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MORE! President’s Message: HBMA Makes Significant Progress Following Strategic Plan Review • ICD-10: Tips for ICD-10
Implementation • Excel Shortcuts: Make Printing Spreadsheets Easier: Part One • From the Road: Is Bigger Better?
BillingThe Journal of the Healthcare Billing and Management Association
V O L U M E 2 0 • S E P T E M B E R . O C T O B E R . 2 0 1 5
Earn 0.5 CEUs toward your CHBME designation, right from this issue! p. 33
ACA Survey
The Results Are In! HBMA Members Share How the ACA Has Impacted Them. p. 15
Management
Keep It Simple with Basic Billing Benchmarks
How Does Your Company Compare? p. 19
Managed Care Contracting and Reimbursement Three Techniques to Up the Ante. p. 11
Industry Insights
Should Offshore Outsourcing Be Your Next Step?
BillingThe Journal of the Healthcare Billing and Management Association
E R . 2 0 1 5V O L U M E 2 0 • S E P T E M B E R . O C T O B
Earn 0 5 CEUs toward your CHBME designation right from this issue! pEarn 0.5 CEUs toward your CHBME designation, right from this issue! p. 3333
ACA SurveyACA S
The Results Are In!
ManagementM
S with BasicKeep It Simple with Basic Managed Care Contracting
Industry InsightsI d I i h
USE IT TO FOCUS ON HIGH-VALUE TASKS p. 8
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THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 3
It’s hard to believe that summer is over and we are rapidly
approaching the last quarter of the year. Our board, committee
volunteers, and staff have been working all year to make
sure that HBMA remains the leading trade association in the
revenue cycle management industry.
This year, we unveiled the member Value Program, or mVP. We
gave it this name to draw attention to the additional benefits to
HBma membership. HBma members are benefiting from a growing
number of affinity agreements that not only provide access to
leading solutions and services, but also benefit our bottom line.
If you haven’t already, make sure you are registered with our RFP
tool on the HBma website. This tool is a great way for practices
and potential clients to find HBma member companies.
as I mentioned last spring, I asked the board of directors to
convene to look at and review our strategic plan. In case you
missed the town hall meeting in July, here is another update. We
met in Chicago at the end of June and had a very productive
meeting. One of our topics was determining if HBma should have
one or two national meetings. The board decided that it would
be best to move to one fall national meeting. We felt this was the
best use of HBma resources as well as our members’ resources.
We felt this would also offer us the ability to remove potential
conflicts from our specialty meetings or offer different content in
the spring. I think next year’s meeting will be very exciting. We are
already planning for the expanded format that I think is going to
allow us to do some nontraditional educational sessions, as well
as implement some new and different opportunities for members
to learn from and meet with our vendors in the exhibit hall. Please
stay tuned to HBma’s NewsWire, this column, and other news in
Billing. We look forward to your feedback as well.
Throughout our meeting, the board had three main goals as
we sought to help HBma deliver the most value to our members
and all other interested parties:
1. gain clarity on who HBma services, and how best to
serve them
2. agree on the rights and privileges of the member
segments
3. Discuss and approve changes to the HBma mission
statement
In april, the ad-hoc Bylaws Committee, led by scott everson,
CHBme, reported back to the board with their recommendations.
They recommended several changes to the bylaws that help
clarify and simplify the language and definitions. a full listing
of these changes has been made available for the membership
for their review and approval.
The ad-hoc Bylaws Committee also recommended changes
to our membership structure, but left that for the board of
directors to make recommendations to the changes to the
bylaws for our members to approve.
Through our strategic planning exercise, the board has deter-
mined that our key membership markets are defined as:
• RCm companies
• Professional billers
• Professional billing departments
• students
• Vendors
all of these markets are currently served by HBma; however,
we feel that there needs to be clarity to our bylaws with respect
to each of these market’s rights, responsibilities, and dues
structure. The board also feels that a better definition of this
will help HBma grow by having a better focus on what educational
content, delivery method, and resources are of most importance
to each of these markets.
I hope you have had the opportunity to review these changes
and have any and all of your questions answered. These are
important times for HBma. The pace of change in our industry
has not slowed a bit. Your HBma leadership is constantly striving
to make sure that we serve all of our members, strengthen our
advocacy on behalf of our members and industry, as well as
provide top-notch education that improves all of our companies.
Thank you for taking the time to learn how HBma is working
every day to further the RCm industry. If this resonates with
you, there are always opportunities to get involved and volunteer.
Lastly, thank you for the opportunity to serve HBma.
– Curt Cvikota, CHBME, HBMA President
PRESIDENT’S message
HBMA Makes SignificantProgress FollowingStrategic Plan Review
about
BillingBilling is published bimonthly for the members of theHealthcare Billing and management association, Inc.(HBma). editorial offices are located at:
2025 m street, NW, suite 800Washington, DC 20036202-367-1177 • Fax 202-367-2177email: [email protected] • Web: www.hbma.org andre Williams, executive DirectorEDITOR� emily schmitt
ASSOCIATE EDITOR� Brittany manning
GRAPHIC DESIGN� JRocket77 graphic Design
articles in Billing are the work of the authors and donot reflect the position or opinion of HBma. No partof Billing may be reproduced without the permissionof HBma. advertising of products or services inBilling does not constitute an endorsement byHBma of those products or services.
HBMA BOARD OF DIRECTORSPRESIDENT� Curt Cvikota, CHBme
VICE-PRESIDENT / PRESIDENT-ELECT� Holly Louie, CHBme
SECRETARY� Ron Decker, CHBme
TREASURER � ginger Ryder, CHBme
PAST PRESIDENT� Jeanne a. gilreath, CHBme
HBMA BOARD MEMBERS
� Dennis allen, CHBme
� michelle Durner, CHBme
� Cindy groux, CHBme
� suzi Hall, CHBme
� Dorothy L. Henslee, CHBme
� Rich s. Papperman, CHBme
� mick Polo, CHBme
PUBLICATIONS COMMITTEE� Cindy groux, CHBme, Chair
� Dennis allen, CHBme, Vice Chair
� madelon Berger, CHBme
� Lisa Clifford
� Lauren Collins
� suzi Hall, CHBme
� Jillian Longpre
� Bill mann
� ginger Ryder, CHBme
� Lorraine Terrero, CHBme
DIRECTOR OF GOVERNMENT AFFAIRS� Bill Finerfrock
LETTERS TO THE EDITORsend to [email protected], and include contact infor-mation. We reserve the right to edit all letters. allpublished letters become the property of Billing.
table of contentsARound tHe HBMA3 . . . . . . . President’s Message
By Curt Cvikota, CHBME
6 . . . . . . . HBMA NEWS
6 . . . . . . . New HBMA Members
FeAtuRe ARticleS8 . . . . . . . Should Offshore Outsourcing be Your Next Step?
By Paul Bernard
11 . . . . . Managed Care Contracting and Reimbursement
By Steve Selbst and Susan E. Charkin
15 . . . . . The Results Are In!
By Billing Editors
18 . . . . . Beating the Blame Game By Kevin Herring
19 . . . . . Keep It Simple with Basic Billing Benchmarks
By Kristina Ziehler
21 . . . . . What Does it Take to Be a Leader?
By Michelle Ann Richards
24 . . . . . Prepare for the Future of Healthcare Payments
By Bill Marvin
26 . . . . . The Success of Healthcare EFT Standard and ERA
By Priscilla Holland
28 . . . . . Improvements in Provider Payment Processing with
Efficient Electronic Remittance Advice Processes
By the American Medical Association
dePARtMentS30 . . . . . ICD-10: Tips for ICD-10 Implementation
By Valerie Fernandez
32 . . . . . CODING CORNER: X Modifier Update
By Jackie Miller
35 . . . . . SOFTWARE: Make Printing Spreadsheets Easier: Part One
By Nate Moore
38 . . . . . FROM THE ROAD: Is Bigger Better?
By Dave Jakielo
4 HBma BILLINg • sePTemBeR.OCTOBeR.2015
news & notes
6 HBma BILLINg • sePTemBeR.OCTOBeR.2015
HBMA Members cast their Votes to Fill openSeats on Board of directors This august and september HBma members voted on which
members would fill four open spots on the HBma Board of
Directors. View the candidates to the right, and keep an eye
out for an announcement to come soon on the election results.
HBMA BOARD OF DIRECTORS CANDIDATES
Sherri Dumford, CHBME
Three Bridges Consulting, LLC
David Gillies, CHBME
Partner, Consulmed, LLC
Emily Osetek, CHBME
President and CEO, SourceNet Medical Billing
Associates, LLC
Cindy Pittmon, CHBME
President, Acclaim Radiology Management
Arthur Roosa, CHBME
CEO, Symed Corporation
Joe Schendel, CHBME
CIO, Provider Support Services
Jackie Willett, CHBME
Senior Vice President, Intermedix
Andres Barriga
Advanced Billing Collection Specialists Inc. • Chicago, Illinois
Simon Braver
MBH Services LLC • Monroe, New York
Sai Chintamaneni
PROMANTRA Inc. • Somerset, New Jersey
Glenn CunninghamG R Capital Management Inc. • Rockville, Maryland
Scott HallEli Global • Durham, North Carolina
Joshua Klinge
NewportMed • Orange, California
Jaeame Koyil
Promedico Billings Company LLC • Los Gatos, California
Angie Newman
ABN Billing Service • Iowa, Louisiana
Neil PenningtonStrategic Healthcare Management LLC • Fort Smith, Arkansas
Glenn Underwood
CareTracker Inc. • Providence, Rhode Island
Jasmine VializIntegrated Practice Solutions Inc. • Ashburn, Virginia
Luanne Wainwright-Erskine
Practical Billing Solutions • Red Bank, New Jersey
Katie Watkins
Millennium Medical Management Resources Inc.Westmont, Illinois
do you Have a Story to tell? HBma’s Publications Committee wants to hear from you! In 2016,
we’ll implement a new column that highlights members’ stories
of success and lessons learned in the healthcare billing and
management industry. The process is simple — we’ll send you
five questions, you’ll write your answers, and we’ll publish the
Q&a in Billing. You’ll be able to share your insight and expertise
with your fellow HBma members with little work on your end.
We all have stories to tell. If you’re interested in contributing
to this column in 2016, please email Billing editor emily schmitt
at [email protected]. Have you been inspired by a fellow
HBma member? Feel free to send that along as well. We look
forward to hearing from you!
newly MintedMeMBeRS
Compliance Conference
MAY 2-5, 2016 | WESTIN BUCKHEAD ATLANTA | ATLANTA, GA
WWW.HBMA.ORG
erpetually flat to declining fee-for-service reimburse-
ments and increasing patient A/R—and the struggles
that come with collecting it—means private practices
must constantly strive to reduce their own overhead.
as the number of practices seeking to gain both performance
and efficiency through outsourcing increases, billing companies
also must continually pursue productivity and efficiency gains.
In short, the “trickle down” effect of revenue pressure on prac-
tices requires billing companies to innovate their business
models, embrace technology as a productivity lever, and
reimagine the end-to-end billing workflow.
One of the most significant opportunities for billing
companies is to build or partner with offshore entities. While
there are benefits to this option, there are also risks. To decide
if it is the right step for your billing company, you must ask
several key questions and consider several key factors.
define your Value The first question is, “Where does your onshore team add
value for your clients?” successful billing companies under-
stand that the value they provide is in solving problems—issues
with a particular payor, working with patients, addressing
coding questions, and actually resolving denials. No one will
say “typing.” No one will say “waiting on hold to talk to a claims
representative.” Having said that, any biller knows that correctly
transposing demographic and coding information and the
tenacity to stay on the line to discuss claims status are essential
to the billing workflow. They are necessary but do not add
value in the same way a well-written appeal can.
successful billing companies understand and manage one
thing better than others—time. managing how much time is
spent on low-value activities compared to high-value activities
is key to managing performance and profitability. Offshoring
can free up resources to spend more time delivering results
and solving problems for clients.
This understanding of the level of value for activities is
exactly why Harout Dovlatyan, CeO of maximum Billing in New
Jersey, has seen his medical billing company grow so rapidly.
“We had trouble finding entry-level staff who would do the
mundane tasks here in the us,” he explains. “We have built
a team in Romania who are hard-working and intelligent, and
for them this is a very good-paying job. They do all the data
entry and spend time researching coverage so my team in the
us can focus on more skilled work.”
The result is that in less than 10 years his company has
P
8 HBma BILLINg • sePTemBeR.OCTOBeR.2015
Shouldoffshore outsourcing
Be your next Step?
USE IT TO FOCUS ON HIGH-VALUE TASKS
By Paul Bernard
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 9
gone from one employee to over 10 employees serving nearly
40 providers across multiple specialties. surprisingly, he also
is able to charge more than some of his competitors. “I provide
high-quality service and help my customers get paid more
because I can have my offshore staff spend more time helping
to ensure the providers get paid for the services they provide,”
says Harout. “Providers are willing to pay me a little more
because they get paid a lot more.”
critical QuestionsIf you decide that you can enhance your business while reigning
in overhead by moving some resources out of the us, there are
several more specific questions to ask.
1. WHAT PARTS OF THE BILLING WORKFLOW DO YOU OUTSOURCE
AND WHAT DO YOU KEEP ONSHORE?
answering the value question posed earlier in this article will
help guide you in this decision. a good partner will be able to
accommodate some customizations in a workflow. One size
doesn’t fit all for outsourcing. For example, you may decide
to outsource all claim entry activities but retain the ability to
review claims or “scrub” them prior to submission. It’s best
to think about billing as a series of subtasks and workflows—
each with their own value to the final result.
Typically the process is demographic entry/eligibility, verifi-
cation/charge, entry/submission/follow-up/payment posting/
appeals/patient billing. all or some of these can be offshored.
The decision about what to send offshore should factor in the
following:
a. Does the step you are considering offshoring add value
or not? For example, if you outsource demographic and
charge entry (low value), can you reallocate those onshore
resources to appeals (higher value)?
b. Does offshoring create an unnatural break in the process?
For example, you wouldn’t offshore payment posting by
itself, as that process is frequently a critical step in deter-
mining if the claim was processed correctly.
c. Can the system we are using easily accommodate issue
resolution? For example, if you outsource charge entry
and your offshore partner has a question regarding a
code, who do they reach out to? Can the billing system
you use accommodate back-and-forth questions and
answers? It’s important to remember that you own the
outcomes—good and bad.
Offshoring is merely a tool to achieve better results. Regardless
of whether you outsource part or all of the billing value chain,
billing companies must retain accountability for the results.
2. HOW DO YOU MANAGE YOUR OFFSHORE PARTNER AND
STAY CONNECTED AND ON TOP OF THEIR PERFORMANCE?
a good partner understands this issue and will work to
create the right visibility and provide a mechanism for
continuous feedback and improvement. Visibility into
performance and data to make real-time adjustments are
must haves, as is clear and frequent communication with
an offshore counterpart empowered to make decisions. It’s
important to note that this may necessitate additional
training or a change in your onshore team. When you
offshore, the day-to-day nature of the onshore work changes,
moving away from tactical transactional work to more consul-
tative problem solving.
Billing companies making this transition must be willing to
coach or train employees to manage accounts or act to replace
team members who are unable to perform these new duties.
Harout is adamant, “No matter where the staff are, you still
have to consider the human factor. You can change and
evolve processes and procedures, but if you don’t choose
the right people, you are destined for failure. so apply a lot
of scrutiny to the people to ensure their competence.”
3. HOW WILL OFFSHORING IMPACT YOUR CLIENTS?
Hopefully, the process is seamless for your customers. But
they will be impacted by the success or failure of your efforts.
Failed offshoring attempts will typically revolve around a few
key issues.
First, billing is a process, not an art. Offshoring only works
if all expectations regarding the process are documented
and clearly communicated. “They are billers, they are
supposed to know that” is not a valuable piece of feedback
to an offshore partner. Rather, onshore billers must document
standard operating procedures and use those as a yardstick
against which to set expectations and measure performance.
second, offshore vendors may overstate their capabilities.
Poor performance is common when billing companies do
not properly interview and vet their potential partners.
Third, failure can occur when onshore vendors fail to properly
communicate relevant process changes to their client base.
FEATURE sTORY
10 HBma BILLINg • sePTemBeR.OCTOBeR.2015
most clients will appreciate a well-designed and thoughtful
plan to improve overall results. They don’t, however, appre-
ciate being surprised. any one of the failures can result in
increased a/R aging or DsO, potentially reduced net collec-
tions rates, and negative client response.
When offshoring works, billing companies should expect
improved overall DsO and aging performance. Faster claim
submission and the ability to concentrate onshore resources
on optimizing performance and identifying new areas of
opportunity are also important positives. In many instances,
billing companies can expect to achieve realized cost savings
that can be used to reinvest or pass through in the form of
enhanced margin.
4. HOW DO YOU ADDRESS ANY PRIVACY AND SECURITY
CONCERNS?
any offshore vendor must execute a formal business asso-
ciate agreement. In addition, most reputable offshoring
firms will also have a designated privacy officer and written
privacy operating procedures that a billing company can
review. some basic safeguards that are typically accounted
for are:
� The inability of billing agents to provide:
• Badge in/badge out facilities
• encryption protocols
• Formal privacy training
It’s important to bear in mind that reputable offshore vendors
are keenly aware of the risks and exposures inherent in
healthcare and the sensitivity many parties in the us have
regarding offshore modeling. This reality makes verifying
and vetting a potential partner’s privacy environment partic-
ularly important.
5. WHAT IMPACT WILL OFFSHORING HAVE ON YOUR BUSINESS?
For many billing companies that effectively embrace
offshoring, the change can be profound. When done correctly,
offshoring enables a billing company to free up its resources
to dig deeper and concentrate on unlocking untapped
practice revenue potential. While there can be some imme-
diate cost savings, the billing company should not choose
to simply reduce headcount onshore. “We have as many
people in the us as we do in Romania,” says Harout. “The
offshore part of our business was a natural progression to
growing in a way that helped maximize resources without
increasing overhead too much. To manage my business and
be successful I need to be sure I am not overspending.”
Cost savings can be reinvested in activities that further
improve clients’ financial performance.
the Right offshore PartnerOnce you’ve thought about these questions and evaluated the
impact that offshoring will have on your billing company and
your practice customers, you have to find the right partner.
Choosing an offshore partner is no different than hiring an
employee. It’s important that the relationship works for both
parties, and the vision and desired state be explicit and shared
by both parties.
The discovery process begins by canvasing trusted industry
contacts for referrals. an endorsement and introduction by
trusted colleagues is by far the most effective way to create a
candidate list. start with a list no fewer than three vendors.
assemble a list of questions based on what’s important to your
business. For example, operating hours based on us time
zones, consistent and standardized performance reporting, a
single point of contact, experience in the specialties you support,
and written privacy policies and procedures, etc. Does their
operating model “match” your own? Do they employ a specialist
model (data entry, follow-up, payment posting as separate
functions) or a generalist model?
many vendors will offer a trial period. This can be useful but
be advised – often, the work to prepare and train a vendor to
operate effectively exceeds the insight you might gain over a
short period of time. It’s best to use a trial period as a final
step in a decision process rather than a vetting step among a
few offshore partner candidates.
Offshoring can be a great way to grow your business and
take it to the next level. But use caution and take time to
evaluate the value to your business and your customers. If you
decide to move forward, be thorough. success could be a huge
boon, but failure will certainly have the opposite result. �
Paul Bernard, MBA, is director of strategy and analytics
for Kareo. Bernard joined Kareo after selling his
revenue cycle management firm, Broadleaf Health, to
Kareo in 2014. Broadleaf, which grew two and half times in six
years under Bernard’s leadership, delivered industry leading
revenue cycle performance to a wide range of specialties through
the use of technology, workflow, and process improvements
along with advanced payment and reimbursement analytics.
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 11
n this article, we will examine three analytical tech-
niques for increasing your commercial payor contracts’
reimbursements:
• use weighted averages to calculate your reimburse-
ments
• avoid the infamous “lesser of” billed charges or
contracted rate problem
• Focus on your most important codes
When negotiating payor contracts, it is critical to do an inde-
pendent data analysis of your clients’ contracts to effectively
increase reimbursements. This work should be done up front,
prior to negotiating any contracts. always rely on your billing
system and your own data to determine your revenue. While
payors also track revenues and can provide this information,
it may not be consistent with your internal tracking data. You
should be able to find the exact fee schedule that a payor is
currently paying your clients. Payors have large underwriting
and actuarial departments and they weigh the risk and payout
of the services in your fee schedules. Plan on spending at
least 50 percent of your time and effort up front, determining
and analyzing predominant CPT codes — that is, the 20 percent
of your codes that drive 80 percent or more of revenue. For
many practices this will be around 20-40 CPT codes.
By applying the three techniques in this article, you will
put your clients’ practices in a much stronger position to
increase payor contracts’ reimbursements and you will be
able to level the playing field with the payors you negotiate
with by putting a well-thought-out strategy in place for your
clients’ contract negotiations.
many practices work on a broad hypothesis and their own
approaches for negotiating payor contracts’ reimbursements.
The problem in doing this, much like amateur stock picking,
is that there are many land mines that can bite client practices,
including unexpected revenue declines from newly negotiated
agreements. If you follow the advice and concepts behind the
three areas examined in this article you will be very effective
in assessing the impact of payor fee schedule changes and
proposals to the practices, and you will also be very successful
in using data and information to maximize contracts’ reim-
bursements in payor contract negotiations.
ANALYTICAL TECHNIqUE 1: USE weighted
AVERAGES, NOT AVERAGES, WHEN YOU ASSESS
PAYOR FEE SCHEDULES
When you are assessing the percentage of local
medicare rates represented by a payor’s fee schedule, in
aggregate, it is important to normalize the calculation across
your fee schedule to take into account the revenue produced
by each CPT code — i.e., the volume performed times the payor
rate at 100 percent, including patient co-payment and co-
insurance vs. the medicare revenue produced by that code at
the same volume. Otherwise, you will calculate an average
that is simply calculated by summing each percentage of
i
FEATURE sTORY
Managed care contractingand ReimbursementTHREE TECHNIQUES TO UP THE ANTE By Steve Selbst and Susan E. Charkin
12 HBma BILLINg • sePTemBeR.OCTOBeR.2015
medicare by CPT code and dividing by the total.
The problem with using averages, not weighted averages,
when assessing a payor’s fee schedule is that the average
does not take into account the relative revenue importance of
the code. That is, the average treats all codes equally whether
they produce $1 of revenue or $250,000 of revenue. many
payors will present very impressive fee schedule changes that
show your average reimbursement as a percentage of local
medicare rates increasing across a broad fee schedule.
However, the codes that you care about most are the ones
producing the highest revenue. all CPT codes are not created
equally. Revenue contribution must be used as a differentiator.
The example in Figure 1 illustrates the importance of using
weighted averages. In this example, the average percentage
of medicare, in aggregate, for the two codes combined is
178.5 percent. This is what the payor will tell you and this, in
fact, is accurate. The only problem is your “real” average reim-
bursement — the weighted average — is actually 137 percent.
This is because when you average the reimbursement across
these two codes, the 266 percent associated with code 77418
is weighted the same as the 91 percent associated with CPT
office visit code 99213. What is not factored into the average
calculation is the medicare revenue and the actual revenue
value of the code based on the payor contracted rate. In this
case, the medicare rate is higher than the payor rate for CPT
code 99213, while the medicare rate is much lower for CPT
code 77418 than its payor rate. (see the formula and calcu-
lation in column H.) The fact is, the average places too much
importance, in this case, on CPT code 77418. since it has
such a high payor rate relative to its medicare rate, it generates
a very high percentage of medicare, 266 percent. as seen in
Figure 1, the real rate when using a weighted average calcu-
lation is 137 percent of medicare.
If this were a real payor contract negotiation, we should be
negotiating up from this 137 percent, not from 178.5 percent.
Further, the payor may be averaging across all CPT codes in our
fee schedule, not just the top revenue producing codes. The
outcome, in cases like this, would be skewed against you. It is
not that the payor is wrong for telling you that the average rate
of reimbursement is 178.5 percent. Rather, it is wrong for you
to base your negotiation on the average since the average does
not account for the revenue impact of each code. It is best to
use weighted averages to maximize your reimbursements.
ANALYTICAL TECHNIqUE 2: AVOID
GETTING BITTEN BY “LESSER OF”
LANGUAGE
In the last 15 years, we have success-
fully negotiated over 10,000 payor contracts
for all sizes and shapes of practices, asCs,
hospitals, ancillary providers, and medicine
and supply/ Dme manufacturers. One of the
most common operational language clauses
in payor contracts is referred to as the “lesser
of billed charges” clause. While the language
may vary slightly among agreements, the
clause is usually worded like this: “[Health
insurance company] will pay provider the
lesser of its billed charges or its payor
contracted rate for each CPT code’s reim-
bursement.” What does this mean exactly
and why is it important?
What this means is that, for example, if
your payor contracted rate at 100 percent,
including patient co-payment, is $110 for
CPT code 99213, a routine outpatient 15-
minute office visit code, but your billed
charge is $90 for this code as defined in
FiguRe 1
a B C D e F g H
CPT Volume Payor Payor Medicare Medicare Average Wt.
$ Rate Revenue $ Rate Revenue (Col C / Average
(Col C x (Col E x Col E) by CPT
Col B) Col B) (∑ Col D)/
(∑ Col F)
99213 3,000 100 $300,000 110 $330,000 91% N/a,same as aVg
77418 200 1,600 $320,000 600 $120,000 266% N/a,same as aVg
aggRegaTe 3,200 $620,000 $450,000 178.5% 137%
By using weighted averages when assessing a payor’s fee schedule, you take
into account the relative revenue importance of the code.
∑ = sum
the joUrnAl oF the heAlthCAre BIllIng AnD MAnAgeMent AssoCIAtIon 13
your charge master, you will be paid $90
per office visit rather than $110, your
contracted rate! If this problem expands
beyond just one CPt code, perhaps even
pervades your entire charge master, then
you could find that, while you have nego-
tiated a terrific new contract, consistently,
your claims are paid at much lower than
your contracted rates. What can you do to
protect yourself from this outcome across
all of your payor agreements?
First, it is highly recommended that you
set your charge master at usual, customary,
and reasonable (UCr) levels. In the absence
of a specific accounting recommendation,
a good starting point is about 250-300
percent of local Medicare rates. this
approach will ensure that your CPt codes
are above your payor contracted rates,
unless you have CPt codes that pay above
250 percent of Medicare (you are one of
the fortunate few, if you do). the point is to
pick a high enough reasonable level of billed
charges for all of your CPt codes.
this approach has two benefits. First, it
prevents your CPt codes’ billed charges from being set below
payor contracted rates. second, you optimize your cash-based
non-par business by ensuring that you don’t leave money on
the table (see Figure 2). In this example, in the far right column
titled “Billed charges less payor allowables,” there is one CPt
code flagged in red, meaning this code has a payor contracted
rate that is less than the billed charges and, as such, needs to
be adjusted up by the negative dollar values specified in this
column to avoid being reimbursed at the lower billed charge
rate rather than the contracted rate. In this example, the
contracted rate for code 96372 is $2.21 per service rendered
higher than the billed charge rate. Imagine if this problem
pervaded an entire fee schedule! It would mean that you have
negotiated higher rates with the payor but are being underpaid
because your charge master is set too low. this is why it is
important to do this comparison for all of your top revenue-
producing CPt codes.
In this example, the middle columns identify codes, in red,
that have billed charges set at less than 250 percent of
Medicare. these codes need to be adjusted up by the amounts
specified in the “Difference between rec. and Actual” column
to make sure that they are set at 250 percent of Medicare,
the desired UCr level for each code.
Finally, the column called “Possible Upside” reflects the
additional revenue that would flow into the practice as a result
of cash-paying patients paying for these codes at their proper
discounted UCr retail rates, at the 250 percent of Medicare
UCr level vs. the lower current charge master rate in the
column called “Billed Charge.” (the current percent of
Medicare is listed in the column called “Current % Medicare.”)
this demonstrates the importance of periodically auditing
your charge master. once every six months should be a
reasonable timeframe to ensure that new codes or changes
to Medicare and payor rates for existing codes will be
discovered. too often, practices set their charge masters and
don’t audit them for many years, if ever. since the “lesser of
billed charges” language is present in almost all payor agree-
ments, it is also imperative that you do a comparison, like
Figure 2, for top codes for each of your payor contracts. this
will ensure that you cross-reference your charges both to the
payor rates of each payor and benchmark as a percentage of
Medicare. Also, make sure to verify, with an accountant, that
FEATURE story
FIGURE 2
Watch for codes that have a payor contracted rate that is less than
billed charges.
14 HBma BILLINg • sePTemBeR.OCTOBeR.2015
you balance write-offs correctly with the uCR threshold that
you select for your charge master rates.
In summary, an easy way to maximize revenue is to ensure
that your charge master is set at uCR thresholds and that you
periodically audit your charge master rates, by CPT code, and
compare to your contracted rates by payor.
Further, it is important that you have a consistent approach
to setting your rates at a uniform percentage of medicare,
preferably 250 percent, or higher, to ensure that you don’t
get bitten by the “lesser of” language.
ANALYTICAL TECHNIqUE 3: FOCUS ON YOUR MOST
IMPORTANT CODES
How do we define “important” codes? These are your
top revenue-producing CPT codes. There is often a
tendency to try to gather and analyze data on payor-contracted
rates for all codes or for the wrong codes. The problem with
trying to gather data for all codes is that you likely will spend
a lot of your staff and analysis time digging up data on 300-
plus codes that have little effect on your revenue and dilute
the focus on the top codes that are driving 80 or 90 percent
of your revenue, which is usually about 15-40 codes.
Further, if you try to analyze a total fee schedule of several
hundred codes or more and you do not have volume data
specific to every code, then you will fall into the landmine
described above, using averages instead of weighted
averages. This means that you will not know the real effect
on your revenue based on the payor’s fee schedule changes.
Revenue, and, therefore, code importance, is a function of
the product of payor rate times volume. You cannot work
with payor rates and volumes in isolation. For example, if
you have a lab code that is $0.50 and you administer it in
an in-house lab 2,000 times, the “importance” of this code
is $1,000 total. However, if you conducted 2,000 99213
office visits at $100, you would be making $200,000. Both
codes have the same volume but very different revenue
results due to the pricing.
In short, begin your analysis by identifying your top revenue-
producing codes and stop when you get to about 80-90 percent
of your revenue. This is likely in the 15-40 code range.
also, monitor your actual revenue to ensure that it is consistent
with payments at contracted rates. When applicable, take into
account the effect of bilateral and multiple procedure reim-
bursement rates on your revenue.
Successful contract negotiationsYou learned three secrets to success in payor contract nego-
tiations. Remember to always work with weighted averages
rather than average reimbursement by code. Fully analyze your
charge master to ensure that you do not fall victim to the “lesser
of” language and that your billed charges are set at high enough
uCR thresholds, and be sure to work with your most important
codes (those codes producing the most revenue). �
Steve Selbst is the CEO of Healthcents. He leads the
business operations, including contracting and reim-
bursement analysis. He is the inventor of Revolution-
Software and leads the development and delivery of the "Blue
Print for Success" payor contracting class.
Susan Charkin MPH, is the founder and president of
Healthcents and leads client strategy and new business
development. Charkin's background includes more
than 15 years of experience in senior contracting positions.
For more information and for help with your payor contracts,
contact Steve Selbst at 831-455-2174 or [email protected]
or Susan Charkin at 831-596-4992 or [email protected],
or visit www.healthcents.com.
Have a consistent approach to setting your rates at a
uniform percentage of Medicare to ensure that you don't get bitten
by the “lesser of” language.
n the spring of this year, the Publications Committee
sent out a survey aimed at gathering data on how the
Affordable Care Act (ACA) has affected HBMA members.
Our purpose was to share the results in order to educate
HBMA members and help them make informed decisions.
We received 77 responses to the survey. unfortunately this
sample size is not large enough for us to confidently publish
our findings outside of HBma. However, we still want to share
some of the results with you so you can gain insight into how
the aCa has impacted some of your fellow members. Read
on to see select results of the survey.*
Finally, thank you to everyone who completed the aCa survey.
We appreciate your help in educating HBma members.
Makeup of Survey Participants The HBMA members who took the ACA survey share similar
job functions and work with similar clients. Here’s a look at
who took the survey:
JOB FUNCTION
CLIENTELE COMPOSITION
States Served The top five states served by respondents include:
How the AcA Has Affected SurveyRespondents
The following is a sampling of select results from the ACA
survey. To view the complete results, visit www.hbma.org/
aca-survey.
q: What percent of your clients accept ACA exchange plans?
16% < 25% accept 8% 25-50% accept
23% 50-75% accept 35% 75-100% accept
18% not sure
the Results Are in!HBMA MEMBERS SHARE HOW THE ACA HAS IMPACTED THEM By Billing Editors
i
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 15
FEATURE sTORY
36% 33%
32%
25%
29%
Illinois
Texas
missouriCalifornia
georgia / North Carolina
62%are the CeO or owner of
their billing company
46%said their clientele is
mostly comprised of
hospital-based and
office-based practices
9%work in compliance,
consulting, sales/
marketing, or technology
6% said their clientele is mostly
comprised of hospital-based
practices
4% work in accounting/finance
25%work in
operations for
their billing
company
48%said their
clientele is
mostly
comprised of
office-based
practices
q: How would you characterize the fee schedules for the ACA
exchange plans compared to other commercial plans?
38% substantially lower 26% somewhat lower
32% about the same 2% somewhat higher
2% substantially higher
q: Have any of your clients terminated any of their ACA
exchange plan agreements?
22% yes 41% no 37% not sure
q: How would you characterize the change your clients have
seen in regard to the number of self-pay patients?
47% no change 33% increase
20% decrease
q: How would you characterize the change your clients have
seen in regard to their patient responsibility portion of A/R?
88% increase in the 12% no change
patient responsibility
portion in a/R
q: By how much has the patient responsibility portion of A/R
increased?
30% <25% 49% 25-50%
7% 50-75% 7% 75-100%
7% not sure
q: Have your administrative costs increased due to reporting
or insurance benefit verification?
65% yes 35% no
q: By how much would you estimate your administrative costs
have increased?
12% <5% 41% 5-10%
38% 10-20% 9% 20-30%
q: Have the number of Medicaid patients increased for your
clients since the ACA’s implementation?
76% yes 24% no
q: Did any of your states continue the increased Medicaid
reimbursement after the required ACA increase?
71% yes 29% no
q: If you have seen an increase in patient A/R due to higher
deductibles, are you also seeing that it costs you more to
collect payments?
Of those who said this applied to them:
92% yes 2% no
q: How many of your clients would you say have a clear under-
standing of the ACA and the impact it has on their practices
and revenue?
47% 0-25% 18% 25-50%
18% 50-75% 12% 75-100%
4% not sure
in their words We asked survey participants to share any additional thoughts
on how the ACA has affected them, good or bad, as a billing
company. Here’s what some of them had to say:
“We are finding that information the plans provide on benefits
verification and network participation is often incorrect or not
being kept current. This has led to much confusion among
patients and frustration among our mDs.”
“Too many consumers purchase health insurance through
an exchange based upon price, instead of understanding
overall value.”
“In my opinion... people would only hear the positive side of
the message – i.e., that healthcare would become more
affordable because premiums would be lower, and many
preventative-type visits, procedures, labs, and drugs would
16 HBma BILLINg • sePTemBeR.OCTOBeR.2015
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 17
be covered 100% by the insurance plan. What was not
mentioned so publicly was that patients who had lower
premiums would pay higher deductibles, that covered benefits
relied more heavily than before on the patient's specific plan,
and that, most likely, there would be more out of pocket
expenses. This misinformation has led to increased phone
calls to explain the patient's coverage, longer days in aR that
are adversely affecting cash flow, and strained relationships
with our patients as well as our providers.”
“more attention to accounts – more work.”
“The amount of pending payments that turn into no
payments due to the patient not paying their premium is
awful. I'm not seeing anything good about the aCa…”
“as a billing company, there are major concerns regarding our
high-dollar clients such as surgeons. Carriers approve the
surgery, the surgery is performed, then either payment is
received and retracted, or not paid at all due to nonpayment
of premiums by the patient. How fair is this? While it's true
that the scenario above could always happen, it rarely
happened. The premiums are not so affordable either. From
another perspective, that of an employer offering health
insurance, it has been very bad. Our premiums have
skyrocketed, where before they were not age banded either,
which only compounded the issue. The affordable Care act
discriminates against anyone over the age of 29.”
“[We have seen] a substantial increase in trying to identify
those accounts that are considered part of the aCa program.”
“aCa has complicated the plans for patients and what to accept
by practitioners. The convoluted coverage options for many of the
plans makes it difficult to know before performing services what
is covered, and as a result, patient a/R rises, which is harder to
collect, meaning higher admin costs for billing companies. at the
practices and hospitals, running eligibility checks to know coverage
before the service has become almost obsolete. also the payments
are relatively lower comparatively with many private insurers.
While I believe the heart of the aCa is good, the plans are difficult
to decipher and they pay less, so there isn't much incentive for
providers to use it, other than the more patients using it now and
having no other choice if they want to increase their patient intake.”
“many enrollees into the aCa have failed to pay the premiums
on time or at all. Providers were presented the aCa insurance
cards and provided services but the claims were denied as
the members are not current with the premiums.”
“more work for less pay.”
“I see little real overall advantage and lots and lots of negative
impact to administration.”
“Cost of our premiums for our employees is now completely
based on age. We can no longer shop for the best plan. They
are all basically the same and we are not a young group.”
“Our client base is nearly 100% community health centers.
Their payor mix is 50%+ medicaid and before aCa, commonly
25-30% self-pay. [We] have seen the self-pay percentage
decrease dramatically and the resulting payment/visit (for
these new aCa covered folks) increase quite a bit.”
“The three month grace period extended to the patients for
payment of their premium is absolutely absurd. many of our
high-risk pregnant patients are seen twice weekly. By the time
we find out they aren't paying their premiums, they can owe
us thousands of dollars that we will never be reimbursed for.”
“There is a huge delay in claims processing because of the
increase in insured bodies and the volume of claims. Because
patients can allow their aCa premiums to lapse up to 90 days,
we have increased follow-up time involved with clean claims
that are not paying until the premiums are caught up.”
“This is a bad law that has dramatically increased health
insurance costs and my clients’ bottom line.”
*Note: Percentages were rounded up to the nearest whole
number. You can view the complete survey results at
www.hbma.org/aca-survey.
aCa: Is IT WORkINgFOR YOu?
65% said less than half their clients
understand the aCa
65% said their administrative costs have
increased
18 HBma BILLINg • sePTemBeR.OCTOBeR.2015
FEATURE sTORY
recently worked with a seriously cynical supervisor—
an accounting manager—who swore he had really smart
employees. The problem: They kept making mistakes and
falling behind on their work.
The manager’s first inclination was to deal with the problem
by paying incentives for fewer mistakes, re-allocating work
between staff, and replacing his worst employees as soon as
he could. He didn’t consider that maybe his employees were
doing all they could, and that the system was the culprit all
along – that is, until he dug deeper. That’s when he realized
his staff shouldn’t take all the blame and instituted a system
that can be applied to any company with broken processes.
The manager and staff asked for help discovering what
caused their biggest headaches and found broken work
systems were at least partly to blame. They grouped them
into three problem areas.
PROBLEM #1. each staff member had a different idea about
who was going to do what. staff members were shocked that
fingers pointed to them when a project was dropped, a
deadline was missed, or a critical call to a client wasn’t made.
PROBLEM #2. When the manager and staff agreed to proce-
dures, they didn’t account for the unexpected. so, exceptions
piled up in the manager’s inbox waiting for the manager to
decide what to do with them. Because they were buried in
his pile, the manager often didn’t know about urgencies until
clients got upset.
PROBLEM #3. sometimes a second or third accountant
needed to help with a project. When that happened, whoever
was handing it off to the next accountant tended to figuratively
“throw it over the wall” and assume it was taken care of.
unfortunately, the other accountants often had no idea a
project was waiting for them until clients asked where their
data or reports were.
The team attacked these problems by looking for ways to fix
their broken work processes and systems.
First, the manager met with staff to prioritize services they
provided according to resources required, ROI, and constituent
needs. since it would take a while to work through every
process, they wanted to start with the most critical ones first.
The manager charged staff members with most of the work
so they would own improvements they came up with.
second, staff members mapped their workflows. They
looked for ways to streamline processes, attacking both actual
and potential process bottlenecks and redundancies. They
tried to account for unusual and unexpected situations so in-
process work would “hang” less often. They clarified who
would be accountable for each step and that everyone was
accountable for the end result. again, to support staff
ownership, staff members drew each final process map and
selected a process champion to coordinate future tweaks.
Third, staff created systems to regulate each process step
and make sure everything went according to plan. They auto-
mated as much as possible using technology. When they
couldn’t, they built in reminders and quality checks like alarms,
checklists, and speech balloons that cut down on mistakes,
missed steps, and missed deadlines.
Last, they reviewed each staff member’s roles and account-
abilities, including what each would do to make the changes,
and they made sure any anticipated problems had well-planned
responses.
It was a great plan developed from a reliable process. But as
they say, the devil is in the details. after creating their plan, they
had to grapple with the hard work of personal change and
successfully executing it. That’s when things can get tough. In
upcoming articles I’ll share their experiences so you can learn
how they developed their processes and systems and find out
how their plan turned out. a production team that followed a
similar process boosted its productivity 21 percent in just a few
months. We’ll see if the accountants can do better than that.
Kevin Herring is founder and president of AscentManagement Consulting, a consultancy dedicated totransforming business units, teams, and leaders and
creating dramatically improved performance through Ascent’sunique and powerful tools and methods. Herring can be reachedat (520) 742-7300.
Beating the Blamegame STAFF SHOULDN’T TAKE ALL THE BLAME By Kevin Herring
i
FEATURE sTORY
As a billing company, do you:
• know you need to check outstanding accounts receivable
and compare to the standard?
• know the basic billing benchmarks?
Hopefully your organization answers “yes” to both! If not,
here are some practical tips and best practices for your billing
company when it comes to benchmarks.
Start at the BeginningThe famous adage “if you can’t measure it, you can’t manage
it” holds true in so many facets of our lives. Would you buy a
used car if you did not check out Kelley Blue Book to see what
it was worth first? Would you buy a big-screen TV if you did
not review the competitors for the best price? In a similar
vein, what do you compare your total accounts receivable and
days in accounts receivable to? In various industries, we
compare one piece of data to another. In business processes
and performance metrics, we call that benchmarking.
Benchmarking is the continuous process of measuring and
comparing performance internally (over time) and externally
(against other organizations and industries).1
WHAT ARE THE BASIC BILLING BENCHMARKS YOU
SHOULD REVIEW?
Let’s start with the percentage of accounts receivable (a/R)
in each aging category. When reviewing this particular
benchmark, your company wants the majority to be in the 0-
30 days in a/R category. after that, the percentage should
be lower as the receivable ages. When benchmarking days
in a/R, you want to compare yourself to the mean (or average).
Here is an example:
Based on this example, your billing office would want to look
at ways to improve their 0-30 days in a/R benchmark since
it is lower than the mgma benchmark. Other opportunities
for improvement exist in the 120-plus days category. Often,
these receivables are never collected. as such, efforts and
improvements must be made to collect earlier in the process.
HOW DOES YOUR COMPANY COMPARE?
Keep it Simple with Basic BillingBenchmarks
Billing Company Benchmark mgma Data example
0-30 days in a/R 60.06% 40.80%
31-60 days in a/R 12.63% 18.17%
61-90 days in a/R 6.93% 15.01%
91-120 days in a/R 4.51% 6.10%
120 + days in a/R 15.87% 19.92%
By Kristina B. Ziehler, MPH
source: mgma Cost survey for multispecialty Practices: 2014 Report
Based on 2013 Data, multispecialty, Physician Owned
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 19
Here are additional mgma benchmarks that are important
to look at:
Months of gross fee-for-service charges
in accounts receivable =
(Total accounts receivable)
(gross FFs charges) x (1/12)
Months of adjusted fee-for-service charges in
accounts receivable =
(Total accounts receivable)
(adjusted FFs charges) x (1/12)
Days of gross fee-for-service charges in
accounts receivable =
(Total accounts receivable)
(gross FFs charges) x (1/365)
Days of adjusted fee-for-service charges in
accounts receivable =
(Total accounts receivable)
(adjusted FFs charges) x (1/365)
Gross fee-for-service collection percentage =
(Net FFs revenue) x 100
(gross FFs charges)
Adjusted fee-for-service collection percentage =
(Net FFs revenue) x 100
(adjusted FFs charges)
Gross fee-for-service plus capitation
collection percentage =
((Net FFs revenue) + (Net capitation revenue)) x 100
(Total gross charges)
Once you begin measuring these items, what is considered
to be best practice? When reviewing months or days in a/R,
it is always better to be lower than the median. This addresses
that you not only collect payments from payors in a timely
manner but that your staff and processes in place work. There
is always room for improvement, so review your processes
and ensure they are running as efficiently as possible.
equally, a best practice for the gross and adjusted
percentage benchmarks is if you are higher than the median.
This provides you a benchmark as to how effective your
company collects revenue based on what was initially billed.
20 HBma BILLINg • sePTemBeR.OCTOBeR.2015
Benchmarks to Set your Future goals Billing companies need to be able to measure the billing
benchmarks to provide improvement to the company, directly
affecting client experience. many internal and external factors
play a part, so even if you do not benchmark all of the metrics
listed above, it is important to start with one or two.
Don’t think of benchmarks as “the place you need to be.”
Instead, view them to gain insight into where you want to go
with your organization. Being the “average” or the “median”
does not mean success.
Without industry comparisons, you cannot measure your
performance. start with keeping it simple and build throughout
time. make sure you are checking the basic billing benchmarks
by setting up a dashboard that your team can have as a visual
and review every month. Continuously monitoring, evaluating, and
then modifying can prove to be the most successful move for your
practice. You will begin to wonder how you ever lived without it. �
Kristina B. Ziehler, MPH, is assistant director, data solu-
tions, for the Medical Group Management Association
(MGMA). During her tenure at MGMA, she has written
articles for the various MGMA publications and has been a
presenter at MGMA and other external conferences. Ziehler also
leads and develops reports that provide nationally recognized
benchmarks for medical group practices. Currently, she co-leads
the new MGMA Research & Analysis initiative. Learn more
about MGMA's additional benchmarks at www.mgma.com/
store/medical-practice-cost-surveys.
Resources1 D. gans, “Benchmarking successful medical groups to
Improve Your Practice Performance.” Presentation at mgma
Conference, Ohio, september 2006.
Where You Want to Be Lower�than the Median
Benchmarks:
• months of gross FFs charges in accounts receivable
• months of adjusted FFs charges in accounts
receivable
• Days of gross FFs charges in accounts receivable
• Days of adjusted FFs charges in accounts receivable
Where You Want to Be higher�than the Median
Benchmarks:
• gross FFs collection percentage
• adjusted FFs collection percentage
• gross FFs plus capitation collection percentage
mgma recommends the median as the typical statistical
measurement when benchmarking, as it is not as affected
by extreme values like the mean is. This is with the
exception of percentage of a/R, described earlier.
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 21
FEATURE sTORY
“great�leaders�don’t�blame�the�tools�they�are�given.
they�work�to�sharpen�them.” –�Simon Sinek
are you in charge but don’t know if you are a manager or a
supervisor? There are clear differences between the two —
and the differences matter when it comes to being a leader.
First, let’s see where they are similar. For the most part,
human resources departments create job descriptions that
categorize supervisory and managerial roles as having to
exercise independent judgment in determining the distribution
of work of at least two full-time employees and make decisions
or recommendations in the following areas:
• Hiring
• Handling patient complaints
• Performance evaluations
• employee training
• Disciplinary actions
Supervisors and Managers – the differences managers also are responsible for making significant decisions
on what the department or practice does — its purpose, func-
tions, and role — and for making commitments and decisions
that require the expenditure of significant departmental
resources. managers have a significant external focus, whereas
a supervisor has a more internal focused responsibility for
implementing the manager’s decisions through the work of
subordinate employees.
Once a decision is made on what to do, supervisors have
a significant role in how to achieve the objective established
by the manager. supervisors often perform the same kind of
work their subordinates do; managers usually do not do the
daily work of the unit as a regular part of their work.
supervisors are responsible for ensuring employees are
working toward a common goal. usually a supervisor is
promoted from within, rather than hired externally. It is best
practice when hiring a supervisor to recruit specifically for
someone who has experience in the businesses service line.
This will ensure that the person hired will be effective in over-
seeing the department. The supervisor usually does not have
authority to make significant decisions as they relate to the
workforce. Therefore, a supervisor often cannot hire, fire, or
promote employees without consulting with a
manager who is privy to higher-level organizational
issues and concerns.
On the other level, a manager is responsible for
the high-level success of their department,
business, division, or area. a manager is less
concerned with the day-to-day activities of indi-
vidual employees and more concerned about the
overall success and productivity of the group as
a whole. a manager is responsible for planning
department goals and directing employees to
achieve certain end products and results.
a manager can be hired from within; however, it
is more common for a company to hire externally.
While a manager needs to understand the general
business goals and positions within the department,
a manager’s critical responsibility is to provide
guidance and direction to ensure overall depart-
mental success. For this reason, a manager needs
to have specialized training in business operations,
people management, or human resources.
generally, a manager can hire, fire, and promote
employees within their department without
consulting with senior management or executives.
However, a manager cannot make significant
changes to the department’s goals or direction
without consulting with senior management and
executive leadership.
what does it take to Be a leader? THERE’S A DIFFERENCE BETWEEN MANAGING AND LEADING By Michelle Ann Richards, BSHA, CPC, CPCO, CPMA, CPPM
22 HBMA BILLINg • SEPTEMBER.OCTOBER.2015
From Manager to Leader Now that we’ve identified the differences between a manager
and a supervisor, let’s determine the difference between a
manager and a leader. In my professional opinion, Warren
Bennis said it best in his 1989 book called On Becoming a
Leader: “The leader’s job is to inspire and motivate.” Bennis
composed a list of the differences between a manager and
leader. I frequently use these differences during my HR training
sessions:
• The manager administers; the leader innovates.
• The manager is a copy; the leader is an original.
• The manager maintains; the leader develops.
• The manager focuses on systems and structure; the
leader focuses on people.
• The manager relies on control; the leader inspires trust.
This information is not intended to downplay the work of a
manager; however, it is provided to you to think about and possibly
change your current management style. One can still pride them-
selves on being a leader and still hold the title of manager.
Telling people what to do does not inspire them to follow
you. All of us have had previous managers or teachers. Think
for a minute about those who inspired you. They are the
leaders. They stood out with their leadership style, spirituality,
or charisma. They found a way of rewarding their students
or employees by allowing them to become better people.
Having a charismatic style does not require a loud personality.
Instead, it means that the leader is good with people, gives
credit to others, and is effective at creating the loyalty that
great leaders engender. This does not mean that they are
buddies with their team of employees. Most leaders often
retain a degree of separation while still engaging others to
work toward their vision.
Leaders are Crucial in HealthcareThe leader is the one who comes up with new ideas and
moves the rest of the organization into a forward-thinking
phase. This person has to constantly keep their eyes on the
horizon and develop new strategies and tactics. They need
to be knowledgeable about the latest trends, studies, and
skill sets and be willing to continuously learn. A leader is
someone who inspires other people to be their best. This will
then create a bond of trust, which is essential in healthcare,
with its constant changes.
While the medical organization is rapidly changing, it needs
a leader who engages employees to believe in its mission. The
leader asks “what” and “why,” whereas the manager asks
“how” and “when.” In order to ask “what” and “why,” one
needs to question others why certain actions are occurring—
and sometimes this involves challenging your superiors. This
means that leaders are able to professionally approach upper
management and discuss concerns regarding current policies
and procedures or other operations when they think something
else needs to be done for the medical organization.
If a new strategy fails, a leader will approach their team by
saying, “What did we learn from this?” and “How do we use
this information to make us better?” The best team lead,
supervisor, or manager is already a leader because they inspire
others. Leaders are critical to the success and development
of any business.
Are There Leaders in Your Organization? Take a look around your medical organization and determine
who wears each title, including yourself. Do you have what it
takes to be a leader?
Leaders have a unique ability to rally employees around a
vision. You may have a subordinate or team lead who shows
the potential to be a good leader. Do not be intimidated by
them! As a leader, your job is to cultivate them, build on their
strengths, delegate duties to them for development, and share
your vision. Because their belief in your vision will be strong,
other employees will naturally want to follow them, which in
turn builds employee engagement.
Find out what drives the people who work for you and make
sure you keep them fired up. Keep your employees engaged.
Engaged employees are productive employees; productive
subject leader manager
focus Leading people Managing work
employees Followers Subordinates
power Personal charisma, Formal authority,
Passion Control
style Transformational Transactional
direction, New roads Existing roads
strategy
How do leaders and managers differ?
QuICk TIP!
ARE YOU A SUPERVISOR OR A MANAGER?
• supervisors are responsible for the day-to-day oper-
ations of employees within a department. managers
are responsible for the high-level success of the
department as a whole.
• supervisors are responsible for directing the work
and goals of individual employees. managers are
responsible for directing the work and goals of a
department.
• supervisors assign tasks to individual employees and
realign tasks among employees. managers realign
job descriptions and organizational structures within
a department.
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 23
employees believe in quality work; quality work leads to
satisfied patients; satisfied patients lead to positive patient
outcomes; and positive patient outcomes lead to more
financial success. all of this can be accomplished by a leader.
Look in the mirror — it may be you. �
Michelle Ann Richards is the compliance manager
for the American Association of Professional Coders’
(AAPC) Compliance Division. She has more than 20
years of healthcare leadership experience. Richards was
part of the team responsible for building 7Atlis, AAPC’s
compliance solution software (www.7atlis.net). She has
successfully built a network of healthcare attorneys while
providing compliance assistance to their clients on corporate
integrity agreements or under government radar. Richards
works with independent physician practices, hospitals,
hospital-owned physician practices, federally qualified health
centers, and third parties in healthcare across the US. She
can be reached at [email protected].
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FEATURE sTORY
24 HBma BILLINg • sePTemBeR.OCTOBeR.2015
t the start of each year, most consumer deductibles
reset to their annual maximum amount, ranging
from $1,000 to $2,000 – up nearly 50 percent since 2009,
according to the Kaiser Family Foundation. To address
increasing patient payments, billing services must
evaluate their patient collection methods to ensure
consumers can quickly and conveniently make payments
to their clients, and more importantly, that the payments
are compliant and secure.
In a previous article, I discussed the latest innovations in
payment technology and security, as well as the importance
for billing services to be aware of the risks and options
available to protect themselves, their clients, and consumers.
Now let’s break out exactly what healthcare organizations
need to know about new and existing payment technology.
APPLE PAY AND NFC
Near Field Communications (NFC) is a capability of payment
cards, and now phones, to transmit data by being “near” a
payment terminal and is completely contactless. apple Pay and
other phone-based payment methods use NFC. most current
payment terminals are not capable of accepting NFC, so a new
point-of-service device will be required.
Requirement: merchants are not required to accept payments
from digital wallets; however, to accept NFC payments,
merchants must have specific payment devices. many
consumers are beginning to appreciate the frictionless nature
of phone-based payments delivered by apple Pay.
Opportunity: Prior to apple Pay, NFC had not gained much
usage by merchants or consumers. However, apple Pay is
increasing consumer demand, and you can expect patients
to ask about this in the future.
P2PE
Point-to-Point encryption (P2Pe) encrypts a consumer’s
payment card information at the point of entry, where the risk
of data breach is especially high, and is not accessible until
it is decrypted by the payment processor.
Requirement: all merchants must comply with the Payment
Card Industry (PCI) Data security standards. While there are
no explicit requirements for P2Pe, new PCI P2Pe rules are
expected to be released soon.
Opportunity: P2Pe significantly reduces PCI scope on your
and your client’s IT networks and computer systems, plus
P2Pe reduces the likelihood of a payment card data breach.
EMV
europay, masterCard and Visa (emV) refers to payment cards
issued with chip technology that requires new terminals for
cards to be inserted while the consumer enters their PIN.
Requirement: as of October 2015, healthcare organizations
that have not implemented emV acceptance will assume
liability for card-present fraudulent transactions.
Opportunity: emV reduces card-present fraud and risk of
charge backs. Healthcare organizations that accept payments
at the point of service should pay special attention to require-
ments of emV.
TOKENIzATION
Tokenization replaces the actual payment card data that is
Prepare for the Futureof Healthcare Payments UNDERSTAND REQUIREMENTS AND OPPORTUNITIES INPAYMENT TECHNOLOGY By Bill Marvin
A
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 25
being processed with a more secure and unique “token,” used
for that transaction only.
Requirement: merchants are not required to implement
tokenization technology.
Opportunity: Tokenization significantly reduces PCI scope on
your and your clients’ IT networks and computer systems, as
well as the likelihood of a payment card data breach.
DIGITAL WALLETS
a digital wallet stores all of a consumer’s payment methods
in one secure location. It also allows consumers to use their
preferred payment method. examples of digital wallets include
applePay and Pay with amazon.
Requirement: merchants are not required to accept payments
from digital wallets.
Opportunity: many digital wallets have a limited scope of use
(i.e., online payments only) and have not gained much traction
with consumers. In fact, google canceled its digital wallet,
while PayPal has been unable to introduce its wallet at the
point of service. Nevertheless, apple Pay has gained a consid-
erable amount of attention from consumers.
Prepare for the Future of Healthcare PaymentsTrends in healthcare payments show that consumer payments
are a growing portion of the revenue for healthcare organiza-
tions. Billing services must understand how consumers are
making payments, as well as ensure payments are collected
efficiently and securely for their clients. �
Bill Marvin has been in the healthcare revenue cycle
and payment industry since 1993 and is the president
and CEO of InstaMed, the leading Healthcare Payments
Network. Prior to InstaMed, Marvin was an executive in
Accenture’s Health and Life Sciences practice, focused on payor
to provider connectivity. Prior to Accenture, Marvin founded
CareWide (now a part of AllScripts after three acquisitions), a
practice management system for provider offices.
FEATURE sTORY
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n 2014, more than 149 million healthcare EFT standard
transactions were processed through the ACH Network,
saving the healthcare industry an estimated $740 million.
Under HIPAA, providers are also able to receive electronic
remittance advices (ERAs) if they request it from their health
plan. In 2013, almost 50 percent of remittance advices were
conducted using the HIPAA standard. It is estimated that
more than $1.5 billion could be saved annually in the
healthcare industry by full conversion to ERA.1
NaCHa worked with provider groups to document savings
realized by different sized organizations, from a single doctor
micropractice to one of the largest hospital groups in the
us. The research shows examples of how practices of all sizes
can achieve cost savings and benefits from converting their
claims reimbursements payments from paper checks to the
healthcare eFT standard transaction and automating the
reconciliation and posting process using the eRa.
Benefits achieved across practices include:
• Faster patient billing, as eFT payments are received
faster, allowing for quicker secondary billing and
billing of patient responsibility
• Reduced posting errors through automation of eFT
and eRa
• Reduced processing costs
documenting Success: case StudiesCASE STUDY #1: a practice with one doctor, one physician’s
assistant, and one administrative director leveraged the imple-
mentation of the healthcare eFT standard to move to a 95 percent
adoption of both eFT and eRa in the practice. Through automation,
the administrative director was able to limit the billing, reconcil-
iation, and posting to only 25 percent of her time, giving her
more time for all other administrative tasks of the practice.
CASE STUDY #2: With the healthcare eFT standard, a midsized
ob-gyn practice with 56 providers and 19 care centers with a
centralized billing office was able to achieve a 90 percent adoption
rate for both eFT and eRa. The billing management staff started
converting insurers it billed most and continues to migrate all
insurers to eFT and eRa. With the migration to the healthcare eFT
the Success of HealthcareeFt Standard and eRAREAL-LIFE EXAMPLES OF SAVINGS By Priscilla Holland
i
26 HBma BILLINg • sePTemBeR.OCTOBeR.2015
standard and eRa, the practice has also been able to reduce its
claims outstanding. seven years ago, the practice’s claims
outstanding were at 25 days. Today, the practice has reduced the
average claims outstanding to 13 days from claims submission
to posted payment, significantly improving the cash flow of the
practice. additionally, despite growth in practice providers and care
centers — and, as a result, claims processed through the business
office — the practice has not needed to increase billing staff.
CASE STUDY #3: a large hospital group with 165 locally managed
hospitals and 115 freestanding surgery centers in 20 states
and england has been converting checks to eFT for over 20
years. With the implementation of the healthcare eFT standard,
the volume of checks converted to eFT has increased signifi-
cantly for the hospital group. In addition, the hospital group has
seen a 70 percent reduction in the processing costs for claims
reimbursed with eFT and eRa as a result of improved payment
posting and reconciliation. Now, the hospital group has an 83
percent match rate of eFT and eRa on the day received (Day
0), which improves to a 98 percent match by Day 2. The
automation of the eFT and eRa has essentially eliminated the
errors associated with manual posting and processing. �
Priscilla Holland is the senior director of healthcare
and industry verticals for NACHA. As senior director,
she leads NACHA's healthcare payments program
and works on other payments and remittance information and
standards projects. Holland has more than 20 years of expe-
rience in cash management, project management, and product
development and is an Accredited ACH Professional (AAP) and
a permanent Certified Cash Manager (CCM).
About nAcHA NaCHa is the federally recognized standards body for the
healthcare eFT standard and is the private-sector rule-making
organization for the aCH Network. NaCHa staff have worked
with the healthcare industry to provide information and
education on the benefits of the healthcare eFT standard. all
case studies are posted on the NaCHa Healthcare Payments
microsite at https://healthcare.nacha.org/ProviderResources.
1 CaQH 2014 us Healthcare efficiency Index
Physician’s Practicefull page
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PHYSICIANS PRACTICE digital EDITION
Minimizing Malpractice Risk
Reimbursement Changes
EHR Productivity
Preparing for ICD-10
And more!
READ THE LATEST ISSUES OF PHYSICIANS PRACTICE
FOR EXPERT TIPS ON:
Visit bit.ly/PPDigitalMag to check out the latest issue, available online now.
No problem. The practice management journal you love is available in an all-new digital format — making it easily accessible from your computer, phone, or tablet.
28 HBma BILLINg • sePTemBeR.OCTOBeR.2015
improvements in ProviderPayment Processing withefficient electronicRemittance Advice ProcessesBy the American Medical Association
n order to improve the efficiency of physician health
claims payments, HIPAA requires health insurers to
offer the electronic remittance advice (ERA) standard
transaction upon physician request. ERA, essentially an
electronic form of the explanation of payment (EOB), is
designed to improve the healthcare billing process by
providing claims payment and adjustment information in
a standard electronic format.
Physician practices can save both time and money with the
workflow efficiencies gained with eRa adoption. Benefits of
eRa implementation include:
• Faster health plan payments
• expedited generation of secondary claims or patient bills
• elimination of misplaced paper eOBs
• Reduced time spent on administrative processes
such as opening mail, filing, manual payment posting,
and calling health insurers
• Improved understanding and management of claim
adjustments with the use of standardized code sets
• more staff time for higher-value, revenue-enhancing
functions such as ensuring correct payment and
appealing inappropriate denials, rejections, or
payment reductions
eRA BasicsLike a paper eOB, an eRa provides details about claims
payments from health plans. For each billed service that a
practice submits on a claim, the eRa will detail the amount
billed, the amount being paid by the health plan, and the
reasons for any differences between the billed and paid
amounts. The eRa can also detail recoupments related to
claim readjudication or adjustments unrelated to a particular
claim, such as interest or capitation payments.
In order to ensure the clarity of payment information sent
to providers, eRa operating rules require uniform use of claim
adjustment group codes (CagCs), claim adjustment reason
codes (CaRCs), and remittance advice remark codes (RaRCs)
to explain claims payment adjustments and denials. CagCs,
CaRCs, and RaRCs are used together to indicate the type of
adjustment made to a claim, the reasons for the adjustment,
and additional supplemental information to help clarify specific
payment details.
In order to promote uniformity in the use of these standard
codes, the Council on affordable Quality Healthcare (CaQH)
Committee on Operating Rules for Information exchange
(CORe) identifies a limited set of CaRC and RaRC combinations
to be used in defined universal business scenarios.
AMA Resources offer eRA implementationSupport and Processing tips1. ERA TOOLKIT: IMPLEMENTATION AND IMPROVEMENT
RESOURCES
While eRa offers practices many revenue cycle efficiencies,
any new process can be challenging at first. The american
medical association’s recently updated eRa Toolkit, available
at www.ama-assn.org/go/era, can help practices navigate
this transition and maximize the value of the eRa transaction.
The toolkit features information to support practices from the
beginning stages of implementation to later process refine-
ments and improvements. Toolkit sections include:
i
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 29
• getting started with eRa – an overview of eRa
structure and content and details the advantages of
remittance advice automation
• Critical conversations with trading partners about eRa
– the specific questions practices should pose to
their health plans, practice management system
vendors, billing services, and clearinghouses before
implementing eRa
• eRa processing tips – general eRa processing work-
flows and suggestions for dealing with the challenges of
overpayment recovery and provider-level adjustments
2. THE AMA CLAIMS WORKFLOW ASSISTANT
In order to receive the intended benefits from standardized
eRa, practices must be able to understand and act on the
coding used in the transaction. unfortunately, interpreting eRas
and determining if submitted claims were properly paid can be
a major hassle for physician practices and their billing partners.
The ama’s Claims Workflow as sistant is an online tool that
helps physician practices understand eRas, advocate for
accurate payment, and take appropriate action on claim
denials. using this tool, physicians can:
• Look up CagCs, CaRCs, and RaRCs;
• Review code meanings; and
• Implement recommended workflows for addressing
claim denials or nonpayments.
The tool’s workflows offer step-by-step instructions to help
physician practices ensure accurate payment and appeal
claim denials. additionally, the tool offers ama members access
to appeals letter templates for contesting a claim payment.
Visit www.ama-assn.org/go/claims-assistant to begin using
this tool today. �
For more ways to reduce administrative burdens and spend more
time on patient care, visit www.ama-assn.org/go/simplify.
Founded in 2005 and headquartered in Los Angeles, Allzone Management Solutions is a leading Healthcare Business Process Outsourcing (HBPO) firm specializing in healthcare services and providing medical billing services exclusively to billing companies across the United States.
Medical Coding
ICD – 9ICD – 10
CPT / HCPCSHCCDME
Specialty Based
Data EntryIndexing
Demographic EntryCharge Entry
ERA / Payment PostingDenial Posting
Patient Registration
Accounts Receivables
Benefits VerificationInsurance calling
AR AnalysisDenials Management
Sec. Claims SubmissionIVR Calling
RCM Services
Denials ManagementA/R Follow-up
Insurance Follow-upClaims Submission
Refunds ProcessingAppeals
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tips for icd-10implementation By Valerie Fernandez, MBA, CPC, CPC-H, CPMA, AHIMA ICD-10 Trainer
When a provider or a facility fails to abide by the new coverage
guidelines or does not submit a claim with the highest level of
specificity, a denial will be the result.
30 HBma BILLINg • sePTemBeR.OCTOBeR.2015
will be assessing outcomes in relation to cost. If a more
effective, established treatment is available at a lower cost,
obtaining an authorization for a newer, higher priced inter-
vention may be more difficult, requiring peer reviews with the
medical directors at the carrier level and more interaction with
the physicians in your office or at your facility.
Denials are expected to increase exponentially with the imple-
mentation of ICD-10. The Centers for medicare & medicaid
services (Cms) predicts an increase in code error rates to go
from an average of 3 percent to 10 percent. The days in
accounts receivable is also expected to increase. The denial
management team must be prepared to conduct root cause
analyses of these denials to ensure system and documentation
remediation. They must also ensure reeducation occurs imme-
diately so that future denials in the same category are reduced
or eliminated. You should also establish a mitigation plan to
reduce the financial risk associated with ICD-10.
most practices and facilities have transitioned to an elec-
tronic medical record. establishing preference lists for providers
by type of service will expedite code selection. ensure that all
services entered by the provider are placed in an edit queue
for review by a coder before submission to the carrier. address
unbundling issues and use of modifiers. Review the ICD-10
diagnosis to ensure that it is a complete code offering the
highest level of specificity. Proactive review prior to claim
submission is time well spent and may reduce denials that
may have constraints about the number of diagnosis and
procedure codes that can be maintained. The primary carrier
may accept ICD-10 codes and the secondary carrier may require
ICD-9 codes. accounts receivable teams need to be prepared
for processing that requires a change in the code set.
The major carriers are ready for the implementation of ICD-
10. Their coverage guidelines have been updated; their systems
have been modified to expect a higher level of granularity and
specificity. When a provider or a facility fails to abide by the
new coverage guidelines or does not submit a claim with the
highest level of specificity, a denial will be the result.
Precertification and authorization requests will be scrutinized
based on the updated coverage guidelines. additionally, carriers
or the last couple of years the focus has been on
preparing for ICD-10. Everyone has been encouraged
to learn about the new code set. Clinicians have been
given information to ensure their documentation is robust
to meet the specificity requirements for ICD-10. Both
internal and external testing of systems using the new
code set has been underway.
When we reach October 1, 2015, the results of our efforts
will be evident. since many carriers will not be prepared for
ICD-10, our systems must have the capability to move inter-
changeably between ICD-9 and ICD-10. some billing systems
F
ThE jOURnAl Of ThE hEAlThCARE bIllIng AnD MAnAgEMEnT ASSOCIATIOn 31
ICD-10
require extensive time to resolve retrospectively.
Quality is the objective of many prospective claim reviews
related to accurate code capture based on documentation.
The relationship between the coders and the clinicians needs
to be enhanced. Providers need to understand the importance
of responding to a coder query and the necessity of updating
documentation to support submission of a particular code.
Tracking and trending the types of denials by carrier will
enable a focused review and assessment for resolving those
problematic claims. Address not only the nonpayment denial
but also the partial payment denial. Additionally, continue to
review the variance report to identify whether the carrier is
paying according to the contracted rate.
Educate your patients about the new code set and the fact
that their explanation of benefits from the carriers and your
patient invoices will look different. Often a denial states that
an incorrect code has been submitted. You want to ensure
that your patients understand that claims are being submitted
with a new code set that may take some time for everyone to
understand so claims are processed expeditiously.
Expect external audits by third parties engaged by the
carriers to increase. The objective of these audits will be to
determine whether the documentation supports the level of
specificity identified on the claim. The RAC auditors are
permitted to review cases for up to three years prior to the
current year. Should the outcome of an audit necessitate
changes to the claim, you will need to resubmit the updated
claim using the code set in place at the time of service. The
potential exists for providing updated claims based on RAC
audits to continue through 2018.
Consider prospective review of all services prior to
submission to the carrier. This will ensure accuracy of both
diagnosis and procedure code and will ensure that the docu-
mentation supports the coding submitted on the claim. If a
denial is received, the appeal process will be effective as the
coding team has been proactive about matching codes to
documented services.
Updating carrier contracts will be a challenge, as the
financial impact of the new code set has not yet been deter-
mined. It will be important to conduct comparisons between
claims submitted in ICD-9 and claims submitted using ICD-
10 to ensure that the same service remains budget neutral.
You also need to remember that claims will continue to be
submitted with ICD-9 codes. Any denial received after October
1, 2015, for dates of service prior to October 1, 2015, will
need to be resubmitted using ICD-9. Any appeal for dates of
service prior to the implementation date for ICD-10 will need
a claim with ICD-9 codes to accompany the appeal letter. Some
carriers will not be prepared to process ICD-10 coded claims.
The onus is on the provider to comply with claims processing
methods of the carriers in order to ensure timely payment.
Many organizations are enlisting the assistance of
consultants for the ICD-10 initiative. When assessing a
consulting group, make sure they have specialty-specific
expertise and that they can provide references that will confirm
overall performance. Remember that a consultant can offer
a recommendation. Use the expertise of your coding team to
analyze those recommendations. Often, tracking and trending
of denials, appeals, and other claim downgrades offer more
information about the expectations of the carriers and what
is considered a robust, clean claim that will generate timely
reimbursement than any recommendation a consultant may
offer. Utilizing software that performs predictive analysis can
bolster trending by carrier for regular and recurrent services.
Successful implementation of ICD-10 requires astute
planning, ongoing education, and, once implementation
occurs, monitoring and reevaluation of performance to
determine where changes can be made to maximize revenue
capture. �
Valerie Fernandez is the assistant director of health informationmanagement, and previously the ICD-10 quality assurancemanager at the Hospital for Special Surgery in New York. Shealso holds a CPC and CPC-H from the American Academy ofProfessional Coders (AAPC). She served as president of themidtown Manhattan chapter and president for the Manhattanchapter of the AAPC.
ICD- 10
n August 2014, The Centers for Medicare & Medicaid
Services (CMS) issued Transmittal 1422, “Specific
Modifiers for Distinct Procedural Services,” which announced
the creation of four new HCPCS modifiers for 2015:
XE . . . . . separate encounter, a service that is distinct because
it occurred during a separate encounter
XS . . . . . separate structure, a service that is distinct because
it was performed on a separate organ/structure
XP . . . . . separate practitioner, a service that is distinct
because it was performed by a different practitioner
XU . . . . . unusual non-overlapping service, the use of a service
that is distinct because it does not overlap usual
components of the main service
The transmittal is available on the Cms website at
www.cms.gov/Regulations-and-guidance/guidance/Trans-
mittals/Downloads/R1422OTN.pdf.
Cms refers to the new modifiers as “X {ePsu} modifiers,”
but in this column we will simply refer to them as X modifiers.
Cms created the modifiers to better define the reason why a
provider believes two procedures that are normally bundled
by the Correct Coding Initiative (CCI) edits are separate and
distinct in a particular case — i.e., procedures were performed
during separate encounters (modifier Xe). The X modifiers are
to be used instead of — not in addition to — modifier 59. The
transmittal states, “Cms will continue to recognize the –59
modifier in many instances but may selectively require a more
specific –X {ePsu} modifier for billing certain codes at high
risk for incorrect billing.”
It was widely anticipated that Cms would include detailed
instructions for the use of the X modifiers in the 2015 edition
of the National Correct Coding Initiative Policy manual, but
this did not occur. Instead, Cms released an mLN matters
article (se1503, “Continued use of modifier 59 after January
1, 2015”) stating that providers could continue using modifier
59 after January 1, 2015 “in any instance in which it was
correctly used” prior to that date. The article stated that addi-
tional guidance would be forthcoming “as Cms continues to
introduce the modifiers in a gradual and controlled fashion.”
at the time this column was written in late June 2015, Cms had
not yet released any additional guidance. However, in the absence
of action by Cms, some medicare contractors have released their
own guidelines for the X modifiers. Interestingly, the first quarter
2015 issue of the american Hospital association’s “Coding Clinic
for HCPCs” states: “On recent clarification from Cms, [hospitals]
should continue reporting with modifier -59 only,” at least until
Cms issues specific instructions for the X modifiers.
Payor PoliciesBelow, I've summarized the guidance that individual medicare
contractors have issued concerning use of the X modifiers.
keep in mind that Cms guidance, when it is finally issued, will
likely override contractor guidance.
many non-medicare payors will accept the X modifiers but may
have their own specific requirements for them. For an example,
see the united Healthcare January 2015 “Network Bulletin.”
Discussion of all of the major payor policies is beyond the
scope of this article, but billing professionals should monitor
their payors’ newsletters for information.
Medicare contractor / X Modifier guidanceCAHABA: The handout from an “ask Cahaba B” teleconference
on march 4, 2015, includes the following guidance:
• Do not apply the X modifiers together with modifier 59
or when the claim includes only one service.
• Do not use the X modifiers with evaluation and
management, radiation therapy management, or
chiropractic services.
CGS: The contractor’s website contains information about the
Cms Transmittal but no contractor-specific guidelines for the
X modifiers.
FIRST COAST: The contractor’s website contains information
about the Cms Transmittal but no contractor-specific guidelines
for the X modifiers.
NGS: The contractor’s webpage for policy education topics,
titled “modifier 59 and the subset modifiers Xe, XP, Xs, Xu –
specific modifiers for Distinct Procedural services,” states:
“Providers are encouraged to use modifier 59 in the absence
of specific Cms instructions in order to avoid the inappropriate
use of the new X modifiers.”
X Modifier updateBy Jackie Miller, RHIA, CCS-P, CPC
i
32 HBma BILLINg • sePTemBeR.OCTOBeR.2015
CODING CORNeR
(continued on page 34)
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 33
You can earn 0.5 credits toward your CHBME by answering quiz questions in each issue of
Billing. Go to www.hbma.org/ceu or use your smartphone to go directly to the site.
CHBme QuIZ QuesTIONs
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CHBME QUIZ
1. Under HIPAA, insurance plans are required to automati-
cally offer an electronic remittance advice (ERA).
a. True b. False
2. For ICD-10, your coding team and billing system will
need to:
a. Process only ICD-10
b. Process ICD-10 and ICD-9 by DOs
c. Process ICD-10 and ICD-9 by DOs and by payor
3. When in doubt, an X modifier can be applied to the
same code as modifier 59.
a. True b. False
4. The decision about what to send offshore should factor
in:
a. Does the step you are considering offshoring add
value or not?
b. Does offshoring create an unnatural break in the
process?
c. Can the system we are using easily accommodate
issue resolution?
d. all of the above
5. The Centers for Medicare & Medicaid Services predicts an
increase in code error rates to go from an average of 3
percent to 10 percent due to ICD-10 implementation.
a. True b. False
6. Benchmarking is the continuous process of meas-
uring and comparing performance internally (over
time) and externally (against other organizations and
industries).
a. True b. False
7. As of October 2015, healthcare organizations that have
not implemented EMV acceptance will assume liability
for card-present fraudulent transactions.
a. True b. False
8. In 2013, almost 25 percent of remittance advices were
conducted using the HIPAA standard.
a. True b. False
9. In order to receive the intended benefits from stan-
dardized ERA, practices must be able to understand and
act on the coding used in the transaction.
a. True b. False
10. Which of the following techniques can you use to increase
your commercial payor contracts' reimbursements?
a. use weighted averages to calculate your reimburse-
ments
b. avoid the "lesser of" billed charges or contracted rate
problem
c. Focus on your most important codes
d. all of the above
34 HBma BILLINg • sePTemBeR.OCTOBeR.2015
NORIDIAN: The contractor has published a fact sheet for each
of the X modifiers. guidance includes:
• use the modifiers only on the Column 2 code of a CCI
code pair.
• Do not use the modifiers when the exact same
procedure code is performed twice on the same day.
• Do not use the modifiers with evaluation and
management services, radiation treatment
management, or multiple injections of the same drug.
NOVITAS: an article titled “modifier 59 and New modifiers Xe,
Xs, XP, Xu” lists the contractor’s suggestions for substituting
X modifiers “should you decide to use them” in the scenarios
from the Cms modifier 59 article. For example, Novitas
suggests modifier Xu in the following scenarios:
• skin lesion destruction (17000) with skin biopsy
(11100-Xu) when the procedures are performed “at
different anatomic sites on the same side of the body
and a specific anatomic modifier does not apply.”
• Laparoscopic liver tumor ablation (47370) together
with an ultrasound-guided procedure that is unrelated
to the ablation (76942-Xu).
• Heart catheterization (93453) together with fluo-
roscopy that is unrelated to the cardiac catheterization
(76000-Xu).
PALMETTO: The contractor has published guidance on the X
modifiers as part of its modifier Lookup feature. guidance
includes:
• The modifiers are used to “note an exception” to the
CCI edits.
• Do not use the X modifiers together with modifier 59
or with evaluation and management services.
additionally, some guidance about the X modifiers can be
found in the Q&a from the “ask the Contractor” teleconference
on February 12, 2015.
WPS: The contractor has published a fact sheet for each of
the X modifiers. guidance includes:
• use the modifiers only on the Column 2 code of a CCI
code pair.
• Do not use the modifiers when the exact same
procedure code is performed twice on the same day.
• Do not use the modifiers with evaluation and
management services, radiation treatment
management, or multiple injections of the same drug.
Modifier tipsunless the payor instructs otherwise, the X modifiers should
be applied only when all of the following criteria are met:
• There is a CCI edit for the code pair;
• The edit is modifier status 1; and
• The circumstances support the use of the modifier.
an X modifier should never be applied to the same code as
modifier 59.
Do not use an X modifier to indicate that the same procedure
was performed twice. most medicare contractors have instructed
providers to use either multiple units of service, or a repeat
procedure modifier (modifier 76 or 77) to show that the same
procedure was performed more than once on the same day.
modifier 59 remains a valid modifier and can be applied
whenever the circumstances of the service support it. If there
is any doubt as to which X modifier is appropriate in a given
situation, it may be preferable to report modifier 59 rather than
risk using an incorrect X modifier. moreover, there is detailed
guidance available on the use of modifier 59. Cms has updated
its longstanding article on the use of modifier 59, which includes
in-depth explanations and examples. The article mentions the
X modifiers but does not give specific guidance or examples for
their use. You can find the article at www.cms.gov/medicare/
Coding/NationalCorrectCodInited/Downloads/modifier59.pdf.
The article briefly lists the following situations in which
modifier 59 is appropriate:
• When procedures that are not ordinarily performed on
the same day are performed on different organs or
different anatomic regions or—in limited situations—on
different noncontiguous lesions in different parts of
the same organ
• When procedures are performed in different
encounters on the same day
• When two time-based services are performed sequen-
tially during the same encounter
• When a preceding diagnostic procedure is the basis
for performing a subsequent therapeutic procedure
• When a diagnostic procedure follows a therapeutic
procedure but is not a common, expected, or
necessary follow-up to the therapeutic procedure
see the Cms article for a complete explanation of these guide-
lines, and watch for additional guidance from Cms regarding
use of the X modifiers. If modifier use is not addressed in a
medicare transmittal, it may appear in the 2016 National Correct
Coding Initiative Policy manual. Once Cms has issued national
guidance, local medicare contractors and some non-medicare
payors are likely to adopt the Cms guidelines. �
Jackie Miller, RHIA, CCS-P, CPC, is vice president of product devel-opment at Coding Strategies, Inc.
(continued from page 32)
THe JOuRNaL OF THe HeaLTHCaRe BILLINg aND maNagemeNT assOCIaTION 35
hough many medical offices are trying hard to go
paperless, sometimes it really helps to have a printed
copy of a spreadsheet. More and more, printing doesn’t
mean paper, either. Lots of spreadsheets are distributed as
PDF files. The advantage of printing, whether to paper or
to a PDF file, is that you can control what your reader sees.
Rather than relying on the reader’s familiarity with Excel,
all the reader has to do is pick up the paper report or open
the PDF file to see your information and analysis. Controlling
what the reader sees also means controlling what the reader
doesn’t see. If there are areas of a spreadsheet with confi-
dential data or protected health information, it is much
easier to print the data rather than sending a copy of the
spreadsheet to end users. This article is the first in a series
of tips to make printing spreadsheets easier.
Print titlesIf your data carries over onto multiple pages and you want to
print headings at the top of each printed page, you can always
type or copy your header cells throughout your spreadsheet,
as shown in Figure 1. Notice how the column headers in row
1 are duplicated in row 15.
There are a couple of problems with manually including
header rows. First, if you insert rows in your spreadsheet or
change the row height, the header rows may not be at the top
of each page. second, if you change the header descriptions,
you either have to manually change the header for each page
or you have to write formulas to do the change for you. Third,
printing on different devices (either printers or PDF drivers)
may give you different results. a page that looks right on one
printer or PDF driver may well be off on a different printer.
Instead of manually creating each page header, it’s easy to
create Print Titles in excel. Print Titles automatically print at
the top of each new page, the left of each new page, or both.
To create Print Titles, you need to access the Page setup menu.
Here are three ways to get to the Page setup menu in excel
2013. Two of the three ways are on the Page Layout tab, as
shown in Figure 2. You can click Print Titles (the larger red
circle) or look for the small arrow in the bottom right corner of
the Page setup section (the smaller red circle). You can also
access the Page setup menu from the Print section of the File
menu, as shown in Figure 3. Choose one of the three ways to
access the Page setup menu and your screen should look like
Figure 4. Note that there are four tabs in the Page setup menu.
Depending on how you access the Page setup menu, you may
need to click the sheet tab to match Figure 4.
The four tabs in the Page setup window have several tricks
to make printing easier. To set Print Titles, click the red arrow
next to “Rows to repeat at the top” to select the rows you want
to repeat on every page. You can include several rows if you
want a report title in one row, followed by a blank row, followed
by the column headers, for example.
If you need to print columns instead of rows, identify the
columns to print on every page with the red arrow next to
“Columns to repeat at left.” You can combine both “Rows to
repeat at the top” and “Columns to repeat at left” to get row
and column headers to repeat on each page as you need to.
Print AreaYou can also control the Print area, the area of the spreadsheet
that excel will print, from the Page Layout tab. Controlling what
parts of a spreadsheet print is a good way to keep confidential
information confidential by excluding cells from the print range.
One way to set the print area is to highlight the cells you want
to print and then clicking set Print area, as shown in Figure 5.
another way to set the print area is to use the red arrow next
to Print area in the Page setup menu shown in Figure 4.
The way I usually set the print area is to use the Page Break
Preview button on the View tab of the Ribbon, as shown in
Figure 6. Page Break Preview looks like Figure 7. You can drag
the solid blue lines to change your print area and drag the
dotted line to change page breaks.
other tips on the Page Setup Sheet tabThe sheet tab in the Page setup window also has boxes to print
cell gridlines when the report prints, to print comments
embedded in your spreadsheet and to control what prints when
Make Printing Spreadsheetseasier: Part oneBy Nate Moore, CPA, MBA, CMPE
t
SOFTWARE
36 HBMA BIllIng • SEPTEMBER.OCTOBER.2015
FIGURE 1
spreadsheet cells have errors. Don’t confuse the checkbox for
“Row and column headings” with the Print Titles we just
discussed. If you check the “Row and column headings” box,
the letters for each column and numbers for each row will print,
not the titles you may have created as part of your spreadsheet.
If your spreadsheet is big enough to have multiple printed
pages both vertically and horizontally, you can choose whether
the spreadsheet prints “down then over” or “over then down.”
Excel has a helpful graphic next to this option to show you how
the order of the pages will be determined. There are also
buttons to quickly print the spreadsheet or to preview the
spreadsheet for printing. In prior versions of Excel, print and
print preview were on separate screens, but in Excel 2013
print and preview are combined on the same screen, so both
the print and print preview button bring up the same screen
shown in Figure 8.
Watch for more printing tips coming in future issues of Billing.
I hope you find these articles helpful. �
Nate Moore, CPA, MBA, FACMPE, writes custom SQL Server code
to mine practice management data for analysis in Excel,
webpages, and via email. Nate’s first book, Better Data, Better
Decisions: Using Business Intelligence in the Medical Practice,
written with Mona Reimers, was recently published by MGMA.
His free Excel videos have been viewed over one million times
and are available at mooresolutionsinc.com. Like PivotTableGuy
on Facebook or follow @PivotTableGuy on Twitter to be notified
each time an Excel video is released.
FIGURE 2
FIGURE 3
FIGURE 8
FIGURE 4
FIGURE 6
FIGURE 5
SOFTWARE
FIGURE 4
FIGURE 7
the journal of the healthcare billing and management association 37
onsolidation is still occurring in the medical billing
industry. In the past few years, we have seen the
highest-ranked medical billing company, ranked by annual
revenue, purchase the third-ranking medical billing
company. Then the fourth-ranking company bought the
second-ranking medical billing company. Plus there have
been a plethora of mergers and acquisitions of small- to
medium-sized companies. This is a trend that doesn’t
seem to be ending soon.
When medical billing companies become bigger, it can mean
that they become better. But that’s not a given. some advan-
tages of becoming larger are:
• You can afford to add additional professionals to your
staff, such as sales people, client managers, data
analysts, etc.
• You can consider investing in additional software like
business intelligence programs that can turn raw data
reports into information for you and your clients.
• You may realize economies of scale that could help lower
cost and improve margins.
another surprising factor driving the mergers and acquisi-
tions trend is that, in many billing companies, the next gener-
ation isn’t interested in working in the industry. The heirs of
the current owners who have successfully built their companies
don’t seem to have an interest in the medical billing field. so
if the business isn’t going to be passed on to the next gener-
ation, then selling or merging are two options, unless you
decide to just close your doors and give your clients away.
On a different front, a day doesn’t go by without at least one
article popping up about how one of the large insurers is trying
to buy one of the other large insurers. Will we see the top five
become the even bigger two or three? Currently the top five
companies have a combined market share of 38 percent.
How will our industry be affected if the payors gain more
and more market share? If we have mega health insurance
companies that control certain parts of the country, the
following scenarios could occur:
• They could establish a “take it or leave it” payment
schedule, and negotiating payments rates would become
a thing of the past.
• Companies could limit participation by enrolling only a
select set of providers.
• They could squeeze out some smaller insurance
companies via temporary premium price wars.
Healthcare systems will continue to consolidate and grow.
systems like mayo and Cleveland Clinics, which already have
a worldwide presence, will be joined by many others. The
university of Pittsburgh medical Center (uPmC) owns over 20
hospitals, has over 500 doctor office locations, and employs
more than 3,500 physicians. They are also an insurance
company. uPmC also owns facilities or is providing training in
Italy, Ireland, Japan, and Canada. They are currently building
centers in kazakhstan and singapore. It’s safe to say that
healthcare is no longer just local.
While it may be exciting to grow rapidly, there can be adverse
consequences. The key to successful growth is having the
leadership “bench strength” to successfully integrate new
clients and companies into your current environment. stream-
lining or combining operations is one challenge, but a bigger
issue is usually merging differing cultures. When a merger or
acquisition fails, it’s usually because of cultural differences.
It’s hard for someone who has built and run a successful
company to all of a sudden assume the role of employee.
It is inevitable that companies will keep consolidating, and
the industry giants will get bigger. But that doesn’t mean that
small- and medium-sized companies will become extinct. The
larger companies won’t want or need to work with smaller
entities or clients, so there will still be ample opportunities to
serve clients in those ranges.
Whether you are a medical billing company, third-party payor,
or healthcare provider, you don’t necessarily need to try to
compete with the giants of the industry. However, you’ll need
to make sure you adjust your goals and strategies to ensure
you remain viable into the future.
success isn’t defined by how large a company is. Rather, a
company is successful if it is consistently achieving the goals
its owner has established. Only you can define success. �
Dave Jakielo, CHBME, is an international speaker, consultant, executivecoach, and author. He is the president of Seminars & Consultingand the past president of the Healthcare Billing and ManagementAssociation and the National Speakers Association Pittsburgh Chapter.Sign up for his free weekly Success Tips at www.Davespeaks.comor text “Davespeaks” to 22828. Dave can be reached via email [email protected] or phone at (412) 921-0976.
FROM THE ROaD
is Bigger Better?By Dave Jakielo
c
38 HBma BILLINg • sePTemBeR.OCTOBeR.2015
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