1. Chapter 7 Visit Charges & Compliant Billing lecture 2 OT 232 1OT 232 Ch 7 lecture 2

2. Strategies for Compliance (cont’d.) Use modifiers appropriately – (CPT Current Procedural Terminology) – -25 Yes, same day. Yes, same physician. YES, clearly separate event did occur! E/M Ex, pg 215 – -59 Not E/M Ex, pg 215 2OT 232 Ch 7 lecture 2

3. Strategies for Compliance (cont’d.) Use modifiers appropriately (cont’d.) – -91 Repeat test or procedure really was performed on the same day for patient management purposes Should not be used due to lab errors, quality control, or confirmation of results Ex, pg 215 3OT 232 Ch 7 lecture 2

4. Strategies for Compliance (cont’d.) Professional Courtesy – All or none billing Discounts – Have to be clear & equally distributed – Not on a case-by-case basis – If any money collected, payer (if there’s insurance) gets percentage Maintain Compliant Job Reference Aids & Documentation Templates – Cheats sheets – Commonly used codes in office – CAC – Computer Assisted Coding 4OT 232 Ch 7 lecture 2

5. Audits (dum Dum DUM!!!!) Formal examination of a representative sample to reveal whether erroneous or fraudulent behavior exists. External – By private payers or gov’t investigators Prepayment – CCI edits Post payment – IRS 5OT 232 Ch 7 lecture 2

6. Audits (cont’d.) Internal – Part of compliance plan – By practice staff or hired consultant – Done to reduce the chance of an external auditor finding problems Prospective (concurrent) – Done before claims are sent » Can reduce number of rejected claims Retrospective – Done after remittance advice (RA) is received » Can see which codes (or people) are problems 6OT 232 Ch 7 lecture 2

7. Comparing Physician Fees & Payer Fees Sources for Physician Fee Schedules –P–Physicians should establish ‘Usual fees’ Charges to most patients most of the time under typical conditions Always exceptions –W–Workers’ comp Nationwide databases are published that show what percentile your fees fall under –F–Figure 7-6, Page 224 7OT 232 Ch 7 lecture 3

8. How Physician Fees Are Set & Managed Geographic Competitive Payers – Billing Tip, page 224 PMP –P–Practice Management Program –A–Adjusted accordingly based on report that can tell what percentage of claims are paid in full or reduced Paid in full? –F–Fee is lower than the max in insurance company will pay, so too low Reduced? –F–Fee may be set too high 8

9. Payer Fee Schedules Charge-based fee structure –B–Based on fees for similar services charged by providers of similar training & experience in geographic area –C–Create a schedule of UCR fees Usual, customary & reasonable –W–What a particular doctor usually charges –5–50% range of physicians with similar training & experience in geographic area –W–Whichever is lower! –T–The lower fee of what a physician usually charges and what is customary for physicians of similar training/experience in a geographic area is considered reasonable. 9

10. Payer Fee Schedules (cont’d.) Resource-Based Fee Structure –B–Built by comparing factors How difficult the procedure is to perform How much overhead expense the procedure involves The relative risk the procedure presents to the patient and provider Very logical –R–Relative Value Scale (RVS) Hybrid of the two (resource and charge) Is some comparison involved for charges Group of related procedures are assigned a relative ‘value’ in relation to a base unit – the higher the value, the more difficult the procedure –T–The base unit is assigned a conversion factor (dollar amount). To calculate the price of a service, the RVU is multiplied by the conversion factor. –E–Example, page 226 10OT 232 Ch 7 lecture 3

11. Payer Fee Schedules (cont’d.) Resource-Based Relative Value Scale (RBRVS) –U–Used by Medicare –R–Replaces charges with what each service really costs to provide –T–Three nationally uniform values are determined for each procedure Work (difficulty, time) Overhead Cost of malpractice insurance (risk) –E–Each value is adjusted for location GPCI –G–Geographic Practice Cost Index –V–Values are multiplied by a nationally uniform conversion factor that is kept up to date with cost-of-living increases RBRVS fees are considerably lower than UCR 15% difference 11OT 232 Ch 7 lecture 3

12. Payment Methods To pay providers, payers use –A–Allowed Charges An amount set as the most the payer will pay for the procedure –I–If the physician’s usual fee is lower, will pay that; otherwise will pay the allowed charge Provider’s status in the plan –P–PAR vs. nonPAR »P»PAR providers agree to accept lower allowed charges than their usual fees »W»What’s in it for the PAR? 12OT 232 Ch 7 lecture 3

13. Payment Methods (cont’d.) The payer’s billing rules –N–NonPAR providers can always ‘balance bill’ »B»Bill the patient for the difference between their fee and the payer’s allowed charge »T»The difference between a usual fee and the payer’s allowed charge must be ‘written off’ if the payer does not allow balance billing That amount is never collected If coinsurance is involved, it is based on the allowed charge 13OT 232 Ch 7 lecture 3

14. Payment Methods (cont’d.) Contracted Fee Schedule –F–Fixed fee schedules with participating providers Capitation 14OT 232 Ch 7 lecture 3