learning he owes much less than he though. Also, many people respond better and more quickly to quantitative information that they can use to draw more tangible conclusions. Leaving detailed information can also increase the likelihood of compliance after the next call or letter. If someone needs two detailed calls (or just one) before they pay, you don’t want the current phone call to count for nothing. Yet, permission to leave detailed messages also allows staffers to leave messages that include words that help motivate the desired response.

Every practice needs to decide its comfort threshold when it comes to these response-driven lines. And it’s recommended to obtain legal advice about what is and is not permitted by HIPAA and other regulations. But the point here is that signed consent gives you some leeway to say things like “this account may be sent to third-party collections professionals” or “could potentially increase the amount you ultimately have to.” It’s also an opportunity to appeal to patients’ sense of appreciation of the practice’s care and service by saying things like “we’re really trying to find ways to help you” or “we wanted to give you another chance because we understand your situation.”

Free your billing software and people to succeed in their goals

These days, more and more practices have made the communications consent authorization an essential part of the new-patient packet. And billing is a primary reason. Information collected and processed by your medical billing software should not be helpful only on phone calls that are answered by the patient. If your medical billing staffers are free to leave detailed voicemails, they can impart information that helps motivate the desired response: Payment. At the same time, they also have the opportunity to remind patients of potential costs and consequences and to deliver the motivating messages they’re accustomed to delivering when patients actually pick up the phone.

Kathy McCoy, MBA March 29th, 2011

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How many times have you read something like this in the last year or two?

“The Detroit News reported recently that The Henry Ford Health System said an employee lost a flash drive — which was not encrypted per Henry Ford policy — on Jan. 31, 2011, that had health information for about 2,777 patients. This was the system’s second security breach in the past few months…”

If this news item sends chills down your spine, you know what a nightmare this can be. And exposed data isn’t the only danger for a practice that maintains its own servers—there’s also the ever-present threat that the computer servers at your medical practice could suddenly malfunction or crash.

You and your staff wouldn’t have access to important patient records or billing information. Patients would get upset when they find out you can’t pull up their records on the computer. Your efficient and productive office would suddenly become slow and disorganized until an information technology (IT) specialist arrived to repair your server. And in the event that your server can’t be repaired, you’ll have even bigger problems, particularly if it involves lost or damaged data. In short, a server crash can turn your medical practice upside-down.

Fortunately, you can protect your sensitive practice data by taking it virtual.

Today’s web-based practice management software and medical billing software systems enable you to keep all of your important practice information safe and secure on a virtual computer server. These web-based systems use HIPAA-compliant data encryption technology to provide ironclad protection for all information and data that is transmitted between your office and the virtual servers. Web-based practice management and medical billing software systems are affordable and easy to setup and learn. Best of all, you and your staff won’t ever have to worry about the inevitable computer server crash, or have to deal with server backups.

Don’t risk losing valuable practice data because of a computer server crash.

Making the switch from an in-office computer server setup to a web-based practice management software system with a virtual server protects all of your sensitive practice data. And web-based practice management and medical billing software systems offer anytime, anywhere access to your practice information through a secure Internet connection.

Your billing employees will never again say, “our server is down.”

Web-based medical billing software such as Kareo is an excellent alternative to traditional billing methods that involve the use of an expensive computer server and third-party software system. If your in-office computer server crashes, your employees won’t be able to manage the billing process in a timely manner; everything will need to be entered offline and/or filled out by hand on paper forms. This is a tremendous burden on your employees that is both time and labor intensive.

Of course, your patients will be frustrated by having to spend more time in your office as a result of a computer server crash, and this could make them lose confidence in your practice. With web-based medical billing software, a virtual server safely stores all of your patients’ billing information so your office can always run smoothly and without interruption.

Save yourself the time and hassle of having to deal with computer server backups.

Automatic virtual server backups are another key benefit that web-based practice management and medical billing software systems offer. The frequency of server backups depends on which web-based software you choose for your practice. Kareo, for example, performs full server backups nightly and differential backups every 30 minutes, which is a great benefit for their customers. This protects against data loss and ensures that your patients’ health and medical billing information is consistent when being archived or restored.

If you are currently using an in-office computer server, you know what a hassle it is to make backups. Your employees are trained in patient care and medical insurance billing, not computer technology, and that means you will have to hire an IT professional to show them how to perform computer server backups.

Know the cost of an in-office computer server crash.

Don’t underestimate the financial implications of an in-office computer crash. Whether it’s a simple fix or a labor-intensive job that requires extensive data recovery, you will have to hire an IT specialist, and they don’t come cheap. Today, IT support costs approximately $200 per hour and server data recovery can cost thousands of dollars and take weeks to complete. Plus, there is no guarantee that all — or any — of your data will be recovered. Losing patient information, billing information and other related data due to a server crash would take countless hours to re-enter, and result in even more work for your already busy employees. And don’t forget the thousands of dollars you would need to spend on a new computer server, equipment and IT support.

Reduce your business expenses.

A virtual server provided by web-based practice management and medical billing software systems can save you money in a number of ways. Gone are the days of paying for IT service calls, hardware upgrades, software upgrades and employee training. Your staff won’t have to do server backups, and you’ll never again worry about computer server crashes or losing your important patient data. The virtual servers are managed by IT professionals who actively monitor them to make sure they are always working properly and without any interruption. Plus, these systems provide the type of security used by Fortune 500 firms—at a fraction of the cost, because it’s shared by a large subscriber base. Going virtual doesn’t require a big investment, and the protection it offers can be priceless.

Access to the important information you need. Always.

Your medical practice carries the necessary insurance against the losses that can occur due to theft, fire or natural disaster. While your office can be rebuilt, and your computers and furniture replaced, your practice records will be lost forever. That’s why you should leave data storage and backups to the experts. Consider web-based practice management and medical billing software systems with virtual servers to protect your sensitive practice data and give you peace of mind.

Nancy Maguire, ACS, PCS, FCS, HCS-D, CRT March 25th, 2011

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Diagnosis coding can be traced back to England in the seventeenth century. The London Bills of Mortality were the main source of mortality statistics, designed to monitor deaths from the plague from the 17th century-1830s. They were used mainly as a way of warning about plague epidemics. Plague had been around in England for centuries but in 1665 the so-called Great Plague hit the country. The bubonic plague spread like wildfire and hit the poor very badly.

Mortality and other health statistics are essential to inform political and programmatic decisions for emergencies and to gather information on the occurrence of diseases and injuries around the globe. Diagnostic data allows us to view an individual patient and his particular problem(s). The standard system of coding diagnoses is called the International Classification of Diseases, Clinical Modification (ICD-CM, 9^th revision). The 10th revision (ICD-10-CM) will be implemented in the United States on October 1, 2013. This means for date of service 10/01/2013, HIPAA code set ICD-9-CM will be invalid and replaced with a new generation of diagnosis codes, ICD-10-CM.

ICD-10 codes are much more specific than ICD-9 codes and this will impact payers who may modify terms of contracts, payment schedules, or reimbursement. ICD-10 contains many “combination codes” that include two or more conditions/symptoms in one code descriptor. Example, code E11.618 describes Type 2 diabetes mellitus with diabetic neuropathic arthropathy (Charcot’s joint).

Identify potential changes to work flow and business processes

The business office of a practice or facility must identify potential changes to work flow and business processes. Consider changes to existing processes including clinical documentation, encounter forms, and quality and public health reporting. Training will be critical because ICD-10 is like learning a new language from the official guidelines to the specificity of detail and code characters required. The Official Guidelines are found in the beginning of the draft manual and should be read and understood before attempting to assign codes from the Tabular list. Transitioning to ICD-10 codes will be a bumpy road but a well thought out strategic plan and dedicated team members will smooth the bumps along the way to compliance.

ICD-10 CM/PCS (International Classification of Diseases, 10th Edition, Clinical Modification/ Procedure Coding System) consists of two parts:

1. ICD-10-CM for diagnosis coding
2. ICD-10-PCS for inpatient procedure coding

ICD-10-CM was developed by the Centers for Disease Control and Prevention for use in all U.S. health care settings. Diagnosis coding under ICD-10-CM uses 3 to 7 digits instead of the 3 to 5 digits used with ICD-9-CM, but the format of the code sets is similar. There are noted differences between ICD-9-CM and ICD-10-CM. ICD-10 captures greater detail in the code descriptors and adds four (4) additional chapters (21) to ICD-9’s seventeen chapters. ICD-10 diagnosis code set contains two “Excludes” notes and this is different from ICD-9 diagnosis coding. Excludes 1 note means the condition(s) listed under that note are not coded to the referenced condition category or subcategory. An Excludes 2 note lists conditions that, if documented, could be an additional code to the main code referenced.

Many codes in ICD-10 tabular list have laterality in the code description, for example code N60.01 describes a solitary cyst of right breast. For bilateral sites the final code in a code set indicates which side (left/right) is being coded. Example: I75.021 Atheroembolism of right lower extremity; I75.022 Atheroembolism of left lower extremity; I75.023 Atheroembolism of bilateral lower extremities and code I75.029 Atheroembolism of unspecified lower extremity. If the code set does not give a bilateral option two codes must be used, one for each side.

Chapters, categories, subcategories, titles, and conditions re-grouped

Chapters, categories, subcategories, titles, and conditions have all been re-grouped. Ex. ICD-9-CM codes beginning with a “V” are grouped under the classification “Factors Influencing Health Status and Contact With Health Services”. ICD-10-CM codes listed under this same classification now begin with Z00 through Z99, chapter 21. Structural changes within the ICD-10-CM book include the deletion of hypertension table, as well as the terms “benign”, “malignant” or “unspecified hypertension (ICD-9 codes 401.0, 401.1, 401.9). The ICD-10 code for essential hypertension is I10. The ICD-10 manual is still divided into an alphabetic index and a tabular index and still requires proper look up in the index and cross-referencing to the tabular list.

It is essential to use both the Index and Tabular List when locating and assigning a code. The Index does not always provide the full code. Selection of the full code, including laterality and any applicable 7th character can only be done in the Tabular list. A dash (-) at the end of an Index entry indicates that additional characters are required. Even if a dash is not included at the Index entry, it is necessary to refer to the Tabular list to verify that no 7th character is required (Official Guideline).

Traditional conventions are still applicable. Brackets still enclose synonyms words, parentheses still depict nonessential modifiers, and NEC and NOS notations still exist. There are still “inclusion” notes, sequencing notations (code first / use additional), and “see” or “see also” notes still exist. Acute conditions are still coded before chronic conditions and general coding rules still apply.

Etiology/manifestation sequencing rules apply in many cases especially if you see “in diseases classified elsewhere” in a code descriptor. Wherever such a combination exists, there is a “use additional code” note at the etiology code, and a “code first” note at the manifestation code. These instructional notes indicate the proper sequencing order of the codes, etiology followed by manifestation. In most cases the manifestation codes will have in the code title, “in diseases classified elsewhere.” Codes with this title are a component of the etiology/ manifestation convention. The code title indicates that it is a manifestation code.

Use of “placeholder” is a new concept

The use of a “placeholder” is a new concept not seen in ICD-9-CM diagnosis coding. The ICD-10-CM utilizes a placeholder character “X”. The “X” is used as a 5th character placeholder at certain 6 character codes to allow for future expansion. Where a placeholder exists, the X must be used in order for the code to be considered a valid code. Example, code O33.5 describes “Maternal care for disproportion due to unusually large fetus”, this subcategory requires a 7^th digit to specify single gestation or specific fetus, if multiple gestation. If documentation confirms a single gestation, the 7^th character is “0”. This code is invalid unless it contains 7 characters. In this case placeholder “x” is placed in the 5^th and 6^th digit place followed by the 7^th character “0”. The full code assignment would be O33.5xx0.

ICD-10-CM diagnosis coding will shake up the coding profession because it is a major change in the way business is done, and has been done for many years. Take heart though, it is a learning process and given adequate time to train (start in January 2013) and absorb the changes, we will become as familiar with the alphanumeric ICD-10 codes as we are with ICD-9 diagnosis codes. Education should focus on the codes most frequently used in the practice but it is never too early to peruse the Draft manual and crosswalk your current codes to ICD-10 codes.

And by the way, the diagnosis codes for bubonic plague?

ICD-9-CM = 020.0
ICD-10 = A20.0

Learn more about ICD-10-CM and how to make a smooth transition in your office – register now for our complimentary webinar, How to Prepare for ICD-10/5010 to Reduce F41.1 (Anxiety Reaction) featuring Nancy Maguire, ACS, PCS, FCS, HCS-D, CRT

Nancy Maguire, ACS, PCS, FCS, HCS-D, CRT, author of The Nancy Maguire GPS to ICD-10-CM Planning and Implementation Guide, is a nationally-renowned procedural and diagnostic coding instructor, bootcamp trainer, and workshop leader. She has spent more than 30 years as a hands-on coder and has authored countless coding articles and presentations. In her expansive career, she has transitioned from nursing, to coding, to practice management, auditing and consulting. Nancy served as Director of Coding and Reimbursement at UTMB in Galveston Texas for four years. She served the first two terms as president of AAPC in the early 1990s.

Kathy McCoy, MBA March 22nd, 2011

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Hear how Tracy Bowers' office went paperless with web-based medical billing software

The statistics are incredible: U.S. businesses print, copy and fax more than one trillion pages of office paper annually, according to InfoTrends, a leading market research company. In addition, over $35 billion is spent each year on paper, postage and related supplies that are necessary to send out billing statements. Paper documents also require a whole host of other things that can put a dent in the bottom line of any business. These include filing cabinets, additional office space and paper shredding costs.

The good news?

Computers, websites, information technology (IT), and web-based applications such as electronic medical records (EMR) and medical billing software have advanced to the point where the dream of a virtually paperless office can finally become a reality. Today, medical practices in every specialty are using these technologies and going paperless. While your office can’t be 100% paperless, there are things you can do to increase your efficiency, reduce your office expenses and eliminate a significant amount of office clutter.

Helping you and your staff be more productive

Patient files and related paperwork can become difficult to manage as your medical practice grows. Patient records can get lost or become impossible to find if your office isn’t using an organized filing system. This directly affects your office staff’s productivity and takes much-needed time away from their daily responsibilities. It can also result in a disorganized and poorly-run front office if your staff also works directly with patients. And when this “bottleneck” occurs, you are less productive, too.

Switching to a paperless office increases your and your staff’s productivity, gives you greater control of patient data and allows for better record-keeping with minimal errors. Imagine how productive your staff will be when they no longer have to spend time searching for paperwork and patient forms that are buried among thousands of files. Did you know that pulling and filing patient charts accounts for more than 20% of administrative time at medical practices in the U.S.?

Providing more value to your patients and referral sources

When you make the switch to a paperless office, you are sending a positive message to your patients, prospects and professional referral sources. You are letting them know that your medical practice is forward-thinking and embraces innovation and technology. Online patient scheduling, electronic medical records (EMR), automated text and e-mail appointment reminders, and web-based medical billing software such as Kareo all take your practice to the next level. All of your patient records are entered via computer, which means they will be accurate and legible. When a patient or referring physician has a question, it can be answered quickly because there is no need to pull a medical chart.

How to become a paperless medical office

Making the switch to a paperless medical office is relatively easy and affordable and can be completed in less time that you might imagine. You should start by determining which areas of your practice will benefit most by going paperless. For example, you might have a disorganized filing system that takes too much time to manage, or an outdated internal medical billing system that is resulting in lost revenue. Ask your office staff where improvement is needed. Their input is invaluable because they are the ones managing the day-to-day business of your medical practice. Following are the main steps to take in order to become a paperless medical office:

Get a broadband Internet connection.
Broadband Internet service will enable your office staff quickly send and receive important information through web-based software applications and e-mail. A slow Internet connection will cause your staff frustration and decrease their productivity.
Purchase a good desktop scanner.
A good scanner is needed to scan, save and electronically fax medical forms and documents, thereby eliminating the need for printing and traditional faxing. This is the easy and waste-free method of sharing files.
Find the right practice-management software and EMR system.
Research the various practice-management software and EMR systems to find the ones that best address your individual needs. Practice management software and EMR are integral parts of your practice; they put all the office information your staff needs at their fingertips, everything from patient information and scheduling to medical insurance billing and more. Some practice-management software systems also feature online appointment scheduling and appointment reminders via e-mail and text messaging.
Switch to web-based medical billing software.
It’s the 21^st century, and web-based medical billing software has revolutionized every aspect of medical insurance billing. It’s affordable and easy to use and doesn’t require an expensive computer server. Kareo web-based medical billing software has plans starting at just $69 a month, and includes free setup and staff training.
Protect your patient data.
As you know, HIPAA requires that patient records, medical images and reports must be protected from theft, accidental disclosure and data loss. Make sure that your computer server is locked in a secure area of your office and make the necessary data backups. To eliminate the hassle of ongoing server backups and maintenance, consider a virtual server. Virtual servers are affordable and secure and your storage requirements can be expanded as needed. Of course, most practice-management software systems and all web-based medical billing software systems have virtual servers for customer convenience.
Retain all of your paper files during the transition.
Keep all paper files and patient charts prior to your switch to a paperless office. Although these will be replaced over time with electronic records, it is very important that you store the original documents in a safe and easily accessible area of your office. Without them, you have no way of knowing important information about your patients such as allergies, medications, and other health-related issues.

Once these steps are complete, get your staff on board to make the transition to a paperless office as easy and seamless as possible. And remember, you aren’t just doing something good for your practice, you’re doing something good for the environment.

Has your office gone paperless? Tell us your story and tips in the Comments box, and we’ll share it with your colleagues.

Kathy McCoy, MBA March 17th, 2011

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Any medical billing specialist can tell you that information is power. It’s what powers your medical billing software, and it is the power behind successful collections…when it’s good. Conversely, when it’s bad, information is the power behind delinquencies, frustration and wasted resources.

This is why effective use of medical billing software — and thus medical billing, and management of the practice’s profitability — really begins with the pen and clipboard when the patient first walks through your door. And it’s why your staff needs to collect as much information as possible and verify it at each point of contact.

Information is the power behind your medical-billing success.

When it comes to medical billing, everything goes smoother when you have ample, quality information. If the patient’s info is correct, your bills arrive in the right inbox and your calls go to the appropriate phone number. If you have the patient’s home and work address and home, work and cell numbers, third-party collectors have an easier time collecting delinquencies. Similarly, providing patients with complete information about your practice’s financial policies and procedures empowers them to better comply with their responsibility to pay. For these reasons, information really is the power behind a successful billing department and optimal collections. So collect as much information as you can, and do it at the first visit.

Patient information must be current and correct, not just present.

But information is also the power behind your practice’s medical billing woes, if you’re not careful. So it’s not just about having information but about having GOOD information. This means not just obtaining the information but verifying it regularly. Annually is a good start, and many practices ask patients if their information is correct each time they’re in the office. It’s also a good idea to have a quality-assurance process to spot obvious mistakes while the patient is still in the office for his or her first visit. Out-of-date or just plain incorrect patient information can result in wasted time, supplies, postage costs, etc. (not to mention decreased staff morale) just trying to collect money you are owed.

Getting paid is a central issue… and should be a foremost commitment.

For this discussion, and many others, it’s essential to remember that patients are customers. While medical practices are dedicated to improving health and quality of life, the fact remains that this is a business enterprise. The financial relationship with the customer is a central issue, and it begins at the beginning. So be sure to give and collect all pertinent information right there at the beginning of the relationship. In addition, your practice and all staffers should aligned around a strong commitment to maximizing the ease and completeness of billing and collections. Getting paid is the lifeblood of the practice, and it starts with the questionnaires you hand to new patients and policies/procedures of which you notify them.

The info you give and collect can improve the bottom line.

The object of medical billing is to maximize the practice’s collections. Basically, the task is to optimize the money coming in. This obviously affects income over operations, or profitability. And it surely is no secret that profitability is the ultimate goal of not just billing and collections but of the enterprise at large.

By consistently collecting ample and reliable patient data, maintaining quality and updates and properly informing patients of policies and responsibilities, the practice can avoid expending much more — and much more costly — labor in collections. You likely don’t need to be told that billing and collections labor adds up quickly. This is particularly true when bad information requires doing things twice (or three times). Good, accurate information not only can leave you doing something just once, but doing a simpler, less time-consuming and less costly task. You can also spare certain staffers a fair amount of misery and frustration, which is no small gain. Also, you can cut your practice’s dependence on third-party collections professionals.

So, what steps should you be taking?

It’s easy. Keep billing, collections and profitability at top of mind for everyone in the practice. Then keep it mind as you review and improve your new-patient questionnaires and information packets. For many practices, making sure the business is legally covered is generally foremost in mind. So notifications of responsibility to pay and financial policies and signed acknowledgments tend to be at top of mind. But don’t stop there.

Are you asking the right questions? All of them? Remember to get as much information as you can, because it is useful for all steps of the collections process, including and especially if you have to send a delinquency to third-party collectors. Also be sure to get signed permission to leave detailed messages, which is a form many practices forget to include with their new-patient paperwork.

Kathy McCoy, MBA March 15th, 2011

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We write a great deal about how to use your medical billing software to maximize revenue, and maybe it’s because April Fool’s Day is right around the corner, but today we’d like to look at the flip side. So just in case you were wondering (and I’m sure you were), here’s how NOT to maximize the value of your medical billing software:

Never check insurance eligibility with real-time verification. This would lead to reduced denials, faster payment, and might even free up some of your office staff to handle other tasks. Who needs that? Never mind that the AMA says you can save $2.95 per claim – you don’t want to fiddle with this. Besides, your patients always tell you when they change jobs, change insurance, etc. – right?
Don’t bother checking claim payments against your fee schedule. Insurance companies pay anywhere from 77% to 94% of the contracted amount, depending on the payer—isn’t that enough? Don’t be greedy and expect your practice to get paid all the amount it is contractually owed. Besides, it takes too long, doesn’t it? Even with medical billing software that provides the info in a few seconds and even fewer clicks?
Never check your practice’s performance on a regular basis. Once a year when you go to the tax man is often enough, for Pete’s sake! Why should you bother checking how quickly you’re getting paid, which practitioners and procedures are most profitable, and other key performance indicators? Sure, you could make some adjustments that would allow you to afford additional staff or equipment, or even take a vacation, but who needs that? And just because you could set up reports once and then have them emailed automatically to you as often as you like - that’s no reason to get crazy, is it?
Don’t waste time checking your payers. As noted above, all insurance companies pay the full amount, on time, and are easy to work with, right? Don’t bother checking to see if there are payers you can’t afford to have—money is money, even if it’s only 77% of what you’ve earned. And a month late. You can still pay your staff, right? Right?
Don’t improve your show-up rate and patient collection rate with medical billing software that offers email appointment reminders and clear, easily understandable patient statements. Patients never forget appointments at your practice, so they don’t need to be bothered with reminders! And you never get calls from patients who don’t understand their statements, so why change?

What would you add to this list? We’d love to hear your suggestions, and on April Fool’s Day, we’ll provide the full list. Tell us your “how not to” ideas in the comment space below.

Sara M. Larch, MSHA, FACMPE March 9th, 2011

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Every medical practice experiences claim denials. Better performing practices have denial rates below 5%; other practices are seeing claims being denied 10%, 20% or in the extreme 30% of the time. In Kareo’s newsletters, you can read many excellent articles about ways to improve your billing performance. Each of us look continuously for an idea and an opportunity to improve our financial performance. One of the best ways to evaluate your performance is to know why claims are being denied. With that information you can determine what your practice needs to do differently to reduce the denials and increase the percentage of time that you get paid correctly the first time!

Why is this important? For those of us who have been involved with physician professional billing for over 20 years, we saw our medical claims go out the door to the payers…..and we received our payments. Over the years, payers created more barriers to getting paid and we agreed to those new payer contracts (referrals, claims data, etc.). Payers have increased the sophistication of their computer systems so they can define different payment algorithms which mimic the contract requirements. Years ago, claims were reviewed, processed and paid by individual claim processors. Today, much of that work is being determined by the computer. For some payers, it seems that the algorithm is “when in doubt, deny it.” In addition, payers are expecting that only a small percentage of medical practices will follow up on claim denials and resubmit them corrected or as appeals. Thus, denying your claims saves the payer money.

So, let’s make sure that your medical practice has “the Basics” taken care of:

1. Measure the number of claims that are denied

2. Identify the major reasons for denial

3. Create a tracking/reporting process which will allow your practice to measure your performance over time

1. Measure the number of claims that are denied: Tracking and reporting your claim denials will require knowledge of your billing practice management system. It will also require entering your denials so that you can then report on them. If your medical practice posts payments electronically, then this data will already be available to you. If you are not taking advantage of electronic payments or not all of your payers offer this to you, then you’ll need to manually enter your denied claims (zero payment remittances) into your practice management system. With that data entered, you’ll want to measure the following:

A. Total claims filed to a payer (number and total charge amount)

B. Number and dollar value (charge) of denied line items

C. Calculate percentage denied (B divided by A)

D. And calculate these percentages for your entire medical practice and also by payer, reason, provider, specialty, and location (if you have more than one office)

As you can see right away, this is going to provide you with some great content on which to analyze your practice’s performance.

2. Identify the major reasons for denial: In order to count the number of denials by reason, you first need to determine the categories that you are going to utilize to track all of your claim denials. The list below identifies the most frequent denial reasons that medical practices experience:

- Registration (examples: Insurance Verification, Incorrect Payor, Cannot Identify Patient)

- Charge Entry (examples: Invalid procedure or diagnosis codes )

- Referrals & Pre-authorizations

- Info from Patient

- Duplicates (example: 2nd CPT on same date)

- Medical Necessity (example: ICD-9 and CPT mapping)

- Documentation

- Bundled/Non-covered (example: Modifiers)

- Credentialing

Don’t hesitate to customize this list. As you become more familiar with your denials, you may identify a new category. I remember first tracking denials in my medical practice. We had not included “info from patient” in our reason list. As we started tracking and reporting our denials, our billing team kept asking “what category are we using when the payer won’t pay us because the payer needs some information from the patient?”. We had not realized the frequency with which that was happening and subsequently added the category so we could know the number of claim denials and could understand how to approach this with our patients and our payers.

3. Develop a tracking/reporting system that will allow your medical practice to track your performance over time: Since it is 2011, I’m going to assume that most practices have some sort of denial reporting. If you do not, then I challenge you to make that a priority. If you do have denial reporting, ask yourself if you are getting the level of detail that you need to really make a difference going forward. Do you have actionable data that will ensure you can make the necessary changes and track the improvement over time? Let me give you an example:

A medical practice has a large percentage of claim denials due to registration related issues. This practice has three locations. Their claim denial data is:

Registration denials are 10% for the entire medical practice for all locations. With just this data, what would the next action plan be to reduce registration denials to below 2%?

Now, if you had the location specific information below….what would you do?

Location A Location B Location C

Registration denials 4% 22% 15%

Without the location specific data, you don’t know that you need to start your improvement and training projects in Location B, then Location C, with only a refresher at Location A. Without the location specific data, you might consume immense time and resources by focusing on Location A because it is your largest location when actually the previsit and visit processes at that location are going really well and your efforts are required at the other two locations.

Having comprehensive details about your claim denials will allow you to focus on the most frequent reason denials are occurring and in the most efficient way because you’ll know if it is payer, location, specialty or provider specific and you can use only the resources necessary to reduce your claim denials and increase your collection performance!

Ask yourself if you are following the basics of denial management. I consider denial data a “roadmap for change” in my medical practice. Every time you reduce your denial rate you bring more money to the bottom line of your medical practice – not only do you get paid correctly but you have eliminated all the rework required when a claim is denied.

Sara Larch, MSHA, FACMPE, is a speaker and consultant in practice operations and revenue cycle management and co-author of “The Physician Billing Process: 12 Potholes to Avoid in the Road to Getting Paid”.

Judy Capko March 9th, 2011

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Regulatory requirements that affect the medical practice are changing rapidly. The primary focus may seem to be on EHR systems and meaningful use to obtain those stimulus funds, but there are other mandatory system changes that need to be addressed now, starting with the conversion to both the 5010 HIPAA and the ICD -10 code set.

Current regulation requires the use of version 5010 HIPAA electronic standard transactions beginning January 1, 2012. Ideally, system changes and upgrades should be occurring now or in the near future to allow adequate internal testing and testing with external partners such as clearinghouses and payers. The regulations allow the use of the 5010 transactions prior to the compliance date if your external partners can accept them, so why wait? The sooner you make these adjustments the better off you will be. It is strongly recommended that medical practices complete their system upgrades far in advance to allow for internal and external testing and to properly prepare the practice for the change.

Another looming change is the required conversion to the ICD-10 coding system – an important advancement in diagnostic coding. It removes the limitations of the ICD-9, which is limited in its reporting descriptive and does not address medical advances and adaption of technology. The new system is more flexible and descriptive, and is expected to result in more accurate health care data reporting.

There are significant structural differences between the existing ICD-9 diagnostic coding system and the adaption of the new ICD-10 coding system. The transition to ICD-10 code set is expected to be one of the most substantial changes for physicians will deal with in the near future. Medical practices will be required to adopt the use of the ICD-10-CM code set by October 2013. Physicians, mid-level providers and staff will need to be trained in the application of this complex coding system. The transition to the new code set will allow for precise diagnosis and procedure codes resulting in improved capture of health care information to enable more accurate reimbursement. Benefits include an improved ability to measure health care services, reduce coding errors, a decreased need to include supporting documentation with claims, and the ability to use of administrative date to evaluate medical processes and outcomes. There are a number of other equally important gains that will be achieved.

October 2013 may seem a long way off, but given the magnitude of this major conversion it is important to address this change now in order to avoid the possibility of severe work disruption and delayed or lost payments.

The first step in planning for the conversion to ICD-10 is to complete an assessment of the organization’s readiness for adapting the new codes and understanding the impact of the change on your practice. Practice leaders must meet with billing system IT representatives to develop an implementation strategy, timeline and budget to accomplish the conversion. The timeline should include testing the system and a plan for providing essential education and training for the team members. This requires aligning stakeholders and obtaining a commitment for the time and resources required to understand the system needs essential to accomplish a successful transition.

Resources are available

Resources to help you through the process of making these mandatory changes and understanding the impact are available through the Centers for Medicare and Medicaid Services. Education and training courses are also available through the American Academy of Professional Coders (AAPC), an organization that is dedicated to providing training programs to become a certified coder and maintain certification through continued education. Codapedia has come to the forefront by sponsoring some free tutorials on ICD-10 to help medical practices prepare for the transition. A number of specialty societies have also written about this subject and have developed tools to guide their members through the transition.

In light of the major changes required to adapt to the new coding system, practices are taking a more microscopic look at their existing systems. This is leading some practices to scrap their entire system in order to become the high tech practice of the future. Regardless of what path you take, it’s important to get started as soon as possible. Begin by having frank decisions with appropriate management personnel and with your existing system provider to discuss how to plan and accomplish everything that is required for this major shift in reporting and managing data.

Judy Capko, who contributes this monthly column to “Getting Paid,” is the founder of Capko & Company and author of the popular book “Secrets of the Best-Run Practices,” Greenbranch Publishing, September 2005. Judy has specialized in medical practice operations and marketing for more than 20 years, and is a certified risk management specialist. www.Capko.com

admin March 9th, 2011

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Use the Alert Screen to Notify Staff of Global Periods

Kareo has a lot of great features to help with billing insurance companies very efficiently. When a patient is within a post op period, you can put the global days (10 or 90 global days) in the alert screen. I put Global period the day we billed out the procedure and for any future claim we know to put a 58 modifier so all claims get paid efficiently without getting a denial from the insurance in regards to being within global periods. This tip can be used for all doctors’ specialties and all procedures that have a global period.

Samar Khoury
AllDocuments Inc.

Nancy Maguire, ACS, PCS, FCS, HCS-D, CRT March 9th, 2011

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Physician practices and hospitals know a change is coming on October 1, 2013, that will dramatically impact current business processes. The mere mention of ICD-10-CM diagnosis codes cause anxiety in the minds of coding professionals as well as practice administrators. Implementation of the Procedural Coding System (PCS) will be a double whammy for inpatient facilities.

Life is full of changes, some daunting and others not as life-changing. Transitioning to ICD-10 diagnosis codes will be life-changing for the medical practice and facility. ICD-10-CM is the new generation of diagnosis and facility procedure coding (PCS). The best approach is acceptance and a positive attitude, which should motivate each player in this process to do what is required to ensure compliance.

It’s very important to focus on your goal and the timelines for completion and implementation. Your tasks should be undertaken one at a time in order of priority. Focusing on one goal at a time will lead to a seamless transition. You need focus and energy because years 2011-2013 will require time, patience and persistence — powerful tools for achieving your goals and compliance timeframes.

5010 is a major upgrade from 4010

Transaction set 5010 is a major upgrade from transaction set 4010. Transaction sets are specially formatted text files designed to convey claim information in a manner sufficient to allow claim adjudication. This is a computer data upgrade and will allow the transmission of electronic data to various business partners or individual payers of health claims. HIPAA Transaction set 4010 cannot transmit codes required for ICD-10-CM alphanumeric code structure. The technical changes in 5010 will streamline information exchange. Version 5010 accommodates the ICD-10 code sets, and has an earlier compliance date than ICD-10 in order to ensure adequate testing time for the industry.

The Department of Health and Human Services (HHS) issued mandatory upgrade requirements from transaction set 4010 to 5010 on January 16, 2009. The mandatory compliance date for ANSI version 5010 and NCPDP version D.0 (pharmacy) for all covered entities is January 1, 2012. The final rule allows use of the 5010 transactions prior to the final compliance date on January 1, 2012. This is the first step in preparing for the ICD-10 coding system. The focus in 2011 should be transaction set 5010, both upgrading and testing transaction submission with vendors, clearinghouses, payers, etc. The goal in 2011 should be to create and receive compliant transactions, and to accomplish this 5010 must be in place and internal/external testing must be completed. For small health plans using Version 3.0, the compliance date is January 1, 2013 (Medicaid subrogation for pharmacy claims, known as NCPDP Version 3.0.). Find more information at http://aspe.hhs.gov/admnsimp/index.htm.

It will be essential to assess current computer systems. Transaction set 5010 is a programming upgrade. The method of communicating with CMS and other carriers must migrate from the current HIPAA 4010 file format standard to the HIPAA 5010 file format standard. This migration is a necessary prerequisite to ICD-10 implementation. The transactions include: health care claims or equivalent encounter information for professional, institutional and dental services; eligibility for a health plan (inquiry and response); referral certification and authorization; health care claim status (inquiry and response); enrollment and disenrollment in a health plan; health care payment and remittance advice; health care premium payments; coordination of benefits. The standard for pharmacy transactions includes: claims, eligibility requests and responses, referral certification and authorization, and coordination of benefits.

Health care providers, health plans and health care clearinghouses must comply with the changes to the transaction set standards. The Centers for Medicare and Medicaid Services (CMS) has a number of educational resources on its website to assist you with a smooth conversion. For more information, visit www.CMS.gov. From CMS home page, click “Regulations and Guidance,” and under “HIPAA Administrative Simplification,” click “Versions 5010 & D.0 & 3.0.”

A significant difference between 4010 and 5010 data requirement changes the billing provider address, because a P.O. Box or lockbox address will not be allowed with this 5010 upgrade.

Identify staff training needs

In the context of the 5010 system upgrade, the team leader should identify staff training needs. Training your staff ensures that transactions continue to be submitted, received, interpreted and responded to correctly. Develop a transition and conversion plan that includes establishing a training plan. There will be glitches, and while this can be a frustrating and overwhelming situation, there are several things that you can do to address this situation and get to the root cause of the upgrade problem. Initially a review of the entire system should be done prior to system upgrade implementation. In other words, prevention is better than damage control. When errors are identified, address them immediately and communicate with all members of the team to aid in problem solving. A strategy plan and specific task assignment and accountability will minimize problems. With any major system implementation, there is a corresponding description of operations that details out processes that need to be followed in order to be successful.

Implementation guidelines are available for IT staff and include:

Data elements required or conditionally required
Definition of each data element
Technical transaction formats for the transmission of the data
Code sets or values that can appear in selected data elements

Define an organizational EDI strategy and determine which transactions you want to process electronically using the standard formats. Identify process changes necessary for 5010 upgrade. Reference the following website for additional information: http://www.wpc-edi.com.

Diagnosis Codes

ICD-10-CM diagnosis codes number 68,000 and increase with application of 7^th digit requirements where applicable. This is up from approximately 13,000 ICD-9-CM diagnosis codes.

ICD-10-CM has 21 chapters, while ICD-9-CM codes cover 17 chapters in the tabular list. The Index in ICD-10-CM is expanded but the formatting is similar to the ICD-9 index. The detail is greater in ICD-10 and many codes have laterality as part of the code description (example, code S61.142A, Puncture wound with foreign body of left thumb with damage to nail, initial encounter). The “A” describes an initial encounter (7^th digit).

Change is on the horizon and the time to prepare is now–or better yet, yesterday. We can weather this storm and this will be done with knowledge, training and education. Keep your focus on the goal and compliance guidelines and establish a plan for how you will get to your destination (October 1, 2013). We weathered the implementation of DRG (diagnosis related groups) in hospitals and we can and will sail through ICD-10 implementation.

Find additional information on ICD-10 and CMS educational resources in our recent blog post. You can also sign up for email updates from CMS.

Nancy Maguire, ACS, PCS, FCS, HCS-D, CRT, author of “The Nancy Maguire GPS to ICD-10-CM Planning and Implementation Guide”, is a nationally-renowned procedural and diagnostic coding instructor, boot camp trainer, and workshop leader. She has spent more than 30 years as a hands-on coder and has authored countless coding articles and presentations. In her expansive career, she has transitioned from nursing, to coding, to practice management, auditing and consulting. Nancy served as Director of Coding and Reimbursement at UTMB in Galveston Texas for four years. She served the first two terms as president of AAPC in the early 1990s.

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