Learn the keys to understanding exceptions related to Medical Necessity Criteria.  Exceptions covered will include clinical judgment, geographic variance, accessibility of care and determination of what is “essential.” Exceptins to MNC are important to good quality care and quality health care management. Accrediting bodies such as NCQA and URAC address the need to make exceptions when clinically indicated. MNC are subject to different, yet equally defensible interpretations by different clinicians.

• Exceptions to standard MNC should be reviewed by a physician or peer reviewer based on accepted standards of good medical practice, and all details of the case should be provided to assist in the decision making. 
• Exceptions may also be based on geographical variances in availability of treatment services.  Cases for this can particularly be found in rural or medically underserved areas. 
• When a medically necessary service is not available the patient will be able to either obtain outside services, or treatment at a higher level of care based on determination of what is “essential” for the optimal care of the patient.

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In tomorrow blog I will review MNC exceptions.

US Miliary healthcare spending increased twice as fast as US healthcare spending as a whole.  US healthcare spending increased by 84% over the same time period.  US military spending on healthcare increased from 6% to 9 % of the military’s budget.  They expect this to continue to increase. The Military is considering increasing the cost through fee hikes.

The jest of the article is that healthcare reform as passed will increase cost with potential little improvement in overall health of the nation. Mr Samuelson begins to discuss the standard payment method used in this country ( fee of service) and how it pays providers for procedures and office visits when patients are sick. This payment structure possibly encourages increased utilization and does not encourage providers to help  patients maintain or improve their health.  He focuses on medical economics and the misperceptions that are held about health insurance reform. Until  we can empower consumers with information and reward healthy choices, we will probably not see change. BHM’s April newsletter that will be addressing Behavioral Economics/Pay for Prevention. This will be released April 6, 2010. You can sign up and the newsletter will be emailed  every other month.

The ultimate goal of any organization is to improve its practices, identify new goals and provide better services. Everyone is in the race to improve healthcare and it all starts with healthcare management.

In an effort to make sure BHM is the right fit for your organization, we offer free initial consultations.

Congress passed health “insurance reform” on Sunday night and the President will sign into law shortly, we as both consumers of healthcare as well as those who work in healthcare will see changes as costs go up and government increases its regulatory role. It is also likely that reimbursement will decrease. It will be interesting to see how it all unfolds over the next few years but preparing for the future is now even more important. Not only is the financial aspects critical but making sure your healthcare organization is running at peak efficiency is critical.

Improving Operational Performance
The operational aspect of a health care organization must also be strengthened through the help of healthcare management consulting. With a strong backbone, organizations can implement the right programs and services. The organization can set new goals in order to increase effectiveness, efficiency and productivity.

With these elements in the right place, the programs can better serve the customers and provide higher quality care. With a new focus, the organization will meet government regulations and have enhanced ways of communicating with physicians and other health care professionals.

Health care is a business and those running the show must understand how to manage the business. This means that administrative information, financial data and clinical data must be taken and analyzed in order to put the information obtained into new strategies and other actions. In other words, health care managers need access to this information in order to understand the nature of the business.

Improving Financial Performance
By working with healthcare management consultants, a health care organization will be able to better manage its operational costs, present new growth opportunities, and ultimately increase revenue. With better financial performance, an organization can provide better health care to patients and eliminate problems with cash flow.

Competition is high in the health care industry and optimized financial performance will put an organization above its competitors. With healthcare management consulting, an organization can have access to necessary tools and data analysis.

The following areas are important to consider during an organization’s due diligence:

• Has the accreditation organization established an excellent reputation in the industry?
• Is the accreditation organization recommended by several respected professionals?
• Has the accreditation entity established a reasonable and competitive cost structure?
• Does the accreditation entity’s staff exude professionalism in every possible venue?
• Is the accreditation organization known for treating potentially accredited healthcare organization’s staff with respect
• Does the staff at the accreditation entity go the extra mile in collaborating with healthcare staff to interpret standards?
• Is there a formal, user friendly process for obtaining information related to interpretation of standards?
• Remember to review the standards to see if they are relevant to your organization, to ensure that no other accreditation entity provides a better match, and that the applicable standards are not prohibitive for your organization 

Getting Paid For What You Do

It sounds simple but “revenue leaks” can cause an organization to lose valuable capital.  A thorough review of the organization’s service to payment operations can identify these leaks and ensure that they do not continue.

Cash Flow

The saying goes “cash is king” and cash is the life blood of any organization.  A solid financial review needs to include the identification of all revenue sources and the setting of benchmarks at all levels of the organization including service contracts, payers, and grants.

Expense Review

If your organization needs to “fund its mission” or “create shareholder value” a critical component of a financial review is to evaluate the expenses required to generate that revenue.  This review will allow organizations to identify programs, services, and offices that bring value to the organization.

Payer Aging

Do you know which payer pays within 30, 60, 90 days or hardly ever?  Do you know the total cost to your organization related to the submission of claims?  The answers to these questions are critical to all organizations.  Understanding your payer aging can stabilize cash flow and increase both the top and bottom line.

Brian Johnson BHM’s SVP of Finanace and Claims Operations stated “Few things are more vital to the success of an organization than a financial analysis”

Please email or write comments about this series or future blog post that could be helpful.

Here are three ways to measure performance in collections:

1. Months in gross fee-for-service AR – this benchmark tells you how many months it takes to get paid –Divide total AR by 1/12 annual gross fee-for-service charges.

2. Percent of total AR over 120 days –Top performing organizations will see less than 10% of AR more than 120 days old

3.Adjusted fee-for-service collection percentage – focuses on the money you expect to collect. Take 12 months of collections, subtract refunds to insurers and patient, and multiply the difference by 100.  Divide this figure by gross charges for the same period minus contractual discounts set by insurers.

The above three simple measures are a good place to start tracking monthly. The next step is to set organizational goals. Because collecting balances is numbers oriented, it is important to set quantifiable work goals which helps produce results. Set both organization wide, and individual collector goals. Develop standard processes for collection of account receivables. Finally award employees for meeting collection goals.

Finally it is critical to utilize collection technology. Some examples would include:

1. Utilize Electronic Claims –Will enable you to receive payment much more quickly –Send claims directly to the payer, rather than going through a clearinghouse whenever possible

2. Utilize Electronic Remittance and Fund Transfer –Automatically post payments and capture information eliminating hours of manual data entry

3. Scan documents instead of making copies

4. Utilize online statements and payments

5.Utilize PDAsUtilize charge-capture software and take it to the hospital where doctors often forget to document services rendered

All E/M and psychiatry codes are currently included in Category I. Nearly 1/3 of all services reported by physicians are E/M services. The CPT codes reported on the health insurance claim form or billing statement should be supported by the documentation in the medical record.  Three similar CPT codes:  90862, 90805, 99214. All three have different requirements and significantly different reimbursement rates.  In fact if your practices is billing $100,000 per year in  90862 but are actually delivering a more comprehensive service ( as most of our clients do) than by correctly coding the practice can bill an addition $67,000 by correctly coding and documenting services delivered.  That is a 67 percent increase.

The exact codes are determined by the combination of different levels of history taking, examination, and medical decision-making performed by a physician or certain face to face time.The following components are used to determine the level of E/M service: History, Examination, Medical decision making, Counseling, Coordination of care, Nature of presenting problem, Time.

Correct documentation is critical and cannot be addressed here.  For correct E&M coding either time or complexity of patient encounter is the critical factor.  Please contact us for more information on how your healthcare entity can improve it’s bottom line.

Practices that do not employ a payment at time of service policy will spend many hours on unpaid invoices. When there is a POS policy that is working In-office collections reduce costs in the following ways: 

1.Mailing out statements

2. improved collection rate

3. Improved cash flow

A  successful POS collection policy includes the following:

1. Reminding patients about payment policies when they call to schedule helps them take financial responsibility

2. Be clear and strict about your policies – no co-pay, no visit

3. Allow hard-pressed patients to set up installment plans for more sizeable bills

Making Point of Service Payments Easy

1.Collect co-pay at check in. Make sure front office staff has any unpaid balance information so they can collect that amount as well.

2.More effective than sending statements. Sending statements actually cost $2 to 5 per statement. Thus if you have to send out two statements to collect at $10 to 20 co-payment it may cost the practice up to half of what it may ultimately collect.

3.Make sure office is able to accept all forms of payment –Check –Credit card –Cash

It is important to set organizational goals

1. Collecting balances is numbers oriented so setting quantifiable work goals helps produce results

2. Set both organization wide, and more specialized or individual staff goals

3. Set detailed goals for the process of collection

4. Award employees for meeting collection goals. Some companies give individual bonuses, and or practice wide bonuses.

A well done POS payment plan will lead to significant gains.  I was working with a practice and they were not collecting copayments well. After a careful review it was determined that each month this practice was not collecting at least $20,000 per month.  It was alarge high volume practice. The copayment for each patient was small, ” just a few dollars” so front office staff as well as management did not focus on the process.  It is important to make sure all key processes are at peak performance as each builds on the other and all are needed to run an efficient profitable health care practice.

We will start with the big issue of No Show.  I recently met with a few clients and discussed their no-show rate.  They range from a low of 20% to a high of 45%.  Although the client with the no-show rate of 20% was very proud of their ”low ” no-show rate.  Even with this “low” no-show rate, the practice  was losing hundreds of thousands of dollars per year.

Missed Appointments

Interrupt the flow of patient care and impede clinic productivity 

A missed appointment amounts to reduced billing and missed revenue 

Four steps an organization can implement in order to decrease their no-show appointments

Charge for Missed Appointments

1.Strategy works well  for reduction of follow-up no-shows

2.Ineffective for missed intakes

3.Billing missed appointment fee not fee for scheduled service

4.Billing insurance companies for services not rendered is illegal

5.Helps track no-shows

Minimize No-Shows

1.Recognize that any activity that reduces the frequency of no-shows is a revenue-generating activity.

2.Make reminder calls for upcoming appointments

3.It works best when reminders reach the consumers one to three days ahead of their appointments

4.Follow up on recent no-shows

5.Call patients who failed to appear this week

6.Survey them as to the reason for their missed appointment

7.Reschedule next appointment

Track No-Shows

1.Since no-shows are now being charged even a minimum fee one can track this activity more easily

2.Analyze no-show statistics

3.Use this knowledge to target reminder efforts

4.Use this knowledge to change scheduling

Overbook:  This is an effective strategy to  protect revenue from no-shows

1.Overbooking requires a good understanding of your no-show statistics

2.Wave scheduling 

Using these four steps practices can reduce no shows and improve their bottom line.  Please contact us to sign up for a free practice evaluation.

Below is a timeline for Federal Mental Health Parity:  

1.—The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Act (WDA) was passed on Oct. 3, 2008 ◦This act was passed as a component of the Troubled Asset Relief Program (TARP) signed by President George W. Bush — .   

2.  The law was initially slated to go into effect on Oct. 3, 2009.    

3.  Congress deferred the effective date to Jan. 2010 for plans which would have otherwise been covered in 2009 .   

4. On Jan. 29th 2009 the IRS (Treasury), Labor, and Health & Human Services, released the interim final guidelines for this act. —The new “rules” go into effect on July 1st 2010.  

The law was 13 pages but the rules are 154 pages.  There are going to be many very significant changes when these rules go int effect.  This will create both challenges as well as opportunities for both healthcare providers as well as healthcare insurers.  BHM’s Mike Forrester will be presenting a number of target webinars to assist organizations in reducing the risk and maximizing the potential of this new legislation.    

Until you are able to join Mike Forrester at one of his webinars below are a few tips to begin the preparation:    

Keys for Parity Preparation • Review organization history of health care coverage patterns    

• Evaluate integration of physical and behavioral health within your current organization • Procure relationships with outside vendors if in-house care is not possible    

• Carefully reevaluate your plans provider network • Evaluate potential changes in the following areas:  

1. Removal of  limits
2. Change in co-payments
3. Change in insurance
4. Covered diagnosis
5. Pharmacy Benefits