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Are Payers Compensating Your Practice Properly?


By thoroughly understanding your payer contracts, you take a step towards insuring timely and accurate payments.

As practices continue to improve processes and update work flow, it’s important to incorporate financial monitoring structures. Ask yourself, do you have a checks and balances system in place to double-check that you are being paid in line with your contract? Do you have a way of knowing if any of your payers are shorting you what you're owed?

There are a multitude of reasons why payers may be underpaying your practice, including simple errors in charge generation, system glitches and failures, and human error. However, there are other, rarer, reasons for incorrect payments, and those are the ones you need look out for.

Over the past few months, providers in the state of California have been battling Blue Shield over new rehab evaluation codes that derived from CMS more than a year ago. Payers were given the opportunity to update their systems accordingly to adapt to the new codes. Providers across the state are now seeking help from the Department of Managed Health Care (DMHC) in setting Blue Shield straight.

In January, Blue Shield began denying all evaluation codes with a PR8 or CO8 code. This code states: "The procedure code is inconsistent with the provider type/specialty (taxonomy)." This means that the billing procedure code the provider submitted is not consistent with their NPI number. It also means that Blue Shield did not get their system updated like other providers did. 

A month later, Blue Shield changed their denial reason to code CO45. This code states: "Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement." This means that the contract that was signed with Blue Shield should state that practices will adjust based on the initial evaluation codes without compensation for those codes. Obviously, no provider would sign a contract with this amendment in it.

Yesterday, I spent time with several other providers in the state along with Mary Wantanabe, Deputy Director, Health Policy and Stakeholder Relations from the DMHC. We shared our concerns about the decisions and practices of Blue Shield this year. With several providers voicing their frustrations, the DMHC is opening an investigation into these claims to get providers paid.

Another area worth monitoring is your practices workers' compensation payer mix. Most providers accept workers' compensation patients into their practice despite knowing there is additional administrative work necessary. Most workers' compensation plans have a decent pay scale, and can be justified to support this payer mix. However, you will need to educate your employees when it comes to "middlemen" and how they benefit from your bottom line. In a press release dated March 16, there is an independent physical therapy group (iPTCA) that are bringing some not-so-savory aspects of these groups to light, in a lawsuit. It’s important that you, as a provider, have a full understanding of the worthiness of groups like this, who are not in business for the patients, but for financial compensation.

This lawsuit is residing in California for the time being, but the group being sued, One Call Medical, Inc, D/B/A One Call Care Management, and Align Networks, operates nationwide. Be sure to check your workers' compensation claims and your fee schedule to make certain you are receiving the correct payments.

These are two extreme examples of practices not being paid what they deserve, but this happens more often than the average provider is aware. My advice is to assign someone in your organization to look through your explanation of benefits and be sure they are well-versed in adjustment codes.  

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