Rheumatology Practice Management February 2014 Vol 2 No 1 — February 28, 2014

San Diego, CA—Every area of a practice’s revenue cycle represents an opportunity to enhance revenue. Current processes will not succeed without an assessment of the current revenue cycle procedures from start to finish in all areas, said Maxine Inman Collins, MBA, CPA, CMC, CMOM, CMIS, a healthcare consultant from Wichita Falls, TX, at the 2013 American College of Rheumatology meeting. Ms Collins also said that education and training are imperative to master the revenue cycle, but unfortunately many practices fail to provide their employees with adequate resources to ensure compliance with coding and documentation, resulting in insurance denials and lost revenue.

Viewing the organization as a whole is essential to mastering the revenue cycle for the practice. The revenue cycle starts with accurate scheduling and patient registration and follows through to coding/documentation, claims processing, payment posting and adjustments, denial management, and accounts receivable management. Collections and billing are usually the focus of revenue management of medical practices, Ms Collins said, to the detriment of other pieces in the system.

“Most of the billing occurs at the front desk, as the receptionist or supervisor at the front desk is gathering that information,” she said. “As we are out doing practice reviews and audits, we are finding that they are not taking the overall view of the practice when thinking about the revenue cycle.”

In the coming months, it is going to be more important than ever to take this overall view because of the many challenges with the implementation of the Affordable Care Act (ACA) and as the state exchanges become operational, Ms Collins noted.

Unfortunately, the front desk staff has, historically, been the least trained and the lowest paid staff members despite having the great responsibility of gathering insurance and billing information from patients, verifying eligibility, and implementing the practice’s policies and procedures as they relate to the revenue cycle.

These policies and procedures will only get more complex with the various individual plans and the myriad copays and deductibles that can be purchased under the ACA. “That puts the burden on the rheumatology practice because it provides services that involve a lot of medications, infusions, and injections, and [requires keeping track of] the fluctuating average sales price of these drugs,” she said. “If we don’t get a handle on the revenue cycle and manage it effectively, we’re going to be behind, we won’t function efficiently, and it will cost us money.”

The value-based payment modifier under the ACA will represent a revenue challenge because uncertainty exists over the comparators that are used to evaluate a practice group’s performance. By 2015, the Centers for Medicare & Medicaid Services (CMS) will begin to apply a value modifier under the Medicare Physician Fee Schedule. Practice groups must have chosen a quality reporting system method by the end of 2013 to avoid a negative 1.5% value modifier adjustment to 2015 payments. Final rules may apply to practices with 10 or more eligible professionals as opposed to practices with 100 or more eligible professionals that are currently subject to the modifier for calculating payment, said Ms Collins.

Establish a Compliance Program
The goal in establishing a reimbursement compliance program is to create a more accurate accounts receivable process and to allow office staff to identify potential problems in billing and to identify systems problems that may be amended through physician and staff education.

Practices must adhere to the coding and billing guidelines defined by CMS for all government payers. As such, an effective compliance program that meets the regulatory re­quirements must be implemented. All coders, billers, and providers must receive training in coding, documentation, and billing compliance issues on at least an annual basis.

Internal or external coding quality audits also must be completed on a regular basis. Findings from the audits must be used to improve coding and health record documentation practices and for education purposes for coders, billers, physicians, and other providers.

Invest in Training
As a result of understaffing, investment in education for coding, documentation, and claims processing is often lacking. In training classes, “I can’t tell you how many students don’t even have current coding manuals,” Ms Collins said. “They say that their physicians won’t invest in those. When we do realize the importance of training and education in our practices, we could solve a lot of our problems.” The electronic health record (EHR) was envisioned as a method to promote easier and more efficient documentation. The reality has been something else, Ms Collins said, as errors in the EHR often lead to failing the medical necessity test for ordering tests and procedures. In doing practice audits, Ms Collins said, “I am amazed at the errors in the electronic medical record. The flow of information is incorrect. It may show in a review of the systems that there are no problems, or it may show that there are, but that particular area will not have been examined or it will be shown as normal. They think that they can then order the testing and it won’t tie back to the information in the medical record. I believe we’ll have a problem there if we don’t get a handle on our coding and documentation.”

Baseline audits are mandatory in the fraud and abuse compliance program for Medicare. “If you read commercial carrier contracts, you quickly realize that you have to do it for them too,” Ms Collins said. “We conduct the baseline audits and construct the compliance program based on the results of the audit.”

Incentive bonuses handed out to practices that have implemented EHRs in a meaningful way are subject to mandatory audits to ensure compliance with the Health Insurance Portability and Accountability Act (HIPAA). Practices must conduct or review a security risk analysis and implement security updates as necessary, and correct identified security deficiencies, as part of its risk management process. The purpose of the risk assessment is to identify conditions in which electronic protected health information could be disclosed without proper authorization, improperly modified, or made unavailable when needed.

“CMS has been coming to offices and asking for the incentive money back if the practice doesn’t have a written security plan in place,” Ms Collins warned.

HIPAA training is mandatory within a reasonable amount of time after hire, and then annually or when procedures have changed, but the timing can vary by state, she said.

Important Measures to Gauge Performance
Important measures in a practice assessment include revenue and cash flow, the number of days a claim is in accounts receivable, the number of rejected claims, the number of insurance denials, the amount of money assigned to collections, performance by payer and contract performance, and the number of compliance audits. Too often, practices don’t know how many days receivables are in accounts receivable, their percentage of write-offs, their cost per patient versus revenue per patient, and they don’t calculate denial rates, Ms Collins said.

Some performance goals resulting from the establishment of best practices to improve these measures are an insurance verification rate of 95%, collection of copays prior to service of 95%, a clean claims rate of 95%, an overall denial rate of <5%, and an overturned appeals rate of >80%. Employees who are responsible for final code assignments should review all claims denied based on codes assigned, and do so in a timely manner to correct errors and resubmit claims.

The most common reasons for insurance denials are listed in the Table. “For example, I’ll audit charts and see that the respiratory or cardiovascular system was shown as normal in the exam, but the chart says that a CT [computed tomography] scan of the chest was recommended,” Ms Collins said. “Medicare will want to know who ordered it and why—was it medically necessary?”


According to CMS, the chief complaint and the history of the present illness must guide the rest of the notes. “If you don’t establish in those 2 items the necessity of reviewing all of the systems, they won’t give you credit for reviewing that system, unless you find something in the exam,” Ms Collins advised.

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