HOW TO IMPROVE BILLING AND COLLECTIONS

1. HOW TO IMPROVE BILLING AND COLLECTIONS CASE STUDIES

2. PRESENTED BY CARYL A. SERBIN, RN, BSN, LHRM PRESIDENT AND FOUNDER SERBIN SURGERY CENTER BILLING, LLC 2

3. CASE STUDY #1 ABC SURGERY CENTER 3 Case Study reflects financial findings/recommendations only – additional clinical findings/ recommendations are not presented

4. 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

5. CASE STUDY - HISTORY • Specialties • - ENT • - GI • - Ophthalmology • - Orthopedics • - Podiatry • - Pain Management • Payor Mix • - Medicare • - Medicaid • - BCBS • - W/C • - PPOs • - HMOs • - Indemnity ABC Surgery Center

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. BILLING • Recommendations • Hire experienced biller, or • Immediate training for current biller including the following: • Electronic submission of all claims where possible ABC Surgery Center

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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

28. 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

29. 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

30. 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

31. 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

32. 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

33. 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

34. CASE STUDY #2 XYZ SURGERY CENTER 34 Case Study reflects financial findings/recommendations only – additional clinical findings/ recommendations are not presented

35. 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

36. CASE STUDY - HISTORY • Specialties • - Orthopedics – 50% • - Ophthalmology – 25% • - Pain Management – 13% • - Urology – 6% • - Podiatry – 6% 36 XYZ Surgery Center

37. 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

38. 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

39. 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

40. 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

41. 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

42. 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

43. 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

44. 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

45. 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

46. 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

47. 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

48. 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

49. 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

50. 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