The Business of Emergency Medicine: Choose Your Partners Carefully.
As the end of another year approaches faster than most of us want to realize, let's take a moment to reflect on the good old days of emergency medicine. In the good old days, which were actually not that long ago for some of the fortunate, terms and acronyms such as DOJ, OIG, upcoding, downcoding, compliance plans, EMTALA, HMO, PPO, IPA, capitation, etc., were seldom heard. These same good old days were filled with greater focus on patient care, higher reimbursement, lower patient volumes, selective participation with managed care plans, less regulatory concerns, and the ability to increase revenue by fee schedule increases. Now, most in our industry not only know all of the aforementioned terminology and acronyms, they have experienced the negative affects these have on the bottom-line of their practice.
More so than in past years, my conversations and consultations with emergency physicians seem to have a common theme: “We are seeing significantly more patients and making less money”. In years past, many emergency physicians were fortunate enough to maintain their level of pay by treating more patients each year; however, now many can no longer make up for decreasing reimbursement through additional patient volume. Budgets have hit rock-bottom and some emergency physicians now face pay cuts, elimination of bonuses, or inability to recruit necessary additional staffing. To make matters worse, many hospitals have eliminated subsidies and usually require the emergency physicians to participate with every managed care plan they choose to ink to a deal. I thought HMO's were designed to reduce emergency department volume? How naïve I must be.
As with the seasons, the practice of emergency medicine changes. Today, the changes in our industry are rapid and complex. Gone are the days of allowing vendors free reign to manage all business aspects of your emergency medicine practice without worry. In today's practice environment, emergency physicians must take an active role in the management and oversight of their vendors if they desire to recover some of the lost reimbursement, flatten the curve of decreasing reimbursement, and stay in compliance with all governmental regulations. While most physicians chose medicine to practice medicine, the reality is that the business-side of emergency medicine is now an integral part of the practice of medicine. For those who disagree with me on this point, please contact one of the many emergency physicians groups who have reimbursed the DOJ or who no longer have their hospital contracts due to decreasing reimbursement.
Now, let's focus on how to evaluate the business piece of your practice. First, you need to perform a detailed evaluation of your business partners. Notice that I said business partners rather than vendors. This was intentional because I firmly believe each physician group needs to partner with companies that view emergency physicians as business partners rather than clients. Since your billing and coding vendor controls a large number of variables that affect your reimbursement and compliance, this should be the focal point of your evaluation. When evaluating a company to perform your billing and coding function, I recommend you answer the following questions at a minimum:
Now that we have determined a few questions to ask, let's dissect each question and dispel a few myths.
Does this company have experience in my market? In my years of experience in operations and consulting for the emergency medicine billing and coding industry, I have found that possessing knowledge and experience in the local billing market is extremely important. While many billing companies claim that they know how to bill effectively in every market, I have personally witnessed breakdowns due to inexperience and lack of knowledge in the local market. Billing in one state can and is drastically different than billing in other states. Not only do you have local insurance laws and regulations, knowledge of the procedures and processes of the local HMO's and PPO's is critical to obtaining maximum reimbursement for the physician group. Inexperience can generate problems such as delayed obtainment of provider numbers, inappropriate discounts, and difficulty in managed care contracting. Many local and regional billing companies offer much more experience and knowledge of your market; however, this is not to say that they are always the best option. You will also find that many smaller billing companies are owned or managed by former executives of larger billing companies, thus they have experience well beyond their years of existence. One key to evaluating experience is to interview all clients of the billing company within your service area or state rather than a small list of their preferred references. Myth #1 : Larger billing companies are always a better option because they possess the most experience.
What can or will this company do to improve my reimbursement? Improvement in reimbursement is a two-way street. While many variables that affect reimbursement such as payor mix, patient volume, managed care contracts, and physician documentation are not variables that your billing partner can directly control, the billing partner can and should assist your physician group with the management of these variables and others that affect reimbursement. An experienced billing partner can assist you with managed care contracting by understanding local reimbursement rates and possessing the ability to assist your group in the contract review process. Most insurance plans offer you a low rate of reimbursement initially to see if you will bite. Negotiating reimbursement rates is the converse of negotiating the price of a car, always negotiate upward. In addition to managed care contract assistance, your billing partner should provide regular updates and analysis on payor mix, patient volume, managed care contract payments, and physician documentation. Monitoring changes in these variables can greatly enhance your reimbursement. When physicians in a group are having their charts downcoded due to insufficient documentation, you want to see examples and arrange training sessions with your billing partner. Downcoded charts result in lost reimbursement that will never be recovered. This type of service is what separates one company from another. Yes, most or all will promise that they provide these services; however, few really provide the detail needed to make a difference. In my experience, the billing companies that charge the lowest rates typically do not provide these services. Myth #2 : All billing companies provide the same services and will collect roughly the same amount of money; therefore, I should choose the lowest billing fee.
How does this company process all types of patient mixes? Internal billing company processing protocol for all patient charts can greatly affect your reimbursement. I have seen all types of processing. Unfortunately, some companies tend to do what I call “skimming the cream” and turn the rest to a collection agency. These companies process the Medicare, Medicaid, and insurance companies that pay quickly, while failing to appropriately work denials adequately. The result is a quicker turn to collections for many accounts. In this scenario, your collection agency looks great; however, only due to the inappropriate collection protocol of your billing company. When speaking with your billing company, ask for details on how they process all claim types, how many patient statement are sent and how often, when and how they process denials, how quickly they post payments and charges, and what special processing they use for workers compensation and auto liability cases. Furthermore, I would make certain that the processing protocols are part of your billing contract. If your billing company takes short-cuts in any of these areas, your reimbursement will decrease and the fees you pay to the collection agency will increase. However, clear and concise contractual language can eliminate many or all of the “skimming” techniques I have previously mentioned. Myth #3 : All billing companies process claims, denials, and payments in the same manner.
Does this company have a strong compliance plan? In today's environment, your billing company should have a strong compliance plan designed consistent with the OIG Model Compliance Plan for Third Party Billing Companies. As we all know, many physician groups have incurred great liability due in part from working with billing companies that failed to have a strong compliance plan or the proper checks and balances in their operating procedures. When evaluating a compliance plan, make certain that the plan is more than writing on paper. Ask if charts are auditing internally and externally, who audits the charts, and whether the charts are audited prior to or after billing. As you might guess, auditing charts prior to billing is the most effective since you can correct the mistake without sending a false claim; however, many companies fail to audit prior to billing because the auditing upsets their normal processing and billing procedures. I would insist that charts are audited prior to billing. Other hot compliance issues to ask of your billing company include: how and when are refunds processed, what are your procedures if you discover charts billed with incorrect coding, and what are your procedures for billing physician assistants and nurse practitioners. In addition to the billing company, your physician group should perform random audits of charts that the billing company has coded and billed. If you do not have the expertise, utilize one of the many consultants or billing companies that have experience in emergency medicine. Blindly depending on your billing company to be compliant is a potential future liability. Additionally be cautious of people or companies who promote the theory that “we have already been investigated and are under a Corporate Integrity Agreement (CIA); therefore, we are safer and more compliant than other companies”. The mere existence of a CIA does not preclude any company from further audits or liability except for the previous period of time specified in their agreement with the government. Remember, proper compliance procedures will greatly reduce or eliminate non-compliant behavior. Not all companies will be investigated by the DOJ, only those that have given reason for investigation. Myth #4 : All compliance plans operate in a similar manner.
What is my cost for billing services? Your cost for billing services can vary greatly depending upon how you are charged. Many companies charge a percentage of collections, while others charge a flat-fee per chart processed. Recently, I have even seen some blended rates where you are charged a flat price for coding and a percentage of collections for billing. Additionally, some companies also charge add-ons for services such as credentialing, mailing of charts, reports, etc. Make certain that you ask the billing company whether their fee is all-inclusive or if they have additional charges. Regardless of the method used to determine billing fees, make certain you understand all of the costs. If your billing company is providing the full spectrum of services I have listed above, your billing fee will usually range from 10-14% or $8.50-10.00 per chart. In a percentage arrangement, your payor and acuity mix greatly affect the billing fee you will be charged. If you are fortunate enough to have a practice that collects around $100 per patient, you should be able to negotiate a billing rate close to 10%. However, if you are on the other end of the scale with a practice that collects $50-60 per patient, you may pay 14% or more. In my experience, most companies are unable to adequately provide the full spectrum of services for less than the aforementioned prices. Myth #5 : Most billing companies charge the same prices for the same level of service.
For many physicians, the evaluation of your billing and coding partner will conclude the evaluation of your external business partners. Now, you must evaluate internal variables such as individual physician performance, documentation, pay schemes, and managed care contracts. Most quality billing and coding partners can assist you with your internal evaluation by providing valuable data. While I have always been strongly opinionated on issues such as physician pay schemes and managed care contracts, we will save the discussion of internal evaluation for a later issue.
As the winds of change sweep through the practice of emergency medicine, remember that attention to the details of your business is the key to success. Choose your business partners carefully because all companies are not created equal.
Bryan Vinyard, MBA