Where is Your Practice Losing Money? Part II

By Carol Hoppe, CPC, CCS-P, CPC-I

In the last issue, we looked at some of the most common areas where practices are losing money.  Today, I have some additional tips on processes you can implement to ensure you are maximizing your revenue opportunities.

Working Your A/R

Following up on A/R is an absolute necessity.  I am surprised when people think that just because you submit a bill for payment, you automatically get paid and paid correctly.  There is nothing further from the truth!  Having a documented and well-executed follow-up plan for your A/R is one of the most important functions of the billing office. Goals should be established and monitored for the average number of days in A/R, percentage of A/R over 90 days, and percentage of bad debt written off each month.

First of all, do not delay.  Most states have a prompt pay law that requires insurance companies to reimburse for a “clean claim” or provide notification of non-payment within a maximum of 45 days, some as few as 30 days for electronic claims.  Each state is different so check with the Department of Insurance in your state.  With Medicare’s 14-day payment response, A/R follow-up should begin anywhere from 15 to 30 days of claim submission. 

Follow claim processing electronically via payer websites or cumulatively at payer sponsored locations like Availity.com.  Do not simply resubmit unpaid claims with the hope of reimbursement if the payer has already received the claim.  This results in unnecessary denials and delayed efforts sorting through the zero-pay EOBs.  Medicare tracks the number of duplicate claims that are submitted and will notify you to stop if you habitually resubmit. 

Find out what is holding up any unpaid claims and get the issue(s) resolved.  Document all phone calls, instructions given, and actions taken.  Mark for follow-up in another two to three weeks or whenever payment is expected.  If you have a good tracking system in your revenue management software, the claim will not reappear for follow-up if it has been paid appropriately and timely.

Finally, do not hesitate to get help.  If you have done due diligence, made reasonable attempts to collect without success and feel you are getting the runaround, contact your state’s Department of Insurance (DOI) and file a formal complaint.  They will contact the insurance carrier and, under most circumstances, you can be assured of prompt payment. 

Make sure you file a separate complaint for each patient or claim.  Each complaint counts as one. If ten practices complain about a particular issue with one complaint each, that counts as ten complaints regardless of how many claims are involved.  If those same ten practices submit 12 complaints of inappropriately denied or unpaid claims, the DOI now has 120 complaints.  This has far greater significance and warrants more attention.  Payers do not like to be reported to the DOI and will act promptly to resolve any issues identified by the DOI. 

Incorrect Payments

Just because you get paid, does not mean you were paid correctly.  Remember that in most cases, claims are processed and paid electronically based on algorithms and edits set up by the payers.  How many times have you heard a payer say they had a “computer glitch”?  How do you think they found out they had a “glitch”?  It takes people like you monitoring claim payments to find errors in payment and report them.  The best way of doing this is to have your top ten payer fee schedules loaded into the revenue management system so you can run reports on payments that do not match the expected amount.  Always take into consideration multiple procedure payment rules where secondary or bilateral procedures are paid at 50%, but for the most part you should be paid at 100% of your contracted fee schedule.  A $2 or $3 difference might not seem worth the effort, but multiply that times the number of times you bill that code each month and see how quickly it adds up.

Also, pay attention to payer newsletters and monitor their websites for information on where claims were paid or denied inappropriately and they have fixed the error.  Sometimes they will reprocess all of the claims on file where that error was made, but more often they ask the providers to resubmit those claims.  This means if you did not know you were paid in error, you will not get paid correctly.  I have seen examples where a payer referred back to an error in payment that occurred three years prior.  Many providers do not even have data that goes back that far if they purchased a new revenue management system recently or archived old data.

Likewise, remember that just because you got paid, it does not mean you coded it correctly.  Again, a computer is processing claims based on how it has been programmed.  If you add a modifier just to get something paid but it is inappropriately used, this is considered fraud.  If you receive a duplicate payment or are overpaid because two payers both paid as primary, you are obligated to return the payment or refund the appropriate payer(s).  Keeping money that does not belong to you is also considered fraud.  Medicare requires that all overpayments be refunded to the carrier or patient, if appropriate, within 30 days.  Failure to refund could result in severe consequences, including recoupment with interest, additional fines and even jail time. 

Lack of Appeals

The opposite of overpayment is no payment at all.  Few people ever appeal unpaid or incorrectly paid claims.  Medicare recently provided statistics on appealed claims under its Recovery Audit (RAC) program.  For FY 2011, the number of claims with over-payment determinations equaled 903,372.  Of that number, only 6.6% were appealed, and of that number, 24,548 claims or 43.4% were reversed with a decision in the provider’s favor resulting in $37.9 million in overturned appeals (Medicare Fee-for-Service Recovery Audit Program Appeals Update, 2012).  Imagine what that number would look like if more people appealed.  Instead most people assumed that the recoupment was legitimate and let that money slip right through their fingers.


Unauthorized Write-offs

The other loss of revenue that astounds me is the number of employees who are authorized or simply have access to write off unpaid charges.  It is one of the questions I ask every time I do a practice assessment.  Most people tell me that their front office or clinical staff does not know how to do anything on the financial side – all they know how to do is schedule appointments.  Even in the billing office, billers and coders have carte blanche ability to write off anything they want.  The question nobody can answer is “How often does someone write off a friend or family member’s copay or outstanding balance?  How often does a person posting insurance payments accept the payment as correctly paid-in-full and write off the remainder owed by the patient?  How often does an A/R specialist look at a claim denial and decide it is not worth appealing?  These questions, and others, give reason to believe that practices and hospitals are writing off millions of dollars inappropriately.  They do not even know why because they are not tracking denials or adjustments.  Everything gets lumped under “insurance adjustment”.  Best practice is to have a manager review all claim denials once they have been worked and post those write-offs with specific denial codes.  The practice should have a written policy that describes how much a biller can write off without approval, when a patient balance gets sent to collections, when a physician decides what gets written off and when someone other than the physician needs to approve write-offs.

These are just some of the areas where you could be losing money.  To find out where your practice is vulnerable, contact Carol Hoppe at (317) 537-7553 or carol@medlucidsolutions.com for a financial assessment of your practice.

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