By Michelle Miller
I recently had an opportunity to speak at the Florida Society of Pathologists in Orlando
My talk centered on the aspects of the pathology practice that are often overlooked and tend to cost you money – the business side of your practice. It’s one thing to turn signed out cases over to a billing agency and another to manage said agency. While it’s not the most glamorous of jobs – especially for a physician that went to school to practice medicine – it’s definitely a job of utmost importance because the biller has a direct line to the pathologist’s wallet.
Items we discussed are not new or earth-shattering. They are basic procedures that need to be monitored and attended to in terms of contractual obligations and compliance. Here are a few points to keep in mind:
1. Audit, audit, audit! It is essential to audit your billing company from time to time not only to be sure there are good processes in place but also for compliance reasons. The OIG has strongly recommended at least one audit per year. Here are a few things to watch for:
Ø Unit billing: Do the units billed match the reports?
o An audit completed by Vachette indicated that the biller routinely billed one unit on multiple unit 88305 cases costing the practice valuable revenue. When is the last time you verified that your biller is capturing units?
Ø Unit billing: Do the units paid match the units billed?
o The billing agency should have a process in place to verify that the correct number of units is paid. For example: 88173 is a common code that must be appealed for more than one unit. Is your billing agency doing an automated or manual check on this?
Ø Paid amounts: Is the amount paid correct?
o One carrier changed their fee schedule and ended up paying a group at 50% of current Medicare! The billing agency was not tracking payments and missed the change. It was only found because the practice requested an audit. Vachette found that biller’s have a hard time tracking correct payment rates by CPT and routinely accept the incorrect amount as final payment. There should be an automated process for tracking payments by CPT.
Ø Adjustments: Are these taken according to contract? Are there adjustments done that should not be done (ex: adjustments taken for a carrier with which you are non-par)?
o Adjustments need to be monitored each month. An audit completed by Vachette found that the billing agency routinely accepted the adjustment for non-participating carriers instead of balance billing the patient which resulted in revenue recovery of over $500,000. There is no contractual obligation for the group to accept the discounted rate at this point. This also takes away from the leverage to negotiate the group should they ever need to negotiate a contract with the carrier/network in question.
2. Contracts: Be sure that you and your billing agency have copies of executed contracts on hand for obligatory purposes: termination, filing limits, etc…
Ø Having a copy of your contract verifies all carriers and networks with which you are participating. If you don’t know, you are most likely not getting paid correctly.
o Carriers will routinely discount through mutually contracted networks whose rates are typically lower than your contracted rate. We negotiated a contract for $132 on 88305-26 and began receiving lesser payments through contracted networks we were unaware of – payments as low as $44.17 per unit. It took 18 months to terminate all the network contracts!
3. Fee schedule: When is the last time you reviewed your fee schedule? This should be done on a yearly basis. If you are billing clinical component, when is the last time the billing agency compared your fee schedule to the hospital’s charge master? This changes regularly and should be reviewed at least quarterly.
Ø During an audit completed by Vachette, we found many examples of carriers allowing 100% of billed charge. This signifies that the fee schedule is too low and should be reviewed and increased.
Ø Hospitals are forever sending clinical tests out and bringing them in house. Chances are that you have changes to make to your clinical fee schedule if your billing agency does not routinely review the charge master from the hospital.
4. Billing automation: What type of data transfer is your biller utilizing? Do they have the capacity to accept/send electronic data to and from carriers? The hospital? The more electronic data transfer (EDT) available, the easier it is to renegotiate billing fees.
Ø Billers like to set things up electronically. This drives down their costs which in turn drive down the fees you are paying to them.
o Another plus to automation is tracking of cases billed. If you are not tracking accessions, you are missing charges. One audit we did showed that of 201 cases, 5% were unbilled. The same audit also revealed that 37 cases were requested for billing after we started the audit.
5. Denial Tracking/Trending: What is the biller doing to improve the front end so there is less manual follow up on the back end? This delays payment on claims.
Ø Denials are a telltale sign of whether or not your billing agency is forward thinking.
o We reviewed a denial report for several carriers with one billing agency and found that the biller had to routinely add a modifier to line item billing for more than one unit per day and appeal the cases for payment. After a quick call to the carrier(s), we found out they wanted multiple units on one line which eliminated back-end denials and appeals!
6. Refunds: Are these done regularly? This is a requirement – especially for governmental agencies such as Medicare and Medicaid that require turnaround in a specified amount of time upon notification.
Ø It is essential that refunds are completed timely. The group could potentially be fined if an audit revealed that refunds were not up-to-date.
o Note that it cost one group thousands of dollars in fines because the billing agency had not completed refunds in over 18 months.
7. Billing Contract: When is the last time you renegotiated this contract? If it’s been over 5 years, pull it out and take a look! There’s bound to have been changes in that amount of time.
Ø Standard billing rate is roughly 7% to 9% depending on region.
o A review of billing contract for a group found that they were paying their billing agency 15%. They had not re-evaluated their billing contract for many years.
Remember that your practice is your livelihood and your billing agency drives whether or not you are leaving money on the table at the end of the day.
What are you doing to watch your wallet? Michelle Miller is the Vice President of Vachette Pathology. If you have any questions or would like more information, please feel free to contact Ms. Miller at 517-486-4262.
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