Who's Managing Your Managed Care A/R ?

Provider’s need to start by including more specific operational requirements in the contracts they sign with payers. Contract clauses that address the following points will be useful to improve the operational aspects of billing and collection.

1. Name provider and payer representatives responsible for operationalizing this agreement within 30 days of contract signing.
2. Identify the availability and access to payer eligibility files. Rosters provide a manual basis for checking certain information, but electronic file or touch-tone telephone access may provide more up-to-date information (depending on how often files are updated). The ability to exchange eligibility, extent of coverage, deductible and co-pay and utilization requirements will help registration staff determine the procedures that apply in each patient situation.
3. Agree on the billing and payment criteria. Determine if electronic or manual UB-92 or HCFA-1500 formats will be used, and if there are any special coding or attachment requirements. Payment, remittance and EOB (Explanation of Benefits) procedures should be spelled out, including payment time frames following the submission of claims.

Just as sure as there are new contracts signed, there are staff who are unaware that patients with new coverages will be calling for appointments, or who will appear in emergency situations. Here are just a few steps to ensure provider readiness:

1. Let everyone know. Sound simple? Believe it or not, it’s sometimes a secret until a registrar questions how to complete the insurance screen on their computer system, or when a bill doesn’t drop because the proration and coordination of benefits in the Insurance Masterfile Listing was not updated. Even worse, when patients are registered as self-pay, and they start complaining about the bill they assumed was covered by their insurance. Memos, newsletters (special editions), and announcements can usually preempt the problems noted.
2. Masterfile Maintenance and Education. With reliance on our "systems" as prevalent in all provider settings, IS (Information Systems) and Business Office staff need to ensure that the Insurance Master, Charge Master and Doctor masterfiles are updated, as well as other tables and profile driven programs. In-service education and training needs to be conducted--ideally, before the first patient covered by this new plan arrives.
3. Comply with Utilization Management requirements. One of the biggest problem areas is failure to obtain or present, attach or record the number of the prior approval, authorization or certification. Without these "permissions," accounts will linger in an open status, and where provided for in contractual terms--denied! Make certain you ask for and obtain these forms. Remind patients to bring them when making appointments.
4. Ensure timely and accurate billing and follow-up. Even New York State’s new law will not exempt a provider from failing to submit a clean claim, and it will allow a payer to delay payment if fraud and abuse is being investigated. However, provider’s need to ensure that all necessary data is captured and transmitted to support the claim. Ineffective follow-up is more the payer’s problem than the payer’s. If the provider fails to serve timely reminders of payment tardiness, don’t expect payers to voluntarily pick up the slack. Hopefully, the actions taken by New York’s legislature will help create a more proactive claims payment environment. But the provider must still be on top of its open accounts.

The combination of effective pre-contract negotiation and inclusion of operational terms, and the internal readiness of a provider’s departments that comprise its cash flow cycle are important ingredients to ensure that managing your "Managed Care A/R" is not left to chance.

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Part II - How Managed Care Has Changed Practice Management's Vital Signs

Part Two of a Two-Part Series by Allan P. DeKaye, MBA, FHMA, President & CEO of DEKAYE Consulting, Inc.

With varying degrees of automation, physician practices may still be producing paper claim formats or computer generated paper. Although most larger practices and those with more advanced practice management systems have been taking advantage of electronic media claims submissions--both directly and via claims clearinghouses, smaller groups can also take advantage. With the growing emphasis by payers, especially government sponsored carriers, to require electronic claiming, many physicians have had to add system functionality to their current office system. Physicians should soon find that the conversion to electronic billing is an easily supported capability.

Claims that are filed are electronically should be paid as early as two weeks sooner than its paper claim counterpart. There are also editing capabilities built in to most electronic claims packages that enable providers to correct errors that would otherwise have gone undetected until initial claims processing--only to be returned and require manually correction at the provider’s site before being resubmitted. Several payers have now made electronic remittance posting available which relieves many practices of a time consuming task. Many providers have been able to further capitalize on their automatic remittance posting capability by being able to automatically bill a secondary payer for any remaining deductible and co-payment.

Improving Up-front Collections

Another often overlooked method is to review patient open balances with patients at the time they make appointments (either on the phone or in person). Not only is the expectation of making payment emphasized, it can also serve as a reminder about an overdue or missed payment, and can be used as an opportunity to have the patient act as a catalyst with a slow paying insurance company. With the recent federal regulations to allow insurance transportability, patients are not shackled to insurance companies, and can change to better plans with less fear of losing or limiting coverage. This same market-driven consumerism can be used to hasten payments from slow or inefficient payors.

Analyzing A/R Components

The business objectives of improving a practice management’s cash flow cycle need to focus on several factors. Many practice managers have more responsibility than just A/R management. One key factor is being in a position to better evaluate your current A/R position in terms of critical contributing factors. Sometimes looking at a trial balance is not enough--especially when comparing two periods.

The key components of "days in accounts receivable" are the days to bill and collect. By examining the averages and variations for a sample of accounts, extreme values will provide areas where concentration of effort should lower the upper range of values, and contribute to a lower A/R. Similarly, by increasing the number of accounts that can be brought to zero on first payment indicates that up-front collection of deductibles and co-payment is being carried out. Also by watching the number of open accounts, management can gauge the productivity of staff in view of current patient visit activity levels. The number of claim rejections in total and by payor will be indicative of the accuracy of data collection and entry, and correctness of computer master file settings that guide the production of claims. Again, electronic claim formats do have the added advantage of providing more payor specific edits which give providers an early warning of claim deficiencies as discussed earlier.

While no practice or practitioner is immune from review, the larger groups and university and other teaching programs will have greater risks stemming from the recent fraud and abuse cases that have sent many facilities into a critical review process that will likely alter its financial, operational and even its clinical behavior for some time to come.

Summary and Conclusion

Physician practices are going through an identity transformation. With a movement to affiliate as a backdrop brought about by the growth in managed care, physicians will find that even after they agree on a "new corporate structures", they must still be attentive to the daily administrative rigors of practice management. Mastery of the basic components of a practice administration, such as patient registration, charge collection and coding, billing and collection and A/R management cannot be overlooked as a key ingredient in providing for revenue maximization. Avoidance of risk is a necessary goal of each practice--and one way to ensure that position is by attaining practice guidelines and conformance with regulatory policy through an aggressive education and training and quality assurance and control program.

Please click here for more information about the DEKAYE Consulting Inc.
Emphasis on Education Course Curriculum.

by Allan P. DeKaye, MBA, FHFMA

Q: We will be undergoing a reduction in staff in our hospital and expect some changes. How can we minimize the disruption and maintain cash flow?

Q: Dealing with insurers in our physician practice has become a full-time job. What can be done to streamline this?

There is no substitute for aggressive accounts receivable follow-up . Contact the payer liaison (if specified) often especially if the specified time period for payment has elapsed. Be certain your claims are clean (because a justifiable delay can be predicated on a non-clean claim), and that your pre-certs are in order.

HOME HEALTH CARE UPDATE:

by Andrew Schulman, Carpenter & Onorato, P.C.

President Clinton announced a new initiative that includes tighter regulations governing the creation of home care agencies. There will be a six month moratorium on the establishment of new agencies nationwide and a doubling of intermediary audits on home health agencies. The moratorium will allow HCFA time to write tougher qualifications for participation in the Medicare home health program and will also target existing agencies forcing them to enroll in Medicare every three years.

When Clinton and Congressional leaders announced a balanced-budget agreement in July, 1997 to balance the budget by the year 2002, cuts were made in the Medicare program totaling $115 billion over 5 years, including cuts to home care of $ 16.2 billion over the next five years. The key provision for home care is for the Secretary of HHS to establish and implement a Prospective Payment System beginning October, 1999. At the end of implementation or if implementation doesn’t occur, payment amounts will reflect a %15 reduction on cost limits and per beneficiary limits. For cost reporting periods beginning on or after October 1, 1997, per visit limits will be reduced from 112% of the mean labor-related and non-labor per visit costs for freestanding agencies to 105% of the national median.

The National Association for Home Care and the World Home Care and Hospice Organization - these dynamic networks of global leaders and organizations dedicated to the interests of all patients, providers, home care and hospices will make up the Home Care Exhibition in Boston, Massachusetts, October 17-22, 1997.

Should you wish to discuss this topic further or need more information, please feel free to contact Andy Schulman at Carpenter & Onorato, P.C. at 516-745-0808 or through E-Mail at CandOPC@aol.com.