How To Improve Billing And Collections

Findings • Biller had no ASC/surgical billing experience • No electronic filing – all paper claims • All business office uses same printer • Billing for non-ASC services in same module

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•Number of reasons for negative cash flow:

- Fee schedule far lower than normally

seen in an ASC

- Managed care contracts low with

unfavorable terms

- Improper billing/coding practices

- Managers with no ASC experience

- Inefficient use of staff

- Appropriate structure and policies and

procedures not in place

Findings

• Evaluation of the fee schedule revealed

that most fees were exceptionally low

low compared to Medicare/BCBS ASC

fees for this geographic locality

• Many fees were actually less than

Recommendations

• Develop fee schedule based on percentage of Medicare group rates

• Carve-outs for higher ticket procedures

• Decide on additional procedure discount

• Sample fee schedule given to Board recommended 500% of current Medicare rates

• Low rates for an area with little

managed care penetration

• Some reimbursement methodologies

varied from market standard

• Unfavorable terms in contracts

• Most carriers require accreditation

• Some contracts were invalid as not

voted on by Board

Recommendations

• Join local PHO and have them assist in

recontracting for ASC

• Cancel five major contracts whose

reimbursement is based on Medicare rate

• Great managed care market – suggest

renegotiate for reimbursement based on

percentage of billed charges

• Move toward becoming accredited – mark

applications as “Accreditation Pending”

• Coder with no ASC or surgical coding experience

• Coding errors included:

- not coding for bilateral procedures

- not coding for multiple procedures

- lack of sufficient modifiers

- improper or no billing of toe implants

- wrong anatomical part

- coding from title – not from body of op note

- no copy of coding history in patient chart

- no cross check to ensure coded all cases

Recommendations

• Hire or outsource to certified coder, or

• Immediate coding certification training for current coder

• Code from body of operative note – use

additional information when necessary

Recommendations (continued)

• Rebilling of all claims with coding errors that result in differences in reimbursement

• Utilize coding form

• Utilize schedule to make sure all patients have been coded

Findings

• Biller had no ASC/surgical billing

experience

• No electronic filing – all paper claims

• All business office uses same printer

• Billing for non-ASC services in same

module – cannot separate in reports

• No cross-check between coded cases and batch report

• Hire experienced biller, or

• Immediate training for current biller including the following:

• Electronic submission of all claims

CPT codes ICD-9 Dx Codes

Sx Procedures Modifiers

Medicare Guidelines

• Payment poster not knowledgeable

regarding managed care contract

allowances – no copy of contracts

• Accepts what payor allows – write-offs are adjusted to match what is paid and not pre-approved

• Not checking to determine if refund due

• Not balancing to deposit

Recommendations

• Hire experienced payment poster, or

• Provide payment poster with copy of

contracts and ASC fee schedule

• If payment correct, transfer amount to be

billed to secondary insurance or patient and send

• If not paid correctly or denied, start denial

process

• If overpaid, begin refund process

• Balance payment batch to deposit log

• Collections not being done regularly

due to lack of business office staff

• No system in place to determine oldest accounts and when to place with

collection agency

• High dollar amount over 150 days old - investigate to determine how much

collectible

Recommendations – Insurance Carriers

• Use Aging by Carrier report to develop collection schedule

• Check all outstanding balances with each carrier, oldest first

• Remind carrier of state prompt payment regulation

• Resubmit bill and/or additional documentation, if applicable

Recommendations – Insurance Carriers (cont)

• Develop tickler system to follow-up on

promised payments

• Future collections – follow-up in 15 days to

make sure carrier received claim

• Follow-up at 30 days to determine if carrier is following prompt payment rule

• Document in patient’s account

Recommendations – Patient Accounts

• Collect deductibles and copays up-front

• Perform patient financial counseling prior to DOS

• Bill patients monthly

• Add notes that increase in language as

account ages

• Contact patients by phone to determine

status and offer payment alternatives, i.e., credit card, payment schedule, etc.

Findings

• Unbilled revenue due to:

- bilateral procedures–second side not billed

- billing from operative note title only

• Sample coding review - 61 charts revealed

27 errors - estimated loss of allowable net

revenue – $33,396

• Review of accounts over 1 year old which

received no payment and were never

rebilled - $79,124 gross

Findings (continued)

• 12 patient accounts not paid or rebilled

($21,338) – few days short of 12 months –

rebilled immediately to avoid timely filing

• Balances never transferred nor billed to

secondary insurance and/or patient

Recommendations

• Check all accounts over one year old to

determine if can be rebilled

• Assess all accounts over 150 days to

determine need for collection, adjustments,

before exceed statute of limitations

• It may be more cost effective to outsource

coding/billing/collections than to retrain and

oversee current employees while trying

remain current and recoup old revenue

POSITIONS* DIRECTLY AFFECTING

REIMBURSEMENT (Not Including Mgmt)

• Scheduler

• Admitting clerk (receptionist)

• Insurance verification specialist

• Patient financial counselor

• Coder/biller

• Payment poster/collector

* Number of employees per position

dependent on caseload

Recommendations/Findings – Business Office

• Currently whoever answers main phone line

schedules patient

• Suggest dedicated phone line for scheduling

• Suggest one employee be assigned to schedule – others can be back-up

• Have Business Office Manager learn all business office positions and act as back-up

• Develop business office policies and procedures

Recommendations/Findings – Business Office

• If maintain billing in-house:

- Add one FTE to business office staff –

best choice – receptionist (lower salary

and less training required)

- Move current receptionist/biller to full

Recommendations - Business Office Manager

• Hire experienced ASC Business Office

• Utilize bank lock-box if available

• If doing deposit in-house:

- utilize and balance to deposit log

- separate payment posting and deposits

- BOM should check deposit for accuracy

- BOM or designee make daily deposit

• Weekly audits of coding and billing

• Move other business billing functions into

separate module

• Within 3 months surgery center in the black for first time

• Gross charges tripled

• Average gross charges per case doubled

• Collections increased more than 250%

• Profit increased more than 400%

• Net income/case increased more than 300%

34 34

• 10 month old ambulatory surgery

center evaluated to determine

compliance and efficiency and

evaluate billing process

- percentage of Medicare groups

- discount off billed charges

• Shared schedule with clinic

• Software does not have place for

Medicare groups nor APCs

• Clearinghouse (part of software) reports not accurate

Findings

• Evaluation of fee schedule revealed that many fees were less than some contracts would reimburse

• No minimum fee – some fees as low

as $200 - $300

• May want to review entire fee schedule based on evaluation and comparison to reimbursement, as well

as case cost

• Suggest minimum fee of $1200 to

$1500

Findings

• ASC does not have copy of most contracts

• Contracts not loaded in computer

• No insurance matrix available to determine accuracy of payments

Recommendations

• Request copies of all contracts

• If change software, load contracts and adjust contractual allowances at time of billing

• Develop insurance matrix and provide to appropriate billing personnel

Findings

• Physicians doing procedure coding -

diagnosis coding done by clinic coder

• Back-up coder has no formal coding or ASC

experience – also does billing, payment

posting, collections for both ASC and clinic

• No substantiation with operative note

• Not being done daily

• Most implant invoices and pathology

reports not provided to biller

Findings (continued)

• Current coding books present – no CCI

or other unbundling references

• No coding audits being performed

• 50 charts provided for coding review

- 24 charts had errors

- additional charts had insufficient back-up support for implants

- $4,328 unbilled revenue

Recommendations

• Utilize certified coder

• Code from operative note

• Track pathology reports and provide

to coder

• Code daily and balance to schedule

• Subscribe to CCI edits to prevent

unbundling

Recommendations (continued)

• Separate coding/billing from payment

posting/collections

• Audit to check for unbilled revenue or

over-billed amounts needing refund

• Continued monthly audits to remain

compliant

• Provide information to physicians

regarding detailed dictation

Findings

• Claims are not being sent until at

least 7-10 days post surgery

• Batches are not closed daily

therefore not able to balance to

schedule to prevent unbilled revenue

• Payments and charges are

combined in same batches

Findings (continued)

• Contract profiles added based

on what is being paid

• ASC staff members unaware of

upcoming 2008 Medicare changes

• No out-of-network policy in place and

no advance notification to payors

• Contractual adjustments not done

at time of billing

Recommendations

• Separate payment and charge batches

• Keep necessary back-up of all charges

• Bill electronically wherever possible

• Develop tracking system to ensure

billing for all implants

Recommendations (continued)

• Run clearinghouse reports – verify

claim on file with payor

• Process all claims within 48-72 hours

from DOS

• Notify all carriers of OON status on

claim

• Correct all errors/unsubmitted claims

found on coding review and rebill

Findings

• Payment poster wears all billing hats

for clinic and ASC – insufficient time

• A/R is increasing – one week ago hired

additional collector

• Payment poster does not have

knowledge of managed care contract

allowances – does not have copies

• Accepts what payor allows – write-offs

are adjusted to match what is paid

Findings (continued)

• Some secondaries have not been billed –

assigned to patient responsibility in error

• Undetermined whether OON payments

going to patient – no attempt to collect yet

• No way to balance to deposit as payments

and charges are in same batch

• Not starting proceedings with denials or

incorrect payments in timely manner

Recommendations

• Provide payment poster with copy of

all managed care contracts and/or

contract matrix

• Payments should be posted daily

• Bank deposits should be made daily

• Keep necessary back-up of all

payments received

Recommendations (continued)

• Review EOBs and promptly start denial

process for erroneous payment or no

payment

• When posting, compare payment to

original claim to determine accuracy

• Credit balances to be reviewed and

promptly refunded, where applicable

Findings

• Collections not being done regularly

due to lack of business office staff

• No accounts have been placed with

collection as no follow-ups done yet

Recommendations

• Review accounts that were denied or

paid in error and rebill where applicable–

timely filing may become an issue

• Follow up on OON claims – determine

which paid to patient and send

statements

• Need to audit Medicare and insurance

payments to detect overpayments –

correct and issue refunds where

necessary

Recommendations

• Use aging reports to aid in collections

• Use tickler files

• Evaluate/correct problem with Medicare

secondaries

• Enforce prompt payment rule

• Institute upfront collection of deductible

and copays

• Establish financial policies/procedures

Findings

• Administrator has no previous ASC

experience

• No business office manager

• Only two FT business office employees

• Billing staff leased part time from clinic

• Few business office policies/procedures

• Vague job descriptions – no real

accountability

• Separate clinic and ASC staff if possible

• If billing remains in-house, recommend

hiring full time experienced coder/biller

for ASC

• Suggested some changes in positions to

cover all tasks

• When caseload increases, recommend

hiring working business office

coordinator who can fill any position as

needed

Findings and Recommendations - STAFFING

• Information flow is fragmented

between clinic and ASC – recommend

evaluation and change

• Need specific business office policies

and procedures and job descriptions

Findings/Recommendations – COMPLIANCE

• Not enough separation between Clinic & ASC

• Billing and payment posting should be

separate and done by different employees

• Three members of business office staff

should review deposits

• No Business Associate or confidentiality

agreements

• No financial policy information available to

patients

Findings and Recommendations –

2008 MEDICARE CHANGES

• Administrator attended educational

seminar on 2008 Medicare changes

• Suggest share information with key

personnel and billing staff

• Evaluation team provided copy of

proposed reimbursement to ASC

• Governing body approved and adopted recommendations

• Outsourced coding and billing functions

• Made other clinical changes not discussed in this report

• Outsource date - January 1, 2008

• Average caseload 100/month

• Accounts receivable decreased 25%

• Over 120 decreased from 22% to 8%

• Average Collections increased from

• Inadequate fee schedule

• Poor managed care contracts

• No copies of managed care contracts

• Insufficient staff

• Wrong staff

• No good policies/procedures in place

• Compliance issues

• No consistency in billing practices

• Not billing for implants regularly

Caryl Serbin

239-482-1777

cas@surgecon.com