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Issue #19 — January 25, 2012

AAPC BillingInsider e-Newsletter

F R O M   T H E   F I E L D

Do's and Don'ts for Managed Care Contracts
By Delly Parham, AS, CPC-A

Government and insurance regulations, reductions and turnover in staff, and the day-to-day headaches of running an office leave us with little time to monitor our insurance contracts and the rates insurers pay. But failing to review your reimbursements could lead to huge losses. Here are a few tips to avoid financial losses, disgruntled patients, and negative cash flow:

  • Review all of your managed care contracts. Look for items such as:
    • The name on the contract, especially if your physicians change name of practice, location, group, etc.
    • Specialties listed
    • Covered services
    • Services requiring authorization
    • Non-covered services
    • Timely filing limits
    • Participation by all physicians
    • Non-physician practitioners' requirements for practice and reimbursement
    • Most importantly, the rates of reimbursement
  • Keep a spreadsheet with all of your managed care insurance contracts, rates of reimbursement, contact persons, and product lines (e.g., Aetna – HMO, PPO).
  • Keep a copy of all managed care contracts.

Implement an annual review of reimbursement rates to make sure they have not changed. You may be surprised (especially if you are a new practice manager) that your practice has not updated its reimbursement rates since signing the contract. For instance, some of your contracts may include rates based on 1999 Medicare reimbursement rates. When this happens, you may want to renegotiate or renew the contract with current rates. You will save your practice a lot of hassle by updating the language in the contract to specify the “current year’s Medicare rates,” instead of citing a particular year. Designate a person to randomly check whether the carriers are reimbursing at the negotiated rates, and to monitor any changes of the insurance carriers at least annually.

When you initially enter into a contract and negotiate or renegotiate reimbursement rates with managed care insurance carriers, keep an eye on the rates the insurance carriers placed in the contract. Always negotiate rates at or above Medicare's prevailing rates for the current year.

G O O D   T I P S

Make Patients Want to Pay

Want your patients to pay when they visit, and be happy about it? Use the following strategies to help them understand what to pay, to be willing pay, and to walk out of the practice feeling their payment was equal to services received.

Acknowledge patients are customers – From the moment money changes hands, patients see themselves as customers. Provide value for their visit and make their experience satisfying—which means thinking about their whole visit, including paying.

Spread the word – Post professional, easy-to-understand messages about co-pays and other costs throughout the waiting room on the walls, as tents on tables, and in communications to your patients. Remember to make messages simple, but explanatory and positive.

Be flexible – Accept credit and debit cards. Take checks. Offer flexible payment plans for patients short on cash. Have enough cash on hand to change a $50 or $100 bill for those long on cash. Short of accepting a chicken, let your patients know you will gladly accept their reimbursement.

Be polite – Make sure the staff at the desk smile, and say "please" and "thank you." Train them how to handle difficult conversations with patients. Hire personalities who will make patients' visits as pleasant as possible. Take cues from companies known for their customer service.

ALWAYS be pleasant – There are a lot of ways you communicate with patients besides in-person: on the phone, via email, through mail, and via invoices. Always be pleasant and polite, and take the time in communications to acknowledge the patient's choice to visit your practice.

Embrace technology – Consider online billing and electronic transfers. If your practice is large enough, install payment kiosk systems. Make paying painless.

F E A T U R E D   S T O R Y

Several Postponements Benefit Practices

When President Obama signed into law legislation to temporarily prevent the scheduled Medicare sustainable growth rate (SGR)-related payment cut for physicians and other practitioners from taking effect on Jan. 1, he also extended a number of other "expiring provisions" affecting your practices.

While the physician fee schedule update will be 0 percent, other changes to the relative value units (RVUs) used to calculate the fee schedule rates must be budget neutral. According to a CMS press release, "To make those changes budget neutral, the conversion factor must be adjusted for 2012." CMS is developing the 2012 Medicare Physician Fee Schedule (MPFS) to implement the zero percent update.

CMS and Congress implemented several changes or postponements of policies:

1. The following three geographic components of the MPFS payment are adjusted: physician work, practice expense, and malpractice expense. Section 303 of the Temporary Payroll Tax Cut Continuation Act of 2011 (TPTCCA) extends the existing floor on the physician work geographic practice cost index through February 29, 2012.

2. CMS has increased the payment amount for the initial and annual wellness visit—which has no cost sharing for patients—to account for the introduction of health risk assessment (HRA).

3. The law extends the 2011 5 percent increase in payments for certain mental health services through February 29, 2012.

4. Primary care physicians, nurse practitioners, clinical nurse specialists, and physician assistants may be eligible to receive an incentive payment equal to 10 percent of their allowed charges for primary care services under Medicare Part B. This incentive is paid in addition to any physician incentive payments for services furnished in Health Professional Shortage Areas.

5. The exceptions process for outpatient therapy caps has been extended. Outpatient therapy service providers may continue to submit claims with the KX modifier Specific required documentation on file when an exception is appropriate, for services furnished Jan. 1 - Feb. 29, 2012.

Therapy caps are determined on a calendar year basis; therefore, all patients begin a new cap year on Jan. 1. For physical therapy, speech language pathology, and occupational therapy services combined, the limit on incurred expenses is $1,880. Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached, and also apply for services above the cap where the KX modifier is used.

6. In the MPFS regulation published in the Federal Register Nov. 2, 1999 CMS finalized a policy to pay only the hospital for the technical component (TC) of physician pathology services furnished to hospital patients. To allow those independent laboratories to be separately paid for the TC of a physician pathology service provided to a hospital patient sufficient time to negotiate new arrangements with hospitals, the implementation of this rule was administratively delayed until 2001. Subsequent legislation formalized a moratorium on the implementation through 2011.

Congress has temporarily restored the moratorium through Feb. 29, 2012. Eligible independent laboratories may submit claims to Medicare for the TC of physician pathology services furnished to patients of a hospital, regardless of the beneficiary's hospitalization status on the date the service was furnished.

7. The following ambulance policies have also been extended through Feb. 29, 2012:

  • The 3 percent increase in the ambulance fee schedule amounts for covered ground ambulance transports that originate in rural areas, and the 2 percent increase for covered ground ambulance transports that originate in urban areas;
  • The provision relating to air ambulance services that considers any area designated as a rural area as of December 31, 2006 shall continue to be treated as a rural area for purposes of making payments under the ambulance fee schedule for air ambulance services; and
  • The provision relating to payment for ground ambulance services where the base rate of the fee schedule is increased when the ambulance transport originates in an area included in those areas comprising the lowest 25th percentile of all rural populations arrayed by population density.

8. Congress has extended the Outpatient Hold Harmless provision through Feb. 29, 2012 to rural hospitals with 100 or fewer beds, and to all sole community hospitals and Essential Access Community Hospitals, regardless of bed size.

9. The 2011 payment rate for bone mass measurement has been extended through Feb.29, 2012. This extension will be reflected in the revised 2012 MPFS.

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.

In This Issue
Managed Care Contracts
Make Patients Want to Pay
Postponement Benefits

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