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Tag Archive for Practice
30
May 2010
Simple Steps That Employers Should Practice to Increase Their Value of the Health Care System
18
May 2010
Does Your Practice Qualify as a Group Practice Under Federal Stark Law
The Federal Stark law prohibits physicians from referring Medicare/Medicaid beneficiaries to an entity in which they (or an immediate family member) have a financial relationship for designated health services (“DHS”), unless an exception applies. DHS include: clinical lab; physical therapy; occupational therapy; radiology (including, MRI, CAT scans, and ultrasounds); radiation therapy and supplies; DME and supplies; parenteral and enteral nutrients, equipment and supplies; prosthetics, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospitalization services. In addition, physicians should also be mindful that the Centers for Medicare and Medicaid Services (“CMS”) issued a proposed rule to amend the Stark regulations effective January 1, 2006 to include diagnostic and therapeutic nuclear medicine, including PET scans, to the list of DHS.
Physicians must keep in mind that they cannot ignore Stark, as nearly every financial relationship between physicians and entities that furnish designated health services (“DHS”) implicate the law. Violations of the Stark law have substantial consequences for all parties involved, regardless of the intent of the parties. Sanctions include denial of payment for DHS claims, civil monetary penalties ($15,000 for each claim submitted plus two times the reimbursement claimed), and exclusion from Medicare and Medicaid. In addition, parties who enter into circumvention schemes are subject to a civil monetary penalty of up to $100,000 per scheme.
Group practices are well advised to document their compliance with Stark. Documentation supporting compliance is particularly important in today’s health care environment, which has had an increase in Federal False Claims litigation and investigations stemming from Qui Tam whistleblowers utilizing technical violations of the Stark law as a predicate for False Claims Act violations.
Application of Stark in the Group Practice Setting
Many common financial relationships can trigger the need for a Stark analysis. This article, however, will focus on Stark’s applicability in the group practice context as Stark applies to referrals of DHS within a group practice. For example, if a physician practice provides services such as physical therapy, clinical lab, x-rays, and/or ultrasounds, within the practice, Stark will be implicated. Once the prohibition is triggered, the relationship(s) must then fall within a Stark exception.
The in-office ancillary services exception has been arguably the single most important exception in the Stark law. This exception is designed to protect the in-office provision of certain DHS that are genuinely ancillary to the medical services provided by the practice. In order for a physician practice that provides DHS to protect its referrals under the in-office ancillary services exception, the physicians must first qualify for the group practice definition. The group practice definition is not an exception to Stark in and of itself, but any “group” of physicians that want to take advantage of the in-office ancillary services exception must be structured to meet the group practice definition.
The Group Practice Definition
Under Stark, a group practice is a physician practice that meets the following conditions:
Single Legal Entity.
The group practice must consist of a single legal entity operating primarily for the purpose of being a physician group practice in any organizational form recognized by the State in which the group practice achieves its legal status.
Physicians.
The group practice must have at least two physicians who are members of the group (whether employees, or direct or indirect owners). Stark defines a member of the group as a direct or indirect owner of a group practice (including a physician whose interest is held by his or her individual professional corporation or by another entity), a physician employee of the group practice, a locum tenens physician, or an on-call physician while the physician is providing on call services for members of the practice. An independent contractor is not a member of the group.
Range of Care.
Each physician who is a member of the group, must furnish substantially the full range of patient care services that the physician routinely furnishes, including medical care, consultation, diagnosis, and treatment, through the joint use of shared office space, facilities, equipment, and personnel.
Services Furnished by Group Practice Members.
Substantially all of the patient care services of the physicians who are members of the group (that is, at least 75% of the total patient care services of the group practice members) must be furnished through the group and billed under a billing number assigned to the group, and the amounts received must be treated as receipts of the group. Patient care services must be measured by one of the following:
Distribution of Expenses and Income.
The overhead expenses of, and income from, the practice must be distributed according to methods that are determined before the receipt of payment for the services giving rise to the overhead expense or producing the income.
Unified Business.
The group practice must be a unified business having at least the following features:
Centralized decision making by a body representative of the group practice that maintains effective control over the group’s assets and liabilities; and
Consolidated billing, accounting, and financial reporting.
Volume or Value of Referrals.
No physician who is member of the group practice directly or indirectly receives compensation based on the volume or value of referrals except as provided under the specialty rules for productivity and profit shares.
Physician-Patient Encounters.
Members of the group must personally conduct no less than 75 percent of the physician-patient encounters of the group practice.
Special Rules for Productivity Bonuses and Profit Shares
The special rules for productivity bonuses and profit shares allow a physician who is in the group practice to be paid a share of overall profits of the group or a productivity bonus based on services that he/she has personally performed (including services “incident to” those personally performed services), provided that the share or bonus is not determined in any manner that is directly related to the volume or value of referrals of DHS by the physician. CMS now takes the position that diagnostic-testing services cannot be billed as “incident to” but practices that provide physical therapy can, however, bill physical therapy services as “incident to” services (provided that all of the “incident to” requirements are met).
The Stark regulations specifically set forth examples of formulas that will be deemed not to relate directly to the volume or value of referrals. For example, a group’s profits will be deemed not to relate directly to the volume or value of referrals if revenues derived from DHS are distributed based on the distribution of the group practice’s revenue attributed to services that are not DHS payable by any Federal health care program or private payer.
Documentation of Compliance
Group practices that choose to take advantage of the special treatment that the Stark law affords them must be prepared to demonstrate compliance with the regulations. In this regard, if requested by the Secretary, group practices are required to provide documentation of the total time each member spends on patient care services, and to maintain documentation supporting compliance with the “substantially all” test. The “substantially all” test is intended to guarantee that the group practice members are providing a substantial amount of their services through the group. Groups can document compliance by any reasonable means, including without limitation, time cards, appointment schedules, personal diaries, or other reasonable means that are fixed in advance of the performance of the services being measured, uniformly applied over time, and verifiable. Groups are also required to document, in writing, a new member’s employment with, or ownership or investment in, the group practice before the new relationship commences.
The In-Office Ancillary Services Exception
In order for a group of physicians to provide DHS within the practice, including without limitation, clinical laboratory, physical therapy, x-rays, and ultrasounds, the group must first meet all of the requirements of the group practice definition. If the group practice definition is met, the group is then eligible to utilize the in-office ancillary services exception to protect its in-office DHS referrals. The in-office ancillary exception exempts services personally provided by the referring physician, a physician who is a member of the same group practice as the referring physician, an individual that is supervised by the referring physician, or if the referring physician is in a group practice, by another physician in the group practice, provided that the supervision complies with all of the Medicare payment and coverage rules for the services. In addition, the exception contains a location and a billing requirement.
Conclusion
This article is intended as only a brief summary of the Stark II Phase II Final Regulations in connection with the in-office provision of DHS within the group practice context. Physicians and groups that provide DHS should also be mindful that many other common financial relationships may also trigger Stark, including, without limitation, (1) lease agreements for space and equipment; (2) medical director agreements; and (3) physician employment contracts with group practices and hospitals.
The attorneys of Wachler & Associates, P.C., represent healthcare entities, providers and suppliers nationwide in all areas of healthcare law. Our healthcare attorneys and assistants have incomparable experience in the Recovery Audit Contractor (?RAC?) and Medicare audit appeals process. Our lawyers have successfully represented clients in thousands of Medicare appeals cases nationwide since 1980. http://www.racattorneys.com
09
May 2010
Medicare RAC Auditors are coming to your area. Will your practice be ready?
Medicare RAC Base Line Audit – What is RAC?
The RAC(s)-Recovery Audit Contract will pursue the identification of Medicare claims which contain non-MSP improper payments for which payment was made or should have been made under part A or B of title XVIII of the Social Security Act.
In 2006, Section 302 of the Tax Relief and Health Care Act made the Recovery Audit Contractor (RAC) program permanent. The program will be in place in all 50 states and Puerto Rico no later than 2010. The stated goal of the recovery audit program is to identify improper payments paid on claims to health care providers through Medicare beneficiaries. These may be either overpayments or underpayments. A demonstration program in California, Florida, and New York was deemed successful and as a result Congress made the RAC program permanent. The demonstration in those 6 states resulted in the return of over $900 million in overpayments to the Medicare Trust Fund between 2005 and 2008 while nearly $38 million in underpayments was returned to health care providers.
What does this mean to me?
Medical claims audits embody significant risk to revenues and profit margins for any healthcare provider. These audits typically include very complex appeals processes with stiff penalties such as the automatic recoupment of funds if appeals deadlines are not met. We can help you to prepare for RAC Audit.Prepare your practice for the impending CMS RAC (Recovery Audit Contract). Anyone who files claims with Medicare will be audited, starting no later than January of 2010. This includes physicians, hospitals, home health agencies, and Durable Medical Equipment providers.
Waiting for Medicare to audit you can prove costly if you do not know where your billing and coding may be improper. The RACs are compensated on a contingency basis, so you can be sure they will be aggressive in their audits. Any overpayments found by the RACs will need to be reimbursed to Medicare, which can collect their reimbursement from any future claims checks owed to you. It is possible RAC auditors could impose stiff fines of up to $10,000 for each infraction.
Medical claims audits embody significant risk to revenues and profit margins for any healthcare provider. These audits typically include very complex appeals processes with stiff penalties such as the automatic recoupment of funds if appeals deadlines are not met. We can help you to prepare for RAC Audit.
CMS RAC Program: Are You a Target?Anyone who files claims with Medicare will be audited, to start no later than January of 2010. This includes physicians, hospitals, home health agencies, and Durable Medical Equipment providers.
So why should I use your service for a baseline audit prior to being audited by the RAC?
By using a third-party audit in advance, your practice can identify improper billing and coding practices and take necessary corrective actions prior to the RAC audit. This can help you save both time and money. In addition, you may find areas in which you are being under reimbursed as well. The audit works both ways. If you have been underpaid due to incorrect coding, etc. then you may collect that amount.
Our process is easy and turnaround time is quick. We will provide you with a base line audit of your billing and coding. Our audits are performed by certified coders who have extensive experience doing government audits. After receiving the information we need from you, a report will be delivered approximately one week later. We will go over that report and help identify and make suggestions as to areas for improvement.
Prepare your practice for the impending CMS RAC (Recovery Audit Contract). Our team will provide a base-line audit on your documentation and billing practices. Our report will allow you time to make any changes in your current practices.
How do I schedule a Medicare RAC Baseline Audit with your company?
Call toll free (800) 813-3740 x 1 today to prepare for RAC Audit and have peace of mind. Waiting for CMS RAC to audit can prove you costly. The RACs are compensated on a contingency basis, so they are very aggressive in their audits. These audits typically include very complex appeals processes with stiff penalties such as the automatic recoupment of funds if appeals deadlines are not met. We will sail you smoothly through the whole RAC process.
How much does the Medicare baseline audit service cost?
Our service cost only $995 per Audit and will be completed in a few days. It is not worth the risk to your practice to wait for Medicare RAC Auditors to find mistakes in your billing practices.
Our team will provide a base-line audit on your documentation and billing practices. Our report will allow you time to make any needed changes in your current practices billing and coding procedures.
Visit www.PaymentAutomation.net or call toll free (800) 813-3740 x 1
04
May 2010
ROI Analysis for Full Cycle Web Based Practice Management Software Solution
ROI Analysis for Full Cycle Web Based Practice Management Software Solution
Executive Summary
Within this document, you will see detailed financial analysis and real world scenarios that will demonstrate the exponential cost savings that can be achieved with a full cycle practice management software.
Full Cycle Practice Management Software will:
· More efficiently utilize your schedule by using Resource Scheduling
· Set-up scheduling rules based on your practice needs (by caregiver, room, equipment, procedure)
· Maintain Caregiver Profiles
· Maintain Payer Contract Fee Schedules
· Set-up billing rules specific to your claim forms and payer contract requirements
· Automatically track your collection efforts and all follow-up
· Complete revenue reporting for financial reporting to stakeholders
Traditional Practice Management Software
Managing a practice should not include adjusting your practice rules to fit your software. The software should adjust to fit your rules. We will look at various aspects of a practice management software.
Scheduling
With a typical manual appointment book system, your employees invest much time in maintaining the “book”. Appointment rules are not built in the appointment book. Instead, your appointments may be based on the person speaking with your patient. If you are no longer using the “book” but instead using an appointment book software system, your appointment scheduling software may not maintain all appointment rules. Both of these types of systems hinders your ability to successfully manage all employees time (appointment scheduler, caregiver, front desk personnel) and provide quality patient care.
Let’s take a look at a real world scenario. Patient A phones your office to schedule a follow-up to a wound care visit. Using “book scheduling” (either manual or software) your appointment scheduler must remember the rules for this type of visit. Unfortunately, Patient A is scheduled for a 15 minute appointment, but in reality the appointment includes time not only with the caregiver but also with a wound care personnel. Patient A’s appointment lasts 30 minutes. By the time Patient G is seen (assuming alphabetical patients) all appointments are 30-45 minutes behind schedule.
How much does this cost your practice? Let’s assume Patient G has time constraints and was assured at time of scheduling he would be out of the office within 45 minutes. Patient G is now 45 minutes past his schedule time, and hasn’t even seen the caregiver. Patient G may either leave your office (unseen) or complain loud enough in your waiting room for patients behind him to leave. If Patient G’s visit charge would have been $100, that revenue has just left your door. Let alone if other patients behind him leave as well.
If this is happens in your office, it does not happen only once. So, you must multiply that number by 3, 5, 10, times as often as this scenario happens within your practice.
Result – A single patient leaving your office due improper appointment scheduling 3 times a month can cost your practice $3600 ($300 x 12 = $3600) per year. This cost is in addition to the employee labor costs involved to maintain your book schedule.
If you feel these projections are not accurate, you are probably correct. The costs are probably higher. The average charge is probably higher than $100. And, the frequency can be realistically higher than 36 lost appointments per year.
Investing in Resource Scheduling Software
With Resource Scheduling, appointment, caregiver, equipment, modality rules will be set up for your practice. The system will manage the rules, and appointment slots will be provided based on these rules. Ongoing labor costs will be minimized, as your employees are not learning the rules for each appointment type. With PiMS you will receive unlimited rules capability, ability to define preferences, block scheduling, the ability to define multiple resources for an appointment, plus much more. With Resource Scheduling, your practice can efficiently schedule appointments based upon your practice rules, and reduce its financial loses while improving patient care.
A typical Resource Scheduling software costs, for single location practice, less than $1,000 to install. With the above scenario, you should experience a return on your investment within 3 months.
Lost Appointment Costs – $300 per month (3 patients @ $100 charge per patient)
Labor Costs – Let’s assume an average of 1 hour per patient @ $25 per hour (appointment scheduler, caregiver, front desk personnel)
Estimated Lost Appointment Cost Total – $375 per month
With this analysis, you can see how investing in a Resource Scheduling software will provide a quick return on investment for your practice.
Billing
Billing errors can cost your organization thousands of dollars. This section analyzes manual billing pitfalls, costs to your organization, and proven ways to recover lost revenue.
Most billing errors can be eliminated prior to the submission of your claim. Managing these errors with little labor (i.e. people) intervention increases your overall profit. Relying on simple billing/claims software and/or personnel to remember specific billing requirements will result in an increase of denials and delayed cash. Instead, invest in billing software that has the capability of building your specific billing rules into the system. The system should allow for multiple claim forms. Your users should be able to view claim forms online, and reformat the claim online if necessary. The system should have the ability to automatically submit clean claims to the Payer, without human intervention. And most importantly, the system should contain your Payer specific rules for billing.
For example, some Payers have different billing requirements for the same procedure code. Your system should have the ability to generate a claim specific to the applicable Payer.. If your system does not have the capability of managing these types of rules, you are relying on personnel to catch the requirement up front and edit the claim prior to submission. Or, the claim will be submitted to the Payer and then denied for missing information.
Let’s examine the cost of both processes (manual versus system built rules). If you are relying on a manual or simple billing/claims system, your process will typically be as follows. A claim is generated and reviewed by your office staff. The Payer requirement states the specific procedure code must be submitted with a letter of medical necessity. Your office staff must remember this requirement (in addition to the other multitudes of billing requirements Payers create). The charge is $500. The claim is mailed to the Payer without the LMN. Twenty days later a denial is received from the Payer, stating the claim is not eligible for payment due to missing information. At this point, your staff will either remember what the missing information is, or more than likely contact the Payer for explanation. Your staff will then retrieve the LMN and resubmit the claim to the Payer with the LMN attached.
How does this cost your organization? Let’s assume the initial charge is $500. Begin subtracting the personnel cost to review the claim up front, review the denial, contact the Payer, correct the claim, resubmit to the Payer, and then follow-up with the Payer regarding payment. On average, this would entail approximately 2 hours of personnel costs. Plus, the $500 receivable has been delayed at least thirty days, resulting in a lower margin to your organization.
Investing in billing software that allows you to build in Payer specific rules will increase your margin almost immediately.
Medical Billing Software
Investing in a Medical Billing software, will decrease your billing denials. Medical billing software should provide flexible billing cycles, the capability to build in rules for Payer specific billing requirements, flexible claim formatting, missing element tracking, online reformatting, and a multitude of other user friendly functions to assist your personnel in billing.
How will this benefit your organization? In the above example, your $500 profit is reduced by 8-10% for personnel costs. That is then reduced by another 5% due to the delay in collection of the receivable. Conservatively, your margin is reduced by 15%. Multiply that by the number of instances this is currently occurring in your practice. You can see how quickly your margin erodes, and cash flow is delayed.
The cost of a typical medical billing software is probably dependent on the size of your practice and number of concurrent users. For a small practice, the cost could be less than $2,500 to install. Taking the above example into our analysis, your return on investment would be seen very quickly.
In addition to the features mentioned above, the software should provide your organization with Revenue Management reporting, an on-line patient financial folder, automatic charge posting, and much more!
Collections
Healthcare practices that do not invest in efficient billing and collection processes may find themselves in a cash crisis without resources to meet financial obligations. Your collection practices must be communicated, and adhered to, by all individuals within your practice. From communicating the patient responsibility, collecting this responsibility at time of visit, and thorough follow through until the account is paid in full should be one of your organization goals throughout time.
Understanding where you are today, and deciding on your organization’s goal for the future should be the first step in developing your collection processes. So, first calculate your current days sales outstanding (the average time it takes to collect your receivables). To do this, divide your net sales by the number of days in the period (I recommend monthly to effectively manage your cash flow). For example, if your sales for month is $75,000, divide that by 30, which equals 2500.
Next, take the above number and divide it into your accounts receivable trade balance. For example, if you have $165,000 in total receivables, divide 2500 into that number, which equals 66 days. Therefore your days sales outstanding is 66 days. Once you calculate this number, you can effectively set reasonable goals and processes for your staff.
Payer collections will probably be the vast majority of your collection efforts. Therefore, it is imperative processes are in place that dictates your organization’s follow up procedures. Your practice management system is the key to successful and timely collections of your accounts receivable. Timely follow-up on outstanding claims, denied claims, claims paid incorrectly, and delayed claims is a must.
Review your Payer contracts. What are the terms of payment? Does your state have legislation that dictates payment guidelines? Build your collection processes around these guidelines. For example, if Payer A contract terms is 30 days, you should be following up with the payer on day 31. Then, you should follow-up every 10-14 days from that point, until the claim is paid in full. Let’s examine how not following these types of processes can cost your practice.
Assume your payer contracts all dictate 30 days payment of a clean claim. The first step you perform is to calculate your current days sales outstanding (i.e. DSO). Once you do the calculation, you find your average DSO is 66 days. In this example, you are financing your current expenses by services you performed 66 days ago. This is not an effective means for managing cash flow and becoming profitable. And, you are allowing your payer to delay payment for services you performed.
Ensure your Payers are abiding by the contract guidelines. You must be able to access their payment style and their ability to process your claims according to your contract. Once payer payment issues are discovered, they must be presented to Management, to assist in contract negotiations and improvements. How does this impact your practice?
If your payer contract stipulates 30 day payment upon receipt of a clean claim, and paid at 80% of billed charges, your staff must be able to determine if payment was made correctly. If the payer is paying your claims at 75% and you are writing off the remaining 5%, you are losing revenue.
Patient collections are an important part of your collection process as well. From the appointment each patient must understand his financial responsibility. That responsibility must be collected at time of service. If the amount is not collected, your collection processes must include how and when to collect any remaining patient responsibility.
Investing in a practice management system that will provide the tools to analyze your current state is crucial in the streamlining of your collection efforts. Your software should accommodate the multiple payer contract payment requirements, and the processes you have developed to collect any outstanding receivable. The more you can automate, the less likelihood of delayed collections. These processes must include both payer and patient collection efforts.
Collections Software
Your collection software should allow you to manage your collection process by user-defined guidelines. The software should provide user activities, worklists, and letters to guide your staff in the collection of your receivables.
Creating automatic collection letters is a must. The letters should be as specific or generic as you wish (from small balances to a more rapid letter sequence for higher balances). Your users should have access to unlimited worklists, with multiple assignments based on your criteria. Supervisors should be able to view employees worklist any time on-line. In addition, the software should provides productivity reports to help you analyze what your collectors are doing.
Another important aspect is the software should provide account financial responsibility by both third party and patient. This eliminates staff confusion and allows the staff to follow-up more efficiently with the third party and patient.
How can investing collection save you money? In the above example, if your payer contract stipulates a 30 day payment, and your average DSO is 66, your are financing your operations out by 2 months. Investing in a software that will provide you both tools and resources to define your current state and automate your collection process will decrease your DSO.
For a small practice, the cost could be less than $2,500 to install. Taking the above example into our analysis, your return on investment would be seen very quickly. Investing in PiMS Medical Collectoins will be paramount in increasing cash flow.
Revenue Reporting
In addition to scheduling, billing, and collections, your software must provide you the tools to accurately analyze your financial picture. These tools should be in the format of reports. These reports must have meaning to your organization. Understanding where your practice is today, and how you can improve will provide Management the necessary information to make important strategic decisions.
The software must provide a thorough selection of real time reports that will assist in you accurate financial analysis of your practice. With PiMS reporting, you will be able to view aging reports (by financial party), revenue reports, productivity reports, plus many more. These reports are real-time, online, and retrievable at your discretion.
Performing routine financial analysis will quickly provide to you not only the items mentioned above, but will also quickly provide you the return on investment you have seen.
In summary, investing in a full cycle practice management system will quickly provide effective processes, streamlining of the A/R process, decreasing labor costs, and most importantly increasing employee productivity and your organization’s profitability.
http://www.pdmsoftware.com