Chapter 7 Visit Charges & Compliant Billing lecture 2

1. Chapter 7Visit Charges & Compliant Billinglecture 2 OT 232 OT 232 Ch 7 lecture 2

2. Strategies for Compliance (cont’d.) • Use modifiers appropriately • (CPT • Current Procedural Terminology) • -25 • Yes, same day. Yes, same physician. YES, clearly separate event did occur! • E/M • Ex, pg 215 • -59 • Not E/M • Ex, pg 215 OT 232 Ch 7 lecture 2

3. Strategies for Compliance (cont’d.) • Use modifiers appropriately (cont’d.) • -91 • Repeat test or procedure really was performed on the same day for patient management purposes • Should not be used due to lab errors, quality control, or confirmation of results • Ex, pg 215 OT 232 Ch 7 lecture 2

4. Strategies for Compliance (cont’d.) • Professional Courtesy • All or none billing • Discounts • Have to be clear & equally distributed • Not on a case-by-case basis • If any money collected, payer (if there’s insurance) gets percentage • Maintain Compliant Job Reference Aids & Documentation Templates • Cheats sheets • Commonly used codes in office • CAC – Computer Assisted Coding OT 232 Ch 7 lecture 2

5. Audits (dum Dum DUM!!!!) • Formal examination of a representative sample to reveal whether erroneous or fraudulent behavior exists. • External • By private payers or gov’t investigators • Prepayment • CCI edits • Post payment • IRS OT 232 Ch 7 lecture 2

6. Audits (cont’d.) • Internal • Part of compliance plan • By practice staff or hired consultant • Done to reduce the chance of an external auditor finding problems • Prospective (concurrent) • Done before claims are sent • Can reduce number of rejected claims • Retrospective • Done after remittance advice (RA) is received • Can see which codes (or people) are problems OT 232 Ch 7 lecture 2

7. Comparing Physician Fees & Payer Fees • Sources for Physician Fee Schedules • Physicians should establish ‘Usual fees’ • Charges to most patients most of the time under typical conditions • Always exceptions • Workers’ comp • Nationwide databases are published that show what percentile your fees fall under • Figure 7-6, Page 224 OT 232 Ch 7 lecture 3

8. How Physician Fees Are Set & Managed • Geographic • Competitive • Payers – Billing Tip, page 224 • PMP • Practice Management Program • Adjusted accordingly based on report that can tell what percentage of claims are paid in full or reduced • Paid in full? • Fee is lower than the max in insurance company will pay, so too low • Reduced? • Fee may be set too high OT 232 Ch 7 lecture 3

9. Payer Fee Schedules • Charge-based fee structure • Based on fees for similar services charged by providers of similar training & experience in geographic area • Create a schedule of UCR fees • Usual, customary & reasonable • What a particular doctor usually charges • 50% range of physicians with similar training & experience in geographic area • Whichever is lower! • The lower fee of what a physician usually charges and what is customary for physicians of similar training/experience in a geographic area is considered reasonable. OT 232 Ch 7 lecture 3

10. Payer Fee Schedules (cont’d.) • Resource-Based Fee Structure • Built by comparing factors • How difficult the procedure is to perform • How much overhead expense the procedure involves • The relative risk the procedure presents to the patient and provider • Very logical • Relative Value Scale (RVS) • Hybrid of the two (resource and charge) • Is some comparison involved for charges • Group of related procedures are assigned a relative ‘value’ in relation to a base unit – the higher the value, the more difficult the procedure • The base unit is assigned a conversion factor (dollar amount). To calculate the price of a service, the RVU is multiplied by the conversion factor. • Example, page 226 OT 232 Ch 7 lecture 3

11. Payer Fee Schedules (cont’d.) • Resource-Based Relative Value Scale (RBRVS) • Used by Medicare • Replaces charges with what each service really costs to provide • Three nationally uniform values are determined for each procedure • Work (difficulty, time) • Overhead • Cost of malpractice insurance (risk) • Each value is adjusted for location • GPCI • Geographic Practice Cost Index • Values are multiplied by a nationally uniform conversion factor that is kept up to date with cost-of-living increases • RBRVS fees are considerably lower than UCR • 15% difference OT 232 Ch 7 lecture 3

12. Payment Methods • To pay providers, payers use • Allowed Charges • An amount set as the most the payer will pay for the procedure • If the physician’s usual fee is lower, will pay that; otherwise will pay the allowed charge • Provider’s status in the plan • PAR vs. nonPAR • PAR providers agree to accept lower allowed charges than their usual fees • What’s in it for the PAR? OT 232 Ch 7 lecture 3

13. Payment Methods (cont’d.) • The payer’s billing rules • NonPAR providers can always ‘balance bill’ • Bill the patient for the difference between their fee and the payer’s allowed charge • The difference between a usual fee and the payer’s allowed charge must be ‘written off’ if the payer does not allow balance billing • That amount is never collected • If coinsurance is involved, it is based on the allowed charge OT 232 Ch 7 lecture 3

14. Payment Methods (cont’d.) • Contracted Fee Schedule • Fixed fee schedules with participating providers • Capitation OT 232 Ch 7 lecture 3