F R O M T H E F I E L D
Secondary Insurance Policies Can Confuse Your Patients
By John S. Aaron Jr, CPC
It is 9:30 a.m. when the call comes in. The man on the line has received a bill for physical therapy services he received a month prior. He has a complaint: "Why did I receive this bill? I have insurance."
The biller explains, "We billed your insurance company and they left a balance of $75 as patient responsibility." The caller advises the rep that he has a secondary insurance policy, which should be paying. The biller responds, "Sir, you will have to file that claim yourself."
"What do you mean?" the caller asks. "Simply take the invoice we sent you and submit a copy to your secondary insurance company," the biller says.
To avoid these calls from confused and/or annoyed patients, share your policy on submitting claims to a secondary payer prior to rendering services. This is a "courtesy service"—most often providers are not required to automatically submit claims to secondary insurers.
The larger the provider group, the more likely it will have dedicated staff working secondary claims. For smaller groups, the reimbursements received may not warrant the work involved.
Keep in mind, before developing any policies on when you will bill secondary insurers, you must check the language in your policies to make sure you remain in compliance. In addition, billing a secondary insurer usually brings payment quicker than billing a patient.
Qualified Medical Expenses
Secondary insurance plans often pay or discount only on "qualified services." In other words, if the patient's primary insurance plan deems a service to be "Non-Covered," the secondary insurance plan will deny these services, as well. This is often due to medical necessity.
Advise patients to ask health plan representatives, "Will this plan cover what my primary will not?" If the answer is "yes," the patient should get that in writing. If the representative tries to "skirt" on the issue, it's not in the plan, and the patient may do better to look elsewhere (although, better plans may come at a premium rate).
G O O D T I P S
Is Your Practice Getting Paid for the Services it Performs?
By Jackie Stack, CPC, CPC-I, CEMC, CFPC, CIMC, CPEDC
Could any of the following mistakes occur in your practice?
- You forget to charge for an EKG that you performed on your patient
- You forget to charge for a CLIA-waived lab test even though you purchased the test kits
- You inject a patient with a drug but only charge for the injection
These simple mistakes can cost your practice. Performing a chart audit is an important step to identify missing charges that can be found and prevent the loss of revenue. A chart audit can also give you a good idea of how your practice is doing as a whole.
A chart audit will show how well the charges for services are being captured and how well the staff follows up on denied claims. Take a look at whether the code selection, charge entry, claims submission, and payment processes are accurate.
Where and how do you begin? First, try to identify potential areas of concern. For instance, run a report of the EKGs paid during a specific time, compared to how many EKGs were performed. Look at where most of your denials come from: Are they from a specific payer or for a specific service?
When you've identified what you want to focus on, begin collecting data. Select a timeframe to focus on and select a single, typical office day to review. Look at a date that is at least 90 days in the past. This increases the likelihood that all of the charges for that date have been paid. You will be able to review denials, appeals, and the follow-up work related to these charges.
Gather all of the information that you will need to perform the audit. Superbills, patient account detail, remittance advice from the insurance payers, patient chart, etc. Organize the data in a spreadsheet.
After you perform the audit and identify the areas that are costing the practice, share the results with the physicians, practice manager, and other staff, and discuss possible solutions that will improve the process.
F E A T U R E D S T O R Y
No Hard, Fast Rule Setting Up Your Fee Schedule
By Terry Leone, CPC, CIRCC, CPC-P
Physician fee schedules are the "usual and customary" fees a physician or group charges for services. Depending on the services provided, you may have multiple fee schedules.
For example, if the group owns the equipment and interprets diagnostic studies, it may charge global fees for the entire service. If the group does not own the equipment, but does interpret the studies (as radiologists working in hospitals do), it may bill for the professional component of the service by reporting the appropriate CPT® code with modifier 26 Professional services appended. Or, if the group owns the equipment but does not interpret the studies, it may bill for the technical portion of the service by reporting the appropriate CPT® code with modifier TC Technical component appended. Or, the group may bill surgical fees based on the facility in which they provide the services.
Hospitals refer to fee schedules as the "charge master." Charge masters are as complex as the various reimbursement methodologies they embrace. Inpatient care is reimbursed via Diagnostic Related Groups (DRGs). Some departments—such as the Emergency Department—are reimbursed by negotiated rates from various payers, while their ambulatory outpatients are generally paid by a fee schedule, similar to that of physicians. Due to hospital charge master complexities, our discussion here will stick to the physician fee schedule.
There is no hard, fast rule on setting your fee schedules; however, there are two methods the majority of physician offices and billing companies generally use.
The first method typically uses three separate fee schedules:
- A workers' compensation/no fault (WC/no fault), which is usually your highest reimbursement. Using just WC/no fault reimbursement rate for the fee schedule would inflate accounts receivable dramatically for all of the patients with general health insurance.
- A Medicaid fee schedule, which is often the lowest reimbursement rate. If you use a WC/no fault rate based on local reimbursement rate, there would be no inflation of the fee schedule over the reimbursement rate. Setting these two fee schedules at the exact reimbursement rates will help to prevent over-inflated accounts receivable.
- A third rate for all remaining payers, including all other insurances and any self-pay patients. This rate is the same for all patients and all insurances, with the fee schedule being higher than the highest payer of this group of carriers. This third group of charges will inflate your accounts receivable.
Using this methodology allows you to change a wrong insurance company without changing the charge rate for the service. Your physicians and billing company clients need to understand there will be payer adjustments (write-offs) for each patient, which is the part of the charge that is higher than the carrier-allowed amount.
For example, if you charge $100 for a service of a participating carrier, but the payer allows $80, you have to write-off the $20 as a contractual disallowance because the charge was higher than the carrier allowed.
The second methodology is to load into your billing system the exact reimbursement rate of every payer you charge. The individual payers' reimbursement rates become your fee schedule.
Although this method probably sounds better than the first, there are difficulties with this method.
For example, I have one HMO in my area with 42 separate lines of business, each having its own fee schedule. I would load all 42 fee schedules, plus the fee schedules of every carrier I send claims to. But the patient's insurance information downloaded from a hospital does not tell you which line of business this patient belongs to. Even if your staff is registering the patient, the insurance card may not indicate which line of business. This means your staff doesn't know which fee schedule to use, which can force a change to the charge amount and insurance company. Some managers don't like staff-changing fees after the patient has been initially charged. Managing all of the different fee schedules is a large task—especially because payers often make changes throughout the year.
After you decide which charge methodology you are going to use, you need to set your "usual and customary" fees.
In the first methodology, it is best to use a percentage of the Medicare fee schedule to set up your general insurance fee schedule, use the workers' compensation/no fault fee schedule for your specific area, and use the state Medicaid fee schedule for your Medicaid fees.
To set up your general insurance fee schedule, know your local payer reimbursement rates. For example, one of my local Health Maintenance Organizations (HMOs) uses 125 percent of our Medicare fee schedule for their reimbursement rate, while another local payer reimburses at 115 percent. After finding out the highest reimbursement rate for local payers, most offices generally set general insurance fees 15 to 25 percent higher to assure they are charging over the highest reimbursement rate. This assures physicians that no money is being left on the table.
No matter how you set it, your fee schedule should be logical, reasonable for your region, created using a set formula, and defensible during an audit.
FROM THE FIELD is thoughts and experiences from you the reader. If you have any tips, ideas, case studies, or just anecdotes please submit them to us for future editions.