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If you're looking to combat rising business costs at your medical practice your best bet is effective coding. Here's how to get started.
Supplier discounts and staffing strategies are all well and good, but if you're looking to combat rising business costs in a meaningful way your best bet is effective coding. The procedural (CPT) and diagnostic (ICD-9) codes used to submit claims for reimbursement dictate how much - and whether - your providers get paid for the work they do. Thus, it's important to ensure your front- and back-office coding procedures are optimized for success.
That means taking steps to minimize denials, training to ensure you're not undercoding (a common problem), and readying your defenses to appeal rejected claims as needed. Such efforts can make or break your bottom line as the industry transitions to the more complex ICD-10 code set this fall.
Here's how billing and coding experts say practices can begin to code more accurately, and effectively:
1. LEARN FROM DENIALS
According to the Medical Group Management Association (MGMA), better-performing practices report a claims denial rate of fewer than 5 percent. If your rate is higher, you must diagnose the problem. The most common reasons for rejected claims can be easily remedied by using software that flags errors and omissions before they go out the door, says Mary Pat Whaley, a certified professional coder and medical practice consultant with Manage My Practice in Durham, N.C. That includes missing information, (such as prior authorization or dates of service), insufficient documentation, coding errors related to the place of service, missing modifiers, and late submissions (each payer has its own deadline for filing claims).
Confusion over primary and secondary insurance may also contribute to kicked-back claims. Secondary payers will usually deny a claim that gets submitted without the primary payer's explanation of benefit information. You may also get denied for Medicare claims that do not include a signed Advanced Beneficiary Notice of Noncoverage, or a waiver of liability, which documents if the patient is willing to assume financial responsibility for services not covered by insurance.
Finally, Medicare and other payers frequently deny claims for services deemed "not medically necessary," either because the diagnosis does not align with the service or because it's covered only at certain frequencies. Such denials can be minimized by confirming insurance coverage and authorizations prior to each visit, says Whaley.
Some payers are more particular than others. It pays to identify those that deny reimbursement most often, so you can ensure those claims are clean the first time around. Indeed, the process of resubmitting is a drain on productivity. It costs most practices an average of $25 to $30 to resubmit a corrected claim, according to the MGMA.
2. COMMUNICATE WITH PATIENTS
By understanding the payment policies of their payers, front-desk staff can work more closely with patients to verify correct insurance information, explain the coverage policies of each plan, and submit claims accurately so the claim adjudicates correctly on the first submission, says Laura Palmer, director of professional development at the MGMA. Be knowledgeable and transparent about your policies and communicate them with your patients, she advises.
3. TRAIN YOUR PHYSICIANS
To benefit from better coding both before and after the switch to ICD-10, additional training is likely required. Perhaps the best way to help physicians improve their coding accuracy is to spend 10 minutes per month at physician meetings having them read a blinded note and coding it together with a certified coder, says Whaley. "Sometimes, physicians can also benefit from having a coder shadow and scribe the visit in addition to the physician's documentation to compare what each comes up with," she says. "You would be surprised how often a physician forgets to say, 'I reviewed the … lab results, X-rays, consultation report, etc.' It's something very simple, but, if it wasn't documented, it wasn't done." Such omissions result in undercoding, which leaves money on the table.
4. IDENTIFY A CODING CZAR
Consider, too, appointing a coding czar - someone in-house who is trained to track and trend claims, says Rachel Mitchell, director of client services for Applied Medical Systems, a medical practice management firm in Durham, N.C. As they do for claims submissions, most payers have deadlines for resubmitting claims and filing appeals. Your coding point person should flag any claims that have not been paid as the filing deadline draws near, in case the payer never received it, or rejects it with no time left to resubmit.
5. STAND YOUR GROUND
In an era of shrinking reimbursement, practices must also be prepared to fight for what's rightfully theirs. It takes time and effort, but appeals often pay dividends. "Sometimes you have to go to bat when you keep getting things denied and you know it's wrong," says Whaley. "You may have to go a couple of levels up the chain of command to appeal and let the payer know they have something wrong in their system. Don't overlook the idea that the payer's system may be wrong."
Finally, Palmer adds that practices should review the list of payable diagnoses when their claim is denied for medical necessity or the service is not covered as part of the benefits. And always appeal in writing following the provider manual guidelines. "Be specific about why the claim should be paid," she says. "Submit supporting documentation. Track appeal results and timing."
If you haven't made proper coding a top priority for your practice, there's no time to lose. Indeed, successful coding is your single best defense against rising costs and shrinking reimbursement. Amid the pending conversion to ICD-10, it is also the best way to minimize disruption to your future income stream.
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Shelly K. Schwartz, a freelance writer in Maplewood, N.J., has covered personal finance, technology, and healthcare for more than 17 years. Her work has appeared on CNBC.com, CNNMoney.com, and Bankrate.com. She can be reached via firstname.lastname@example.org.
This article originally appeared in the April 2015 issue of Physicians Practice.