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HOW TO IMPROVE BILLING AND COLLECTIONS. CASE STUDIES. PRESENTED BY. CARYL A. SERBIN, RN, BSN, LHRM PRESIDENT AND FOUNDER SERBIN SURGERY CENTER BILLING, LLC. 2. CASE STUDY #1 ABC SURGERY CENTER. 3. Case Study reflects financial findings/recommendations only –
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HOW TO IMPROVE BILLING AND COLLECTIONS CASE STUDIES
PRESENTED BY CARYL A. SERBIN, RN, BSN, LHRM PRESIDENT AND FOUNDER SERBIN SURGERY CENTER BILLING, LLC 2
CASE STUDY #1 ABC SURGERY CENTER 3 Case Study reflects financial findings/recommendations only – additional clinical findings/ recommendations are not presented
CASE STUDY - HISTORY • 14 month old ambulatory surgery • center evaluated because not • meeting projected revenue • Semi-rural area • Joint-venture – 7 physicians/ • local hospital • Average case volume - 350 month ABC Surgery Center
CASE STUDY - HISTORY • Specialties • - ENT • - GI • - Ophthalmology • - Orthopedics • - Podiatry • - Pain Management • Payor Mix • - Medicare • - Medicaid • - BCBS • - W/C • - PPOs • - HMOs • - Indemnity ABC Surgery Center
CASE STUDY - HISTORY • 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 ABC Surgery Center
FEE SCHEDULE • 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 Medicare allowable • Fee schedule had been based on • physician DRGs • No consistency in fees – similar • procedures had wide variances ABC Surgery Center
FEE SCHEDULE • 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 ABC Surgery Center
MANAGED CARE CONTRACTS • Findings • 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 ABC Surgery Center
MANAGED CARE CONTRACTS • 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” ABC Surgery Center
CODING • Findings • 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 ABC Surgery Center
CODING • 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 ABC Surgery Center
CODING • 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 ABC Surgery Center
BILLING • 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 ABC Surgery Center
BILLING • Recommendations • Hire experienced biller, or • Immediate training for current biller including the following: • Electronic submission of all claims where possible ABC Surgery Center
BILLING • Recommendations (continued) • Additional printer near biller to run claim forms • Purchase separate software module to bill for non-ASC services • Balance billing batch report to coding forms/schedule to ensure no unbilled revenue ABC Surgery Center
PAYMENT POSTING • Findings • 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 ABC Surgery Center
PAYMENT POSTING • 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 ABC Surgery Center
COLLECTIONS • Findings • 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 ABC Surgery Center
COLLECTIONS • 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 ABC Surgery Center
COLLECTIONS • 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 ABC Surgery Center
COLLECTIONS • 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. ABC Surgery Center
UNBILLED REVENUE 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 ABC Surgery Center
UNBILLED REVENUE 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 • responsibility • Coding and billing are non-compliant due to: • - inequity of charges • - inequity of balance billing • - errors ABC Surgery Center
UNBILLED REVENUE 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 ABC Surgery Center
THE BUSINESS OFFICE STAFFING 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 ABC Surgery Center
STAFFING • 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 ABC Surgery Center
STAFFING • 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 • time biller • - Change current coder/biller to coding • and collections • If outsource billing – no additional staff needed ABC Surgery Center
STAFFING • Recommendations - Business Office Manager • Hire experienced ASC Business Office • Manager, or • Educate current BOM in following areas: • - write-offs • - adjustments • - checking for errors • - collection agency • - refunds • - audits ABC Surgery Center
FINANCIAL PRACTICES Findings • No counter-check of deposits • No auditing of coding/billing • Reports invalid as reflect another • business as well as ASC ABC Surgery Center
FINANCIAL PRACTICES Recommendations • 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 ABC Surgery Center
RESULTS • Governing Body approved and adopted recommendations • Hired outside management to institute changes • Outsourced coding and billing functions • Discontinued secondary business in ASC • Made other clinical changes not discussed in this report ABC Surgery Center
RESULTS • 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% ABC Surgery Center
CASE STUDY #2 XYZ SURGERY CENTER 34 Case Study reflects financial findings/recommendations only – additional clinical findings/ recommendations are not presented
CASE STUDY - HISTORY • 10 month old ambulatory surgery • center evaluated to determine • compliance and efficiency and • evaluate billing process • Semi-rural area • Solely owned by physician and • non-physician partners • Average case volume – 80-100 month 35 XYZ Surgery Center
CASE STUDY - HISTORY • Specialties • - Orthopedics – 50% • - Ophthalmology – 25% • - Pain Management – 13% • - Urology – 6% • - Podiatry – 6% 36 XYZ Surgery Center
CASE STUDY - HISTORY • Payor Mix • - Medicare • - Medicaid • - BCBS • - W/C • - PPOs • - Indemnity • Contract reimbursement is based on a • mixture of: • - percentage of Medicare groups • - discount off billed charges 37 XYZ Surgery Center
SOFTWARE • Findings • Sharing practice management software with clinic • Software does not allow loading of contracts • Shared schedule with clinic • Software does not have place for Medicare groups nor APCs • Clearinghouse (part of software) reports not accurate 38 XYZ Surgery Center
SOFTWARE • Recommendations • Consider purchasing ASC-specific software – need to be able to schedule separately and load contracts • Suggest changing to independent clearinghouse 39 XYZ Surgery Center
FEE SCHEDULE • 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 40 XYZ Surgery Center
FEE SCHEDULE • Recommendations • 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 41 XYZ Surgery Center
MANAGED CARE CONTRACTS • Findings • ASC does not have copy of most • contracts • Contracts not loaded in computer • No insurance matrix available to • determine accuracy of payments 42 XYZ Surgery Center
MANAGED CARE CONTRACTS • 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 43 XYZ Surgery Center
CODING • 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 44 XYZ Surgery Center
CODING • 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 • - $5,558 over-billed revenue 45 XYZ Surgery Center
CODING • 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 46 XYZ Surgery Center
CODING • 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 47 XYZ Surgery Center
BILLING • 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 48 XYZ Surgery Center
BILLING • 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 49 XYZ Surgery Center
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 50 XYZ Surgery Center