Cost control: Boost revenue by auditing claims processing

Physicians are looking for ways to control costs and increase income as malpractice premiums and practice overhead costs skyrocket and rates paid by insurers decline. Many physicians have exhausted cost-control measures, and most are not aware that they can increase their revenue by improving coding and overall claim processing and reviewing their payer contracts.

With the development of MDsConnect.net, physicians now have access to understanding this process in real time. This article will give you examples of how to maximize your practice’s revenue using auditing, coding and payer contract tools.

Changes to internal processing

Auditing is an effective tool because it identifies areas that need to be improved today in order to increase revenue tomorrow. Charges, patient accounts and refunds are areas that can provide the most financial gain. Auditing charges and charge entry can verify whether all of the charges are being captured and billed in a timely manner. If charges are not entered and billed in a timely manner, then the practice should carefully evaluate their process and implement changes to ensure that all charges are captured and billed for payment. Auditing patient accounts can maximize your revenue by identifying whether:

• your external billing company or internal office staff is working accounts accurately according to payer contracts, policies and procedures;

• claims are not being billed and followed up on according to payers’ timely filing guidelines for claim submission and appeals;

• incorrect adjustments are applied to accounts when payments still may be obtained; and

• payers are being processed according to the contracted rates, and non-contracted payers are being handled appropriately. For example, it is common that non-contracted payers who are not using a contracted network will process claims with an adjustment or discounted amount on the explanation of benefits (EOB).

Auditing refunds and accounts with a credit balance will help you find revenue that has been lost due to duplicate refunding of the same account, refunding an account when the refund was not owed or refunding the wrong entity. It is important to audit accounts with a credit balance to ensure that refunds are being handled in a timely manner so that the practice will not incur fees and/or other significant penalties.

Correct code assigning

Correct code assignment can also maximize revenue. Aggressive coding practices such as up-coding (reporting a higher level code than the medical record supports) may increase your revenue, however, up-coding can also lead to recoupment of overpayments by payers and possible prosecution by the government.

Some physicians intentionally under-code (that is, they report a lower level code than the medical record supports) in the mistaken belief that it will decrease the likelihood of being targeted for an audit. In fact, under-coding will not decrease your chances of being audited, and it will result in a loss of revenue.

The key to maximizing your practice’s revenue without undue risk is to assign codes based on the correct level of service that the medical record supports. In order to do this, everyone in the group who assigns medical codes must use current coding materials, and they must be educated as to the rules and nuances of proper coding for the dermatology, evaluation and management and other codes used by your practice.

Pricing lists, also known as charge masters, can be an additional source of significant problems. Charge masters can provide misleading information because they use abbreviated CPT code descriptions and they may not be updated on a regular basis. In order to maximize your practice’s revenue and minimize risk, assign codes accurately, use current coding references and invest in proper training for anyone who assigns codes.

Contract negotiations

You should regularly review your payer contracts to determine if the rates and terms are reasonable. Old contracts will frequently also contain language that negatively impacts your practice, such as language that restricts what you can collect or onerous timeliness provisions. They also typically do not adequately address complex current topics covered in newer contracts. Old contracts often contain rates that no longer adequately cover the costs of your practice and no longer represent a reasonable market rate for your area.

Secondly, to determine if an individual payer’s rates are reasonable, you should first determine your practice’s general level of reimbursement. Review the contracts for your top non-governmental payers and determine what each payer’s contracted rate is as a percentage of Medicare.

Because some payers create their own fee schedules, it is important to use a standardized means of comparison (such as Medicare rates) so that you can more accurately compare each payer’s rates. Once you know your top payers’ rates and can compare their rates based on a common denominator, then you will be able to determine which contracts should be identified for renegotiation based on fees.

Negotiating higher rates is not the only way you can increase your revenue through changes to your payer contracts. Often, payers will include language in contracts that restricts what you can collect or keep. For example, some contracts contain language that restricts the amount of time you can pursue underpayments (at the same time giving the payer no limit on how far in the past they can pursue you for suspected overpayments). Some contracts also contain language that imposes very short filing deadlines that are difficult to meet.

If a payer knows you do not completely understand any part of the process, they will often use it to their advantage to try to intimidate you into accepting a less-than-favorable offer.

You should carefully review each contract, including all addenda, to identify terms and language that are disadvantageous to your practice, and then draft language changes that you would like the payer to make (along with any changes in fees). Throughout your contract review process, all actions should be consistent with your original plan (goals) regarding what you requested, what each payer has offered and what you are willing to give up to get what you want.

If you choose to negotiate directly with your payers, you should be aware that this can be a lengthy process and if you try to rush the process you will likely receive far less than you would like. Typically, a contract negotiator will first review your proposal and then submit it for internal review to determine its impact on the payer. Each party will negotiate until an agreement is reached on rates and terms. The contract negotiator will draft a new contract or rate addenda for your approval.

After the signed document is returned, the payer will load the contract into its system and provide an effective date. Contract negotiations are typically the more time consuming and complicated of the areas of focus presented in this article, but more often than not they will yield the biggest financial benefit over time.

Lower risk, boost revenue

You can lower your risk and improve your revenue by carefully crafting and implementing a plan. Take action sooner rather than later. Your financial losses and gains are processes that change over time - not overnight. Acting earlier to identify opportunities to increase your practice’s revenue will help you to keep more of what you work for.

If you need help, get it. With the development of MDsConnect.net, physicians now have access to understanding this process in real time. Save yourself time and money by taking action to increase what you receive.