Maximizing Reimbursement, Minimizing Penalties


 Templates for the level of procedure complexity help both physicians and coders make accurate choices for maximal reimbursement. Source: Tammy Gott, CPC, Wellmont Holston Valley Hospital, Kingsport, Tenn.

In today’s healthcare reimbursement scene, reimbursement in cardiology per procedure code tends to be declining. Along with flat or declining volumes and increasing overhead costs, many shareholders are experiencing a downslope in income. Thousands of dollars can be recouped, as well as costly penalties avoided, by paying close attention to billing and coding.

When Brian Rutledge became the manager of business and clinical operations in the Division of Cardiovascular Diseases at the University of Mississippi Medical Center in Jackson in 2006, he found a division that had not changed much in nearly 30 years. The coding, in particular, was problematic as the system and personnel had not kept up with the rapidly changing nature of cardiovascular procedures and coding.

Rutledge found coding errors in complex as well as simple cases. He found problems with peripheral vascular and electrophysiology (EP) cases. Some complex procedures can have up to 15 different codes, each potentially reimbursing $1,500. “Missing just a few of these over the course of the year can mean tens of thousands of dollars in lost charges,” Rutledge says.

He also encountered communication issues with the billing office, which tended to not give feedback regarding denied claims. “You can’t recover what you don’t know you lost,” he says.

When he looked for new personnel, he found it difficult to locate highly qualified coders. He heard about CodeRyte, a computer-assisted coding company based in Bethesda, Md., and decided to give them a chance. He crunched some numbers and found that CodeRyte’s cost would be half that of a full-time coder, including fringe benefits, salary, overtime and “the headaches of managing an employee.”

Now more than ever Rutledge needs to recoup every legally earned dollar. They are in a growth phase, expecting to double the size of their practice by year’s end. Three interventionalists and two electrophysiologists have recently joined the existing practice of 10.

He began using CodeRyte in November 2007. An audit of the first 25 patient encounters handled by the new service revealed that the old manual coding system was potentially losing hundreds of thousands of dollars a year.

While it’s difficult to compare this year’s numbers with last year’s, given a practice plan consolidation and an increase in the practice’s fee schedule, Rutledge says his codes are more complete, more accurate and charges are up. In March 2008, the department had the largest month of gross charges ever, which could be partially due to the increase in the fee schedule, but Rutledge gives a lot of credit to the automated coding system.

Besides the cost savings, he points to an improved turn-around time. They have gone from a four- to five-day lag time, which involved several handoffs to various departments and making copies along the way, to a 24-hour turnaround ending with an electronic submission to the billing office.

Periodic audits

If a practice is performing its own coding, it’s imperative to conduct periodic audits to determine what if anything is out of the ordinary. One thing to check is coding ratios. For example, a coronary catheterization procedure involves a code for injecting the coronary arteries (93545), along with a corresponding supervision and interpretation code (93556). If those two codes are not close to a one-to-one ratio during an audit, something is not right, according to Marjorie A. Amato, MBA, director of the Business Office Coding Network at MedAxiom, a professional organization based in Neptune, Fla., specializing in helping cardiology practices perform at a higher level. “When we see that expected ratios aren’t met, we teach our clients to dig deeper,” Amato says.

In order to be paid for what you do, you first have to ensure that you are billing for every code you can—and at the highest level of the code, Amato says. She culled data from 100 member cardiology practices to determine if they were coding at the proper level. She looked at the E&M (evaluation and management) levels for hospital admissions, hospital consultations, new office visits and office consultations—the four categories available for first-time patients. Each category has various code levels, each level representing a more comprehensive evaluation and, therefore, more reimbursement.

Many procedure codes involve a corresponding supervision and interpretation (S&I) code. If an audit reveals a strong deviation from a 1:1 ratio between the two, practices should investigate the problem. Source: MedAxiom Business Office Coding Network

Amato found that the 100 practices billed nearly 35,000 units of service for levels 1 and 2. At those levels, the management options are rest, gargling and elastic bandages, she said. She presented this data at a conference in Boston for MedAxiom members and challenged the audience to consider if they really saw 35,000 new cases—initial visits—last year where the conclusion was to gargle and sleep.

Further analysis of the data from the same 100 practices indicated nearly 215,000 units of service billed for low level of complexity—again for first-time patients. These are patients, for example, with a stable chronic illness such as well-controlled hypertension. Management options include over-the-counter drugs or physical/occupational therapy.

“I question whether or not we really did initial workups on that many people with that low level of acuity,” she says. “Some of them are valid, but I challenged the practices to review their documents to ensure they were making the right choices for the patients they see.”

She stresses that educating both staff and physicians is key to understanding the complicated cardiology coding rules for procedures. But understand they must. Back-of-the-envelope calculations suggest that if all 250,000 units of service were underbilled by two levels, with an average Medicare difference of $75, the practices were losing $18 million dollars annually.

A new wrinkle to the equation is the recovery audit contractors (RACs), private companies contracted with Medicare to recover overpayments as well as underpayments. The program became official this year after Medicare recouped nearly $440 in overpayments to providers during the two-year pilot phase (see sidebar, page 28). Amato says that practices have to be particularly vigilant. “I caution practices that if something looks odd to me, it could look odd to the RACs and other people who do extensive analysis with sophisticated software,” she says.

Coding vigilance

The cardiology coders and staff at Wellmont Holston Valley Hospital, a 400-bed facility in Kingsport, Tenn., are constantly training, says Tammy Gott, CPC, chief coder in cardiology and cardiac and thoracic surgery for Cardiovascular Associates, a 29-physician practice. “We have access to several medical publications and our company sponsors numerous webinars, teleconferences and travel opportunities for training seminars,” Gott says.

She has two other full-time coders and one in apprenticeship. One coder handles only Medicare claims, including denials and explanation of benefits. Gott won’t hire anyone who is not a certified professional coder and she looks for proficiency in EP and peripheral vascular. Gott occasionally conducts phone consultations at the request of other practices and the predominant concerns right now are coding for peripheral vascular disease and EP procedures. “You ask anyone, coders proficient in those two areas are worth their weight in gold,” she says.

Medicare recovery contractors (RACs) collected more than $350 million in Medicare overpayments to providers. Incorrect coding accounts for nearly half.

Gott made the decision to code directly from the report after an audit revealed hundreds of thousands of dollars being missed because the submitted charges were incomplete and/or unrealized. She created a procedural coding spreadsheet log that is updated on a daily basis from information gathered via faxes and/or phone calls received from the various sites of service. Coders also perform checks and balances for diagnostic reads from patient logs. They can generate a computer report for any services performed in the office. The compliance officer completes routine dictation audits of the physicians and yearly audits of the coders. Occasionally, the practice will hire consultants who meet with the physicians and non-physician providers, as well as the coding and billing staff.

“Our physicians are very open and easy to interact with if I or another coder has a need to speak with them regarding their dictation. We actually follow the ‘not dictated, not done’ rule of thumb,” Gott says. She adds that a good way to persuade physicians of the need for audits, consultant visits or educational initiatives is to show them the red and black ink. “You show your doctors the money trail and they start listening.”

Coders are a particular breed, very detail oriented, Gott says, and they tend to have a high burnout rate. Surprisingly, Gott has a team with excellent tenure. Jennifer Miller, the business office manager, says she dreads the day when a coder leaves. “It takes years to develop good coding skills and it’s very costly to the practice to train people.”

Last year, Wellmont Holston Valley Hospital was named one of the top 100 hospitals for cardiovascular care by Thomson Reuters. “Of course, I think our docs are the best because they have such great coders working for them,” Gott says, half jokingly. “Knowing that their billing is in very capable hands allows them to concentrate fully on patient care.”


Recovery Audit Contractors ‘RAC’ Up Success
By employing recovery audit contractors (RACs), Medicare has collected nearly $440 million in overpayments since the RAC program began in 2005.

Last year, the RACs identified $371 million in improper payments from California, Florida and New York, the three states with the largest number of Medicare claims. The RACs are paid on contingency, so it’s no surprise that approximately 96 percent of the $371 million were overpayments to healthcare providers; the remaining 4 percent were underpayments.

The cost to operate the program in 2007 was $77 million, which left a return of $247 million. CMS has decided to make the program permanent and will phase it in gradually over the next two years.

Most of the improper payments that the RACs identified occurred when healthcare providers submitted claims that did not comply with Medicare’s coverage or coding rules. More than 85 percent of the overpayments collected and almost all underpayments refunded by the RACs were from claims submitted by inpatient hospitals.

The types of errors leading to improper payments, found by the RACs, include:
  • Payments made for services coded incorrectly—for example Medicare is billed for a certain procedure but the medical record shows that a different procedure was actually provided;
  • A healthcare provider is paid twice because the provider submitted duplicate claims; or
  • A claim is paid using an outdated fee schedule.

Healthy Leadership Will Carry ?Practices through Lean Times
In complex, competitive environments where reimbursement constraints are realistic and often beyond the control of any one small practice, organizations have to look for other strategic advantages such as discipline, structure and strategy, says Ronald N. Riner, MD, president of The Riner Group, healthcare management consultants based in Naples, Fla.

“Historically, if you look at the healthcare organizations that reached growth plateaus in very constrained environments, the survivors had appropriately focused strategies and an organizational structure that allowed them to be competitive,” Riner says. He adds that the strategy of many practices is merely to “stay above the fray” on a daily basis.

“Twenty years ago, it was still possible to come out of school, hang your shingle and learn on the job. That’s not true today,” he says. In fact, the margin of error for many practices is small and that’s where strong management and leadership come into play.

Practices need to “take their pulse” to determine where they are and how best to move forward. It entails looking at all aspects of the practice including processes, finances, management and leadership. Riner has found the biggest deficit in most practices is a failure to appreciate the importance of management, structure, leadership and governance. “If I had to pick one, I’d say the ultimate problem is with leadership: a practice’s inability to either identify the appropriate leadership or support the appropriate leadership or to have a leadership that understands its roles and responsibilities.”