Making Cents of Reimbursements Chris Sipe, MD Fertility Centers of Illinois Chicago and Oakbrook offices

Medical reimbursements  Middle Ages  Colonial America  s routine care was self pay –Major Medical Insurance –Followed home/auto concepts  1980s Advent of insurance HMO, PPO –Covered basic health and major medical

How are REIs reimbursed  No fertility coverage, i.e. Self-pay  Insurance –Maximums, benefits, rules –Employer dependent  Practice style –Private –Academic  Practice arrangement –Solo practitioner –Group Practice

Private Practice Reimbursement- Self pay Nurses/Staff Rent/Utilities Equipment Supplies Malpractice Marketing $ $$

Private Practice Reimbursement- Insurance Nurses/Staff Rent/Utilities Equipment Supplies Malpractice Marketing $ $$ Coders/Admin $

How does insurance work  Employer is required by law to offer insurance to Employees –Plan must follow all state and local insurance laws  Employer can chose to add or remove coverage to suit their needs –Add pregnancy rider, mental health, infertility  Employer contracts with an insurance company to gain access to preset prices and range of services for their employees –The insurer can be paid a set fee for year to provide all services Budget $1,000,000 if over insurance company covers –Or insurance can pass the bills onto the employer (self-Insured) All bills paid by employer- harder to budget

How does insurance work  Medical offices use ICD 9 (soon to be 10) codes for listing diagnoses for patients. –Example: Endometriosis, Infertility, Abdominal Pain  This then determines what treatments can be covered by insurance for that code –Endometriosis Laparoscopy covered, BCP covered, but not trigger point inject  Medical offices then bill CPT codes to denote what work was done –Laparoscopy with fulguration of endometriosis  Insurance then pays Medical office negotiated price within days

Rules for coding  Every CPT has a description of what it includes  Clinic CPT codes require documentation of elements that were done –Time (state amount of time spent with patient) –3 Components: History, Physical, Consult  Only 1 CPT code will be reimbursed at a time –Others may reimbursed, but at a lesser rate TAKE A CODING CLASS

How much does insurance pay  AMA determines Relative Value Units (RVU) for every procedure performed within every specialty that is reimbursable –Helps equate surgery to clinic reimbursement –15minute consult with PCP is reimbursed differently from 15min with Cardiology  Insurance negotiates a price in a contract with each provider based on a conversion factor of the RVU –Medicare is the $35.28 per RVU –Some insurances force all providers to take the same reimbursement amount –“Carve-outs” special price for an individual provider due to his/her expertise  Whatever the agreed upon price a provider cannot charge the patient more

Insurance Billing from employer/ee  Total cost to insure an employee/patient is $1000 per month –Patient pays $250 per month while her employer pays $750  Clinic charges $2000 for a medical procedure (Billings) –Insurance contract will pay $1500 for medical procedure –Clinic discounts fee $500  Patient has $1000 deductible as part of plan –So patient pays clinic $1000 and insurance pays clinic $500 –Clinic receives $1500 (collections) –After expenses subtracted, left with $600 (Net Revenue)

States with Infertility Mandates  15 States have enacted mandates about infertility  Arkansas (Lifetime Max $15,000)  California (offered, but coverage not guaranteed)  Connecticut (4-6 IUIs, 2 IVF cycles)  Hawaii (1 IVF)  Illinois (4 IVF cycles)  Louisiana (no coverage, but cannot refuse if preexisting)  Maryland (3 IVF cycles)  Massachusetts (IUI and IVF no limits, but rules)

States with Infertility Mandates  Montana (HMO must cover infertility)  New Jersey (up to 4 IVF cycles)  New York (Diagnostic testing, but not treatment)  Ohio (Diagnostic testing, but not treatment)  Rhode Island (Lifetime max of $100,000)  Texas (Employers can decide to offer coverage)  West Virginia (requires HMOs to cover infertility services)  Only 8 states truly require IVF coverage for treatment

NO THANKS, I’LL JUST GO INTO ACADEMICS

Academic Practices  Traditionally rewarded for teaching and publishing research  Grant money and protected research time  Less emphasis on money earned for department  Evolving as reimbursement go down and research grants dry up  The Advent of the RVU

RVU  Each hospital and department determine the relative value of an academician’s productivity  Example: –Lecture to Medical Student = 1 RVU –Director of residency = 100 RVU –Day in clinic = 5 RVU –Surgery = 2 RVU –Collections = 1 RVU per $1000 dollars  End of year RVU determine a possible bonus or next year’s pay

Academic Reimbursement Nurses/Staff Rent/Utilities Equipment Supplies Malpractice Marketing $ Coders/Admin $ $$ Dean’s Tax Residents Fellows More Admin Research Grants Graduate Medical Education

Academic Reimbursement  Not just an REI division  Not just an OBGYN department  Multispecialty Hospital  Hospital negotiates insurance contracts  Hospital determines budgets

Thanks for your attention Any Questions?