Prudent Policies Regarding Billing Procedures and Compliance Presented to: September 19, 2008 Presented by: Timothy Tob

1. Prudent Policies Regarding Billing Procedures and Compliance Presented to: September 19, 2008 Presented by: Timothy Tobin, President

2. Objectives • Review current industry trends • Examine the “ideal” billing process • Present “TOP 10” billing and compliance procedures

3. Industry Trends • Federal/State Regulations • Reimbursement Trends • Accreditations Guidelines • Changes in financial responsibility • System interoperability • Industry horizontal integration • Future

4. AR Cycle Source: www.medical-billing-company.com

5. #1 –Insurance Verification • Check prior to surgery • Obtain pre-certification • Inform patient • Facility vs. professional services vs. anesthesia • Financial policy • Collect prior to surgery • Patient payment options • Payment plan: promissory note

6. Promissory Note On this date of ________,in return for valuable consideration received, the undersigned borrower[s] jointly and severally promise to pay to YOUR FACILITY , the "Lender", the sum of $_______ Dollars, • Terms of Repayment • Payable On Demand • Late Fees • Default • Modification • Transfer of the Note • Severability of Provisions • Choice of Law

7. #1 –Insurance Verification • Online Websites • Availity www.availity.com • Medicare www.wpsic.com • Medicaid www.michigan.gov/mdch • NEBOS www.nebos.com • Clearinghouse • Many offer “real time” eligibility and deductible status

8. #2 – Registration & Charge Capture • Scan insurance card and driver’s license • Verify registration information • Offer online registration • Coordinate with the surgeon’s office • Develop charge capture tool • Reconcile charges • Enter timely

9. #3 – Proper Coding • CPT-4 2008: Current Procedural Terminology • HCPCS Level II 2008: Healthcare Common Procedure Coding System • ICD-9-CM 2008: International Classification of Diseases • Specialty association websites • Coding software • NCCI edits • Medicare Part B resources

10. #3 – Proper Coding • 2008 Changes • 450 non-office based procedures • 360 office-based procedures • More than 3,000 procedures on the CMS final list • Note new billable services • Calculate financial impact

11. #3 - Proper Coding • Gastroenterology • screening colonoscopy vs. diagnostic colonoscopy • Polypectomy • Podiatry • Modifier usage • Bunionectomy • Hammertoe • Orthopedics • Knee arthroscopies • Shoulder synovectomies • Hardware removal

12. #3 - Proper Coding • ENT • Bilateral coding • Impacted earwax • Myringotomy vs tympanostomy • Pain Management • Multiple injections • Diagnostic vs. therapeutic injections • Implant neuroelectrodes Operative Note must match Billing!

13. #3 - Proper Coding Payment for procedures includes: • administrative, housekeeping items and services, recordkeeping • nursing services, services of technical personnel • facility use such as pre-operative areas, OR and recovery room areas • diagnostic or therapeutic items and services • materials and supplies used for anesthesia • blood, blood plasma, platelets, etc., except for those applied to the blood deductible • supplies not on “pass through status” • intraocular lenses (except new technology lens)

14. #4 – Timely Claim Submission • Know your payor contracts • timely filing limitations • Verify electronic claim submission • NPI numbers • Search https://nppes.cms.hhs.gov • Patient “statement” letter • Follow-up on claims

15. #5 – Monitor Payments • Reimbursement • 2008 vs 2009 • 4-year phase-in • Load fee allowable in system • In-network vs out-of-network • Calculate case cost • “Re” negotiate contracts • Know your “carve outs” • Survey your referrals

16. #5 – Monitor Payments • Michigan Prompt Pay Laws Department of Legal & Economic Growth www.michigan.gov/dleg • Clean claim must be paid within 45 days of receipt • If not clean, the facility must be notified within 30 days • Penalty for late payment - 12% annually • Appeal denied claims (use Code violation) • Write a letter to the insurance commissioner • Source: http://www.michigan.gov/dleg/0,1607,7-154-10555_12902_35510_36782---,00.html

17. #6 – Manage AR • Follow-up on aged AR • Consistently, not at 365 days • Use ATB reports • Check status: phone, electronic system, online • Staff collection worklist • Involve the patient and/or employer • Contact the provider relations rep

18. AR Indicators Key Billing Performance Indicators

19. AR Indicators AR Liquidation Table

20. #6 – Manage AR Patient Collections • Implement collections procedures • Statements vs. Letters • “Dial for Dollars” • Fair Debt Collections Act • Use a collection agency • Legal options

21. #7 – Work Denials • Track denials by category • Know the payor’s appeal process • Pay attention to timeliness • Don’t give up!

22. #7 – Work Denials • Almost 1 out of every 3 claims is denied • 15% never worked • Goal - 7.1% denial rate 5 Billion Claims

23. #7 – Work Denials Top 10 Denials • Registration error • Eligibility issue • Lack of authorization/referral • Coding/bundling • Medical necessity • Untimely filing • Duplicate • Addition information requested • Coordination of Benefits • In process

24. #8 – Know Your Contracts • In-network vs. out-of-network • Is the patient getting paid? • Have patient sign a promissory note before the surgery • Monitor reimbursement • Note payor requirements • Carve-outs • Negotiate

25. #9 – Have a Compliance Plan • Internal monitoring & auditing • Compliance & practice standards • Compliance officer or contact person • Education/training • Respond to offenses • Open lines of communications • Enforce disciplinary standards

26. #10 – Prevent Internal Fraud Association of Certified Fraud Examiners reports: • Smaller organizations suffer • $127,000 median loss • 6% of total revenues • Based on GNP, 600 Billion or $4,500 per employee • Embezzlers are older • $18,000 with aged 25 or younger • $500,000 aged 60 years or older • 80% of the time • 1 in 4 employees has been employed >10 years

27. #10 – Prevent Internal Fraud • Set up rigid protocols • Implement system audit trail • Perform independent audit • Send staff on vacation • Look through drawers • Review canceled checks and bank statements • Sign vendor checks w/matching invoice • Purchase insurance

28. #10 – Prevent Fraud • Segregate duties/create job description • Create checks and balances • Use a lockbox • Monitor adjustments • Create a budget • Perform random drug testing • Inform staff

29. Conclusions • Measure KPI • Monitor, monitor, monitor • Take action • Review your information systems • Outsource for more efficiency, protection and net bottom-line

30. Websites BCBSM:  http://bcbsm.com/ BCBSM EDI Professional Commercial Payer List: www.bcbsm.com/pdf/commercial_payer_list.pdf BCBSM EDI user guide for 837 format:  www.bcbsm.com/pdf/edi_userGuide.pdf Medicare CSNAP:  www.medicareinfo.com/apps/cms/home.do Medicare:  www.wpsmedicare.com Centers of Medicare and Medicaid Services:  www.cms.hhs.gov Cofinity (formally PPOM):  www.ppom.com/ppomui/index2.aspx HAP:  www.hap.org

31. About Medorizon • Operating for over 20 years • Full service medical billing company • Complete revenue cycle management • Practice management system installation • ASP system hosting www.medorizon.com