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.

It’s a common challenge for healthcare organizations: improving the timeliness and accuracy of coding. For University Physician Associates of New Jersey, the difficulties of a poor payer mix and a high amount of charity care led the organization to implement a system that enables providers to document and submit professional charges at the point of care.

The system, electronic charge capture, is designed to drive appropriate, accurate, and timely coding. Electronic charge capture has resulted in significant financial and administrative benefits for UPA, adding $6 million in revenue per year to the organization and leading to a 55 percent decrease in time to patient billing.

The Road to Electronic Charge Capture

UPA is the faculty practice plan of The University of Medicine and Dentistry of New Jersey, the nation’s largest health sciences university. The mission of UPA is to promote and foster the clinical activities of UMDNJ faculty. The resulting revenue is used to support educational programs at the university and to fund clinical and scientific research.

UPA provides healthcare services in 14 clinical areas and 30 medical specialties at nearly 70 sites across the state, including University Hospital of Newark, the state’s largest hospital. UPA’s 350 physicians bill for more than 500,000 patient visits per year, amounting to more than $325 million in charges.

But the organization has faced several financial challenges. In addition to its poor payer mix and high level of charity care, increased billing complexities have yielded higher denial rates. Tougher contractual terms also have led to declining levels of pay. Additionally, monitoring physician compliance with federal billing regulations strained UPA’s finances, at an estimated cost of $1 million annually. In 2002, these issues led UPA to seek ways to enhance its revenue cycle by improving the accuracy and timeliness of professional charge capture and submission.

From the Back Room to the Exam Room

UPA quickly realized that to effectively deal with the myriad issues that the organization faced–specifically in regard to professional charge capture and submission–physicians would need not only to be involved in the process, but also to become the central focus of such efforts.

Initially, UPA held educational sessions with its medical staff to instruct physicians on proper coding practices. In one year alone, more than 200 sessions were held. The organization also increased the frequency of its prospective billing audits in an effort to improve billing compliance.

Although both strategies were helpful, UPA found that as long as it relied on a paper-based charge capture process, any process improvement initiatives would always function in a reactive mode. The real desire was to work proactively with physicians to head off potential billing and compliance issues.

To understand how UPA could affect coding in “real-time” as charges were being rendered, rather than days or even a week later, UPA consulted a number of coding compliance experts. After reviewing UPA’s needs, these experts suggested point-of-care charge capture as the prime option to explore. UPA assessed the available applications and selected a mobile solution that could also provide front-end decision support and billing performance measurement over time. An ROI analysis performed by the vendor forecasted that this system would yield a 14 percent improvement in charge generation.

Gaining Buy-In-Early and Often

In September of 2002, an initial pilot group of 30 physicians was identified as the system’s first users. Interestingly, these physicians were not particularly technology-savvy. They were instead chosen to reflect a cross-section of users to identify the full spectrum of potential issues that could result from implementing this new technology.

The next step to drive overall physician acceptance and adoption was to appoint the chief of UPA’s orthopedic trauma service, Michael Sirkin, MD, as the project champion. Sirkin was charged with engaging a physician champion within each department who would then help secure the buy-in of colleagues by communicating the need for electronic charge capture as well as the anticipated benefits of this system. These departmental champions would also prove instrumental in the training process down the line, helping to answer questions, mitigate any concerns, and model system usage.

Prior to training, UPA’s technical support staff collaborated with the vendor’s interface engineering team to integrate the necessary scheduling data from UPA’s two separate office and hospital scheduling systems. Another interface also was created to send charge data into the billing system. Eventually, all three feeds were tested and implemented, allowing for real-time data transfer to and from the charge capture application in a seamless manner.

Going Live–The Technology Litmus Test

When it was time for the pilot rollout, participating physicians were given handheld devices, purchased by UPA, to run the charge capture program. Each handheld device was tailored with custom locations based on where the physician practiced, and each location was populated with patient census data. As patients were seen over the course of a day, physicians would “tap” appropriate diagnosis and procedure codes into the patients’ electronic charge records. The system would then compare entered charges against numerous billing and compliance regulations, including local medical review policies, Correct Coding Initiative edits, and Medicare guidelines, to confirm the appropriateness of the charges, and would alert the user to issues requiring attention.

3M Health Information Systems has acknowledged that the U.S. Department of Defense (DoD) Military Health System, one of the nation’s largest health care providers, has selected 3M to provide a fully integrated system of software products and consulting services for medical records coding, compliance and data analysis as part of their TRICARE Patient Accounting System. Following an initial performance period at a multi-site demonstration, it is the goal of the DoD Military Health System to deploy 3M Health Information Systems products and services at more than 100 military hospitals and associated medical and dental clinics worldwide.

Under the agreement, the DoD Military Health System will implement 3M’s industry-leading coding and reimbursement product suite, integrated with comprehensive data analysis and reporting modules of the 3M Health Data Management System. 3M will support DoD goals to improve the accuracy of clinical information, help ensure correct billing, reduce the risk for noncompliance, trend clinical performance, target education efforts and improve revenue generation. 3M will team with Planned Systems International Inc. (PSI), based in Columbia, Md., to meet the objectives of the program. 3M also will be working with Park City Solutions of Midway, Utah, the prime systems integrator for the coding and compliance project.

3M will provide the DoD Military Health System with data analysis and reporting tools for every step in the care process, including applications for coding, grouping and editing; reimbursement calculations; patient data abstracting; care management evaluation; and medical necessity review. As part of the overall implementation, 3M also will provide process improvement and training services for DoD coding and billing operations. Products included in the agreement are the 3M Coding and Reimbursement System, 3M Physician Coding and Reimbursement System, 3M Coding Reference Software, 3M All Patient Refined DRG (APR-DRG) Software, 3M Audit Expert Inpatient and Outpatient Software, as well as 3M Health Record Management Software and the 3M Care Management System.

“For more than 15 years, 3M Health Information Systems has partnered with the DoD Military Health System to provide software products that enhance the delivery of patient care to military personnel and their families,” says James Burgess, division vice president of 3M Health Information Systems Division. “[This] announcement represents an important strategic alliance for us. We look forward to helping the DoD meet the complex challenges of patient care with advanced technology for measuring performance, influencing outcomes, and managing resources across all military healthcare facilities.”

The scope of the agreement includes full integration of the 3M coding and reimbursement product suite and 3M Health Data Management System with both the Department of Defense Military Health System Composite Health Care System I (CHSC I) and Composite Health Care System II (CHCS II) the global computer-based patient record (CPR) system presently being developed within the DoD Military Health System. CHCS II has been developed using core software components of 3M Care Innovation, a suite of expert applications that form the foundation of a computer-based patient record. The DoD enterprise license agreement for 3M Care Innovation software was awarded in September 1999.

The DoD Military Health System is one of the largest enterprise health care providers in the United States. The contract covers all DoD Military Health System entities whose mission is to provide health care services and support to members of the Armed Forces, their family members and others entitled to DoD health care–from worldwide theater of operations to the continental United States.

PSI is the prime system integrator for the DoD Military Health System Third Party Outpatient Collection System (TPOCS). Founded in 1988, PSI is an IT solutions and services company. With a staff of over 210 quality IT professionals, PSI core competencies include information systems development and integration, communication and network systems, healthcare informatics, information assurance, and e-commerce solutions, supporting key customers in the public and private market sectors. PSI’s major clients include the U.S. Navy; DoD Health Affairs; Defense Finance and Accounting Service; the Department of Agriculture; the National Science Foundation; State of Maryland; and commercial customers, including Unisys and IBM.

Park City Solutions of Midway, Utah, is the prime systems integrator for the coding and compliance project for the TRICARE Patient Accounting System. Park City Solutions is a leading technology and professional services firm that advances health care performance through its people, process and technology. By delivering a broad range of Web solutions, and providing clinical best practices and IT consulting services, Park City Solutions assists its health care and governmental clients to better manage the quality and cost of care.

For 40 years, Billian’s HealthDATA Group has offered customers comprehensive information about healthcare organizations across the continuum. From the groundbreaking directory Hospital Blue Book, to online healthcare IT information, Billian’s has successfully responded to customer requests for healthcare data about multiple markets in multiple formats.

We provide business process outsourcing services exclusively to the healthcare industry. We offer strategic HIPAA-compliant solutions addressing the revenue cycle including traditional A/R services through complete outsourcing of PFS. Technology-driven processes, partnering, and superior personnel allow us to exceed our client’s expectations.