improving your patient revenue while ensuring integrity and

RSM McGladrey Inc. is a member firm of RSM International – an affiliation of separate and independent legal entities.

Improving Your Patient Revenue While Ensuring Integrity and Compliance

Region II Annual Primary Health Care ConferenceJune 1 - June 3, 2010

RSM McGladrey Inc. is a member firm of RSM International – an affiliation of separate and independent legal entities.

Presented by:Peter R. Epp, CPA, Healthcare Practice Leader, Managing Director, RSM [email protected]

Gil Bernhard, CPA, Managing Director, RSM [email protected]

• Establishing a culture of Revenue Maximization and Integrity and Compliance

• Setting the Health Center up for Success – operationally and compliance

• Regular Reports and Monitoring• Intervening When Necessary

Improving Your Patient Revenue While Ensuring Integrity and Compliance

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Impact of Executive Management and BoardWhile the day to day processes of the revenue cycle are performed by dedicated health center staff, executive management and the Board play a large role in determining the success of the process by:

– Establishing the proper culture of billing and collection: health centers that have a clear mandate from the board through management to bill correctly and maximize reimbursement as an organization priority do a better job of billing and collection than those who do not. This mandate plays out in management and staff goals

– Maintaining a balance of financial, operational and regulatory requirements– Maintaining the overall financial health of the health center and its revenue

streams– Developing and monitoring processes; intervening where appropriate

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Patient Enters Facility/greeted at reception

Patient Registers

Claims sent to payor (non-capitation)

Denials Investigated and Corrected

Patient Seen By Provider

Provider Completes Encounter Form

Patient Released at Front DeskClaim Report

PreparedEncounter Form Processed

Remittance Received with Payment

Billing Department Reconciles and Posts

Resubmission of Denied Claims

Month Ending Journal Entries Posted

The Revenue Cycle

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Objectives when Reviewing Billing/Revenue Cycle

• Strong internal control procedures/compliance with policies• Collection of proper billing information• Proper recording of revenue• Maintenance of subsidiary accounts receivable• Collection of information for management reporting• Satisfy Federal reporting requirements

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• Set of expectations• Many health centers are strong in policies and weak in procedures• Steps for revising policies & procedures:

– Board and management affirm commitment to process– Identify goals and implementation date– Develop internal committee– Develop appropriate policies and procedures– Board of Directors approves policies– Implement; distribute written policies and procedures– Reinforce that compliance with policies and procedures is central to health center mission– Reinforce through regular education and training– Monitor & take action against violators

Establishing Policies and Procedures

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• Good Policies and Procedures without follow up are worthless– “Even the best laid plans of mice and men oft go awry.” – Robert Burns

• Review all Policies and Procedures

• Having a well-established compliance plan can reduce risk of fraud and abuse, as well as potential penalties

• Compliance plan also goes beyond Policies and Procedures by:– Defining appropriate behavior and helping improve employee behavior– Promoting self-evaluation, problem detection and resolution– Promoting open communication

Ensuring Compliance with Policies and Procedures – Compliance Review

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Billing and Revenue Strategies

Billing and revenue strategies are intended to improve the billing and collections process in the Health Center and encourage the effective use of staff who perform these functions.

Common goals and objectives achieved through billing and revenue strategies:

• Increased patient revenue.• Improved collections rates.• Reduced medical coding errors.• Cost savings of doing it right the first time.

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Typical Medical Billing for Primary Care Services

• Use Current Procedural Terminology (CPT) Codes and Descriptions– Charge-Master is tied to CPT Codes

• Use International Classification of Disease (ICD) Codes – 9th version – Clinical Modification – Referenced as ICD-9-CM codes

• Bill visit to insurance and patient is responsible for balance.• Patient may have deductible and pays 100% until it is met.

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Typical Medical Billing for Primary Care Services

Family Medical Practice Statement Date: 04/06/2009

123 Any StreetDate Due: 05/06/2009

Anytown, IA 88888

393-000-1250

STATEMENT OF ACCOUNT

Jesse James

234 One Way Street

Anytown, IA 88888

DATE DESCRIPTION CHARGES CREDITSACCOUNT BALANCE

Balance brought forward $56.00

04/01/0999213 - Intermediate Office Visit - Dr. Jones $75.00 $131.00

04/01/09 80048 - Basic Metabolic Panel $125.00 $256.00

04/01/09 84132 - Potassium $20.00 $276.00

04/01/09 Co-Pay $15.00 $261.00

04/03/09 Filed Ins. - $205.00 ($205.00) $56.00

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Types of Health Center Reimbursement

• All-inclusive Rate– Medicare (Cost-Based Reimbursement)– Medicaid (Prospective Payment System)

• Fee-For-Service– Commercial carriers

• Capitation– Medicare– Medicaid– Commercial carriers

• Contract Revenue• Patient Self-Pay Revenues

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FQHC - Getting Started

• What is the difference between a FQHC and a Community Health Center?

• Must apply for FQHC status.

• FQHC Medicare Provider Billing numbers are by delivery site. Medicaid may be different depending on your state.

• For FQHC Medicare, must complete and submit CMS-855A form in order to enroll in the FQHC program. For FQHC Medicaid, your state may require FQHC Medicare status before awarding FQHC Medicaid status. Again, depends on your state.

• Approval timeline may be 2-4 months.

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CMS 855A Form• Form requires completing information on health center’s identification (locations,

address, etc.), legal history (including adverse rulings), ownership interest (sheet per board member with SSN), practice locations, etc.

• Copies of all:– Professional/business licenses– CLIA licenses– Pharmacy licenses– Legal Action documents– EDI Agreements– Articles of Incorporation/Corporate charters– IRS Documents– Notice of Grant Award

• Go to www.cms.hhs.gov/– Click on Medicare; then CMS Forms

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http://www.cms.hhs.gov/

What are Billable FQHC Medicare Services?

• Medicare FQHC Services, as defined in Regulation 405.2400 are:

– Physician Services and services/supplies incident to– Nurse Practitioner and Physician Assistant services and services/supplies

incident to– Clinical Psychologist and clinical social worker services and services/supplies

incident to– Visiting nurse services– Nurse-midwife services– Diabetes Self-Management Training (DSMT)– Medical Nutrition Therapy (MNT)– Preventive primary services

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DSMT & MNT Services

• Effective January 1, 2006

• Section 5114 of Deficit Reduction Act of 2005, FQHC definition of face-to-face encounter is expanded to include encounters with qualified practitioners of Outpatient Diabetes Self-Management Training (DSMT) services and Medical Nutrition Therapy (MNT)

• Program requirements for provision of such services set forth in Part 410, subpart H (DSMT) and Part 410, subpart G (MNT)

• IOM 100-02, Chapter 15, Sec 300 = Accreditation from American Diabetes Assn. or Indian Health Service

• IOM 100-04, Chapter 18, Sec 120 = Billing requirements

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FQHC Medicare Services (Billable and Covered).Preventive Primary Care Services

• Services required under Section 330 of PHS Act

• Furnished by providers listed in previous slide

• Medical social services• Nutritional assessment and referral• Preventive health education• Children’s eye and ear

examinations• Prenatal and post-partum care

• Perinatal Services• Well Child care• Immunizations• Family planning services• Taking patient history• Blood pressure measurement• Weight• Physical Exam• ETC

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Medicare Cost Principles• Social Security Act

– §1861(aa)(4) Statutory Requirements– §1833(a)(3) = Payment provisions

1832(a)(2)(D) =Managed Care provisions– 1861(v)(1)(A) = FQHC Services & IOM 100-02,Chap 13– Regulation 405.2400 (RHC/FQHC)

• General Methodology– The reasonable cost of any services shall be the cost actually

incurred, excluding any cost found to be unnecessary in the efficient delivery of needed health services

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• Pay FQHCs/RHCs 80% of All-Inclusive Rate

• No Medicare $100 Annual Deductible for visits to FQHCs

• 100% Reimbursement for Pneumococal and Influenza Vaccines and Administration

• Medicare Bad Debt Recovery

• Sliding Fee Scale Applicability

• 62 ½ % Reimbursement for treatment of mental, psychoneurotic, and personality disorders (phase in of increase over next 5 years)

• Medicare Part B for non-covered services

Medicare Payment Provisions

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Medicare FQHC Billing-Outpatient Mental Health

• Outpatient Mental Health Treatment Limitation – (Rev. 1843, Issued: 10-30-09, Effective: 01-01-10, Implementation: 01-04-10)

• The limitation has been 62.5 percent since the inception of the Medicare Part B program and it will remain effective at this percentage amount until January 1, 2010. However, effective January 1, 2010, through January 1, 2014, the limitation will be phased out as follows:

– January 1, 2010 – December 31, 2011, the limitation percentage is 68.75%

– January 1, 2012 – December 31, 2012, the limitation percentage is 75%

– January 1, 2013 – December 31, 2013, the limitation percentage is 81.25%

– January 1, 2014 – onward, the limitation percentage is 100%

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FQHC MedicareMedicare Advantage Plans

• The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 renamed the Medicare+Choice plan and made other changes including regional PPOs, special needs plans for dual eligibles, and others, and created private drug plans effective 1/1/06. Rates paid to managed care companies were also increased in many cases.

• Overall HHS target is to increase Medicare enrollees in managed care to 30% by 2013 from 12% in 2003. 10,609,264 are enrolled as of January, 2009, which is approximately 25%.

• Also includes supplemental wrap-around payments to FQHCs who contract with Medicare Advantage (MA) plans.

• Includes HMOs, PPOs, and PFFS’. All are known as MA Plans.• Created also were Special Needs Plans (SNP) which restricts enrollment only to

dual eligibles , those residing in institutional settings, or those with multiple chronic conditions.

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FQHC MedicareMedicare Advantage Plans

• Health centers with MA plan contracts will be paid based on the contract. In addition, will qualify for a supplemental wrap-around payment when it provides FQHC Services.

• With PFFS plans, health center is entitled to 80% of its reasonable costs (up to the cap), plus 20% of its actual charges, less the plan’s co-pay.

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FQHC MedicareWrap-Around Provisions

• Three contractual requirements between Plans & CMS:– Must be written contract between FQHC and MA Plan– MA plan must pay FQHCs an amount similar to what it pays other non-

FQHC providers– FQHC must accept MA payment and wraparound as payment in full

• Covers FQHC services only– Does not include certain Part B services such as lab and x-ray. Does not

include pharmacy costs under Part D.– Part B services should be billed directly to the MA plan

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FQHC MedicareWrap-Around Provisions

• System changes made to accept payment on 6/3/06 (bill type 73x and revenue code 0519)

• For first 2 rate years, FQHC submits an estimate of MA payments to fiscal intermediary

• FQHC will receive payment for each wraparound bill it submits to fiscal intermediary

• NACHC Issue Brief # 86 dated June, 2006

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FQHC Medicare Wrap-Around

ProcCode

Procedure Description Estimated Units

PlanRate

WeightedRate

99211 Est. Office Visit 38 $ 21.16

$ 804

99212 Est. Office Visit 411 62.25

25,585

99213 Est. Office Visit 3,596 72.04

259,056

Totals

Per-Visit-Rate

5,200 $ 309,388

$ 59.50

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FQHC MedicareWrap-Around

AGE PMPMAnnualized

Capitation/100EstimatedVisits/100

Per-VisitRate

1-12 $13.32 $15,984 299.38 53.39

13-18 $27.55 $33,060 620.38 53.29

19-36 34.35 $41,220 765.60 53.84

37+ $46.42 $55,704 990.64 56.23

Per-Visit Rate $ 54.19

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FQHC MedicarePart D Pharmacy

• Starting 1/1/06, prescription drug plans (PDPs) will be the primary mechanism for Medicare enrollees to receive prescription drug benefits

• Optional benefit; enrollees will need to sign up• Dual eligibles will receive coverage through Medicare Part D, not Medicaid• Health centers with pharmacies will need to contract with PDPs to receive

reimbursement for Medicare pharmacy patients• No statutory provisions preventing health centers with 340B programs from

participating in Part D

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FQHC Medicaid Services

• FQHC/RHC Services, as defined in Section 1902(a)(10)(A) and 1905(a)(2)(C) of the Social Security Act, and any other ambulatory service in the State Medicaid plan provided by the FQHC/RHC

• Examples:– Dental and pharmacy– Enabling Services, i.e., transportation, case mgmt., translation– EPSDT services– Certain inpatient services– Nursing home or home care services

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• “Beginning with fiscal year 2001 with respect to services furnished on or after January 1, 2001….”

– New Section § 1902(aa)(1) of the Social Security Act

• “The new Medicaid PPS requirements are effective in all States with respect to services furnished by FQHCs on or after January 1, 2001.”

– January 19, 2001 State Medicaid Director Letter (SMDL)

Prospective Payment System for FQHCs

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Prospective Payment System

• Who are the FQHCs?• Initial PPS rate-setting methodology

– Current FQHCs

– New FQHCs• PPS rate-setting for the future• Medicaid managed care shortfall payments (“wraparound”)

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OVERVIEW OF PPS• Payment calculated on a per visit basis.• States required to pay current FQHCs 100 percent of the average of their reasonable

costs of providing Medicaid-covered services during FY1999 and FY2000.• Adjusted to take into account any increase (or decrease) in the scope of services

furnished during FY2001 by the FQHC and inflated by the MEI (Medicare Economic Index) for 2001.

PPS ReimbursementMEI 2.1% 2.6% 3.0% 2.9%

1999 Costs

2000 Costs Avg 2005 2006 2007 2008

Medical 50.00$ 55.00$ 52.50$ 63.38$ 65.03$ 66.98$ 68.92$ Ancillaries 10.00$ 10.00$ 10.00$ 12.07$ 12.38$ 12.75$ 13.12$ Enabling 15.00$ 15.00$ 15.00$ 19.70$ 20.21$ 20.82$ 21.42$ Administration 15.00$ 15.00$ 15.00$ 18.11$ 18.58$ 19.14$ 19.70$ Capital 10.00$ 15.00$ 12.50$ 15.09$ 15.48$ 15.94$ 16.40$ Total 100.00$ 110.00$ 105.00$ 128.35$ 131.68$ 135.63$ 139.56$

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OVERVIEW OF PPS

• PPS baseline rates will be calculated using one of the following methodologies. This varies by state.

– the rates established for the fiscal year for other centers or clinics located in the same or adjacent area with a similar case load or

– in the absence of such a center, in accordance with Medicare FQHC regulations and methodology, or

– based on other tests of reasonableness as the Secretary may specify

• The MEI will be applied to the new FQHC’s rate for each year following the baseline year.

New FQHCs After 2001:

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“Change in Scope” per CMS Q & A Document:• A change in scope shall occur if :

– The center has added or has dropped any service that meets the definition of FQHC/RHC services; and

– The service is included as a covered Medicaid service under the Medicaid state plan.

• A change in the “scope of services” is defined as a change in the type, intensity, duration and/or amount of services.

• In making such an adjustment, state agencies must add-on the cost of new services even if these services do not require a face-to-face visit with a provider.

PPS CHANGE IN SCOPE OF SERVICES

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1999 2000 Avg. Trended 2008

Medical 50.00 55.00 52.50 57.75 60.00

Ancillaries 10.00 10.00 10.00 11.00 20.00

Enabling 15.00 15.00 15.00 16.50 15.00

Administration 15.00 15.00 15.00 16.50 15.00

Capital 10.00 15.00 12.50 13.75 25.00

TOTAL $100.00 $110.00 $105.00 $115.50 $135.00

Cost Per Visit Analysis:

PPS CHANGE IN SCOPE OF SERVICES

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Alternative Payment Methodologies• States may opt to pay FQHCs using a methodology other than PPS (“alternative

payment methodology”) only if the methodology selected meets the following conditions:

1. Must be agreed to by the State and each individual FQHC to which the state wishes to apply the methodology

2. Must result in a payment to the center or clinic that is at least equal to the amount to which it is entitled under PPS.

3. Must be described in the approved State plan.

• Many states have adopted alternative methodologies. Examples of such methodologies include:

– Continuing to use cost-based reimbursement or some version of it.– Allowing states to select as their base year costs the higher of 1999 or 2000– Reimbursing for full capital costs. How capital is defined also differs amongst

states. – Varying when during the calendar year the MEI goes into effect.

• For more information on a state-by-state basis, please review the NACHC report at www.nachc.com/

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PPS Wrap-Around• States required to make supplemental payments to FQHCs that subcontract (directly

or indirectly) with managed care organizations (MCOs) – particularly important in Section 1115 States where managed care is statewide.

• Supplemental payment is the difference between the payment received by the FQHC for treating the MCO enrollee and the payment to which the FQHC is entitled under the PPS.

• IMPORTANT - Incentive payments, e.g. risk pool payments are excluded from the wraparound calculation.

• Also, whether payments for non-direct medical services such as case management and administration will be figured into the wraparound calculation will also vary on a state-by-state basis.

• FQHCs are entitled to be paid at least as much as any other provider for similar services.

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HMOs, PPOs, Indemnity Coverage

Commercial Insurance Payers

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TRADITIONAL FEE-FOR-SERVICE MANAGED CARE

PROVIDER OF SERVICE MANAGER OF CARE

VISITS

REVENUE NO CHANGE IN REVENUE

VISITS

REVENUE MAXIMIZATION COST MANAGEMENT

Cultural Changes Required to Participate in Managed Care

BASICS OF MANAGED CARE

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Forms of Reimbursement Under Managed Care

• Fee-For-Service:– Based on CPT Codes – Earn More Revenue by Performing More Services– Different Charges for Different Types of Services


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Forms of Reimbursement Under Managed Care

• Capitation:– Revenue is based on a prepayment of a fixed periodic

amount per member per month (PMPM).– The amount of revenue earned is based on the number of

members enrolled - not on the number of visits.– To earn more, control utilization and provide fewer and/or less

costly services.


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In these cases two separate sets of entries should be booked in the general ledger:

• Capitation payments received for month’s capitation• Gross charges for capitation services rendered during month• Gross charges and associated contractual allowance for all specialty services (if

a co-payment is required, then an entry to self pay receivable and revenue is required)

NOTE: Under this type of contract, it is essential that centers track the different types of services rendered to each patient.

Contracts with Both Capitation and Fee-For-Service Components


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Fee-For-Service

Fee-For-Service (FFS) Methodology:• In a FFS environment, reimbursement is based on Current

Procedural Terminology (CPT) code.– Different Charges for Different Services– Reimbursement Based on CPT Code at Fees Established by Third

Parties– Amount of Revenue Earned Is Based on the Number and Type of

Billable Services Provided

• Fee-for-service procedures include, but are not limited to, laboratory, radiology, etc.

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Maximizing FFS Revenue

To generate more revenue, a health center can:

• Provide more procedures

• Properly code encounter forms to ensure all services provided are billed

• Utilize a comprehensive encounter form to ensure all billable procedures are included

• Have a system of collections

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• Collect data on provider visits (E&M Codes)– By individual Provider– In the aggregate for the health center

• Prepare graphs to show frequency of codes used– Show increasing intensity of visit from left to right

• Overlay Health Center providers and aggregate data in national averages– Include payor-source specific graphs

Ensuring Proper Coding – High Level Overview

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*Source: Ingenix, 2001

National Average*

E&M Codes % of Total # Visits % of Total99211 2.7% 2,300 23.0%99212 20.6% 3,500 35.0%99213 63.5% 3,800 38.0%99214 11.3% 400 4.0%99215 2.0% - 0.0%

UNDERCODER HEALTH CENTER

Established Patient VisitsUndercoder Health Center

0%

10%

20%

30%

40%

50%

60%

70%

99211 99212 99213 99214 99215

National Average* Undercoder

How Can You Recognize Improper Coding?

When we add payer-based coding information, the differences may become even clearer:

0%

10%

20%

30%

40%

50%

60%

99211 99212 99213 99214 99215

Medicaid

Medicare

CommercialInsurance

Self Pay

NationalAverage

How Can You Recognize Improper Coding?

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• Each procedure code has an associated value – an RVU• The RVU compares services against one another

– The more intense the service, the higher its RVU• Three components to the RVU

– Work RVU which measures effort of the provider– Practice Expense RVU which measures support staff and overhead costs associated

with providing the care– Malpractice RVU which translates the cost of average malpractice coverage attributable

to the code• Work RVU is the important component for provider productivity

Tracking Productivity and Performance based on Relative Value Units (RVUs)

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Billing and Revenue Strategies – Understanding Contracts

• Eligibility/preauthorization• Claims timeliness• Complete information• Accurate information• On appropriate forms• In compliance with managed care contract/from provider manual

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Compliance Programs

• A set of procedures and processes instituted by an organization to regulate its internal processes and train staff to conform to and abide by applicable local, state and federal regulations.

• Defined corporate standards and expectations

• Communicates uniform work procedures to assure the corporate standards and expectations will be met

• Describes the methods for monitoring standards

• Identified to ‘go-to’ person(s) for staff when compliance issues arise

• Provides corrective action processes

Required in Healthcare Reform Bill

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Benefits of a Compliance Program

• Establishes and promotes awareness of federal and state regulations• Defines the standard of organizational values and expectations • Creates the framework for meeting regulations by providing the

necessary parameters and protocols for staff to follow• Can help to identify organizational vulnerabilities/weaknesses• In the event that a violation occurs, an effective compliance program

can serve as a mitigating factor in determining penalties.

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Seven Recommended Elements of a Compliance Program • From OIG Compliance Voluntary Program Guidelines for Individual

and Small Group Physician Practices– Designating a Compliance Officer or Contacts– Conducting Internal Monitoring and Auditing– Developing Written Standards and Procedures– Conducting Training and Education– Responding Appropriately to Detected Offenses– Developing Open Lines of Communication– Enforcing Disciplinary Standards

• New York has eight– Policy of non-intimidation and non-retaliation for good faith participation in the

compliance program

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• Accounting policy and procedure manual (Including Patient Revenue and Receivable recording and reporting)

• Policies and procedures governing– Internal controls– Grants management

Community Health Center program Other (Ryan White, state & local grants)

– Tax filings and compliance New IRS Form 990

– Cost report filings and compliance (Medicare and Medicaid)

– Billing and coding compliance (Medicare and Medicaid)• Internal auditing and monitoring

Basic Elements of the Finance Portion of Your Compliance Program

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Objectives

• The essential components of a revenue integrity program and introduces you to the tools to build one. Topics covered include:– Defining your scope of care…delivering the right services in the right setting with the right providers– Documenting services…collecting and recording data to support your claim for reimbursement…on

paper, or in the computer– Coding accuracy…making sure that your providers properly code the diagnoses of your patients

and the care they deliver– Checking system performance…checking regularly to make certain your automated systems are

not automating an error!– Monitoring revenue integrity results…establishing an ongoing program for reviewing and

monitoring the critical elements of your claims process, from point of care through posting of payment.

• The responsibility for revenue integrity rests with all center staff. This applies to clinical staff who provide care, business office staff who bill for the care, and those in positions of leadership or governance.

Revenue Integrity Defined

• Revenue Integrity is the state of accurately coding or classifying care provided based on: – patient needs– services provided– payer requirements

• And collecting, recording, and storing the data required to support the claims.

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The Heart of the Matrix

Operational Performance

Quality Improvement

Corporate Compliance

Revenue Integrity

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Environment Scan

• There is increasing pressure on all providers of care to ensure revenue integrity due to:– Limitations of Federal and State reimbursement, with current budget concerns– Increasing scrutity by Federal and State agencies on proper claims

submissions– Development of a “revenue recovery” mentality by Federal and State

governments (e.g. RAC audits, State Medicaid Audits, etc.)• Half of health care reform is expected to be funded by reducing fraud,

waste, and abuse by providers

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McGladrey Pyramid of Revenue Integrity

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System

Performance

Proper Coding

Monitoring Feedback

Board Clinicans Staff

Foundation of Revenue Integrity Program

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System

Performance

Proper Coding

Monitoring Feedback


Foundation of Revenue Integrity Program

Strategies for Success:• Include in job descriptions the specific activities of

each person as it relates to revenue integrity– Keep job descriptions general and refer to following

policies and procedures which are frequently updated• Provide formal training during on-boarding of new

people of their expected performance– Explain that revenue integiry is an important component

of the organization’s corporate compliance program• Provide periodic reviews of mission critical

performance activities– Review quarterly or annually the policies and

procedures which are most important or have been problemmatic

• Provide feedback on individual and team performance– Stress that achieving revenue integrity is a combination

of individual and group performance

The people of your organization provide the foundation of your revenue integrity program. It is critical to have their engagement, support, and involvement in the building of the pyramid in whatever areas relate to their individual jobs. In order for you to achieve high levels of engagement, support, and involvement, you must develop and implement a planned strategy for success. This includes everyone from the governing body, to providers and clinicians, to administrative and support staff.

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Role Differentiation for Revenue Integrity

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Board Clinicians Staff

• Participates in training on Revenue Integrity, Compliance, and Quality Assurance

• Includes revenue integrity as a goal of it’s charge to management in developing and implementing a compliance and quality assurance program

• Receives periodic performance reports on revenue integrity as part of compliance or quality assurance program

• Allocates resources and ensures follow through for development of systems and processes to correct or improve revenue integrity issues identified.

• Participates in training on proper documentation of care provided, and on coding accurately

• Maintains awareness of coverage status of common visits, tests and procedures by common payers.

• Documents care provided according to center’s standards

• Documents coding to center’s standards

• Dates and signs all documentation accurately.

• Writes clearly and legibly.• Electronically signs and locks all

electronic documentation properly• Participate in problem solving focus

groups when issues are identified..

• Participates in training on supporting revenue integrity by properly preparing and filing documentation, collecting and verifying insurance coverage information on residents, and maintaining an awareness of coverage status of common visits, tests and procedures by common payers.

• Implement all procedures and processes in support of revenue integrit

• Participate in problem solving focus groups when issues are identified.

Define the Scope of Care

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System

Performance

Proper Coding

Monitoring Feedback


Define Your Scope of Care Strategies for Success:• Outline the clinical services needed by your

patient population– Consider the age groups you serve, health status of

your population, and preventive care requirements• Identify the place of services that are required

– Consider if you serve children who may need school based programs, or elders who may need nursing home or home based visits

• Review Medicare, Medicaid, and Commercial Payer requirements for services and place of care– For each service you plan to provide (e.g. primary care,

podiatry, maternal/child, substance abuse) find the regulation or provider manual reference that shows coverage requirements, designated provider, and place of service limitations.

– File supporting documents for each service

While each segment of the revenue integrity pyramid is critical, the definition of the scope of care is a primary step. This is where you determine what activities needed by your patients and provided by your staff meet the requirements of coverage by your payers. It also includes a definition of who the appropriate providers of these services are. It is important to remember that these payer requirements will vary between Medicare, your individual state’s Medicaid program, and commercial payer requirements.

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Sample Documentation of Scope of CareDiscussion Purposes Only– Must be individualized for each FQHC based on state regs

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Clinical Service

Place of Service

Appropriate Provider

Covered by Medicare

Covered by Medicaid Covered by Managed Care

Applicable Utilization Limits

Annual Physical

Center or Home Care

MD, NP, PA Yes Yes (This is State Specific and need to check State regs)

Yes Medical Necessity

Psychology Services

Center or Home Care

PhD (Psych), or LCSW

Yes Yes (This is State Specific and need to check State regs)

Varies by contract or plan—list separately

Medicaid limits to two visits per month.

For each “yes” in coverage columns, attach copy of regulation or coverage memo

Appropriate Provider

• For each service provided, know the appropriate provider for that service– E.g. Primary care by MD, DO, NP, or PA – E.g. Mental Health services by PhD (Psychologist) or LCSW

• Also make sure each provider is appropriately credentialed– License and education verification– Employment contract or agreement– Validation that they are not on either a federal or state banned provider list

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Utilization Limits

• Medical necessity is required for Medicare clinical services• Many Medicaid programs, as well as commercial and managed care

plans, may have utilization limits– Coverage limits by type of service

• Lifetime• Coverage year• Month

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Ensure Adequate Documentation of Care (Charting)

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System

Performance

Proper Coding

Monitoring Feedback


Ensure Adequate Documentation of Care

Strategies for Success:• For each service provided, create documentation

guidelines for providers to follow – Consider the required documentation to support the

medical necessity of the service, the level of coding, as well as any requirements for quality of care incentives under managed care contracts.

• Validate that clinical forms or electronic health record templates support the required documentation– Providing cues for required documentation can improve

compliance, but make sure that documentation is individualized to patient and not templated

• Reinforce policies and procedures for dating and signing clinical documentation– Include standards for when signing/locking must occur– Also, include procedures for making changes or

additions to documentation at a later date

We have all heard the adage, “If you didn’t write it, you didn’t do it.” Ensuring adequate documentation is more involved than documenting clinical care. Specific requirements for payment may depend upon documentation, and providers need to know them. For example, some visits may require documentation of a face-to-face encounter with a provider, even if the majority of care is given by staff. And if E&M coding is used for determining the level of reimbursement, then the required charting is needed as well.

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Sample Documentation Guidelines

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Examples:

99213- Established patient -Office visit

2of the 3 key components are required

(EPF) history, (EPF)examination, (MDM) low complexity.

• History = brief HPI 1-3, problem pertinent ROS, PFSH is N/A

• Exam = limited exam of the effected body area or organ system, 6 elements.

• MDM= 2 or more self limiting problems, one stable chronic illness, or an acute uncomplicated injury. Over the counter drugs…..

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Ensure Proper Use of Billing Codes

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System

Performance

Proper Coding

Monitoring Feedback


Ensure Proper Use of Billing Codes

Strategies for Success:• For each service provided, create coding

guidelines for providers and staff to follow – Define the appropriate CPT or payer specific codes

required to describe the service provided– Define the appropriate place of service codes for each

setting in which care is provided• For each service encounter, provide a

mechanism (either on paper or in electronic health record) for provider to assign code based on care provided– Each year, review codes for continued applicability and

for any changes in definition or requirments• Design a process where coding is checked during

the claims submission process– This may be done by manual review of each or a sample

of claims, or by electronic billing edits / reports

The services provided, the provider of those services, and the place of service are represented in codes on the claim for each encounter. If the proper codes are not utilized, payment may be provided for services for which the center is not entitled. For example, if a provider encounter for follow-up of CHF is performed in a hospital rather than in the center, if the place of service is coded for the center and not the hospital, the center may be paid for a non-covered FQHC service.

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Coding and FQHCs

• FQHC providers are not required to submit a HCPC code on a claim however operationally many FQHC providers need to include a charge amount and HCPC to allow a claim to be created in their practice management systems (PMS). An FQHC commonly includes the E&M code only for the Medicare threshold visit (regardless of what other services were provided) and includes the total charge amount associated to that visit to the E&M code line item/HCPC.

• Type of Bill (TOB) is used on Institutional claims which is required for FQHC providers seeking reimbursement from Medicare for threshold visits, similar to place of service on a professional claim. Centers should ensure they are using the appropriate TOB and revenue codes to ensure claims are not denied. For example certain mental health visits with certain diagnosis codes need to be submitted with a revenue code of 0900 whereas medical visits are submitted with a 0521.

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Coding and Billing Reviews

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Claim # Date of Service

Date Claim Filed

Submitted Place of Service

Audited Place of Service

Submitted Billing Code

Audited Billing Code

Submitted Provider

Audited Provider

Was claim submitted withinallowableTimeframe?

Was care givenin a covered place of service?

Proper Billing Code?

Do providers match?

E&M Codes

• E&M codes may be required by certain state Medicaid programs, or by commercial or managed care plans that centers may contract with.

• Even though E&M coding does not affect Medicare Part A reimbursment for FQHCs, it is a good idea to promote acurate E&M coding for these patients as well.– This helps to ensure provider coding acuracy for patients with payers where

coding does matter.– The clinical documentation needed to support E&M coding helps to

demonstrate medical necessity of the visit

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Evaluation and Management Documentation Guidelines CPT

The descriptors for the levels of E/M services recognize seven components which are used in defining the levels of E/M services. These components are:

• History• Examination• Medical Decision Making• Counseling• Coordination of care• Nature of presenting problem; and• Time

Documentation and Coding are driven by the nature of the presenting problem.

• Key Components of the note.– Understanding the basics of

choosing the correct level of service– History, Examination, and Medical

Decision Making – Understand how Contributory Factors

effect your level of service– Successful linking of CPT and ICD-9-

CM

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Evaluation and Management Documentation Guidelines ICD-9-CM

• The importance of consistent, complete documentation in the medical record cannot be overemphasized.

• Without such documentation accurate coding cannot be achieved.

• The entire record should be reviewed to determine the specific reason for the encounter and the conditions treated.

• Selecting the correct ICD-9-CM code– When to code for signs and

symptoms– Choosing the primary diagnosis– Coding to the highest level of

specificy– Prepare for the immanent

mandated change to the ICD-10-CM.

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Ensure Proper System Performance

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System

Performance

Proper Coding

Monitoring Feedback


Ensure Proper System Performance

Strategies for Success:• Validate that all definitions, edits, and templates

in your electronic health system are consistent with your policies, procedures, and processes– This strategy should be performed during initial set up,

and updated annually or after any process change• Test a sample of automated claims against a

manual claims submission process– Again, perform this during initial system implementation,

after any modification to system, and at least quarterly– Be sure to include a sample of all claim types

• Review user performance with system to identify issues– Check that providers are electronically signing and

locking notes– Check reports of timeliness of claims processing, and

whether edits are unnecessarily holding up submission

Electronic health systems have tremendously improved the efficiency and effectiveness of claims submission and reconciliation…but they also have introduced a new area of concern for breaches in revenue integrity. The electronic system only formats claims in the way it is set up to do, and using data provided to it in an appropriate manner. If the definitions or edits that have been programmed into the system are incorrect, then the error is perpetuated through the automated process…and it may not be noticed for awhile.

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Other Systems Considerations

• Systems are set to appropriately select payer– E.g. Medicare should always be primary payer for dual eligibles, no-fault

insurance is primary for auto accidents, etc.• Co-payments and co-insurance amounts are billed for and tracked• Claim denials are tracked and appealed

– Claim denial trends are analyzed and systemic issues identified for performance improvement

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Sample System Performance Management

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Date Software Upgrade, or “switch” turned on or off

Post system change testing completed

Comparison of post system change testing to hand coded sample of clinical documentation

6/1/2010 Rates updated in system 6/3/2010 100% correlation

Ongoing Monitoring Activity

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System

Performance

Proper Coding

Monitoring Feedback


On-Going Monitoring Activity

Strategies for Success:• Conduct an annual risk assessment for revenue

integity to identify monitoring focus areas, based on:– High volume services– Low volume, but complex services– Services that are the focus of government or payer

audits– Services for which claim submissions have been

problemmatic in the past• Design and implement a monitoring program for

the high risk areas identified– Develop review tools and define frequency of

implementation– Analyze results of these reviews and identify root

causes and develop corrective action plans– Track corrective action plan implementation and check

for improvement

The monitoring activities of both your center’s corporate compliance program, and quality/process improvement program should support the goals of your revenue integrity strategy. Since revenue integrity is important to demonstrate compliance with Federal and State regulations and prevention of fraud, waste and abuse, and it is critical for the financial success of your organization, all of these programs inter-relate. Successful revenue integrity strategies will lead to success in compliance and meeting financial goals.

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Provide Continuous Feedback

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System

Performance

Proper Coding

Monitoring Feedback


Provide Continuous Feedback

Strategies for Success:• Communicate findings of revenue integrity

monitoring activity to board, providers, and staff– Include these reports in regular board, provider, or staff

meetings– Don’t report raw data– first conduct root cause analysis

and develop recommendations for improvement– Be sensitive to compliance or legal issues when

reporting results– use data summaries and only characterize problems as performance issues and not as compliance or legal issues

• Provide on-going education to providers and staff– As requirements, policies, and procedures change, it is

critical to update written procedures and guidelines to reflect them

– All changes should be communicated to providers and staff

– A record of training should be maintained

Remember that the foundation of your revenue integrity program is made up of your board, your providers, and your staff. It is critical that all three of these groups get feedback from your monitoring activity. If the information on program performance is collected, but not shared, then any opportunity for process and outcome improvement is lost. The feedback loop is two-way, and ideas and suggestions from the board, providers, and staff should go back to the revenue integrity team as well.

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Monitoring Verses Auditing

• Monitoring is a process of gathering data during the revenue cycle process to ensure that procedures are being followed– Example of monitoring in a paper based environment might be checking that

there is a encounter sheet signed by a provider for each claim being submitted– Example of monitoring in an electronic enviroment might be an electronic email

notification if a claim lacks an electonically signed and locked clinical note• Auditing is a retrospective process where a sample of claims is

selected and tested to see if the expected outcome matches the actual performance– Example of auditing is a review of 300 claims submitted against a checklist of

requirements, such as signed note, documentation of medical necessity, etc.

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PDSA Performance Improvement Cycle

Do

Study

Act

Plan

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Plan for Performance Monitoring

• Develop an annual plan for quality assurance audits of revenue integrity, with a calendar of audits to be done throughout the year– Plan should be based on high volume claim submissions, high risk, things that

have been problemmatic in the past, etc.)• Feed findings of audits into PDSA cycle to facilitate process

improvements• When strategies for improvement are identified, plan and implement

ongoing monitoring activities to make sure the gained improvements are sustained.

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Benchmark Monitoring

• Key benchmarks of revenue integrity performance should be established and monitored by management and the governing body

• Examples include:– Net collection ratio– Rate of claim denials by payer class– Days from service to claim by payer class– Days receivable by payer class

• If data shows performance decline, closer review is indicated

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McGladrey Pyramid of Revenue Integrity

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System

Performance

Proper Coding

Monitoring Feedback


Self Assessment of Your Organization’s Revenue Integrity

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Standard Yes Maybe No

For each service or activity which we submit claims for, we have copies of regulations or billing guidance showing that it is appropriate for an FQHC to bill for in our state and settings.We have written clinical documentation guidelines to ensure our providers understand how to show medical necessity and to suppor appropriate coding based on patient services provided. We regularly review the coding of services, provider, and location of service for accuracy and appropriateness.After initial implementation and each software change, and at least once annually, we review the billing generated by our electronic system for accuracy and appropriateness.We maintain a system for concurrent monitoring and retrospective auditing of revenue cycle processes and accuracy and appropriateness of claims submitted.The results of our monitoring and auditing activities are appropriately shared with board, providers, and staff.

Questions???

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improving your patient revenue while ensuring integrity and

Economy & Finance