How outsourced billing and collections can hasten the reimbursement process.

The recent deadlines for compliance with the Health Insurance Portability and Accountability Act (HIPAA) have placed another hurdle in front of providers whose organizations have moved to computer-based systems. As a result, technology education and adoption have become mandatory issues in clinical practice and practice management circles. Some physical therapy practices see HIPAA as just another set of government regulations with which they are forced to comply. However, some are taking a more forward-looking approach: utilizing HIPAA compliance as an opportunity to review and improve overall business processes to gain a competitive advantage by improving operational efficiency, revenue generation, and patient service. Speaking from experience, my medical practice learned this firsthand.

In September 2001, San Antonio Orthopaedic Group, a medical group specializing in orthopedics, broke away from a larger organization, and we found ourselves in need of a billing system that would comply with HIPAA. We worried that an adequate system, one that would successfully and efficiently suit the needs of 26 physicians and 150 employees, would require a tremendous amount of money, not to mention time and resources we would have to invest in training. With these issues in mind, we needed an outsourced revenue cycle management solution that would not require us to invest a lot of capital in servers, software, or staff.

We liked the idea of a company that could manage and distribute software-based services and solutions to its customers across a wide area network from a central data center. Using a business service provider (BSP) seemed like a way for us to outsource most aspects of our information technology needs. A BSP-driven service whose incentives were tied to our practice’s performance seemed ideal, and one that could provide practice management assistance with scheduling, charge entry, and claims processing—and which was more than just technology—would be even better.

We found all this and more with a full-service, outsourced billing, collections, and claims management service, which uses actual people—and their knowledge—to take on paperwork burdens and administrative tasks. Taking on primary responsibilities for communications with payors, this company claimed it would efficiently manage the reimbursement process, creating a significant decrease in days-in-accounts-receivable (DAR) and a noticeable increase in revenues. The company required little capital up front and made money only when our practice made money through paid claims. Training was easy because the program was so intuitive; whereas typically it took 2 to 3 weeks to train staff on a billing system in the past, it took one and a half days to get up and running with this system.

The system was so intuitive that even our physicians, who previously considered collections a back-office responsibility, started to use it.  Our therapists were thrilled they could find out what was going on in the practice from the office, from home, or even from the beach. With a few keystrokes, they could see appointments being made, determine how the collection effort was going, or scroll down to see the explanation of benefits (EOB) for a particular patient.

Revenue Cycle Management

Our group has also benefited tremendously from our revenue cycle management solution’s close relationships and in-depth familiarity with insurers. We believed if the solution built in enough rules to ensure clean claims, more clean claims would go out and, theoretically, the money should come back in faster. We found this to be true. One dimension of the company’s product acts as a knowledge repository, providing access to information on the more than 800,000 different health care plan options in the United States. The company has built an extensive payor database, complete with updated coding rules—updating and adding more than 300 proprietary rules per month on average—which enables practices to submit claims properly the first time and promptly receive payment for services rendered.

With our revenue cycle management solution in place, we eliminate the payor-knowledge void, help prevent claims denials, and drastically reduce tedious administrative work. The insurance companies now have no excuse not to pay us because we submit the correct information the first time. In fact, collections went up more than 80% in the first 90 days after implementation of our revenue cycle management system, from $50,000 to more than $90,000 a day.

We now utilize a rules engine for the collections process: if the EOB does not correlate with the claim, our revenue cycle management solution can automatically appeal it or identify the shortcomings so we can appeal it, making the collections more effective. Instead of the 30 to 50 people I might ordinarily need to handle the task for all 26 physicians (as well as 13 therapists and 10 additional physician extenders), I employ eight people for the job because the nuts and bolts of billing and collections are done by our outsourced revenue cycle management company. These eight employees are then utilized for more concentrated appeal efforts that require direct contact with local payors.  Not only do I save money on staffing, but the practice now has the time and energy to devote to more comprehensive collection efforts around the office.

A simple way in which a revenue cycle management solution benefits the orthopedic practice on the front end is by checking each claim entered against the primary insurance company’s rules of appropriateness for everything from an incorrect member ID format, to alerting the biller when a diagnosis is not coded to the highest specificity, or an ICD-9 code is not supported by a local medical review policy (LMRP). The solution we use notifies the user when errors on a claim might not support payment.  Prior to implementation, collection efforts and financial resources would be expended on the back end correcting and resubmitting claims after they have been denied; instead, effort is now focused on the front end, proactively streamlining claims before they hit insurance edits.  

A specific instance of this process is controlling coding mistakes that stem from Medicare CCI code additions and deletions. For example, in October 2002 Medicare created a code G0289 for chondroplasty (separate compartment) to replace code 29877-59 for chondroplasty when used in conjunction with procedure 29880 (arthroscopy of the knee with meniscectomy—medial and lateral) or 29881 (arthroscopy of the knee with meniscectomy—medial or lateral). Although Medicare would no longer reimburse the 29877-59 in the above situation, we wished to still bill the combination when it was a private insurer. Our Waltham, Mass-based revenue cycle management service quickly updated its Medicare rules engine to notify the biller when a “dirty” claim was entered with the deleted code. The result was that claims were not inadvertently billed out using a deleted code to Medicare. The correct and payable code could be entered, and the procedure was paid the first time. This freed up my reimbursement department to go after and appeal private payors for payment of the 29877-59 based on accepted orthopedic guidelines.

HIPAA Compliance

There is an added benefit in using an outsourced revenue cycle management company powered by technology and human knowledge—it can quickly and easily get a practice’s billings and collections processes HIPAA-compliant. Offloading electronic transaction security to an outsourced claims management service enables someone else to assume total responsibility for risk and HIPAA compliance. There are additional business benefits an organization can achieve as a result of an outsourced HIPAA-compliant system billing and collections process—increased revenues, and time and control over practice administration and patient data.

HIPAA-related benefits of using an outsourced revenue cycle management service include the management of all data migration to HIPAA-compliant transaction formats (ANSI X21). This helps make certain that the majority of claims will go out clean and be processed quickly. An outsourced revenue cycle management solution can also review payor-and-clearinghouse specific companion guides and billing guidelines for changes to rules, code sets, and other payor requirements, including paper formats. Finally, the service can build and test new formats with each trading partner to meet readiness for clean claims submission in a HIPAA environment. This ensures that from day one with the outsourced service, the practice’s claims, billing, and collections process runs smoothly.

Physical therapy practices that implement an outsourced billing and collections service not only meet HIPAA requirements for electronic transactions and data security but also reduce administrative costs, decrease DAR, improve patient service, and show a commitment to patients’ privacy. HIPAA-compliant practice management systems that are tightly integrated with the claims and revenue cycle management process will fit naturally into the work flow of the office. They include the following HIPAA-related features:

Privacy History—a central dashboard to view all privacy-related information about a patient;

Patient Authorizations management and display features;

The ability to easily record and manage patient requests, restrictions, and complaints via Patient Notes;

A Disclosure Log feature that enables users to track all disclosures made with regard to a patient’s record;

A Patient Privacy summary that accompanies each patient throughout the practice work flow, alerting practices to the patient’s current privacy status (for example, if the patient has been given the Notice of Privacy Practices );

The ability to store and print Compliance Forms with ease;

Compliance Reports that help practice privacy officers and super-users track compliance activity, such as the list of patients who have unresolved privacy complaints or who have requested special privacy restrictions.

Audit trails that enable users to track changes to patient demographic data easily (complementing already existing audit trails that track changes to claims and patient insurance information); and

A Block Patient feature that enables practices to restrict access to specific patient records (“special” patients, such as fellow employees, high-profile individuals, etc). 

In addition, implicit in the HIPAA privacy regulations is the principle that health care organizations must have in place a certain degree of security to ensure the privacy of protected health information. While the HIPAA security provisions have not yet been finalized, and while the compliance date for these security provisions will likely be later in 2005, upgraded passwords and user account management standards, audit trails that track changes to user permissions, and auto-log-off of user accounts after a specified period of time to help prevent unauthorized access should also be features.

It is important to note that not only should your practice be HIPAA-compliant but so too should your outsourced revenue cycle management company with regard to electronic transactions. This not only takes a good deal of pressure off of your practice but saves time, money, and effort. The revenue cycle management solution we chose was one of the first in June 2003 to give their commitment to be HIPAA compliant by October 15, and they were. My practice did not have to do as much work to prepare for the deadline, because our outsourced service was already so proactive in that area.

With outsourced revenue cycle management, both large and small physician practices benefit from resources that help them become HIPAA-compliant without being required to have additional staff, knowledge, and time at their disposal. Outsourced practice- management services can be low in cost, easy to use, and extremely flexible, and can offer the ability for your staff and PTs to drill down to the heart of the data needed. It may seem like a lot to demand in one package, but in today’s world more companies must meet this high standard if specialty practices are to remain competitive in a challenging economy.

An outsourced revenue cycle management company is crucial in this era of medicine when PTs are working harder and getting fewer dollars for their efforts. Today, it is about being smarter. PTs can now be as busy as they have always been: but because the paperwork gets completed correctly the first time, with the appropriate fields populated and the right HIPAA-compliant transaction code sets entered, revenue comes in the door faster, relieving pressure for physicians and administration. What is more, a practice’s physicians now have greater control over their schedules and can get back to what really matters most—providing patients with quality care.

Stephen S. Burkhart, MD, managing partner of San Antonio Orthopaedic Group, LLP, in San Antonio, is a shoulder surgeon specializing in the area of arthroscopic procedures. Burkhart recently completed a 1-year term as president of the Arthroscopy Association of North America (AANA).