Maximizing Commercial Payer Reimbursement: “Dealbreakers” When Negotiating Payer Contracts

Kathy McCoy, MBA January 31st, 2012

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Be sure to consider these "dealbreakers" when negotiating payer contracts.

When it comes to getting your practice paid, the payer-provider agreement is critical, and providers/practices are wise to protect their interests in contract negotiations. Penny Noyes, founder, president and CEO of Health Business Navigators, offered a number of key considerations when negotiating payer contracts, concentrating on the “dealbreakers,” in her presentation at the recent MGMA annual meeting

Dealbreakers: Know what they are, and be ready to stand firm

Dealbreakers — provisions that are a detriment to practices’ business interests — exist… and not just in first-draft agreements. They commonly end up in finalized agreements, which is why practices must be proactive:

  • Read the agreement.
  • Negotiate the needed changes.
  • Understand the commitments you’re making and identify the dealbreakers.

Also, be prepared to walk away from negotiations over dealbreakers. But be realistic and understand when laws apply and when they don’t. (Do the research as to state laws on timely filing, timely payment, offsets, correction of under- or overpayment.)

Be aware of how laws do and don’t apply

In most markets, 60 to 80 percent of group health plan members covered by provider-payer agreements are in self-funded plans. Self-funded plans are not subject to the same laws that apply to insured plans. So providers could end up with obligations and processes for self-funded plans that differ from how they work with insured plans.   

While state law may specify requirements about timely filing, timely payment, responsibility to pay, etc., these should not be assumed to apply to self-funded plans. These plans are governed generally by states’ labor departments, which have few rules to help providers. Therefore, practices are wise to protect themselves by negotiating specific contract language that will define terms and responsibilities in line with the rules that govern insured plans.

Some payer-contract provisions are just plain bad for your business

There are a lot of potential dealbreakers in payer-contract language these days. Some apply to some practices and not others. Hospital-based practices and clinical practices do things differently and should have different payer agreements. Sleep centers and ambulatory surgery centers have special considerations, as do solo and group practices. But there are dealbreakers that pertain to virtually any practice, including:

•     Reimbursement – For any reimbursement model, make sure to ask the questions about how the model is applied. Insist on clarity and don’t accept vague descriptions (e.g., “industry-accepted”). Beware the absence of language that could lead to payer discretion about reimbursement. Get clarity and concrete commitments. And push for a CF that’s 100% or more of Medicare, which is low enough already.

•     Amendment provisions – Don’t accept language that allows payers to amend your agreement without your written consent. Beware of “except as otherwise indicated herein,” which can mean there is an exception in some other provision that affects amendment of agreement. Your practice may agree to regulatory changes needing 60 to 120 days notice, but with the option to terminate the agreement should the regulatory change render the agreement no longer worthwhile. Also, be sure that notification for amendments is specified clearly and requires delivery receipt.

•     Products or plan types included – Payers should not be free to add any plan to their agreement at any time they please.

•     Timely filing & timely payment – State requirements, again, don’t apply to self-funded plans. For filing, insist on 180 days or the state’s minimum time period (if it’s longer). Do not agree to language that allows self-funded plans to dictate a time period different from the contracted time period. Also, beware of language that may be hidden in other provisions allowing another plan or program to supercede in a conflict with the agreement. And don’t forget to build in language about patients’ ultimate responsibility to pay for services rendered. For self-funded plans, agreements lacking language about timely payment mean there is no timely payment obligation.

•     Hold harmless patient member – Resist language about holding patients harmless. If a self-funded plan goes “belly-up,” the practice should still get paid. Be sure the agreement includes language about the patient’s ultimate responsibility to pay.

•     Contract conflict (Which contract prevails?) – While the negotiated agreement may say something clearly, there are instances where another agreement/contract can prevail. You don’t want these.

•     Term & termination – Don’t accept language that ties termination to the anniversary of the plan. (If you must, accept it only for the first year of the agreement.) Also, don’t accept language that requires very long lead times for written notice. In other words, “at least 180 days prior written notice” is a long time to be stuck, as Noyes put it, “in a bad marriage.”

•     “Medical necessity” – In some agreements, self-funded plans may include “unless otherwise specified by the health benefit plan” in their definition of medical necessity. Eliminate this language. Companies and unions have no standing to define medical necessity. For insured plans, medical necessity is defined by law. This should be the definition for self-funded plans as well.

•     Affiliates & assignments – Make sure affiliates are well-defined, assigns are specified and there is a clear understanding of responsibilities in the event of mergers and acquisitions.  

In future posts, we’ll revisit the topic of payer reimbursement and contracts. What tips and advice do you have for those negotiating payer contracts?

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Maximizing Reimbursement with Medicare Claims Processing Manual Chapter 20: Modifier 25 & More

Kathy McCoy, MBA January 30th, 2012

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Medical coding for maximum appropriate reimbursement can sometimes seem like a moving target, yet nothing is more important to maximizing your cash flow. With Medicare adding clarifications and revisions that are usually then adopted by other payers, it’s important to stay up on CMS changes in coding policies and procedures.  Kareo regularly sponsors webinars and short videos on various claims processing issues for that very reason: to help medical billers and coding professionals obtain the maximum reimbursement legally allowed.

Our recent video update Medicare Claims Processing Manual Chapter 20 features founder and author Betsy Nicoletti, M.S., CPC. A well-respected coding guru, Betsy explained Medicare’s Global Surgical Payments and how modifiers should be used when coding procedures. She gives detailed specifics in the video, some of which are recapped here. If you want the “Cliff Notes” version, keep reading.

According to Betsy, Medicare’s Global Surgical Payments reimburse providers for pre-op, inter-operative and post-op services in one bundled payment. It covers pain management, pre-op paperwork and any post-op instructions provided to the patient. To adjust for the severity of the procedure performed and the length of time a patient is under the physician’s care, various procedures have been assigned global payments based on 0, 10 or 90 days of care.

The good news is: There are some evaluation and management (E&M) services that providers can be paid for within that global package. However, they must meet the criteria set in modifiers 24, 25 or 57. For instance, modifier 25 can be appended to the global payment if those E&M services are provided the same day as a minor surgical procedure—0 to ten days of care, according to Medicare. One example would be a woman who is seen in her OB/GYN’s office for abdominal bleeding, and subsequently has en endometrial biopsy performed that same day. Modifier 57 can be appended if E&M services are provided the day before, or day of, a major medical procedure. An example would be a physician who sees a patient in the ER with abdominal pain and ends up performing an appendectomy. For patients who are still in  a post-op global period, Modifier 24 will pay for E&M services during an office visit if the condition is unrelated to the patient’s surgery.

How to handle surgical modifiers

Betsy also discusses how to handle surgical modifiers. Modifier 50 would be used to append codes if they do not already indicate a procedure was done on both sides of the body. And modifiers 51 or 59 may be used in some circumstances if the surgeon has done a second procedure on the same day. Whether or not you get paid for the second procedure depends in part on if the second procedure was a component of the first and other variables.

Betsy advises that all coders should have ready access to the National Correct Coding Initiative’s edits in order to submit correct claims. This has never been more important than now. Why? The Office of Inspector General recently issued its 2012 Work Plan and it expressed concern about how E&M modifiers are being used during the global surgical period. Correct coding is not only important to ensure you are paid for all the services that providers perform, but to ensure compliance with Medicare guidelines on how modifiers are used and when. For more information, Betsy suggests googling  “Medicare Claims Processing Manual Chapter 20.”

Kareo regularly sponsors video updates and webinars that feature the best and the brightest experts discussing new or reliable strategies for effective practice management and medical billing. Sign up now for our notification list for upcoming informative webinars.

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Let’s Collect Deductibles in 2012: Tips for Improving Self Pay Collections, Part 1

Kathy McCoy, MBA January 27th, 2012

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Expert Sara Larch reviewed strategies for collecting deductibles and copays from patients in this recent webinar

If you haven’t reviewed your strategies for collecting money from patients within the last year, now is the time to re-evaluate your policies and procedures for doing exactly that.  Why? Because now more than any other time, you have a golden opportunity to maximize your cash flow—and the outcome is almost entirely in your hands.

That was the message during an information-packed webinar presented recently by practice management expert and author Sara M. Larch, MSHA, FACMPE. Called Let’s Collect Deductibles in 2012: Tips for Improving Self Pay Collections, the presentation was the latest in a series of practical “how-to” webinars sponsored by Kareo on making your practice more profitable and efficient.  We will be recapping Sara’s strategies from the webinar over several blog postings. Check back to take advantage of our abbreviated synopses of her presentation that make for fast reading—and good business sense.

Because many workers are choosing high-deductible health plans out of choice or a lack of selection, the percentage of a patient’s out-of-pocket costs in relation to the total reimbursement for their care is skyrocketing. Industry experts expect patient payments to comprise a whopping 30 percent of a practice’s total annual revenue in 2012. Compare that to 20 percent in 2011 and just 12 percent in 2007! So if you haven’t done anything to shore up your patient self-pay collection policies, you are already at 30 percent risk of bringing in less money than before.

Industry experts expect patient payments to comprise a whopping 30 percent of a practice’s total annual revenue in 2012

What types of payments are considered a patient’s responsibility? They include:

  • Deductibles
  • Co-payments
  • Balances for procedures where only a portion is covered by insurance

And of course, uninsured patients are responsible for the entire cost of their care. Too often, however, practices are reticent to insist on payment up front. Yet these are dollars the clinicians are earning and depend on for their livelihood. Perhaps these statistics may put patient self-pay collections in perspective:

According to industry research, collecting payments upon registration leads to an 80 to 100% recovery of the dollars owed by the patient. Why? Because the patient wants to keep the appointment. Practices can expect to only collect 50 to 70% of what the patient owes after s/he is treated. And consider this: 65% of all patient bad debt is the result of insured patients, not the uninsured. Clearly, payment at the time of service (PATOS) is a critical way to bring in the maximum dollars to your practice.

Our next blog will focus on strategies for increasing your PATOS in ways that are patient-friendly yet firm. You can receive notification of upcoming informative webinars such as this one by signing up for our notification list. And be sure to check out our webinar archive for other topics that may be of interest to you

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2012 CPT Code Changes: Reporting Procedures Related to Pacemakers and Cardioverter-Defibrillators

Lisa Eramo January 25th, 2012

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Did the physician insert a pacemaker or pacing cardioverter-defibrillator (ICD)? Did the pacemaker or ICD system include single, double, or multiple leads? What, specifically, did the physician remove? Did he or she replace it, too? These are just a few of the questions that come to mind when billing for these procedures.

Relative value units (RVU) can vary significantly, depending on the code reported. (Note: To view specific RVUs for each code, visit the CMS site and unzip the file ‘RVU12AR.’). Physicians must ensure that documentation reflects the actual work they performed in order to receive accurate reimbursement.

Raemarie Jimenez, CPC, CPMA, CPC-I, CANPC, CRHC, director of education at the AAPC in Salt Lake City, provided an overview of new codes and CPT® guidelines for 2012 related to pacemakers and ICDs as well as what physicians and coders should keep in mind.

Although most physicians distinguish in their operative reports between pacemakers and ICDs, new CPT guidelines provide an explicit definition for pacemakers and ICDs. Both pacemakers and ICDs include a pulse generator and one or more electrodes. With a pacemaker, however, only one electrode is inserted into either the atrium or the ventricle (for a single-chamber pacemaker system) or into the right atrium and right ventricle (for a dual-chamber pacemaker). Alternatively, an ICD may require multiple leads even when only a single chamber is being paced. This isn’t new information per se, but it does help coders understand the differences between the two devices.

One noteworthy new guideline pertains to the removal of a pacemaker or ICD. When a physician removes either of these devices without replacing them, coders should report either 33233 or 33241.

However, physicians may also remove and replace only a certain part of a pacemaker or ICD (i.e., the pulse generator the lead[s]). New combination codes 33227-33229 and 33262-33264, for example, denote both the removal of a pacemaker or ICD and the replacement of a new pulse generator only. Previously, coders would have reported two separate codes—one for the removal and one for the replacement. Other new CPT guidelines in this section provide explicit direction regarding how to bill for the insertion, removal, replacement, repositioning, and upgrade of these devices.

CPT guidelines include a helpful table

Coders will be happy to know that CPT guidelines now include a helpful table that simplifies the process for reporting transvenous procedures related to pacemakers and ICDs. The table provides a quick-reference guide for procedures and helps coders quickly choose the appropriate code to ensure accurate reimbursement.

Another important new guideline pertains to imaging (i.e., radiological supervision and interpretation), which is now included in codes 33206-33249 when it’s related to the pacemaker or ICD procedure. This means that physicians can no longer bill separately for it. However, per the new guidelines, if physicians use fluoroscopic guidance to perform the procedures, they may bill separately for it using code 76000.

Note that many of the codes in this section—including new ones for 2012—include moderate (conscious) sedation, which means coders cannot report this service separately. Appendix G of the CPT Manual includes a summary of CPT codes that include moderate sedation. These codes are also denoted by a bulls-eye symbol in the surgical section of the manual.

Coders should also note the various parenthetical notes provided throughout this section, many of which indicate that certain codes should not be reported together. Inaccurate billing (e.g., reporting the removal and replacement of a pulse generator separately or inappropriately unbundling imaging services) not only leads to inaccurate reimbursement, but it can also result in line-item denials that could—over time—raise a payer’s red flag and prompt an audit.

Multiple codes may be needed for complete payment

In some cases, however, coders need to report multiple codes to ensure that physicians are paid completely. For example, when a physician removes the entire pacemaker or ICD system and replaces both the leads and pulse generator, report 33233 in conjunction with either 33234 or 33235 and 33206-33208. Therefore, three separate codes are required for this procedure.

Physicians should note that reimbursement differs depending on whether a procedure involves a single vs. dual vs. multiple lead system. New codes for 2012 (i.e., 33221, 33229, 33231, and 33264) actually specify multiple leads whereas this information was previously captured using add-on code 33225. In addition, new CPT guidelines clearly define each type of lead system, and physician documentation should reflect this information to ensure accurate reimbursement.

Lisa A. Eramo is a freelance writer and editor specializing in medical coding, health information management, and other healthcare regulatory topics. Visit her website at

For additional information on 2012 CPT code changes, read our recent articles Getting Paid in 2012: 2012 CPT Code Changes and More and CPT Changes for 2012: An Overview.

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Complimentary Webinar: Optimizing Office Visits for Preventive Services

Kathy McCoy, MBA January 24th, 2012

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Thursday, February 23, 2012
1:00 PM EST/10:00 AM PST
Speaker: Betsy Nicoletti, M.S., CPC

Preventive services are becoming more important to medical practices’ profitability, especially with Medicare coverage of the Annual Wellness Visit.

Preventive services are becoming more important to medical practices’ profitability, especially with Medicare coverage of the Annual Wellness Visit. With Medicare now also covering screening for additional services such as alcohol misuse and depression as well as obesity counseling by primary care practices, understanding the delivery and billing of preventive services is more important than ever. Does your practice know how to best manage preventive services to maximize revenue appropriately? Join expert Betsy Nicoletti as she explains how to optimize office visits for preventive services.

This webinar will describe key strategies including:

  • The importance of benefit verification prior to services
  • Using modifier 33 to prevent denials and patient co-pays for covered preventive services
  • Coding preventive services for commercial patients and Medicare patients
  • Reporting other services provided at an annual exam
  • And much more

Learn how to optimize office visits for preventive services in this complimentary webinar with expert Betsy Nicoletti

CEU Credit

"Optimizing Office Visits for Preventive Services" meets the criteria of the Professional Association of Health Care Office Management and is approved for 1.0 CEU(s).“Optimizing Office Visits for Preventive Services” meets the criteria of the Professional Association of Health Care Office Management and is approved for 1.0 CEU(s).

The American Medical Billing Association (AMBA) will award 1 CMRS CEU for participation in this webinar.The American Medical Billing Association (AMBA) will award 1 CMRS CEU for participation in this webinar.

You can download the Kareo Optimizing Office Visits for Preventive Services Webinar Handout now.

Question-and-Answer Session — Ask your tough questions and get answers to your current concerns about how to optimize office visits for preventive services.

Who Should Attend — Private practice owners, office managers, billing managers, billers, billing service owners and others concerned about maximizing practice profitability.

About Your Speaker:
Betsy Nicoletti, M.S., CPC

Expert Betsy Nicoletti will discuss how to optimize office visits for preventive services in this complimentary webinarBetsy Nicoletti is the author of The Field Guide to Physician Coding and the 2007 Physician Auditing Workbook, as well as founder of She developed The Accurate Coding System to help doctors get paid for the work they do. She simplifies complex coding rules for practitioners and engages physicians in a positive and respectful way, which encourages attention and accuracy in their coding. Besides doing auditing and compliance work, she is a speaker, writer and consultant in coding education, billing and accounts receivable.

Betsy holds a Masters of Science in Organization and Management from Antioch, New England, and has worked in and around physician offices for over 20 years. She became a certified coder in 1999. Betsy is a member of the National Speakers Association, the Medical Group Management Association and the Healthcare Financial Management Association.

Learn how to optimize office visits for preventive services in this complimentary webinar with expert Betsy Nicoletti


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The Medical-Practice “Game” Has Changed Forever: Improving Practice Productivity and Profitability

Kathy McCoy, MBA January 23rd, 2012

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Increased demand, competition and regulatory oversight. Legislative reform. Declining reimbursements. For these reasons, and others, the business of running a medical practice has changed forever. And it will continue to change. In a recent presentation at the MGMA conference, Marc D. Halley, MBA, of The Halley Consulting Group asserted that physicians and practices (and, by extension, medical billers and other staffers) must get ready for dynamic change. Indeed, they must foster these changes to their methods and processes… but without sacrificing the quality of their clinical care or their patient service.

To survive and thrive requires significant changes from providers and practices

A fundamental premise of Halley’s presentation is that, to be successful in this new “game” of healthcare, physicians and practices must make dramatic improvements in practice productivity and efficiency. Only in this way will they remain viable, financially and operationally, while still providing high-quality care. In his presentation, Halley called these changes “rigors.”  The changes that practices and providers — and, again, medical billing professionals along with them — include process improvements, effective application of technology, “highest- and best-use” staffing, job design, performance measurements and others.

How and why the game has changed… and is changing still

Halley described a “perfect storm” of factors that are driving the changes in the medical-practice environment: Unprecedented demand accompanied by both declining reimbursement and increasing costs and regulations. So, what are the implications of this reality? Well, besides lower reimbursement and greater regulatory-compliance obligations, we’re likely to see fewer and larger “systems” of providers. Of course, there is already a well-known and widespread focus on quality of care and an emphasis on improving the relationship between cost and performance. There is also already increased competition for the “right” (read: most desirable) patients.

Get ready to make many changes throughout the practice

To survive all this, physicians and practices have some strategic imperatives to embrace. They must strive to control market share with a retail strategy and a readiness/willingness to become (and promote themselves as) the “provider of choice.” They must demonstrate their clinical quality and their quality of service. They must be able to access capital to make changes that will affect every aspect of their operation, from human resources to technology to facilities. And Halley was emphatic that productivity is of central importance. Practices/providers must be efficient, effective and accessible, because productivity means volume, and volume means revenue. (And they are all key to compensation, not incidentally.)

In fact, while cost-cutting is essential, Halley said that revenue/productivity is how practices will survive and thrive in the new healthcare reality.

“Revolutionary” change must be dramatic, careful, intelligent and customized

Another central premise in Halley’s presentation is that dynamic change is what it will take to overcome the challenges of the “current extraordinary environment” of healthcare. By dynamic, he meant revolutionary, not evolutionary. While incremental improvements in performance have been adequate in the past, those days are over. The dynamic change that’s necessary today will come from physicians and managers working together, creatively, to enhance the quality of their care, their customer service, their team productivity and the organization’s financial viability.

The changes must be significant. According to Halley’s presentation, this means careful management of the direction of that change, and of its pace, its process and ultimately its outcome. Halley pointed out that practices need a site-specific action plan that includes initiatives tailored to the individual business. Revenue-enhancement tactics are vital, as are expense-control tactics. What is the financial impact of these changes? Who are the responsible parties? What are the timelines for these specific initiatives? And there must be a model for accountability, including a budget review, income statement review and a means of implementing additional tactics.  

Job One: Enhance revenue

Marketing is, of course, a topic unto itself. But in his presentation, Halley offered some basics. Relationship management is paramount, particularly for being the “provider of choice.” (In short, you must make the “of choice” assertion true, and that means managing relationships.) Practices/providers can implement new service lines, and they’d better promote them. Revenue can also be enhanced by improving office/clinic flow, such as exam-room turnaround times. Adjustments to the fee schedule. Improved scheduling. Review of and improvements to coding and documentation. Improvement of the payer mix. Eliminating the volume and impact of no-shows. There are, of course, many other tactics. This is where the “creative” part comes in.

Job One, Part II: Cut costs

Success in the changed healthcare “game” must, as Halley stressed, be dramatic. So it’s not enough to enhance revenue. Practices and providers must reduce their costs, pure and simple. This means taking a new look at the provider-compensation model. “Highest- and best-use” staffing measures are also important. This certainly could impact medical billing staffers, and medical billing companies, who are wise to make changes in their own habits and dedicate themselves to the practice’s success objectives. In his presentation, Halley said managers must consider removing C-grade staffers, evaluate staff wage ranges and benefits packages. Other cost-cutting measures suggested are increasing the number of providers and increasing square footage.

The topic of the changing healthcare environment is not new, but it certainly is relevant for everyone involved, including medical billing professionals. We will continue to cover the topic and its changing details in future articles on this blog.

Read more about reducing no-show rates.

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Medical Billing Update: What CMS Exclusion Means to You

Kathy McCoy, MBA January 19th, 2012

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As part of its continuing provider-compliance training series, the U.S. Office of the Inspector General (OIG) produced a video featuring OIG attorney Geeta Kaveti discussing “Exclusion Authorities and Effects of Exclusion.” The video covered the definition and types of CMS exclusion, how it can affect your business, what it may mean for your employees, how long exclusions might last, and whether or not reinstatement may be considered.

According to Kaveti, exclusion is when the OIG prevents an individual or entity from participating in Medicare, Medicaid, or other federal health care programs. The practical upshot of exclusion is that “no program payments will be made for items or services furnished, ordered, or prescribed by an excluded entity or individual.”

Kaveti then gave two examples of how exclusion may affect health care providers – one for an individual and one for an entity:

  • A home health care agency can’t employ or contract with an excluded home health aide. Furthermore, it may have to refund to the government any federal claim payments associated with the work of that excluded individual.
  • If an excluded physician orders series of tests at a hospital for a Medicare or Medicaid patient, the hospital will not be reimbursed by the government for the costs of those tests, unless it can show it did not know the doctor was excluded or that it would not have any reason to know.

Just about any class of health care provider may be subject to exclusion, from licensed clinicians, to unlicensed administrators, billers, or even secretaries. The OIG can also apply exclusion to corporate entities or officers. As Kaveti explained, “Exclusion extensively limits employment opportunities with entities that get federal dollars.” This is why it is very important for health care providers to make certain their employees do not fall under the exclusion rule.

Can an excluded individual still work in a health care setting? Kaveti explained that they can, under several conditions. They can work in a non-federal health care payment setting (i.e., for an entity not serving Medicare or Medicaid patients). They can provide care to non-federal health care beneficiaries (i.e., patients not on Medicare or Medicaid). Finally, they can work in a non-patient care setting. Kaveti provided two examples of this: facilities management or graphic design services.

There are two types of exclusions that may be in effect. Kaveti detailed the circumstances for either mandatory or permissive exclusion for entities or individuals:

Mandatory (the OIG is required to exclude):

  • Conviction of a program-related crime
  • Conviction of patient abuse or neglect
  • Felony conviction relating to misuse of controlled substances
  • Felony conviction relating to health care fraud

Permissive (at the OIG’s discretion) — Sixteen statutory authorities govern this, including:

  • Lying on an enrollment application
  • Some misdemeanor convictions
  • Loss of state license to practice
  • Failure to repay college education loans
  • Failure to provide quality care

How long might an exclusion last? Although it may vary from case to case, either mandatory or permissive exclusions will generally be in effect for a set period of time, but it may be indefinite for any licensure action. Kaveti added that a mandatory exclusion will be in effect for a minimum of five years. Reinstatement for mandatory or permissive exclusion is neither guaranteed nor automatic. An individual must apply for reinstatement and receive a notice from the OIG that they have been granted reinstatement.

Kaveti closed by pointing viewers toward the OIG Exclusion page online, which has more in-depth resources on the topic. You can view Kaveti’s full video explaining exclusion in full screen mode.

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Getting Paid in 2012: What You Need To Know Now To Make It Happen – Trends with Commercial Payers

Kathy McCoy, MBA January 18th, 2012

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In the recent webinar, Getting Paid in 2012: What You Need To Know Now To Make It Happen, Elizabeth Woodcock discussed trends with commercial payers

For medical practitioners, finding ways to get paid fully, fairly and in a timely manner will continue to be challenging in 2012. To address this very large issue, Kareo recently sponsored an information-packed webinar entitled Getting Paid in 2012: What You Need To Know Now To Make It Happen. The webinar was conducted by someone who certainly knows: Elizabeth Woodcock, MBA, FACMPE, CPC, a nationally recognized author, practice management consultant and medical billing expert. Elizabeth frequently presents timely topics related to enhancing efficiency and cash flow within medical practices.

Our first few blogs recapping the webinar touched on 2012 changes in CPT codes and physician fee schedules and other changes from Medicare. Click any link above to see our blog postings on these topics, or check out our webinar archive. To see her thoughts on 2012 trends with commercial payers, you’re in the right place.

According to research by the MGMA, 10% of a practice’s revenue is now derived from High‐Deductible Health Plans

The biggest trend in the commercial insurance marketplace, according to Elizabeth, is the increasing adoption of high-deductible insurance plans by employers. Research conducted by the Medical Group Marketing Association found that 10% of a practice’s revenue is now derived from High‐Deductible Health Plans. The reason? Employers are looking to contain their escalating health care costs wherever they can. Employees either select these plans because they are cheaper than lower-deductible plans, or they simply don’t have a choice—that’s the only option offered by their employer. And it is not uncommon for deductibles to total $5,000 over the course of a year.

Elizabeth presented some statistics that drove the point home: in 2007, patient financial responsibility as a percentage of total revenues amounted to 17 percent for the average practice. In 2012, that figure is projected to rise to 30 percent—nearly double the percentage in 2007. This becomes significant because many practices still finding collecting monies due from patients to be their biggest challenge. Elizabeth advises that billing professionals and practice managers begin to think of the patient’s obligation as their financial responsibility before insurance. That means collecting co-pays at the time of service and even requesting pre-payment such as in the case of scheduled procedures. They should also have strategies in place to collect on balances due after insurance payments are deducted.

Our upcoming blogs on Elizabeth’s webinar will focus on the Affordable Care Act and “voluntary” incentive programs offered by Medicare and Medicaid.  You can receive notification of our upcoming informative webinars on medical billing, managing cash flow or enhancing your team’s efficiency by subscribing to our notification list.

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Confusion Over Patient Payments Reigns – And It’s Costing You Money

Laurie Morgan January 17th, 2012

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Confusion over patient payments may be costing your practice money.

In our work as practice management consultants, one of the themes we’re constantly repeating is the need to explain (and repeat!) patient payments to patients so that they understand what portion of their bill is their responsibility.  It may seem that this work should be done by insurance companies and benefits administrators.  But, the reality is that it is crucial for practices to take responsibility for this, to protect their revenue.  Making sure the patient is clear on what they will owe for services is crucial to gaining commitment to pay and reducing the work of explaining “incorrect” bills down the road. 

Over the holidays, I had an unusual opportunity to see the effects of patient confusion about insurance coverage in a dramatic way. A family friend who joined us on Thanksgiving and Christmas apparently thought health insurance and medical bills were universally annoying enough for holiday small talk.  Naturally, I was hoping to be “off duty” for the holidays, but when I heard how thoroughly he misunderstood everything about his insurance coverage and his doctor’s compensation, I knew I had to pay attention and try to set him straight.

“Fred” started our Thanksgiving conversation by stating unequivocally that his doctors are “greedy and overpaid.”  When I gently pointed out that, actually, many practices are facing declining profitability thanks to shrinking reimbursement, insurance bureaucracy and the difficulty of collecting from patients, Fred was unmoved. “They get all the co-payments now!” Fred blurted in frustration.  “That all adds up to a fortune at $30 a pop – and it’s all on top of what the insurance companies pay them. “ 

“But Fred,” I said, “those co-payments aren’t on top of insurance reimbursement.  The insurers have just shifted responsibility for that part of the doctor’s fee to patients.  And, as a result, doctors are getting much less in many cases, because some patients can’t or won’t pay their co-pays.”  Fred thought about this for a minute.  “That doesn’t make sense – the doctor can just deny the patient care.”  Not always possible, I explained. And, unless the practice can collect the co-payment up front, they won’t know in advance of treatment who will fail to pay.  Fred thought doctors would just report patients to credit bureaus or use collection agencies, but I tried to explain that it might not be profitable to do so when the amounts owed are small (even though those small numbers add up to a big bite of total practice revenue).

I thought I’d made some headway with Fred, who said he appreciated the clarifications I’d provided.  But, along came Christmas – and our second conversation.

“Well, I keep getting billed co-insurance for my colonoscopy last month, and I know you say I should be able to trust that my doctor’s not just sticking me for extra money.  But I am sure that I don’t owe them anything – I already met my deductible, so there shouldn’t be any more co-payments or anything.  I’m just so frustrated, I’m going to ignore the bill.“ 

Common Patient Misconceptions

My conversations with Fred about his healthcare probably lasted only 15-20 minutes in total, but his misconceptions spoke volumes.  It was pretty clear that:

  • Despite visiting his doctor repeatedly throughout the year, Fred had never understood that his co-payment is part of the total payment his insurer permits his doctor to receive – not a “bonus”
  • Fred’s pre-procedure consultations did not include clear explanations of what portion of the total fee would be his responsibility
  • Fred wasn’t asked to pay his co-insurance at time-of-service
  • No one had ever explained to Fred the difference between co-payments, co-insurance, deductibles and out-of-pocket maximums

Fred has been a heavy consumer of medical services over the past several years – besides the colonoscopy his procedures have included knee arthroscopy, hip surgery, lots of physical therapy and treatment for chronic arthritis. All of these visits to different physicians were opportunities for Fred to learn what his insurance covers and what it doesn’t.  He could have learned not just how the portion he owes is calculated, but also how much more value he’s getting from his insurance and his physician’s care than he’s actually paying in premiums.  Instead, Fred is confused and assumes he’s being ripped off by his doctor, his insurer or both – and he’s costing his physicians money by paying slowly and questioning his balance due.

The increasing complexity of insurance programs and patient payment schemes has put a burden on practices to analyze and explain a wider variety of scenarios.  And, sometimes it’s not possible to make every patient understand.  But, that doesn’t mean it’s not worth trying.  If someone at Fred’s doctor’s office had explained his co-insurance, along with the difference between a deductible and out-of-pocket maximum, at the very least, Fred might have been more comfortable that no one was trying to make him pay money he shouldn’t owe.  And at best, the practice could have collected that co-insurance at the time of service – avoiding Fred’s confusion and irritation with receiving a subsequent bill.

Make a resolution to be sure your practice is doing its best to explain to patients what they’ll owe, and why – when setting up appointments, when confirming appointments, and at the time of service.  And ask for your payment at time of service!  You’ll have fewer “Freds” who are confused and annoyed by bills and believe they’re being overcharged, you’ll receive more of the revenue your practice is entitled to, and you’ll spend less on explaining bills and collecting balances.

Laurie Morgan is a management consultant with Capko & Company. She specializes in marketing, management and technology for medical practices and blogs about practice management issues at Laurie has a BA in Economics from Brown University and an MBA from Stanford. Her last article for Getting Paid was Small Business Lessons for Physician Practices – Part 4 of 4 – Operations Management for Physician Practices.

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What You Need to Know About Selecting the Right EHR: EHR Relationships with PMSs and Patient Portals

Kathy McCoy, MBA January 16th, 2012

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Ron Sterling discusses what you need to know about selecting the right EHR

A lot of ink has been devoted to the subject of Electronic Health Records (EHRs) and the availability of meaningful use dollars to acquire them in medical practices. But many offices have already invested in full-blown Practice Management Systems that may—or may not—work well with an EHR. In addition, some practices may also use a patient portal to manage interactions between its office staff and their patients. Can these different products interface and work well together, and do they ever replace each other?

That was part of the discussion when health information systems expert Ron Sterling of Sterling Solutions, LTD, presented his Kareo-sponsored webinar, What You Need to Know About Selecting the Right EHR. Ron is a nationally acknowledged expert on the selection of EMRs and practice management systems, and authored the 2008 HIMSS Book of the Year, “Keys to EMR/EHR Success,” as named by the Healthcare Information and Management Systems Society (HIMSS). Our first blog on Ron’s webinar detailed the five key components of EHRs that most practices will need to manage patients appropriately. This blog explores the relationships between EHRs, patient portals and PMSs. Look for upcoming blogs that summarize additional portions of Ron’s webinar.

Ron Sterling discusses the importance of selecting an EHR that will interface with your PMS and/or patient portal

EHRs are essentially a digital form of a patient’s medical record. Practice Management Systems (PMS) are a different type of product that was developed separately to manage patient information such as demographics, encounter information and medical billing charges. Patient portals offer an electronic means of two-way communications with patients, such as appointment reminders, refill requests, statement inquiries, online payments and diagnostic test results. They may also allow practices to collect information, such as on a present illness or a patient’s medical history. Over 700 products have been certified by the Office of the National Coordinator for Health Information Technology, meaning they qualify for meaningful use dollars. But according to Ron, that doesn’t mean they all work together.

In a perfect world, a PMS would send appointment and patient demographic information to an EHR, which would then send back charge and medical billing information to the PMS. Information collected or communications received through a patient portal would flow back into the patient’s EHR.  But some PMSs may not necessarily interface well with newer EHRs, according to Ron. And some EHRs may not support all the capabilities of patient portals that are required for meaningful use dollars, such as providing electronic clinical summaries. Ron cautions that if you already have a PMS or patient portal in use, be sure the EHR you select will fully support the capabilities of your current systems in order to perform the required IT functions per The Health Information Technology for Economic and Clinical Health (HITECH) Act.

Check back soon for our upcoming blog postings based on Ron’s comprehensive webinar. And be sure to review our complimentary webinar archives for other informative videos that may interest you. Kareo regularly sponsors webinars that feature industry experts discussing ways to improve your medical billing and reimbursement. To insure you receive notification about upcoming informative webinars such as this one, join our notification list.

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Welcome to Getting Paid, a weblog by Kareo offering ideas, news and opinions about medical billing and practice management with the goal of making medical billing easier and yes, getting you paid. Visit the Product Blog for more information on our products.

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