John Guiliana, DPM, MS knows that understanding the "alphabet soup" of our health care financing system is crucial to a physician's success. In this first of a two-part lecture, Dr Guiliana discusses the billing and collection process. He also explores the various third-party payers that insure your patients, examines their similarities and differences, and helps you understand how they impact your practice.
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Understanding the Billing and Collection Process ��" Basics
Welcome to understanding the billing and collection process of a podiatric practice. On behalf of present course wear my name is Dr. John Guiliana. Today we’re going to be discussing some of the important definitions and policies associated with healthcare financing that you're likely going to encounter, while in private practice. I'm also going to be sharing with you some of the important billing and collection strategies that are going to be germane to your practice’s success.
Let's jump right in and talk about the three major types of insurance carriers that your patients are going to insured by aside from Medicare. They are: the HMO, or Health Maintenance Organization; the PPO, or Preferred Provider Organization; or the POS, the Point of Service plans. Let's talk about each one of these separately.
An HMO, or Health Maintenance Organization, is a very cost-effective healthcare plan. People who join an HMO pay a fixed annual fee for comprehensive health care, which does include preventative care. However, members who are part of an HMO are restricted to use only the plan's network of providers and hospitals. Many services must be preapproved by the HMO.
Like an HMO, a PPO or Preferred Provider Organization has a network of providers. Patients are allowed to utilize the services of non-network physicians, but when they elect to do so they must pay the difference between the network doctor’s fee and the cost of the doctors not covered by the plan. A PPO costs the patient and their employers a bit more than an HMO plan.
The final type of non-Medicare for non-Medicaid insurance carrier is a POS, or Point of Service plan. This is generally looked at as a hybrid of the HMO and PPO type of plan. Members of the Point of Service plan can use doctors that are not in the plans network, but if they do they have reduced levels of benefits. For example, utilizing a plans network doctor the patient may have 100% coverage; going out of network they may only have 70% coverage.
Before moving on it's important that we differentiate the HMO, PPO, POS plans from that of Medicare and Medicaid. Medicare and Medicaid are federal and state-funded programs. Medicare insures the elderly and those who are disabled, while Medicaid insures those whose income falls below a certain threshold. Unlike the HMO or POS plans, patients do not need primary care referrals to see Podiatrists. The Medicare fee schedule is published annually and Medicare pays 80% of the allowable fee. Either the patient or the patient’s secondary carrier is responsible for the remaining 20%. Medicaid also, has a set fee schedule but the fee paid is generally lower than Medicare and billing the patient any balances is prohibited.
Medicare is broken up into two fundamental parts, Part A and Part B. Part A. Medicare refers to that entity which provides payment to hospitals for in-patient care, hospice care, as well as some skilled nursing facilities. Part B Medicare is that entity which pays for doctor services, such as podiatry, as well as outpatient care and other medical services generally not paid for by Part A.
Since Medicare only pays 80% of outpatient and doctor fees many patients elect to have what’s known as a Medigap plan, which are private health insurance plans that supplement the Medicare benefits. These are often underwritten by private companies such as Blue Cross Blue Shields or Etna and they pay the 20% that Medicare does not cover.
To combat the declining fees offered by the various manage care plans discussed many doctors are forming and joining IPA’s or Individual Practice Associations. Through an IPA, physicians group together for the purpose of improved bargaining power with the insurance industry. Many hospitals offer an IPA to their staff of physicians.
So you should now be very familiar with the entities that make up managed care. Now, let’s take a look at the meaning behind some of the policies that these plans contain.
All healthcare plans have an established fee schedule that you should obtain at the beginning of each fiscal year. The reason for obtaining this fee schedule will be discussed in part two of this presentation. Simply put, the fee schedule is a listing of accepted fees and allowances for specific medical procedures. It usually represents the maximum amount that the program will pay for the specified procedure.
Members who are part of a managed care plan often have what's known as a copayment. This is a small fee the patient must pay at the time of service to a physician. Copayments are actually designed to discourage over utilization of healthcare services as those $10 or $20 per visit add up for patients. Recently, there is a noticeable trend of increases in copayments; thereby, lessening the amount owed by the insurance plan.
Many patients and providers alike often confuse the term coinsurance with co-pay. A coinsurance is the amount of the fee in percentages that a carrier pays leaving the patient or a patient's secondary insurance carrier with the balance. Many patients will subscribe to a secondary insurance plan to help pay this balance. If they don't have a secondary plan, the patient is liable for that balance. As discussed, in a point of service plan in the patient elects to go out of network they may be subject to an even higher coinsurance.
In managed care terms, the abbreviation PCP is used a lot. This is generally a physician who serves as the gatekeeper for all specialty services including podiatry. They are responsible for providing patients with either written or electronic referrals to specialists. Generally, it's the patient's responsibility to obtain and maintain those referrals; although, most practice consultants advise that the providers keep careful track of them as well.
Some managed care plans will provide a physician or practice with a one lump payment per month to provide services to all patients enrolled in the plan within the practice’s vicinity. This is known as capitation. Generally, the plan will provide a payment per member per month. This capitation often includes all services unless there is what's known as a carve out for particular services such as surgery or orthotics. Providers who elect to participate in capitated plans must pay careful attention to the utilization rate of the members; otherwise, unless the contract is renegotiated it can lead to an economic disaster.
Many plans including Medicare have an annual amount of money that a patient must pay out-of-pocket before their insurance benefits are initiated. This is known as a deductible. Particularly, at the beginning of each year it's important to educate your patients about their deductible and attempt to collect it in a timely manner to avoid a cash flow crunch.
Following the service, a patient receives a comprehensive document that discloses what fee was allowed, what the physician was paid for that service, and what the patient's financial obligation is. This is known as an Explanation of Benefits or EOB.
When submitting a claim, physicians must classify as patient's diagnosis utilizing the International Classification of Diseases. The ICD code is readily available for a variety of resources. As some codes have a number of different subsets to them, care must be taken at the most specific code for that particular patient is utilized in the billing process. The ICD code is reported on the claim form and must appropriately match the next item discussed, the CTP code.
Current Procedural Terminology or CPT codes are used to describe medical and surgical services on a claim form. Like the ICD code, they are readily available through many resources. The CPT code reported on a claim should accurately describe the service. For example, the CPT code for a first metatarsal head osteotomy is most often 28296. A more proximal osteotomy would be described by a different CPT code. It's crucial to properly match the CPT code to the corresponding ICD code, as carriers will often reject claims that don't. For example, billing a 28296 for an ingrown toenail will undoubtedly earn you a rejection. This appropriate matchup is mandated by what's known as the correct coding initiatives or CCI edits.
As physicians practice more and more comprehensively they are now not only providing necessary medical and surgical care, but also the durable medical equipment or DME’s required to optimize that care. Historically, the only DME's that most podiatrists dispensed was an orthotic. But nowadays, podiatrists are dispensing cam walkers, night splints, therapeutic diabetic shoes, and many more DME's. This change in clinical practice protocols has typically led to better outcomes for patients and greater revenue streams for providers.
During the reporting of a service, occasionally the CPT code must contain a modifier alerting the insurance company that an extenuating circumstance is present. Some modifiers are essential for payment of a service. Listed here are some of the most common modifiers used in the podiatry. They must be reported with the CPT code in certain instances. For example, if you provide an office visit reported with CPT code 99212 for a tenia infection, but the patient also requires a matrixectomy as the same visit for an ingrown toenail the office visit CPT code must have a 25 modifier on it in order to indicate that the office visit was for a separate service than the surgery since office visits and surgeries are generally not paid together. Billing an office visit with a matrixectomy would typically be denied unless this is a new patient or an established patient with a new problem; therefore, the 25 modifier is essential. Modifier 59 indicates that a particular CPT code is a separate surgery performed at the same time. For example, if you are performing an osteotomy at a matrixectomy together as always matching up the CPT code to the appropriate ICD code is essential. It's important for providers to understand these modifiers and how to use them. Just as important, it's essential not to abuse them as they can often lead to inappropriate payments. I highly recommend that you attend a coding seminar regularly in order to master and keep abrisk changes within the healthcare coding system. Outsourcing this process to a billing company is always an option.
In podiatry, many CPT codes come with a global reimbursement meaning that you can not be paid for related services following that particular procedure for a defined period of time. For example, most bone surgery performed in podiatric surgery has a global period of 90 days. Any related post operative care performed by the same physician within 90 days will not be reimbursed. However, when the patient presents with an unrelated procedure within the global period of the surgery a 79 modifier must be attached the procedure code in order to be reimbursed for that unrelated procedure.
If the patient presents during a postoperative global period for an unrelated evaluation and management service; for example, an office visit for a paranekia that CPT code of that office visit must be modified with a 24 modifier to indicate that this is an unrelated E & M service from the postoperative global period.
Modifier 50 indicates that the CTP code is a bilateral procedure. For example, in performing bilateral first metatarsal head osteotomies, one might bill 28296RT indicating right foot and 28296LT indicating left foot with an attached 50 modifier to indicate that this was a bilaterally performed surgery.
According to the policies of individual healthcare plans some will pay for an assistant surgeon during a surgery. The assistant surgeon should bill the CPT code appropriate for that procedure followed by an 80 modifier to indicate that he or she was the assistant surgeon.
Many healthcare plans including Medicare use T-modifiers to indicate the digit in which the procedure was performed on. For example, in performing a matrixectomy on the left hallux you would use CPT code 11750 and a T-modifier of TA in order to designate that it was performed on the left hallux.
A super bill is an office form that is used by physicians which is quickly completed and transferred to the front office for transcribing and data entry for billing purposes. The form contains information about the patient such as the treating doctor, the patient's diagnosis, and the CPT code for that particular visit. The front office then enters this information into the computer in order to prepare it for electronic billing. I prefer to use of the term charge slip in place of super bill, as super bill may invoke a negative connotation.
As a physician, it's important that you comply with all Medicare guidelines. One such guideline applies when we provide service to a patient that might not be covered by their Medicare benefits. In these circumstances, it's important that you have patients sign what is known as an Advanced Beneficiary Notice or an ABN. This document states that the patient is aware that the services you're going to provide may not be covered by their Medicare benefits.
HIPAA or the Health Insurance Portability and Accountability Act was signed into law by President Clinton in 1996. All healthcare providers are to adhere to the HIPAA regulation guidelines. The HIPAA law is actually a multistep approach that is geared to improve the health insurance system. One of the approaches of HIPAA regulations is to protect patient privacy. In fact, all healthcare providers, health organizations, and government health plans that use, store, maintain, or transmit patient healthcare information need to comply. Some health care providers have taken steps such as controlling access to medical files by electronic key card systems and only allowing employees limited access to the minimum amounts of information that they need. In addition, the use of special services to make electronic transactions secure. It's also being used by meaning medical facilities and insurance. This law is all about protecting what's known as PHI or Protected Health Information on patients.
Electronic claim submission streamlines the billing process. Claims are sent to a clearing house with the press of a button and the clearing house takes care of sorting and sending the claims to carriers. You know longer need to print, copy, sort, and mail paper claims. Electronic claim submissions minimize cash flow disruptions because claims are processed faster, which means quicker payment. Additionally, practices receive fewer claim rejections because the clearing house edits and scrubs the claim before sending them on to the carriers. They will identify any missing or invalid information and return the claim to you within a day or two instead of up to two weeks for paper claims.
EMR or Electronic Medical Records also known as Electronic Health Records or EHR is a patient's medical record in electronic format accessible by computers on a network for the primary purpose of providing healthcare and health-related services. Information in an EHR includes documents relating to the past, present, and future health of the patient. Medical test reports can be included and multimedia images and financial and demographic information as well. In addition, ordering of medical tests, treatment, medication, and clinical guidelines used for the patient's care are accessible within the EHR during the encounter. The EHR data can be captured or transmitted, received or updated, stored or retrieved securely in real time by users at the point of care or a distant location.
Higher collection rates and fewer staff headaches, these are the benefits of outsourcing billing operations that third-party billing companies like tell. Personally, I've seen outsourcing increase revenue tremendously simply because the person doing the billing within the practice really didn't know how to do it. For many doctors, the decision to outsource billing is not always so clear. Many practice consultants contend that it is often more efficient and less expensive to keep billing in-house as long as you're doing it correctly. Billing companies typically charge a percentage of the fees that they collect. That percentage varies by company, most of them around 7% of collections. While investigating and comparing billing companies, it's important to be sure that you compare apples to apples. For the fee what does it mean include in their contract? Though a few large national firms exist, most billing companies are local operations. Do your homework before you sign up. Get references not just from physicians but from those in podiatry and with your size and type of practice and your type of payers.
It's essential that healthcare providers remain compliant and protect themselves against inadvertent acts of fraud or abuse. One of the fundamentals of this compliance is medical record documentation. I encourage all physicians to perform a bi-annual internal audit to access their level of compliance. During this audit 25 randomly selected charts are examined of patients seen at least four months ago. The charge slips are cross-referenced to the chart notes of these patients to be sure that documentation was complete. The charge slips are then cross-referenced to the patient's lecture or account within the computer to be sure that all charges were accurately transcribed by the front office. Lastly, the explanation of benefits of each patient is examined to assess the accuracy of payment.
I wish to conclude part one of Understanding the Billing and Collection Process with some philosophical points. While billing and quality care are often never viewed as being related those physicians who practice comprehensively hence with better outcomes and patient satisfaction often enjoy larger revenue streams. While some doctors choose to see only the mycotic nail in front of them others will evaluate and treat the mycotic nail but will also approach the podiatric care of the patient from a more comprehensive perspective. Patients often have a multitude of pathologies. It's our responsibility to identify them and educate our patients. This type of approach often leads to better care, prevention of disease and disability, more satisfied patients, and indeed more revenue. In end, it actually saves healthcare dollars. Remember an ounce of prevention is worth a pound of cure. On behalf of present course wear I wish to thank you for joining me in this introduction to the billing and collection process. Next, we’ll explore the details of this process as well as your account receivable management.