Revenue typically is lost because providers do not have controls in place to ensure complete billing for every patient encounter. Charging fully for all services can significantly increase a practice's revenue.
This article appears in the February 2014 issue of Managed Care Contracting & Reimbursement Advisor.
Optimizing your revenue is an ongoing challenge for any physician practice, and the task only gets harder as the healthcare industry changes and reimbursement is restructured. But one way to improve your practice revenue can easily be overlooked in all the effort to accommodate the new factors: making sure you are charging fully for each service that you already provide and not missing out on payment for activities you think are not billable.
Paying close attention to billing for normal, everyday services can significantly increase revenue, says Brian White, founder of Competitive Solutions, a physician practice consulting company in Franklin, Tenn. He typically finds that physician practices fail to bill for 10% to 12% of reimbursement to which they are entitled.
"This results in a tremendous revenue loss. Practices must make sure they are capturing all that they do before they even think about improving revenue with new services or more profitable services," White says. "So many practices lose money by not charging properly for services like smoking cessation counseling or putting on an elbow brace or a knee brace. There are codes for these things that you may not think about, and you need to make sure you are billing for every single code that you can."
Revenue typically is lost because practices do not have controls behind the scenes to ensure complete billing for every patient encounter, White says. There should be processes that verify complete billing for each patient after the visit, he says.
"There has to be a backstop in which you obtain that list of every patient seen by the doctor the previous day and you go through the documentation to make sure that everything is properly billed," he says. "The hardest ones to pick up are the consults the doctor picks up while walking down the hall in the hospital. Another doctor asks him to give an opinion on Mrs. Jones while he's there, and a lot of times the doctor doesn't communicate that back to his office after the fact so they can bill that encounter."
Physicians should have a specific process to document and refer those consults for billing, White says. This can range from an automated system that the doctor can use to enter the encounter to simply texting the office manager or biller a quick note with the patient's name and the time of the consult. Others write the information on note cards carried in their pocket and then turn those over to the biller every day or two.
"Doctors come up with their own solutions. Whatever works for them personally, something they can commit to and stick by, is going to be effective," White says. "Even so, there should be a backstop in the office. It is a very good policy to have someone in the physician's practice responsible for asking the doctor every day, 'Who did you see in the hospital in the last 24 hours?' "
Another way to miss out on revenue is when a practice "self-bundles" codes that could be billed separately, White says. This happens when a practice does not bill for certain encounters or services because the biller expects those claims to be denied. But, White says, this almost always results in lost revenue because some of those claims most likely would be paid. If the insurer is denying routine claims that should be paid, that's a problem that should be addressed directly with the insurer.
"That self-bundling can really hurt you. Maybe not every claim is paid by every insurance plan, but it's those five or six times a year where you collect that are critical if you are going to maximize your revenue," White says. "If you do it, bill it. Make sure you bill for each individual line item, and let the insurer deny it if they're going to. Most of us have been told no before and we get over it, but if you don't ask you're not going to be paid."
Self-bundling can seem like an efficiency measure, he explains, because the biller avoids the time and effort of filing the claim and also any effort to appeal the denial.
"That's a trap, focusing on trying to minimize your adjustments from denied claims," he says. "Focus on maximizing the cash coming through the door, not trying to eliminate denials and adjustments."
Hudson Health Plan in Tarrytown, N.Y., has made an effort to educate providers about missed reimbursement opportunities, employing field staff to show how they can bill for services they might assume to be unreimbursed. Smoking cessation counseling is one focus because physicians often don't realize that the service can be billed, says Catherine Clancy, who heads provider relations at Hudson Health.
"We realized that sometimes our systems don't connect and cooperate. In managed care, how we measure quality and do things isn't always consistent with how providers operate," Clancy says. "So rather than taking on a punitive role, we took on a teaching role to help them maximize their income because when they maximize their income, we maximize our quality scores. It's a win-win situation."
Hudson Health staff analyze claims reports and denial problems, then go to the physician practices with high levels of denials or missed opportunities to do in-services on billing and revenue optimization. Hudson Health also analyzes the Healthcare Effectiveness Data Information Set (HEDIS) codes that play into the quality scores, which often dictate whether providers receive bonuses. If the HEDIS codes do not seem to be fully utilized or properly coded, Hudson Health works with the providers to help them set up effective chargemasters and improve coding.
"When we see a coder using a bad code, a code that doesn't get the maximum reimbursement for them, we go out and meet with them to help them improve that situation," Clancy says. "We want them to properly document and code for their services because that not only gets them paid what they are entitled to, but it also generates the proper quality data that we are looking for."
Clancy notes that the most common failing in physician coding is in the area of prevention and counseling. Most providers use the straightforward E&M codes and frequently forget to add diagnostic codes, she says. Physician practices "almost always" neglect to put counseling codes on their claims, she says.
Hudson pays for medical reconciliation after an ED visit and after hospitalization because it has been shown to significantly reduce readmissions, but the codes are underused, Clancy says. Another example is counseling for antibiotics related to bronchitis, which Hudson pays for.
"In our area, with the focus on quality, paying attention to this kind of thing could make a significant difference in the bonus you receive," Clancy says. "We pay very significant bonuses and we're just a Medicaid plan. If you're in any shared savings arrangement or pay-for-performance with your managed care company, you should explore some of these options and ask the managed care company to come in and discuss the code set. Those payments could be $100,000 or more, depending on volume and your negotiated rates."