Health Care Compliance Watch : New York Health Care Compliance Lawyer & Attorney : Ilana Sable : NY Physician Representation Law

Over the past few years health care providers have reported an increasing surge in the outsourcing of medical billing and collections  to third party medical billing companies.  The outsourcing surge stems from a number of factors, most of which are focused on increasing revenue and surviving payor scrutiny.  

First, health care providers rely on medical billing companies to assist them with processing claims in accordance with applicable rules, regulations, laws and statutes (“health care laws”).  With the increasing complexity of the health care industry, the demand for familiarity with health care laws can be overwhelming for health care providers and will often require the education, knowledge and skill of an independent professional.

Second, health care providers are increasingly consulting with medical billing companies to provide them with timely and accurate advice regarding reimbursement matters and overall business decisions.  Medical billing companies normally support a variety of providers and organizations with different specialties and, therefore, have a unique insight to reimbursement issues, as well as diagnosis and procedure code utilization and optimization.  The critical component is a medical billing company’s ability to conduct practice-to-practice comparisons and data mining of coding, billing and collection patterns.

Third, medical billing companies normally have professionals dedicated to specific specialist and/or process areas, thereby increasing employee efficiency, skill and knowledge within the assigned area.  For instance, professionals skilled in collecting unpaid cardiology claims will have the benefit of uncovering and monitoring payor patterns of rejection and denial, and will have the insight to determine which coverage determinations are worth fighting or which coding practices to alter.  

Fourth, in most cases a medical billing company will consistently provide clients with customized practice reports and analytics that offer an in depth look at key metrics an allow the provider to make informed, strategic, decisions concerning billing, coding and collections.  While most of this data and analysis can be conducted in-house, is often underutilized or overlooked altogether with small physician practices. 

Finally, another issue that small physician practices face with in-house medical billing is hiring, training and maintaining an adequate medical billing staff.  Normally, small physician practices allocate one to two designated staff members for medical billing and collection purposes and suffer the consequences of insufficient and inefficient staff in the form of timely filing issues, timely appeal issues, lack of follow up and collections, contractual allowances and, ultimately, write offs.

It is important to note that third party medical billing companies significantly vary in terms of the type of services provided and the manner in which these services are provided for their respective clients. For example, some medical billing companies provide coding services for their clients, while others only process pre-arranged Superbills that have already been coded by the provider.  Additionally some medical billing companies offer a spectrum of management services, including patient intake support, accounts receivable management and debt collections. 

The main question to consider when determining whether to use an in-house medical billing professional or to outsource to a outside medical billing company is “what are you coding and billing, and why?” If the answer to this simple question is not supported by customized practice reports and analytics, strategic and informed, decisions concerning the coding, billing and collections choices made for each patient, and driven by the voluminous rules, regulations and statutes affecting health care practice, then the answer is flawed and is likely costing the practice critical revenue.

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While Congress continues to tackle the difficult decision of when (not “if”) to implement a 21% cut in Medicare payments to physicians, medical practices are facing the equally difficult decision of whether they can afford to keep treating Medicare patients.

On June 24, the House of Representatives passed a six month deferral of the proposed 21% cuts in the Medicare physician fee schedule and retroactively reversed the June 1, 2010 payment cut for 6 months. Physicians were also given a 2.2% fee schedule increase. This temporary deferral marks the tenth time in less than eight years that Congress has blocked the proposed 21% cut in Medicare payments to physicians. Although Congress has pushed the proposed cuts a bit further down the road, the deferral is nothing more than a temporary fix. The Medicare Trust is rapidly depleting and lawmakers have no long term option other than to drastically reduce the country’s Medicare spending.

The bigger issue is that even without the proposed 21% payment cut, physicians across the country have been facing the hard business decision of whether they can afford to keep treating Medicare payments for several years. Many doctors – mainly primary care physicians such as internists and gynecologists – have increasingly stopped treating Medicare patients due to Medicare’s low reimbursement rates, growing demands for supporting medical documents and audits. On average, Medicare pays providers approximately 78% of what commercial insurers pay yet demands a great deal more effort and time in receiving, and often times retaining, payment for services rendered. Plus, with the advent of the RAC program, physicians are finding that they need what amounts to a secondary degree in billing and coding just to stay ahead of the audits and recoupments.

The end result: an increasing amount of physicians are choosing to put the needs of their medical practices above the needs of their senior patients and have either stopped accepting new Medicare patients or have opted-out out of the Medicare program entirely. According to the Centers for Medicare and Medicaid Services, approximately 10 % of physicians have opted out of the Medicare program, with the number of physicians opting-out of the program steadily rising ever year.

If your practice is considering reducing the amount of Medicare patients that it accepts or opting-out of the Medicare program entirely, there are several critical questions that must be asked an evaluated when making these decisions.

·         How much time, effort and secondary support (including staff members and physicians) is allocated toward preparing, processing and submitting medical bills to Medicare? 

·         How much time, effort and secondary support (again, including staff members and physicians) goes into requests for supporting documents and audits? 

·         On average, how do Medicare reimbursement rates measure up against reimbursement rates from commercial carriers for: (a) rate of claims paid and (b) amount paid on claims?

·         How much additional time would physicians and staff members have to allocate toward other projects if the practice reduced or eliminated its treatment of Medicare patients?

·         Would the practice require less staff, space and/or secondary support if it reduced or eliminated its treatment of Medicare patients? 

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