What this chart illustrates: Denied claims are a daily norm. We fix them within our practice management/billing systems, make notes and then move on to the next round of denials/correspondence. Most practice management systems today are not designed to review collective data from a historical viewpoint. Therefore, we typically treat each denial as a single error instance and do not “learn” how to alter our revenue cycles to prevent mistakes from occurring again in the future. Below is an example of all reason/remark codes received from Medicare of Arkansas as related to CPT code 99213 – Established Patient Office Visit.

What this means to you: Having access to the denial reason/remark codes for a given CPT code by payer will allow you to understand globally what errors are causing most of your denied claims. In the example below, there were 114 occasions when Medicare was billed when another insurance company was the responsible party (reason code 22). Knowing this, you would be able to alter your eligibility checks and front office insurance verification processes to ensure that the correct insurance/responsible party is identified prior to sending the claim out, ultimately reducing your practice’s days in accounts receivable. Additionally, in this example, it is clear that there are issues with diagnosis assignment, additional information requested and even billing services after the date of death.  A complete understanding of your denials will guide you to the problem areas in your revenue cycle.

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What this graph illustrates: The most commonly billed Current Procedural Terminology (CPT) codes come from the Evaluation and Management (E&M) section of the CPT manual. The graph below displays the distribution curves for the specialty of cardiology for the most utilized E&M codes, those being for New Patients (99201-99205) and Established Patients (99211-99215). The information was derived from both the 2008 CMS Evaluation and Management Codes by Specialty Study found at http://www.cms.gov/MedicareFeeforSvcPartsAB/04_MedicareUtilizationforPartB.asp and Navicure’s 2008 claim data from cardiology groups.

What this means to you: The proper coding of Evaluation and Management codes ensures protection for a practice from both a high compliance risk and lost revenues perspective. Utilizing comparative data sets, as shown on the graphs below, allows you to gauge where your practice falls on the risk spectrum (too high E&M levels = elevated risk of compliance audit) as well as how much revenue your practice is potentially leaving on the table (too low E&M levels = potential lost revenue). Note: Just because your practice falls inside or outside the guidance of these distribution curves does not mean that you practice is doing anything incorrectly. The bottom line is: Correctly code your E&Ms based on the examination, history and medical decision making components of the patient encounter and you will be fine.

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What this graph illustrates: Over the past twenty years, the healthcare revenue cycle has experienced a surge in the use of technology to improve overall financial results. Electronic claims submission, electronic remittance advice (ERA) and electronic eligibility verification have all resulted in a quicker adjudication processes at the major insurance carriers (Medicare, Aetna, United, Oxford, etc.). The graph below segments Aetna’s payment lag times (calculated from the date of claim submission to receipt of 835/ERA) into five day periods. As illustrated below, the majority (36.93%) of Aetna’s claims are paid within 11 to 15 days of claim submission.

What this means to you: Maintaining consistent cash flow is one of the most important objectives of a billing staff for a multitude of reasons, including physician and staff compensation. Understanding payment lag times for each of your major insurance payers will enable you to accurately predict/model short term cash flow as well as quickly identify when one of your insurance carriers decides to deviate from the norm. In this Aetna example, you can see that claims that are “going to be paid” are paid quickly. If you have not received reimbursement within 30 days of billing an Aetna claim (or a corresponding denial), you may want to have your billing staff review the claim for accuracy/correctness.

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What these graphics illustrate: With Medicare’s recent abolishment of Evaluation and Management (E&M) consultation codes (CPT codes 99241-99255), effective January 4, 2010, we must now correctly choose the appropriate E&M code that best fits our patient examination, history and medical decision making process versus the historical consultation CPT code. The graphics below show the redistribution tendencies for cardiology and multi-specialty practices when choosing the correct E&M code to replace the historical consultation code for Medicare patients.

What this means to you: As the typical reimbursement for E&M CPT codes is less than that of consultation codes, it is vitally important for both the physician and coding/billing staff to choose the correct replacement E&M code as to limit the potential losses of revenue to your practice. Consultative services historically required greater levels of review for examination, history and medical decision making, therefore, the redistribution choices of your practice should mimic these levels of review when choosing the proper E&M code.

What this graphic illustrates: The table below ranks the Top 5 specialties by rate of reporting CPT Category II Codes. The rate is calculated as Total Medicare Claims with at least 1 CPT Category II Code / Total Medicare Claims. The timeframe for this data sampling of Medicare claims was July 2009 through January 2010.

Definitions:

CPT Category II Codes – These are optional CPT codes that can be reported on your claim to provide quality or performance measurements. An example would be code 3038F which is “Pulmonary function test performed within 12 months prior to surgery”. See the AMA or CMS websites for more information.

PQRI – Physician Quality Reporting Initiative. The CMS project to incent healthcare providers to report quality and performance measurements.

What this means to you: Currently, Medicare provides an incentive of 2% (fiscal year 2010) for Medicare Allowed Charges for those physicians who choose to participate in the reporting of performance measures. However, the future of PQRI reporting will require physicians to report all performance measures or risk being penalized for not doing so. The graph below is intended to provide you with an understanding of the level of today’s PQRI reporting. It is recommended that you compare these utilization number to that of your practice to ensure that you are (1) benefiting from the current incentives and (2) preparing yourselves for the future changes.

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What this graphic illustrates: The graph below shows the relationship between the claim submission lag time and the percentage of the allowed amount that was applied to the patient’s deductible responsibilities.

Definitions:

Claim Submission Lag Time – is calculated as the time interval (in days) between the date of service (the date that the procedure was performed) and the date upon which the claim was filed with the insurance plan. Read More ›