When are carriers instructed to update their coding system to reflect changes made in the Current Procedural Terminology (CPT)?

Answer: I know, you just got familiar with the old codes and now they went ahead and changed some of them on you. Unfortunately, every new year equals more changes in the coding system. So I guess this probably means you’ll be spending some of your free time researching the changes that will affect you.

HCFA has granted a 90-day grace period to allow you adequate time to make these changes. You may bill a 2000 code for a 2001 date of service until March 31, 2001. This will give you some time to research the new codes to see which changes you may want to make to your superbill and computer system, and to train your billing staff.

During this grace period, HCFA will pay all deleted codes using the applicable 2001 payment methodology. On or after April 1, if you bill a 2000 HCPCS code for a 2001 date of service, HCFA will deny the claim. Don’t use a 2001 HCPCS code to bill for a service performed in 2000.
HCFA has granted a 90-day grace period to allow you adequate time to make these changes. You may bill a 2000 code for a 2001 date of service until March 31, 2001. This will give you some time to research the new codes to see which changes you may want to make to your superbill and computer system, and to train your billing staff.

During this grace period, HCFA will pay all deleted codes using the applicable 2001 payment methodology. On or after April 1, if you bill a 2000 HCPCS code for a 2001 date of service, HCFA will deny the claim. Don’t use a 2001 HCPCS code to bill for a service performed in 2000.

Physicians don’t always have an opportunity to fully document every patient risk factor when updating medical charts. Even when they do, errors can be made when these risk factors are later entered into hospital databases by administrative staff. While the underreporting of patient risk factors may not always directly affect a patient’s medical care, it can have a serious, negative effect on hospital rankings created by industry groups such as the Joint Commission on

Accreditation of Healthcare Organizations and the National Committee for Quality Assurance.
Hospitals that underreport patient risk factors will have lower predictions for patient mortality. Even if their success rates are equal to other hospitals, their rankings will be lower because their actual patient outcomes were worse than what should have been expected from the reported risk factors.

How call hospitals and other healthcare providers improve the accuracy of their reported patient risk factors? Text mining software can play a key role in helping analysts automatically deduce predicted patient risk factors by examining ICD-9 codes in patient billing data.

Patient Risk Factors

The standard procedure used by insurance providers, industry watchdog groups and professional societies to examine hospital quality and cost-effectiveness has been to compare risk-adjusted estimated length of stay, healthcare costs, mortality rates or complication rates against the actual values of these rates.

The Department of Obstetrics & Gynecology and Women’s Health at Montefiore Medical Center (MMC) in New York was seeing red. Its accounts receivables were growing at twice the pace of revenue. MMC managers recognized that improving financial performance was paramount.

Organizations historically have invested more dollars and time in managing back-end, instead of front-end, revenue-cycle operations. Yet front-end operational improvement often makes a more dramatic bottom-line impact.
MMC managers, with the assistance of consultants and the support of MMC senior leadership and the chairman of the department, focused on the billing cycle. They reasoned that by supporting and training front-end staff to collect the right information as patients registered, back-office employees would chase fewer rejected claims and amass larger payments.

In 2000, the department’s revenue growth–5 percent in the prior three years–was outpaced by its A/R growth of 30 percent. With a total A/R of $15 million, $5.8 million was in the collection-agency category, while 35 percent of rejected claims were attributable to causes correctable at the front end. MMC could increase collections by $1.2 million without cost cutting or billing increases.

MMC managers set out to retool billing processes. Two years later, the department’s gross collection rate had increased to 42 percent, collections had increased 58 percent, while charges had risen only 11 percent. More than $5 million of the $7.4 million increase in income was due to collection-rate improvement. In addition, active A/R, days outstanding, and bad-debt write-offs dropped by 50 percent. This initiative required a Herculean effort to turn the billing process on end by training and retraining support staff and involving physicians in data collection at a level rarely experienced before. The department implemented change across the board: in the collection process for patient demographic and insurance information; verification of eligibility and referrals; approach to obtaining precertifications for procedures and surgeries; registration; use of waivers and consent forms when applicable; copayment collection procedures; financial plans for self-pay patients; capture of all relevant information on encounter forms; and coding and charge entry.

The department’s success was driven by operations, not data. Financial improvement required front-line overhaul, using myriad strategies.

Appoint one leader. The department had expertise in revenue analysis and reporting. However, no one was accountable for revenue cycle performance. MMC created the position of billing director to implement a “quality-in/quality-out” philosophy, by coordinating all inputs, people, and processes throughout the revenue cycle.

The billing director implemented rapid, effective, sustainable change by setting and enforcing clear performance goals and by combining performance goals with a coordinated plan of improvement, supported with the right tools and people. Perhaps most important, a single leader was able to develop a unifying organizationwide strategy that motivated all, including physicians.

Standardize procedures. Care delivery in the department was complex. More than 50 subspecialists provided services in six divisions over 31 locations. Multiple payers, a challenging payer mix with a high percentage of indigent patients, and high turnover among the support staff further complicated efforts to effect streamlined, efficient, and consistently high performing, front-end revenue-cycle operations.

This diversity, combined with growth, spawned substantial variation in revenue-cycle processes. Several site and division staff and managers had developed systems that worked in their location for their specialty. However, the lack of standard procedures resulted in potential lost revenue, significant duplication of effort, and no uniform understanding of how individual performance affected the bottom line. Standardization was needed to solve these problems.

First, managers restructured workflow processes, particularly preclaim tasks, to shift focus from appealing claims and fixing errors to preventing errors. Managers implemented preregistration, eligibility, and referral checking to collect as much of this information as possible before patient visits. Automated scheduling was used for most services, thereby providing a better trail for services performed and helping improve data capture and editing, as less rekeying of information helped minimize errors.

Next, as much as possible, managers created and standardized appropriate policies and procedures. For instance, MMC did not have a well-enforced, up-to-date uniform policy for handling cash. Instead, staff in different offices used different approaches for accepting patient copayments, issuing receipts, and creating daily deposits. The copayment process was standardized: like cashiers in a supermarket, every staff member had a cash drawer and had to “proof out” to a supervisor with end-of-day deposits.

The list of agencies that perform audits includes the Health Care Financing Administration, the Office of Inspector General of the Department of Health and Human Services, state Medicaid fraud control units, insurance companies, medical board inspectors, and even the Treasury Department, the Attorney General’s office, the Federal Bureau of Investigation, and the Postal Service.

“If HCFA investigates you, you get on a list shared by all the agencies and they say, ‘Maybe we should investigate too, said Dr. Weinman, who is a consultant for Professional Medical Management Services, Dallas, Pa.

Civil penalties are handed out daily, at $10,000 per wrongful claim. One of Dr. Weinman’s colleagues, a cardiologist, was fined $1 million by HCFA for doing electrocardiograms on every patient at every visit.
Dr. Weinstein cited some common mistakes to avoid in reporting claims, including the following:

* Not documenting medical necessity. Include all required information and backup tests, diagnostic codes, and treatment with the patient history Medical necessity can be subjective, but claims are rarely denied if justification is provided, he said,

* Certificates of medical necessity that are not current. Don’t sign these without looking at them first. They are big-ticket items that can raise flags to insurance companies and monitoring agencies.

* Failing to collect copayments. Medical providers must make a “reasonable attempt” to collect copayments from all patients and for all insurance companies, according to Dr. Weinman.

* Upcoding. Definitely do not engage in this practice, he said.

* Misrepresenting diagnoses. Altering codes so that patients can get paid is illegal for HCFA and all insurers. Don’t do patients any favors in this arena.

* Double billing. Similarly sending identical claims to Medicare and to the beneficiary or insurer is treading on dangerous ground.

Adding therapy services to the treatments furnished to a beneficiary in a Part A stay does not automatically require a new assessment. However, if the therapy was added because the beneficiary experienced a significant change, an SCSA must be completed. In this case, the primary reason for assessment would be a SCSA (A8a = 3). If the SCSA is done during a Medicare assessment window, the SCSA can be combined with a regularly scheduled Medicare assessment. If the SCSA is not within a Medicare assessment window, the Medicare reason for assessment should be coded as AA8a = 3 and AA8b = 8, Other Medicare Required assessment.

Q: I have already transmitted an assessment to the state, and it has been accepted. I found a few days later that the resident was receiving skilled rehab. Am I able to submit a correction MDS? And if I can, how far back can you correct the MDSs?
A: There is no problem with correcting the PPS assessment. The time frame issue is that the adjustment bill to correct the payment must be sent within 120 days of the service “through” date on the claim covered by the assessment. See transmittal A-02-121 at http://cms.hhs.gov/manuals/pm_trans/A02121.pdf. Download the MDS correction policy at http://www.qtso.com/mdsdownload.html. It applies to all types of MDS assessments.

Q: Is it appropriate for therapists to record their time with Part A residents in 15-minute increments?

A: No, it is not. The PPS final rule addressed this issue, mandating that exact minutes spent treating the resident are to be reflected on the MDS. For billing purposes, the 15-minute increments may be used on the UB-92 claim form, since the RUG score is calculated from the MDS and not from the bill.

Q: If during a 7-day observation period I have 4 episodes of a 4 (total dependence), 5 episodes of a 2 (limited assist), and 1 episode of a 3 (extensive assist), how would I code this and why?

A: The definition for extensive assistance is “full staff performance of the function for part (but not all) of the last 7 days.” Since there were 4 days of total dependence, then extensive assistance is the correct code for self-performance. Total dependence would not be the correct code, because the resident would have to require full staff performance of the activity during the entire 7-day period, with no participation by the resident at all. Limited assistance would not be correct, even though there were 5 episodes at that level, because the coding rules require coding at the highest level of dependence that occurred 3 or more times during the observation period. Refer to the flow chart on page 3-90 of the RAI Manual.

When providers file claims with payers, the rules of the game are “Two strikes and you’re out.” Hospitals and physicians have two opportunities to obtain full or partial payment: on “first pass,” or initial submission, and afterward, when the payer returns a denied claim.

Until recently, providers found it difficult to improve their “batting average” and learn from their mistakes. The tremendous volume of paper and arcane details that constitute medical claims taxed the resources of many facilities and made categorization and analysis almost impossible. For example, the average medical group has more than 20 percent of its claims denied on first pass; half of these claims are never collected upon.
However, recent advances in claims format standardization have made it possible for a wide variety of healthcare organizations, including solo practitioners, to incorporate data warehouses and logic engines into their overall business data strategy. By creating data warehouses and employing analytical software, providers can have the same advantages as payers, which, with the benefit of mainframe computers, have long used these techniques to manage and deny claims.

Creating a Level Playing Field

The creation of a data warehouse, combined with its automated workflow environment, can virtually eliminate claims-related paper and fax transactions. Data are accessible electronically by departments throughout the organization, decreasing the need for staff to check on outstanding claims status requests or respond to third-party payers by phone or via the individual payer web sites.
Although certain claims management tasks will require individual attention, data warehouse technology has the capability to “thin slice” massive amounts of claims information into actionable reports, then route the reports to specific decision makers. These reports can identify issues by dollar volume or procedure code and suggest various actions.

The widespread adoption of standardized claims data–in particular, the X12N standards for electronic data interchange now required under the Health Insurance Portability and Accountability Act–can provide a blueprint for a common format for collecting, filing, and retrieving claims data.

Hospitals and medical groups have significantly increased their use of electronic transmission in recent years, with more than 80 percent of physicians now filing most or all claims through EDI. However, the 2003 HIPAA rules, designed to facilitate EDI filing, have actually presented a new set of challenges for providers. The rules enable payers to add optional data to their claims and deviate from a standard claims format–in effect, making it more difficult for providers to submit clean claims.

Typically when a payer denies a claim, whether partially or completely, the denied claim will be sent back to the provider with an Explanation of Benefits, stating the reason(s) for the denial. In contrast, many claims are rejected outright because they lack sufficient information to process them (e.g., the patient’s ID number is missing). Usually these claims are not sent back with EOBs or other explanations. Because there is so much variation in the claims formats used by payers, more and more claims are being rejected outright due to missing or improper information.

Claims clearinghouses and other e-commerce companies serving physicians can provide reasonably good information on rejected claims. However, without the EOB information (usually supplied by payers directly to providers), clearinghouses cannot provide meaningful data about denied claim trends. In addition, payer edit reports from clearinghouses are often delivered to provider billing offices in paper reports. They are rarely integrated into the practice management system and may sit for weeks on a desk gathering dust.

With a data warehouse and a fully integrated software system, providers can get instant reports from both the “front end,” as they are submitted, and the “back end,” when claims are denied. Using an advanced business logic engine, a data warehouse gets “smarter” with each additional claim filed. It can spot billing issues as they occur, rather than during a quarterly review by a billing analyst.

Developing a Game Plan

New advances in analytical software make it possible to bring together claims information from hundreds of small medical groups across the country into a claims data warehouse. For example, one data warehouse contains claims information from 1,000 healthcare providers across 23 states, most of which are working in smaller groups. This data warehouse currently contains about 7.3 million individual billing items, such as current procedural terminology codes, and is growing rapidly.

Until recently, it has been difficult for small physician groups across various regions to work together in using this technology. The key to operating a successful claims data warehouse lies in the development of a channel that enables managers to extract the information they need quickly and efficiently, then collate the information into easily understood analytical reports.

RHIOs are regional collaborations between health care providers, in which patient information can be securely stored but is electronically accessible to those involved with providing care for patients within a community. Electronic medical records play a critical role in the formation of RHIOs as they bring patient information from paper charts to an electronic format that can be shared among qualified parties with patient consent. Central Oregon and Columbia Gorge physicians can utilize the Application Service Provider (ASP) model of eClinicalWorks EMR and PR solution being built by COEMR to streamline internal processes between multiple locations and promote patient safety while reducing costs. “Our goal is to establish an electronic network that will allow area physicians to better serve patients through the use of electronic health records,” said Andi Cable, CEO of Central Oregon Electronic Medical Records, Inc. “Deciding what EMR and PM solution was best for our initiative required collaboration and a vote from a EHR selection committee comprised of physicians, nurses, medical assistants, office managers, front desk personnel and coding and billing professionals. It was imperative that all types of health care providers be behind this decision in order to make the project a success. These providers chose eClinicalWorks because of the flexibility and seamlessness in which the software integrates into the physician’s office.”

As part of this exclusive value-added reseller agreement, COEMR staff will be trained and certified in product sales, installation, training and support of eClinicalWorks EMR and PM solution. The first COEMR installations will begin this month.

“As electronic medical records are utilized more frequently, the next step is to create a network of providers that can share information to enhance patient care,” said Girish Kumar Navani, president of eClinicalWorks. “Central Oregon Electronic Medical Records sees the larger picture of how health care is going to soon be delivered and is ahead of the curve with their initiative. Health care providers using eClinicalWorks will deliver higher quality patient care though a more efficient office and increased data quality.”

eClinicalWorks’ EMR solution enables COEMR subscribers to manage patient flow, immediately access patient records in-house or remotely, electronically communicate with the referring physicians and securely send consult notes and clinical data. Users can easily access and review complete patient histories, past visits, current medications, allergies, labs and charts. Integrated with EMR is eClinicalWorks Practice Management, designed to instantly streamline the medical billing process.

“By all accounts, Med Billing Services was thriving,” says Garcia, who has more than 25 years’ experience in medical management. “We were doing well financially. Our clients were happy, our employees were happy. But the medical field had changed, as had technology. Doctors were becoming increasingly frustrated by complex business functions — such as billing, collections, and dealing with insurance carriers and managed care providers — which took time away from patient care. As a result, they were becoming more and more dependent on us to provide immediate answers to problems, and instant access to information.”

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 sought to resolve many of these problems by creating new standards for the electronic storage, management and transmittal of healthcare data. HIPAA requires the use of standardized coding for medical conditions and procedures, as well as the use of standardized electronic transactions between healthcare providers and payers to create a nearly paperless nationwide system. HIPAA mandates that all healthcare providers and payers conform to its transaction standards by October 16, 2003.

In April 2001, Albert Santalo, Ben Sardinas, Francisco H. “Frank” Recio, and Santiago Pique founded Avisena, Inc., to address the implications of HIPAA on healthcare organizations. The four also saw a tremendous opportunity to offer healthcare providers a wide range of services, ranging from the automation of basic front-office functions such as appointment scheduling and payment processing, to support for back-office functions such as billing, collections, and insurance claim follow-up.

Avisena centers on powerful, Web-based, proprietary software called Avisena Practice Manager, and combines it with highly effective support services. Through the use of Practice Manager and its many components, client-physicians are able to easily record and access real-time information regarding daily business activity; avoid entering information that would ultimately result in insurance claim denials; and self-generate reports on demand relating to patient billing, insurance claims, and payments. Offering convenience, safety and HIPAA compliance, all information is stored on a secure, centralized server. Avisena’s unique Reimbursement Management System (RMS) enables the company to immediately address claim denials or incorrect or partial payments on a line-item basis, and to keep working until an acceptable response is achieved.

Rounding out Avisena’s software and support services are its consulting services and document management services. Avisena professionals are available to consult on a wide range of business issues that will help client companies ensure smooth operations, increase revenues, enroll providers in managed care plans, and maintain HIPAA compliance. Further facilitating this compliance, and providing client companies with easy access to patient information, Avisena can scan existing paper documents, such as medical and financial records, and store them electronically.

Because Loida Garcia’s company had focused on providing personalized customer service, much of its work was being performed on the telephone or in an off-line, paper-based manner. Billing claims were sent to insurance carriers by mail and electronically. Rejected claims were analyzed manually. Account status reports were printed out and sent to clients when requested. Med Billing Services and its clients lacked the electronic resources to meet the mandates set forth by HIPAA.

“Certainly, we were in need of an upgrade,” says Garcia. “We needed to find an electronic solution that would enable us to more easily submit claims for clients, more quickly collect on those claims, and allow our clients to instantly assess the status of their collections activities. And with the quickly approaching HIPAA deadlines, we knew we had to do something right away.

“But,” she adds, “it would have cost hundreds of thousands of dollars to license this technology.”

About the same time that Garcia was searching for a solution to her company’s problem, Avisena was looking for new opportunities to expand its business. Already providing software and support services to a large number of clients, Avisena had devised a strategy that would enable it to add more clients by acquiring successful medical billing and collections companies. Upon meeting Garcia, the principals became immediately interested in acquiring Med Billing Services, considering it a successful company that would enable Avisena to increase its portfolio of customers.

Following are a few of the books available to help both new and seasoned healthcare financial managers hone these key skills.

2004 ICD-9-CM Professional for Hospitals, Volumes 1, 2, & 3

Ingenix, 2003 These volumes feature the current pertinent coding and reimbursement information healthcare finance professionals need. The books include revised complete official coding guidelines, new and revised code symbols, fourth- and fifth-digit requirement alerts, and more. Ingenix, HFMA, 2004 The Almanac helps hospitals assess their competitive position and improve organizational efficiency. This book offers a database of audited financial statements collected directly from hospital sources. It allows comparison with state, national, and industry benchmarks related to ratio, profit per discharge, and more.

Essentials of Health Care Finance, 5th Edition

William O. Cleverley and Andrew E. Cameron 475 pages, Aspen Publishers, 2002 This text blends current finance theory, with the tools needed in day-to-day practice. The revised edition includes new information reflecting payment system changes in the industry.

Finance in Brief: Six Key Concepts for Healthcare Leaders, 2nd Edition

Kenneth Kaufman 152 pages, Health Administration Press, 2003 This book provides the working knowledge of finance needed for healthcare executives to make sound strategic decisions that generate a positive bottom line. It explains the six key principles of effective healthcare financial management.

Ingenix, HFMA, 2004 The Almanac helps hospitals assess their competitive position and improve organizational efficiency. This book offers a database of audited financial statements collected directly from hospital sources. It allows comparison with state, national, and industry benchmarks related to ratio, profit per discharge, and more.

Essentials of Health Care Finance, 5th Edition

William O. Cleverley and Andrew E. Cameron 475 pages, Aspen Publishers, 2002 This text blends current finance theory, with the tools needed in day-to-day practice. The revised edition includes new information reflecting payment system changes in the industry.

Finance in Brief: Six Key Concepts for Healthcare Leaders, 2nd Edition

Kenneth Kaufman 152 pages, Health Administration Press, 2003 This book provides the working knowledge of finance needed for healthcare executives to make sound strategic decisions that generate a positive bottom line. It explains the six key principles of effective healthcare financial management.

The American Diabetes Association annually
designates the fourth Tuesday of March as a
one-day call-to-action for people to find out
if they’re at risk for diabetes. There are 20.8
million Americans, or 7 percent of the
population, who have diabetes. While an
estimated 14.6 million have been diagnosed,
unfortunately, 6.2 million people (or nearly
one-third) are unaware they have the disease.
The Alert’s goal is to raise the awareness that
diabetes is serious, that you can have diabetes
and not even know it, and that early detection
is important.

SMMC Activities: Health Fair, which will
include blood glucose screenings, foot
screenings, and diabetes counseling. This FREE
event, March 28, from 11 a.m. to 1 p.m. at the
St. Mary’s Medical Center cafeteria at 450
Stanyan Street, San Francisco, is open to
everyone.

Weekly Diabetes Classes, which cover all
aspects of taking care of diabetes, are FREE
and open to everyone.

SMMC Expert: Elissa Hallen, a registered
nurse/certified diabetes educator (RN/CDE) and
Coordinator of Diabetes Services at St Mary’s.
Her areas of expertise include the diagnosis of
diabetes, development of diabetes, living well
with diabetes.

Other Observances  National Nutrition Month
SMMC Expert: Tracy Dalton, Registered
Dietician/Certified Diabetes Coordinator. Her
specialties include Cholesterol Know-How,
Diabetes and Heart Healthy Eating.

About SMMC         For nearly 150 years, St. Mary’s Medical Center
has provided the Bay Area with compassionate,
personalized care combined with the latest
advances in medical care and cutting-edge
technology. St. Mary’s is a full-service acute
care facility with more than 575 physicians and
1500 employees who provide high-quality and
affordable health care services to the Bay Area
community and patients from around the world.
Home to advanced medical practices, such as the
nation’s first digital cardiac catheterization
laboratory, pioneering spine surgery and
comprehensive rehabilitation, St. Mary’s
Medical Center is one of San Francisco’s
leading hospitals, offering patients a full
range of outpatient and inpatient services
delivered with the human touch.