October 2016 marks the end of a year long grace period for ICD-10 by Centers for Medicare and Medicaid (CMS). Providers haven’t seen many denials related to ICD-10 during the past year because even private insurance companies followed Medicare with payment flexibility for ICD-10. Expect this to change as CMS updates its code set and implements 1,974 new codes starting October 1, 2016.
Here are three things to keep in mind while you prepare for shifting gears with ICD-10 implementation
2) Minimize use of unspecified codes.
Expect to see denials or delays in payments if you do not identify specific diagnosis. CMS ignored the use of unspecified codes during the grace period and continued making payments but we are beginning to see signs that they will hold back payments when documentation is insufficient. Use unspecified codes very rarely, if at all. If you’ve setup any defaults in your EHRs for unspecified codes, remove them and be prepared to code more specifically.
According to a recent survey, 46% of physicians said they faced a burnout from practicing medicine. Unable to bear the pressures of inane insurance requirements, expanding government regulations, time consuming technology mandates and challenges of managing a business, several doctors are quitting medicine to get their life back. Business of medicine has become overtly complicated. However, there are ways to bring balance and find your space to do what you love without being overwhelmed. Over the last twelve years, we’ve used these methods to help several doctors practice medicine profitably. These ten ways will help you keep your medical practice sustainable and profitable.
1. Submit claims within 48 hours
When you designate a day of the week to submit claims, you reduce the chances of getting paid correctly and in time from insurance companies.
Use integrated billing and EHR systems to submit claims the same day or at best the next day of seeing the patients. Ensure that billing staff performs quality checks before submitting claims or even better automate quality processes. Cloud-based systems can help you complete your work even outside of the office.
Develop cheat-sheets for most commonly used CPT, ICD-10 codes and modifiers to make sure your claims aren’t held up for billing. Have your billing team create a “missing information” log that you must clear out before the end of every business week.
2. Apply Pareto’s Principle for billing
Apply Pareto’s Principle (also called the 80-20 rule) to identify top 20% insurances, procedures and denials – these typically contribute to 80% of your gains and pains.
For example, you may bill an EGD (an upper gastroenterology procedure) to BlueCrossBlueShield (BCBS) insurance most of the time. If your billing team does not go on high alert to ensure clean billing of EGDs for BCBS then your profitability is at risk.
Your entire operations can be optimized to submit top 20% claims quickly and cleanly. Fix the sources of your top 20% denials that contribute to 80% of your losses. Negotiate with insurances on your top 20% procedures to see an uptick in revenues. Applying the 80-20 rule to everything in your practice will help you identify what you need to focus on.
3. Aim for zero denials
Denials occur because practices miss playing the game according to changing insurance rules. Collecting accurate payments when you submit claims the first time is far more profitable than dealing with denials. Consider the time you will spend in following up on claims, collating accurate information, writing appeal letters and so on.
Practices fail to get prior authorizations and referrals on procedures they are about to perform. Missing to verify patient benefits and eligibility prove extremely costly. They even fail to submit claims in time.
Develop rules to fix the sources of denials. For example, get prior authorizations at least two days in advance. Rigorously implement performing eligibility checks on all patients you are about to see. Use online insurance eligibility tools to verify walk-in patients.
On July 8 2015, CMS released the 2016 Medicare Physician Fee Schedule proposed rule which, if finalized, would drastically cut reimbursement rates for colonoscopy and other lower GI endoscopy procedures. Can your afford such cuts? Whether or no1t the proposed reimbursement cuts take effect, gearing up for the worst case scenario is the best way going forward.
Here are three tips that will help your practice plan better should the cuts be implemented (or not): 1. Same day claim submission: Many ambulatory surgery centers and specialty practices have specific days in a week when claim submissions happen. This results in an overwhelming number of claims pending to be submitted. To catch up with the piling claims, practices often resort to a rush job with lack of quality checks, not following billing guidelines, resulting in a growing number of denials. As a result, they face uncertain reimbursement patterns. Set an internal benchmark of clearing claims within 24 – 48 hours of the date of service.
2. 90+AR at 5%: Accounts receivables is mostly where the money lies. As with same day claim submission, also resort to same day denial management. Take relevant action on denials as soon as they occur. This is your best bet to get accounts receivables under control. Aim for 90+ AR to be at 5% to avoid reimbursement disruption.
3. Accurate medical documentation: At the onset of reimbursement cuts, it becomes extremely crucial that each claim be processed and paid accurately. On many occasions insurance companies ask for supplementary medical documentation prior to processing the claims. Adopt case specific documentation methods vs. templated approach. The benefits are twofold – the turnaround time for such claims to get paid is relatively less (as there is no back and forth with the carriers on missing/incorrect documentation) and it establishes your practice as a place for getting patient centric medical care.
The above tips can help optimize operations irrespective of reimbursement cuts. Not only does the payment cycle becomes more predictable, but also, provides clarity on the overall health of the practice. Have suggestions of your own? Let us know in the comments below.
Want to fast track your reimbursement cycle? Different insurances differ in the time they take to process claims. Target easier insurance carriers with specific focus and see the change. One carrier which centers should look at is Medicare. It has a straightforward submission process coupled with fewer hassles for reconciling denials.
Five reasons to target Medicare:
1. Medicare is the fastest paying carrier – often pays within 15 days.
2. Denials are easy to understand and resolve.
3. Establish standard set of coding and billing guidelines to be followed.
4. Claim submission and payment is fully electronic.
5. A straightforward appeals process.
Three ways to maximize reimbursements from Medicare:
1. Submit claims as per the Local Coverage Determination (LCD) guidelines.
2. Use appropriate modifiers while billing multiple procedures.
3. Pre-audit claims for compliance before submission.
By employing a more knowledgeable approach to claims submission, the majority of your claims can get paid at the first submission, even achieving 95% first-pass ratio (getting paid without needing a follow up). This simple focus can yield greater reimbursements for your practice.
Tracking and reconciling denials are extremely crucial for every medical practice. They form a metric for practice performance and are a direct reflection of reimbursements. They also reveal loopholes in practice operations.
Practices typically decide a day/s on which they would act on denials. For example, if a practice decides to work on denials every Friday, the denials don’t wait for Friday to pop up. They keep accumulating since the first day of the week and become a pile by Friday. And the practices are left intimidated and overwhelmed with what they see.
Daily denial management is an effective tool to manage denials in a more methodical manner. By definition it means getting a sense of what your denials are on a daily basis and equipping yourself the tools required to tackle the denials. Its relatively simple to practice, doesn’t take a lot of time and the outcomes are significant.
Here’s how you can implement this process in your practice:
1. Know the nature of denials. Which are the top denials for your practice? Which denials are more frequent than the other.
2. Create relevant “buckets” for the denials eg. Denials requiring medical records, incorrect coding, coverage dependent (eligibility, benefits, authorizations), deliberate denials by payors, those requiring appeals… you get the point.
3. Before the end on each day get a load of all the denials you have come across that day. If you do the billing yourself, then you can easily make out the denials from the EOBs or ask your billing department to get the report for you – its fairly easy.
4. Categorize the denials into the buckets that you have created.
5. List down the action requirements for each bucket.
Once you employ this practice you’ll see a pattern emerging for the denials. You will notice that most denials are consequences of something that you had missed. Go back and fix the missing, not only for that particular claim or denial but for the process, for e.g. there has to be a 59 modifier associated with 45380 – Colonoscopy with Biopsy when billing with 45385 – Polypectomy – Polyp removal – make a note of such coding updates and use them every time you submit same procedures.
When the process is fixed the denials will reduce. With every fix the process becomes stronger. As little as an hour can save you dollars and time.