Priority Management Group, Inc.

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Priority Management Group, Inc.

Presents

Priority Management Group, Inc. 700 School Street Pawtucket, RI 02860 P: 401-616-2000 F: 401-616-2001 www.chcbilling.com

Agenda

• Introduction

• Clean Claim Components

• Elements of the Billing Process

• Feedback to Clinic Operations

• PMG Benchmarking

• Client Sampling

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Raymond T. Jorgensen is President and CEO of Priority Management Group, Inc. (PMG). Ray is responsible for oversight of consulting operations as well as coding, reimbursement, and payer related issues for the out-sourced billing component of

Speakers:

Ray Jorgensen, MS, CPC, CHBME

PMG’s services (more than 850,000 annual encounters). He has personally trained

thousands of providers from over 35 states on coding, billing, and reimbursement in addition to authoring two books and dozens of articles.

Ray’s health care experience and education is unique in that he was schooled by

the payers. Having worked for Blue Cross and Blue Shield as well as United HealthCare Corporation, primarily in professional relations and contracting, Ray has an understanding and perspective on the payer’s objectives and process unlike other medical business consultants groomed from the provider side

other medical business consultants groomed from the provider side. •BA from The College of the Holy Cross (Worcester, MA)

•MS from Northeastern University (Boston, MA)

•CPC from the American Academy of Professional Coders (Salt Lake City, UT) •CHBME from the Healthcare Billing & Management Association (Laguna Cliffs, CA)

PMG’s Vice President, Consulting and Compliance

Speakers:

Caroline Peucker, CPC, CPC-H, CPC-I

Caroline has more than 25 years experience in the physician billing and coding industry. Her extensive experience includes serving as the Vice President, Coding and Compliance, Manager of coding and Billing Operations Manager for physician billing companies that serviced a wide range of specialties and practice types. She has broad experience with hospital-based physician and private practice where she was integral to coding and compliance education and training for clinical providers, practice and billing office staff members. She has performed and managed chart audits with objective of both compliance and optimizing reimbursement through correct coding and thorough documentation.

Caroline holds a Bachelor of Science degree in Health Service Administration from Providence College. She is an AAPC certified coder and PMCC instructor.

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Robert Skeffington a founding partner and Executive VP of Sales and Marketing for Priority Management Group, Inc. (PMG). Responsible for PMG‘s overall business development strategy, Robert also works with staff to assess the impact of Health Care

Speaker:

Robert Skeffington, CHBME

development strategy, Robert also works with staff to assess the impact of Health Care Reform on PMG and its hundreds of clients. Robert works diligently to enhance relationships with the National Association of Community Health Centers, state and regional CHC organizations, and individual community health sites.individually. In addition to his role in PMG Billing, Robert also leads marketing and sales efforts for PMG Consulting which provides CHC centric education, operational assistance, and training services around revenue cycle management, coding, and other health care finance related matters.

During his more than 17 years in health care Robert has worked with CHCs in the 48

During his more than 17 years in health care Robert has worked with CHCs in the 48 contiguous states with an exclusive focus on revenue cycle management for the past 12 years with PMG. He is a speaker for NACHC and other regional CHC associations on a variety of health care revenue cycle related topics.

•BS from Salve Regina University (Newport, RI)

•CHBME from the Healthcare Billing & Management Association (Laguna Cliffs, CA)

Disclaimer:

1. The coding guidelines, interpretations, and recommendations set forth as part of this training session are presented as a guide only. Attendees part of this training session are presented as a guide only. Attendees understand and recognize that actual coding decisions are the sole liability and responsibility of the provider(s) and respective billing staff. Priority Management Group, Inc. does not accept any liability or responsibility in this regard.

2. The presentation today includes discussion about a particular commercial product/service and the presenter has significant financial

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Clean Claim Components

(What is your percent of clean claims??)

• Objective: Paid all the money anticipated on first claim submitted

• CMS Billing Formats:CMS Billing Formats:

• 1500 (Part B/Professional) • UB-04 (Part A/Facility and UGS)

• Critical data

– Demographic:

• Name, Address, Phone(s), COB, MVA, etc. • Eligibility Verification

– Payer Specific Data:

• Member and Provider Number(s), Coding, referrals/authorization

– DOS, POS, CPT, ICD.9, etc. (No Chart Seen)

• NO CHART SEEN BY BILLING

Billing Process : The Elements

• Demographics

• Charge Entry

• Transmit Claims

– Patient Statements

• Post Payments

• Manage Denials

• Unpaids & Appeals

U pa ds & ppea s

• General Management

• Close & Reporting

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Billing Process : Demographics

• Most Critical Function

– “Battle is won or lost at the front desk.”

• Time of Service (TOS)Time of Service (TOS)

– Correct patient address, phone, work, insurance, etc. – Name spelled as it is on the card

– Eligibility verification

• TOS Payment (unassigned credits)

– Co-pay: non-negotiable & CAN BE slid on scale – No insurance verified… pay cash (NO EXCEPTION)

– Donations: #1 reason people give? Someone asked… • Oversight By Whom?

– Typical boss: Clinic Services Director/VP (COO) – Except providers: Medical Director

– Actual accountable party for revenue: CFO

Billing Process : Charge Entry

• At Centralized Billing NOT Front Desk

– TOS Full Self-pay (not partial): Only charge entry • Why?? Not Simply Data EntryWhy?? Not Simply Data Entry

– National Correct Coding Initiative (NCCI or CCI) – Charges (RVU based? No, how will they know order?) – Ranked & linked ICD to CPT

– Modifier utilization

• Time from DOS to Charge Entry? • Batch Cover Sheet Comparison

• Time to Enter a Charge: 30 to 40 seconds per – Not happening? Why not?

• Automate

– EMR/EHR: Never easy or seamless

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Billing Process : Transmit Claims

• Direct versus Clearinghouse

– What do you do really well… EDI? Probably not… – Clearinghouse house edits before payer denialsClearinghouse house edits before payer denials • Percentage of Electronic Claims

– Paper pays monthly versus electronic weekly – Frequency of transmission

• You Must Know

– Payment deadlines for top five payers – Typical volumes (and verify)

• Secondary Claims to Paper: Who and How • Patient Statements

– Policy to limit number and duration • Time from Charge Entry to Transmission

• System Verification of All Patients Seen versus Billed

Billing Process : Post Payments

• Define:

– Electronic Remittance Advice (ERA)

• EDI of Explanation of Benefits (EOB) versus paper

– Electronic Fund Transfer (EFT)

• Direct deposit

– Automatic Payment Posting (APP)

• Automatically posts entirety of EOB without manual intervention

• Timeline from Received Payment to Posting • Time to Post a Payment: 30 to 40 seconds per • Reconciliation of Check Amount to Posted DollarsReconciliation of Check Amount to Posted Dollars • Underpayment Management

– If paid within 10% of charge, charge is too low

• Scan line of EOB from right to left

• Sum payer payment and patient responsibility columns • Subtract this total from charges for the DOS for this patient • If ≤ 10% of charge, charge is too low

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Billing Process : Manage Denials

• Quick Corrections at Time of Payment Posting

• Examples of Expected Denials to Be Worked – ICD missing 4_{ICD missing 4 or 5 digit (no record required)}th_{or 5}th_{digit (no record required)}

– Prior Authorization missing (but in system)

– Place of Service Correction (SNF versus Residential) • Should NOT Mitigate Payment Posting Timeliness

• Corrected Claims Batched for Immediate Resubmission in Next Run

• Transaction Codes to Track Denial Reasons Eli ibili

– Eligibility

– Coding (ICD/CPT) – Credentialing

• Communicate Reasons to Clinic Staff (all reasons to all staff… clinical and administrative)

Billing Process : Unpaids & Appeals

• More Complicated Than Denials

• Regular Work Flow

– Mondays- 9 AM to 10 AM: UGS MedicareMondays 9 AM to 10 AM: UGS Medicare

– Tuesdays- 9 AM to 10 AM: Part B Medicare & United – Wednesdays- 9 AM to 11 AM: Medicaid

– Thursdays- 9 AM to 11 AM: Commercial • Must Be Scheduled and Worked (ALWAYS) • Form Letters with Check Box for Routine Issues

– Preventive E&M service with Problem E&M Visit – Notes for surgical service

– Wrong DOS/POS/Provider

• Tracking of All Claims by Transaction Code

• Communicate Reasons to Clinic Staff (all reasons to all staff… clinical and administrative)

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Billing Process : General Mgmt.

• Management Information System

– Vendor relations liaison

– Internal staff training (front desk/data extraction)Internal staff training (front desk/data extraction) – Support work with vendor

– System updates (new version, annual coding, etc.) • Q&A…

– Patients (balances, updated insurance) – Clinic Staff (system, coding, general billing) • Coding (education/auditing/resource)

• Tracking & Storing Encounter Forms (Charge Tickets) • Bank Deposits

• Interact with Accounting/Finance • Third Party Payer Relations • Credentialing

Billing Process : Close & Reporting

• Closing and Reconciliation

– Daily, weekly, monthly, and fiscal year end • Management Information System Data ExtractionManagement Information System Data Extraction

– Charges, payments, & adjustments – Accounts receivables

– Unpaid claims work

– Productivity by provider, clinic, department, etc. • Non-standard Data Extraction & Analytics

– UDS: Ethnicity to disease to age range to income – FPAR: Birth control method to age to income – Ryan White: HIV patients, multiple cross references – Unique, last minute, grant requests

• Upload to General Ledger (GL) • Sustain Auditor Scrutiny

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Feedback to Clinic Operations

• What Actually Gets Paid

– Core Provider visit versus “nurse/MA” visit

• Most Common Denials

– Eligibility verification – Inaccurate demographics

• What They Can Fix

– Coded encounter forms (at least one ICD and one CPT) – Clearly legible and linked

• Why Patients Call

– “I was told I did not owe any money.”

– “I was told my insurance paid for this.”

• Encounter Rate by Clinic (by Provider)

• Charges versus Payments (by Clinic and Provider)

• Units of Services (HCPCS with understandable descriptors)

Rejected EDI Analysis

Sample Client January 2007

Total Claims Billed $ Number Rejected % Monthly Transmission Rejected Claims Summary - MCC

Total Claims Billed $ Number Rejected % 4657 $699,501.80 293 6% # of Claims % 27 9% 14 5% 0 0% 13 4% 34 12% 0% CPT Invalid Diagnosis Invalid Hospitalization Dates Required Physician Name/Referring Physician Error Rejection Description Insurance ID# Incorrect Demographics Error 0% 1 0% 43 15% 161 55% TOTAL 293 100%

Subscriber Policy Expired Physician Not On File Provider Number Invalid ys c a a e/ e e g ys c a o

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Returned Item Analysis

Reason For Return Jul Aug Sep Oct Nov Dec TOTAL % MISSING/INVALID INFO

CPT

CPT not clearly indicated on encounter 24 4 7 3 3 41 36.61%

Invalid CPT 6 6 5.36%

Missing Tooth/Surface 1 1 0.89%

Modifer indicated but not linked to procedure 0 0.00% Was an E&M service performed? 0 0.00% Date(s)

Missing Pre-natal Dates 2 2 1.79% Missing Date of Injury 1 1 0.89% Diagnosis

Invalid Dx marked on encounter 3 3 2.68% Diagnosis not marked on encounter 21 2 5 7 35 31.25% Dx missing 4th or 5th digit 1 1 0.89% Fee Schedule

Fee not in system for Procedure 0 0.00% Insurance

Invalid Insurance ID 0 0.00%

Invalid/missing Patient/Subscriber DOB 6 2 8 7.14% Provider

Treating Provider not indicated 0 0.00%

Billing/Supervising Provider not indicated 8 8 7.14% OTHER

Adjustments

Sliding Scale Expired 1 1 0.89% Reconciliation

Missing Encounter 0 0.00%

Registration/Demographic Error

Patient not registered 5 5 4.46% Name does not match account # 0 0.00% Missing pt/subscriber address 0 0.00%

TOTAL 0 59 6 9 16 22 112 100.00%

Claim Status Analysis

# $ # $ # $ # $ # $ # $ # $ STATUS

No Claim Found - Rebilled 135 $24,971.27 3 $296.00 138 $25,267.27 Claim on File - In Process 16 $1,643.05 16 $1,977.00 32 $3,620.05

TOTAL Jul Aug Sep Oct Nov Dec

Claim on File - Set to pay 82 $9,820.81 24 $2,588.00 106 $12,408.81 Suspense 7 $229.00 7 $229.00 Sent back to office for info 11 $1,309.00 11 $1,309.00 Denial:

Demographics 2 $205.00 3 $497.00 5 $702.00 Eligibility 7 $615.00 7 $615.00 PCP 7 $857.00 7 $857.00 Diagnosis/CPT 1 $390.00 1 $93.00 2 $483.00 UGS Rev Code Correction 0 $0.00

Duplicates 0 $0.00 EOB Needed 0 $0.00 Adjustments: Global 17 $1,262.00 17 $1,262.00 Non-covered 6 $493.00 6 $493.00 F C 1 7 $888 00 8 $888 00 Free Care 1 7 $888.00 8 $888.00 Capitation 10 $376.00 60 $8,612.00 70 $8,988.00 Small Balances 0 $0.00 Other (see comments) 34 $1,802.00 7 $975.00 41 $2,777.00 Transfer Balance to:

Secondary 6 $941.60 6 $1,056.00 12 $1,997.60 Tertiary 1 $1,500.00 1 $1,500.00 Patient- 37 $4,023.51 21 $1,525.42 58 $5,548.93 Ded/Coins 10 $914.48 1 $169.01 11 $1,083.49 Mental Health Vendor 0 $0.00 Totals 383 $49,359.72 156 $20,669.43 0 $0.00 0 $0.00 0 $0.00 0 $0.00 539 $70,029.15

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PMG

’s Recommended Benchmarks

• DAR: < 60

– Weeks of AR: < 9

• FTE to Encounters Ratio: 1 : 12,000-15,000

• Expense as Percent of Payments: < 9%

• Cost Per Claim: < $8

• Electronic Claim Transmission: 90%+

• Clearinghouse Utilization: Yes

• Certified Staff: At least one

• Net AR: As close to $0 as possible

• RVU/Medicare Based Charges: Yes

•Charge Entry or

Payment Posting

Production Benchmarking

– Each is 18-28% of Process – Encounters equals

visits equals units

– Full Time Equivalent

is FTE

Charges or Payments

Daily Units (Units = EF/Visit)

240.00 Units Per 5 Day Week

1,200.00

Monthly Units (4.3 weeks)

5,160.00

Annually Units (48 weeks)

61,920.00

–Just entering charges

and posting payments (no automation), FTE should manage 30,000 visits annually (easily)

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Production Benchmarking

•Unpaid Claims

Management

Ch

P

t

– 25-30% of Process –Encounters equals

visits equals units

–Full Time Equivalent

is FTE

–FTE should work

Charges or Payments

Daily Units (Units = EF/Visit)

90.00 Units Per 5 Day Week

450.00 Monthly Units (4.3 weeks)

1,935.00

Annually Units (48 weeks)

23,220.00

20,000 unpaid claims annually (easily)

NOTE: Daily Units- 6 Hours @ 15/hour

Evaluative Category Scoring

DAR <50 days, yes = 2, no =0 0

PMG

’s Evaluative Tool (1 of 3)

y y

FTE Biller Managing 12K encounters annually; yes = 1, no = 0 0 Billing expense as percent of payments less than 8%; yes = 1, no = 0 0 Cost per claim less than $7; yes = 2, no = 0 0 90% of claims filed electronically; yes = 1, no = 0 0 Clearinghouse; yes = 1, no = 0 0 Staff with CPC or compliance/billing certification; yes = 1, no = 0 0 RVU system for charge schedule calculation; yes = 1, no = 0 0

Total: 0 Rating:

Rating:

8+ = Exceptional billing process/product

6-8 = Needs improvement, change in process desirable

5 or less = Significant loss to organization, effect immediate change

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PMG

’s Evaluative Tool (2 of 3)

CHC Data Requirements

Time Period (Months) Used for Charge & Visit Data: 12

Total Charges: $ 3,200,000.00 Total Payments: $ 2,100,000.00 Total Expenses: $ 2,600,000.00 Total Patient Visits 30,000.00 Medicare Encounter Rate: $ 115.00 Medicaid Encounter Rate: $ 127.00

Accounts Receivable (A/R): $ 700 000 00

Accounts Receivable (A/R): $ 700,000.00

Total Number of Full Time Equivalent (FTE) Billing Staff: 8.00

Total Detailed Billing Expense: $ 319,898.00

Basic Data Necessary for “Mini-Assessment” of Billing Process

PMG

’s Evaluative Tool (3 of 3)

Annual Billing FTE Expense Analysis: Data Points Total Number of Full Time Equivalent (FTE) Billing Staff: 8.00 Salary for billers $ 210,000.00 Salary for billing manager $ 50,000.00 CHC share of FICA / Social Security (6.20) & Medicare (1.45) $ 19,890.00 Health Benefits $ - Dental Benefits $ - Disability insurance $ - Unemployment taxes $ - Retirement match / costs $ - Workmens compensation $ - Billing software maintenance and support $ 40,000.00 Billing department computer, email and network support* $ - Billing department printer, cartidriges, maintenance $ - Billing department rent & cleaning costs $ - Local government tax on equipment (tangable prorerty tax) $ - Patient call center cost $ - Temporary staff to augment billing staff for vacations, sick, etc. $ - Billing staff Training, Certification, Subscriptions & seminars (inc.

travel):

$ - Ad ti i f billi t ff $

Delineation of actual billing expense for

purpose of

“Mini-Assessment.”

Advertising for new billing staff $ - Allocation of overhead to billing staff (CFO time, utilities, etc.) $ - Compliance officer (may be % of FTE dedicated to billing staff) $ - Personal Computer, IT Networking, Internet: $ - Telephone Expense (phone lines, handset, etc.) $ - Office Supply Expense (e.g., paper, printing supplies, claim forms) $ - Postage for claims not sent electronically $ - Postage machine rental and maintenance $ - EDI (clearinghouse, direct payer link(s), etc.) $ -

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Benchmark Category/Description Benchmark

PMG Consulting Client Sample A

Data Blended Encounter Revenue Rate: $ 136.28 Blended Encounter Expense Rate: $ 134.58 Net Profit/Loss Per Encounter: $ 1.70

Days of A/R: 52.89

Annual Encounters Per FTE Biller: 5 732 40

Annual Encounters Per FTE Biller: 5,732.40 Billing Cost Per Encounter: $ 9.10 Expense as a Percentage of Payments: 13.36%

PMG Consulting Client Sample B

Benchmark Category/Description Benchmark D t Data Blended Encounter Revenue Rate: $ 19.60 Blended Encounter Expense Rate: $ 276.30 Net Profit/Loss Per Encounter: $ (256.71)

Days of A/R: 98.27

Annual Encounters Per FTE Biller: 8,125.33 Annual Encounters Per FTE Biller: 8,125.33 Billing Cost Per Encounter: $ 5.79 Expense as a Percentage of Payments: 29.56%

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PMG Consulting Client Sample C

Benchmark Category/Description Benchmark Data Data Blended Encounter Revenue Rate: $ 104.34 Blended Encounter Expense Rate: $ 126.36 Net Profit/Loss Per Encounter: $ (22.02)

Days of A/R: 63.51

Annual Encounters Per FTE Biller: 7 602 22

Annual Encounters Per FTE Biller: 7,602.22 Billing Cost Per Encounter: $ 8.42 Expense as a Percentage of Payments: 8.07%