Coding Manager Handbook Ch 5 Revenue

CHAPTER 5 THE REVENUE PROCESS
**The Revenue Cycle
**The Appeal Process
**The Budget

As a manager, you will find that the basis for office and hospital medical coding services, is the revenue process. Most physician practices are revenue based and are part of a “for profit” business model. Some practices are part of a hospital system that are included in the “not for profit” business model. The for profit vs. the not for profit practices do have variances regarding how they are set up with tax structures etc..., However, both have many similarities involved in the oversight of the monetary flow. I have always thought of the monetary processes as a stream or river when the money flows consistently with some ups and downs, but is constantly moving forward. You want to avoid those occasions where the flow of revenue falls to a trickle, or has been impeded for what ever reason.

A good revenue cycle or revenue flow process depends on all team members working together effectively and communicating if there is a problem or issue within the cycle. This is an on-going process for the clinic or hospital facility. Within the revenue cycle are these functions are:

1. Patient accesses the system

2. Schedules an appointment with the Patient Services Representative

a. Verification of insurance
b. Authorization and certification to see provider
c. Pre-registration gathering of demographics
d. Identification of referring physicians or consultants
e. Patient is informed of the referral process, and instructed to bring all insurance cards and co- payment amounts

3. The registration forms are filled out and consents signed

a. Hands on verification of insurance at time of services, ensure that pre-authorizations are on-file
b. Review all demographic information with the patient 1-1
c. Collect co-pay as appropriate


4. Patient meets with the provider for care of documented services

a. Patient is seen and examined regarding identified medical concerns ro problems
b. Procedures are performed and/or treatment prescribed or initiated
c. Final diagnosis is noted
d. Physician or provider of care documents the services rendered within the medical chart/record. This is to be appropriate and correct and informative for the patient.

5. The documentation is reviewed and coded

a. The services documented by the physician or provider is reviewed by the coder to accurately reflect services utilizing CPT, ICD-9 and HCPCS codes.
b. Documentation is completed and signed off by the physician or provider

6. The charges are keyed and processed

a. Keyers and coders enter the data into the patient management system to include all fees .
b. Claims software scrubs the entries for correctness
c. Charges are to be entered in a timely manner for prompt payment by 3rd party payers.

7. Claims and statements are produced

a. Claims are created and edited to be complete and correct (an additional scrub)
b. Claims are then sent electronically to the payer, or the clearinghouse daily.
c. Goal is to have 100% of all claims go electronically initially. Only appeal claims should go out via a paper process
d. Billing statements are sent out to patients with a self pay balance

8. Payment is processed by the 3rd party payor or by the patient
a. Electronically and manually key and post all monies received from payers and patients.
b. Manually key the denials, rejections and or adjustments as per what is noted on the remittance advice from the 3rd party payers
c. Create and document any and all refunds to be sent back to 3rd party payers or patients. All refund activities should be processes within a designated time frame (such as 1 week, once per month etc)
d. Reconcile all charges, payments and adjustments at the end of the day, or within a 24 hour time period.


9. If not paid, the claim goes back out for re-submission and appeal
a. Review all remittance advice, for rejections.
b. Make all coding and charge corrections (if warranted by documentation)
c. Correct any demographic errors, or missing referral/pre-authorization numbers
d. Review bundling edits and adjustments

10. Secondary claim is filed (if necessary)
a. Have coding department submit claim to secondary/tertiary payers. The goal for this should be within 1 week of receiving initial claim. Most Medicare plans will automatically medi-gap the claim to the secondary/tertiary payers.
b. If initial claim is rejected, have appeal letter created, and submit with appropriate documentation and forms
c. Re-submit and appeal with hard paper copy, or via electronic submission if possible.
d. Follow up on all re-submitted claims within a 30,45,60 timeframe process. If goes to 75 days, move to self pay balance ledger.

11. Follow up with the patient (if necessary)
a. Initiate in-house collection call for self pay accounts within 30,45,60 day periods
b. Create payment arrangements or a budget plan for outstanding balances that exceed XXX dollars.

12. Claim sent to collections (if necessary) Legal processes
a. Consider sending bad debt to a collection agency
b. Review garnishments of wages
c. Review liens on property
d. Formal collection processes through the court system (small claims, etc)

As you can see from the above format, that when there are problems or issues within the revenue cycle stream, your payments and accounts receivable will suffer. Of course, if the dollars are not coming in the door, then you will struggle to meet your accounts payable obligations. As the coding manager, you are an integral part of this process. You need to be willing to learn each and every part of this process, and enable it to keep working smoothly.

The revenue cycle in the office practice and the hospital realm are very similar. As the coding manager, you may be responsible for any or all of these above processes depending how large the practice is. Some of the pitfalls of this cycle are high deductibles, or self pay patients, charitable contributions, peaks and valleys such as cold and flu season, holiday seasons, restrictive processes such as pre-authorizations and referral issues. Your front desk personnel should be well versed in collection of co-pays and revenue collections.

Within the revenue cycle, you need to make sure that your electronic claims submissions follow the most current protocol and use the most current forms that are available. Currently CMS requires physician practices to file claims on a CMS 1500 form, and facilities for file claims on a UB-04 (aka CMS 1450)
If you are unsure of the criteria to fill out the CMS 1500 or the UB-04, CMS has explicit instructions on the website www.cms.hhs.gov for the criteria needed to fill out the forms. (For Medicare CMS-1500 form completion and coding instructions, see Chapter 26 of the Medicare Claims Processing Manual (Pub.100-04), For Medicare CMS-1450/UB-04 completion and coding instructions see Chapter 25 of the Medicare Claims processing Manual (Pub.100-04). The UB-04 will be the only hardcopy claims format accepted by CMS after May 22, 2007.) Your medical management software should have the electronic versions of the CMS 1500 form and the UB-04 already encoded within it. However, you should know the criteria needed to complete the forms correctly.

It is important that you know the ins and out of these claim forms. Your department may be the one who does the secondary claims filing, or files hard-copy claims with 3rd party payers. You may be lucky enough that you have an information services (IT) department who handles this.

Now that the forms are filled out, direct submission to 3rd party payors is next, or your usage of a claims clearing house may be implemented by your practice or facility. You may or may not know what a medical claims clearing house is. It is “data repository” and re-filing of such data that is transmitted from you to 3rd party payors. Some clearing houses not only offers claim submissions, but also provide ancillary services such as

 Electronic patient eligibility inquiry
 Prior Authorization and Referral authorization processes
 Patient address verification
 Patient credit and history verification
 Claim submissions
 Claim status inquiry
 Electronic remittance advice
 Patient statements (for both self pay and balances after 3rd party payor revenue receipt

The clearinghouse that you use should integrate seamlessly with your medical practice software, for easy submission to/from the clearinghouse. In addition, they should have a 95% or higher successful clean claim submission guarantee to you in writing. They should also offer secondary or tertiary electronic submission of claims. The ideal situation, is that upon successful sending of the electronic data you should anticipate payment via electronic remittance advice between 10 and 15 working days. Outlined below, shows the progression of how the clearing house works

1. Create an electronic file of charges keyed by the coder or data entry staff
2. You upload this file to the clearing house via secure encoded data transmission files
3. The clearing house then scrubs the claim checking for errors.
4. If error free, it will then transmit your data file to the specified payer.
5. If there are error present, the clearing house will inform you of the error, and you then have the opportunity to go in on-line and make corrections to that particular claim.
6. Once corrected you can re-submit.
7. If all claims rec’d are correct, the 3rd party payer will process those claims, and return a reimbursement check back to you via your bank if you have direct deposit, or with a formal reimbursement check. An explanation of benefits will accompany any financial remittance.

This is an ideal set up, especially if your coding/keying staff are on the ball, you can key the charges on and within 2 -3 weeks have reimbursement for those charges back in the door to your practice. Other benefits of a clearing house, is that you can fix your errors in minutes rather than days or weeks down the road after you receive your remittance advice. You should ultimately have fewer rejected claims, as the initial scrub process should take care of that initially. You should also be able to reduce the amount of paper, envelopes, postage etc, but utilizing the data for on-line submission, rather than paper format.

The EOB and remittance advice will be coming back to you much more quickly via an electronic submission, rather than paper submission by hand. Once you have that EOB in your office, you will need to have this information keyed on to the patient’s account via the single line-item process functionality. This ensures that the correct payment correlates with each line item as was submitted initially on the CMS 1500. There are many different companies that offer electronic claims submission, These companies all have to file the claims based upon HIPPA data and transaction criteria. The price for these services varies too, so you will want to do a thorough investigation of what these companies offer versus what the cost is to have the claims submitted to really get a good picture of the expense to your practice/facility. Just because the company may “charge” a higher price, may not mean you are getting a better product or service. Do the work and investigate throroughly before signing any type of financial commitment to the clearing house.
Now that you’ve submitted your claims, you should receive back a data file that is also HIPAA compliant. With the implementation of the HIPAA national standards, a listing of remittance advice remark and claim adjustment reason codes are available through the internet at http://www.wpc-edi.com/codes/Codes.asp. CMS also has put up a web site that can walk you through the search function of the remark codes, or you can view them all. WPC assists several organizations in the maintenance and distribution of HIPAA-related code lists external to the X12 family of standards. Each of the lists have different release schedules. These committees maintain the integrity of the HIPAA transaction and code sets. The National Uniform Claim Committee , maintains the health care provider taxonomy code set, by the Centers for Medicare and Medicaid Services maintain the remittance advice remark codes, and the Insurance Business Process Application Error Code Maintenance Committee maintains the insurance business process application error codes.
If you are lucky, your claims have gone through cleanly and have been paid in a timely manner. Unfortunately, you will always have claims that error out, or need to go through an appeals process.

The appeals process is a necessary evil. When a claim is denied, and you have to appeal, it costs you in time, effort and money. You now have to utilize your employees to gathering everything together, writing an effective appeal letter, sending accompanying documentation that the claim should be paid, then re-filing via a paper claim. So now, instead of having the revenue back to you within 10-14 business days, it has now been delayed up to 6-8 weeks before you may even hear from the 3rd party payor. If you are lucky, you will get a favorable response to your appeal, and you’ll have your payment within 6-8 weeks.

When choosing to appeal a claim, you will want to make sure that you are appealing the non-payment decision for all the right reasons. If you are appealing a claim for a bundling edit, make sure that the correct modifiers are on the claim, and that the procedures should be paid separately and unbundled. Your documentation from the provider for the procedure should clearly spell this out. Otherwise, you’ll receive another denial- and probably correct that the procedures were not separately identifiable.

Tracking your medical claim reimbursements is vitally important to the revenue cycle too. When your data entry keyers and auditors are posting the monies to the accounts, train them to look at the reimbursement and evaluate if you are getting paid correctly for the services. Ask the questions, were you reimbursed correctly? Were the claims processed properly?. Do you have a set fee schedule with specific payors, and was the claim paid out correctly to you? Always review your contracts, and make sure that your employee have access to copies of those contracts as well. If the payor is operating outside of your contract, you may, in fact, be due more money than they have been paying you. When reviewing your claims reimbursements look at these areas.

 100% reimbursement. This may look like a good thing, but chances are it’s not! The carrier may have reimbursed you below the set fee schedule. Did you bill the carrier below what they are willing to pay as a maximum amount on a specific CPT code? Always review your fee schedule and what you have contracted with the pay for specific CPT codes. Never sign a contract unless the specifics are spelled out in regard to reimbursement by the carrier per CPT code.

 The Explanation of Benefit (EOB) shows no payment made. There may be a couple of reasons for this. There may be a coding issue (such as modifier, bundling edit etc) or the patient may not have coverage from the carrier at this time. Verify with the coder and the payor if re-sending a claim that is in a “new coding year” determine if the payor wants the correct code for that specific CPT /ICD9 year, or does the payor want you to bill with the “new coding year” codes? Most insurance companies want attached documentation, and that documentation should support medical necessity on each and every claim submitted.

 If your EOB shows a large contractual adjustment, or has a reason code for a reduced payment rate you should verify that the claim was submitted with the correct information. If the wrong place of service code (POS) was coded that can reduce your payment, also missing modifiers, or inappropriate modifiers appended to the CPT codes can affect the payment processes. Look carefully too, as the payor may have reduced payment, if the pre-authorization was not obtained prior to the services being performed. Another area for error is in the CCI bundling edits. Always have your coders double check the bundling edits. Do not unbundled the services and expect separate payment, unless you have the documentation to prove that the procedure was separately identifiable, and should be unbundled.

Claim denial can happen for nearly any reason. Denials are caused by usually human error, and are not intentionally fraudulent in nature. However, in this age of HIPAA, CMS and the OIG are looking for any way possible to safeguard the payment processes for the government. These entities are charged to audit the payment process for the Medicare and Medicaid systems, and will find any means to reduce or deny your claim within the government boundaries CMS has implemented audit type programs prior to paying claims, and will request full documentation on a small sample (1 or 2 claims) to ensure correct coding and billing.

CMS also conducts post payment audits of a random 10 charts. If they feel there is sufficient evidence of incorrect billing, or possible fraudulent billing, they will escalate their audit process, and do a formal inquiry into an entities formal billing processes. Most physicians and providers have denials simply due to human error. I’ve listed below many common payment denials reasons from payers. If you can cleanly submit your claims on a regular basis, you will consistently reap the reward of continuous revenue flow.

Common Payer Denial reasons:
 Patient Demographic Information is incorrect on the claim. Avoid using characters such as asterisks, dashes, slashes, periods, commas etc on the claim form. Many electronic data software programs cannot recognize these notations, and the clearing house, or payor will reject the claim as unrecognizable. The claim will then be rejected and returned back to you without being received by the payor, It is up to you to review the rejected claim, correct the claim (i.e remove the dashes, slashes, periods, commas) and resubmit. Do not add any dashes in the patients insurance member IDS, or with a social security number, do not add periods to the address information, (e.g. P.O. Box # type in as POB or PO Box)

 Non-Coverage or Terminated Coverage , or Member is not found on file at the time of service. If your front office staff has performed an initial authorization for eligibility of service, and your claim is denied for this reason, call the carrier themselves, and get a re-verification. Then double check your software to ensure the information was entered into your computer system accurately. Make any necessary changes, and resubmit your claim.

 Pre-authorization or Certification not on file, No referral on file. If your practice did not obtain pre-certification , pre-authorization or have a referral from the patient’s primary care physician, claim approval and or payment for services, procedures or injections, will be denied. There are few instances where you can obtain retro-service approval for payment. Most often you will have to absorb the cost of these rendered services, and your patient will not be held financially liable. The EOB will state that the patient’s liability is zero, and the physician cannot bill you for the balance.

 CPT/ICD-9/HCPCS issues. Make sure that your staff is using the correct years’ codes, that 5th digits are correct, modifiers are appended to the correct service code, in the correct sequence, bundling edits have been reviewed and are adhered to. Incorrect use of the modifier can be one to review closely. If the procedure is not a bilateral procedure, do not append a bilateral modifier. Look carefully and educate your coding staff to ensure that RT, LT, TC and 26 modifiers are used correctly. Modifiers 59, 22, 52, 53, 99 require documentation be sent to the insurance payor, prior to being paid. Be prepared to re-submit the claim to the carrier with the documentation to support the modifier, or medical necessity via paper claim once you receive this type of denial. The carrier may be willing to have you fax or electronically file this data to them to expedite your claim.

 Internal software system errors such as a missing UPIN or NDC number, or physician ID numbers incorrectly input into your billing software, or missing provider, or facility information on the claim. These claims will be rejected. You may have to enlist the help of your IT/IS department to help clear these issues up prior to resubmission of your claims.

 Some claims will be denied for a third party liability marker. If the claim involves workman’s compensation, or auto accidents those claims should be sent to those payors, and NOT to the patient’s medical or dental insurance carrier. Some of these medical/dental carriers will reject the claim up-front if specific accident codes (such as 800/900 series ICD9 diagnoses) are denoted on the claim form, and the no TPL is not on file within the claim. Some accidents that occur at the patient’s home should be sent to the medical carrier, but get rejected too. In those instances, you will need to appeal with the correct documentation showing that the accident occurred at the patient’s home, and is not subject to payment from a 3rd party liability payor such as workman’s comp, or an auto accident policy.

 Be sure to file your claim within the timely filing deadline. Many of your contract will specify that the claims have to be submitted within a certain number of days or months. CMS, Medicaid programs, and major medical insurance carriers all have specific timely filing criteria. You need to educate your staff regarding these timeframes. If you have filed the claim within the timely filing timeframe and have to appeal be sure to track when the initial claim was submitted, denied and re-billed. Again, you may have to enlist the help of the IT/IS department to see if there is a tracking/documentation system within your submission software to show when the initial claim was filed, if the payer or clearing house received the claim and the documentation of the initial rejection via the EOB, so you can appeal if necessary. If you have to submit a claim via paper, be sure to send it via certified mail, or have it sent via an independent courier system (such as FED-X, UPS, etc) so you can have accurate tracing documentation of the submission of the claim, and receipt by the carrier.

If you find that you have to perform the formal appeal process, keep in mind these steps to expedite your claim for payment of the denied services.

 Claim Information: Determine from the EOB the specific denial reason or remark codes used to adjudicate your claim. You have the right to request information as to the criteria they used to deny your claim. (such as the payer utilizes a specific encoder software edit system, that denied your claim, or they do not recognize or have a contract with your practice or facility).

 Write your appeal letter: Make sure that you are within the timely filing deadline for appealing the claim. If you are be sure that you have made copies of all pertinent information to file back with your claim form. This appeal packet will include

o A copy of the initial denial letter
o A copy of the original EOB showing the denial
o A copy of the patients insurance card
o A copy of the pre-authorization, certification, referral
o A copy of the medical record documentation showing medical necessity
o A copy of the contract you have with the payer (if needed)
o A clean copy of the CMS1500 or UB-04 claim form

 The formal written appeal letter should state what you want to have happen with this denial

o Clearly describe the service, procedure or injection that you want covered

o Clearly describe what you want the carrier to do (such as re-review the operative report, explain why the modifier(s) used are correct and why etc)

o Include your name, your facility or practice name, and where and when you can be contacted. Include the patient’s name, policy number and copy of the patient’s insurance card if possible with your appeal information.

o State why you want this to happen. If your health plan states in their policy that you must have tried A, B, C and D first, then make sure you have tried A, B, C and D. Then, support your description with medical records to show how you tried A, B, C and D. Include any ancillary services such as x-rays, MRI’s or lab tests that were done too.

o Explicitly explain why you feel they adjudicated your claim in error, and what your expectation is to remedy the situation. i.e. You adjudicated the modifier 50 in error, as this was a bilateral procedure, so I anticipate payment from you at 150% of the standard fee schedule, or that they erroneously bundled procedure abc123 with procedure def567.

o State the time frame for which you expect a written confirmation or re-adjudication. i.e. I expect to have written confirmation from you in regard to this situation within 10 business days.

o Last but not least…. Review your letter for spelling errors. Re-read your letter to ensure that it clearly states what you want to have happen. That it includes all pertinent documentation and the timeframe for when you want the carrier to resolve this issue. Be sure to keep a copy of what you have sent to the carrier in a separate file for your audit documentation procedure and protocol.


Audit Processes

The audit process can encompass many different areas. For physician based practices you will look to an audit process to ensure that the claim you billed, matches the documentation in the medical record. There are numerous tools that you can use to verify that the E&M code billed matches the claim on your CMS 1500 claim form. The ultimate goal is that the physician documents the services provided to the patient accurately within the medical record, the coder accurately bills for the service to the 3rd party payor, the 3rd party payor sends you a check for the services rendered.

However, life rarely works this easily. CMS and the OIG want to ensure that physicians are documenting and billing correctly for the services provided, AND that those services were medically necessary. The cost of healthcare and physician time is a huge concern. Patients feel the “sticker shock” of the cost of healthcare when they see what a 15 minute visit with the provider costs. Then the patient also has to contend with the overall cost of their insurance, in addition to an increase in premius, deductibles, co-pays, and then the skyrocketing costs of medications. But on the flip-side, physicians and providers also face similar circumstances. The physicians face increasing overhead costs of employee salaries, decreased reimbursement from private payers, and overall operational expenses. The trend is more self-pay patients due to job losses and lay-offs, patients are more critically ill when seeking care, some resort to non-compliance of maintenance medications due to the expense.

It is always a good idea to look at how your staff is performing and do a quick but comprehensive overall office audit. This way as the coding manager, you can get a good handle on what areas may be needing some TLC from you. I have included a generic physician office audit template that will give you a broad idea of areas that need some attention. You can quickly go through this by yourself, or enlist others in your department to help out with it too. I feel that if all take part in the process, then all can be a part of the solution to any problems you may encounter.

If you are noticing a drop or dely in your revenue stream, the self audit should be the first place to start. You really need to evaluate which type of audit will work best for you in your particular situation.

1. Review your Fee slip/Superbill/Encounter sheet. Have the coder review to ensure all CPT, ICD9 and HCPCS codes are correct and for the current year.

2. Do a “top-10” procedures audit. Run a report showing the 10 ten procedures performed in your office, and verify that the documentation in the medical record matches what was billed.

3. Audit your medical records to verify that signatures, consents, waivers, and ancillary reports are on filed, and correctly filed within the chart.

4. Follow up appeals audit. Look at the denied claims that you have appealed and formulate a percentage of those that were successful appeals vs/unsuccessful appeals to the carriers.

5. Have your coding staff implement a routine on-going audit process within the department. If the medical record documentation if dictated or on-line, have the coding staff compare the completed fee slip/superbill/encounter sheet that the provider fills out, against what the provider has documented in the medical record. Coding by documentation is always better, than “assuming” that what the physician noted on the superbill was correct. The coder can also ensure that the correct sequencing of the diagnosis codes is correct. Mine for any procedures that were inadvertently missed by the provider’s documentation on the fee slip. The coder also has the opportunity to add/subtract and make other coding corrections prior to the claim being sent.

Coding by documentation is always the best way to ensure correct claims are going out the door. But if you do not have dictation on-line, and have to wait for hard copy, you may want to consider doing periodic random audits of your charts. A 10-chart audit of each physician should be performed every month. Track the outcomes of these audits, and educate and follow up on any trends that you see happening. With just a few of these suggestions aabove, you may be able to increase your revenue flow quickly and easily.

What happens if CMS or the OIG want to see what is happening in your billing and medical records? What should you do? CMS has been charged by the federal government to be the custodial parent of the taxpayer dollars being paid to providers through the Medicare and Medicaid programs. They are trying to ensure that providers are putting forth a reasonable effort for maintaining proper billing practices, and ethical medical practice standards of care. However, there have been providers and entities that have committed Fraud and/or Abuse by filing false and/or inaccurate medical claims solely for the purse of obtaining additional health care benefit payments and reimbursements from federal government programs.
The majority of physicians and medical providers perform within the scope of ethical practice. If errors are found, they are most often, human caused errors. Not a willful or intentional fraudulent act. Lean on your compliance plan and your risk management department to help with maintaining an ongoing self-audit practice and plan.

If you are subject to a governmental audit, seeking counsel from your risk management team, and also your legal counsel is always a wise idea.




THE BUDGET

Just as you audit your medical records, your billing records and office processes, you should also audit your budgeting processes. Most medical practices and hospitals have a firm budget process in place, but as a new coding manager, you may want to have a “mini budget” for yourself and your department, or you may be charged with handling the entire budget for the practice.

The sample budget template gives you a quick look at all the areas within a practice to know where your revenue is coming in at (Accounts recieveable) , and also being disbursed to (Accounts Payable) and the ability to track your ancillary expenses. As the manager, you truly need to be a good steward of the financial resources that are entrusted to you by the physicians and the patients.

Physician compensation will also play a big part of how financially successful your physician office is. Physicians can be compensated for their work in a number of ways. In addition to the actual salary physician receive, other ancillary benefits such as pensions, 401K, medical savings accounts, employee medical, dental and vision insurance benefits, paid time off, holiday pay, and on-going medical education credit, malpractice insurance premium payments, or even bonus incentives.

Today, most physician compensation is based upon a salary, net or gross revenue , but some packages include the bonus or incentive component. Again, as the coding department manager, you will probably not be the one to oversee these issues, but it is a good idea to educate yourself on the policies of how physicians are compensated within your organization.

TYPES OF PHYSICIAN COMPENSATION
 Independently contracted physician services (such as a locum tenens)
 Employee physician/provider services, paid as an hourly employee
 Employee physician/provider services paid as a salaried employee
 Contracted physician service compensated by percentage of monies collected within the A/R after expenses
 Contracted physician service compensated by RBRVS/RVU, (aka physician based patient encounter credits based on cpt worked service units)

 Other types of reimbursement/payments or incentives.