Practice Management Alert

Written by Barbara J. Cobuzzi, MBA, CPC, CENTC, CPC-H, CPC-P, CPC-I, CHCC

We have been in a suspended state while the battles have gone on around us about the Accountable Care Act (ACA). As the supporting players in the field, we have all got opinions, thoughts, and strategies as to how the ACA will affect us and our practices. The mission of our practices is to deliver quality, compliant care, while the mission of our billing departments is to ensure that we compliantly bill and are paid for the services provided, optimizing our practice's income. Now, that SCOTUS (Supreme Court of the United States) has ruled, the ACA is taken out of suspension and is now on track for implementation (ignoring the political posturing that exists in DC). We have to think about how this will affect us and our practices. Below are some of my thoughts.

I think it is terrific that dependents through the age of 26 will continue to be on their parent's insurance. Many children today are still in college, may be unemployed or may be in employment situations where there is not available healthcare insurance (even with the healthcare reform, ie: in part time jobs). This helps the young people coming out of school and into the employment market get a running start before they have to find their own insurance.

From a medical billing perspective, this keeps a pool of patients in the insurance population for an additional 5 to 8 years when prior to the reform they may have been tossed from the third-party insurance rolls when they turned 18-21 years old. This reduces the amount of self pay patients in a population that is usually less able to afford to pay their medical bills.

At the same time, this may also encourage this patient population to pursue healthcare services because they have insurance when they may have forgone the services because they were uninsured without this regulation.

The individual mandate can be viewed two ways. I read an article where it said that by SCOTUS upholding the individual mandate, the ACA will probably increase the number of insured by 15-20 million people in the coming years, many using health insurance exchanges for their insurance. This increase in the number of insured would mean 15-20 million people who will be coming to the doors of medical practices with health insurance to assist them with the payment when prior to the ACA, they would have been self-pay. This means a few things:

Like stated above, these 15-20 million insured will probably avail themselves to more healthcare services than they would have when they were uninsured

Unlike when they were uninsured, the practice will not be billing the patient FULL FEE for the service, but depending on the practice's participation status, they may be collecting substantially less than full fee based on the contracted fee schedule with the payer BUT, collection from the payer could be easier than collection from a self-pay patient, especially if the practice is not good at collecting monies due for the services provided at time of the service for self-pay patients.

So, the self-pay balances in the Accounts Receivable should go down and the insurance balances will go up.

Insurance write offs for participating fee schedules (assuming the practice participates with a number of payers) should also increase.

However, a lot of the people who do not believe in the individual mandate, feel that more patients than not, will opt to pay the "tax" for not purchasing the insurance, and stay uninsured.

The "tax" can be perceived as less expensive than the cost of insurance. But the taxpayer should keep in mind that in paying the "tax", they receive no benefits. But by paying insurance premiums, the taxpayer will be receiving the benefits of health insurance.

And the third question is whether some businesses, particularly small businesses will drop their coverage of their employees in deference to paying the "tax." A lot of the detractors of the ACA feel this will happen.

I wonder if this is true and think that the pricing of insurance through the exchanges, Small Business Health Options Programs (SHOPs) and Consumer Oriented and Operated Plan (CO-OPs) (see next point) may determine this.

Although there is a lot of unemployment, there is still a competitive market for the good employees, so do businesses want to take away benefits that encourage employees to work there?

As high as the unemployment is, there are many unfilled jobs, because the unemployed are not qualified for the unfilled jobs.

Health Insurance Exchanges, SHOPs, and CO-OPs are an important part of the ACA. These will be insurance purchasing mechanisms which have not existed up until the implementation of the ACA due to the patchwork of individual state insurance laws.

Without the power of purchasing groups such as these, individuals have been penalized, paying the highest prices for insurance coverage, not getting the advantage of large numbers of insured to spread the risk over.

With the Exchanges, SHOPs and Co-Ops, individuals and small businesses will have purchasing power for health insurance that they have not had in the past.

The Sustainable Growth Rate (SGR) formula is not addressed in the ACA and is not affected by the Supreme Court ruling. Physician reimbursement under the SGR formula is set to be cut by 25 percent at the end of 2012 unless further Congressional action is taken. Congress is expected to act to keep rates frozen for the foreseeable future. This is a political hot potato that Congress just does not want to touch.

The ACA is still keeping the Independent Payment Advisory Board. I know that this is an issue that is of great concern by many physicians as Medicare Part B has been one of the last bastions where if "medical necessity" is meant per the LCD (if one exists), this would not be an issue. There is fear that the IPAB will change this one place where the physician's decision within the caveat of the LCD is the last word.

Since the power to enforce the Medicaid limits on the states was not included in the SCOTUS decision, there may still be "working poor" falling into a crevice, where the states who decide to not provide Medicaid for them (ACA says 133 percent of the federal poverty level should be covered by Medicaid, but any state may decide to not cover up to 133 percent). These patients may find they can only "afford" to pay the "tax" (really not afford the "tax," but that is the lowest cost alternative in the short run) and therefore, they will be a underserved population, between what the states determine what they will cover with Medicaid and 133 percent of Federal Poverty level.

Medicare will only pay for home health and DME if the ordering physician (the physician that is put in the "referring physician" field on the claim) is a Medicare enrolled physician. This is not who provides the service, but the physician who ordered the service. This may be extended to other services beyond home health and DME, such as other diagnostic services.

Right now compliance plans are optional. Under the ACA, a compliance plan adoption plan that has the "core elements" which will be established by DHHS and the OIG will become a requirement for continued enrollment in the Medicare program. This is a huge change. First we will need to find out what the core elements will be.

About the author: Barbara J. Cobuzzi is President of CRN Healthcare Solutions in Tinton Falls, NJ. She holds a BS in Industrial Engineering from Rensselaer Polytechnic Institute and an MBA from New York University. She holds certifications from the American Academy of Professional Coders (AAPC) as a CPC (physician coder), CPC-H (hospital outpatient coder), CPC-P (payer coder) and a CPC-I (coding instructor). She also holds a specialty certification in Otolaryngology (CENTC). Ms Cobuzzi is a past member of the American Academy of Professional Coders National Advisory Board as well as their Executive Board. She has also earned her Certification as a Healthcare Compliance Consultant from Healthcare Compliance Resources. Ms. Cobuzzi owned Cash Flow Solutions, Inc., a medical billing company for 13 years where practices received high value added coding and billing services, before she closed the billing company and entered into full time consulting.