7 myths of practice management

By Bradley K. Reiner
Practice Management Consultant, Reiner Consulting and Associates

It’s time for my top seven. That is, the top seven fallacies that befall physicians. These misconceptions are things that people think are true, but in fact are not even close. I hope you find this entertaining, if not educational.

1. The Documentation Guidelines for E&M Services are trash.

This is not true. Yes, I know you think they are a piece of trash, but if you want to tiptoe through the tulips successfully, you must know these guidelines upside down and inside out.

As you must be aware, there are two sets of guidelines currently in effect: the 1995 and 1997 Documentation Guidelines. These guidelines are specifically designed to assist physicians with documenting evaluation and management services. Haven’t you ever wondered what a detailed history is or what a comprehensive exam encompasses? These guidelines have been developed to help clarify these items in detail.

Are they perfect? Absolutely not. In fact, I can find a lot of fault with them. However, the audits you have heard about by insurance payers including Medicare and Medicaid utilize these guidelines. Since these audits are increasing, it is important to learn the guidelines and know what is necessary in your documentation to meet a particular level.

I recently heard about a physician being audited by Humana. The insurer stated the doctor was billing a significantly higher number of high-level, established patient visit codes than his peer group. In fact, most of his established codes were being billed with CPT 99214. This code requires a specific amount of documentation. They reviewed about 35 records billed with this specific code and the majority of records did not substantiate the level billed. I was asked to review the same records to determine if I agreed with Humana’s account. I reviewed the records and discovered the majority of the records were accurately audited. I was hoping to find Humana had made mistakes and be able to prove the physician billed correctly, but this was not the case. The records were extremely hard to read and it was evident he did not have a grasp on the amount of documentation needed for particular code levels. I had to report back to the doctor that Humana had accurately reviewed his records. Unfortunately, he was required to refund the difference between what he billed and what should have been billed. We spent time reviewing the guidelines and requirements for each level, which will help him with future records.

My recommendation is to review each set of guidelines and find out which one would be best for your style of documentation. Either set is acceptable, however most primary care doctors use the 1995 version. The 1997 guidelines are more geared to specialty practices. You can download a copy of each guideline from the CMS website, www.cms.gov.

2. Managed care contracting is as simple as pie. Just sign on the dotted line and watch the money come rolling in. Negotiation is a waste of time.

If you buy that, I’ve got some ocean-front property in Arizona for you. Please don’t ever sign a managed care contract without reviewing the language and fees carefully. You may be thinking what good that does if you want to participate and get patients. In some cases you may have a point, but don’t think for one minute that you can’t negotiate fees and some terms of the contract. Most primary care doctors I speak with think they have no leverage when dealing with a huge health plan.

Au contraire! There are many things you can use to get the increase you deserve. For example, do you provide any ancillaries in your office? Things like a moderate complexity full lab, stress tests, echoes and nerve conduction studies are great examples of additional services you provide that save the plan money. Plans will ultimately look at all of the benefits you bring to the table when determining any increase in fees. You have to show them that you are being cost effective while maintaining high-quality care. If you can demonstrate some of these things, you have a more-than-average chance of getting an increase. In addition, ask for a multi-year increase. I know of at least one plan that likes these arrangements because they know that you won’t come back after one year asking for another raise. Makes sense doesn’t it? Try it, you might like it.

3. Reviewing Explanation of Benefits is a waste of time and money. I know insurance plans are paying me correctly.

Don’t be easily fooled. Just because you see CPT code 99213 being paid at $58.11 on your EOB doesn’t mean it’s correct. You have to know what your contract states, especially what fees you are to be paid. I’ve seen doctors being paid less than what the contract says. My recommendation is to get specific fees for your top 30 to 40 codes (those that represent the bulk of your revenue). Then measure these against your EOBs. You may be shocked to see payments less than your contracted rate. Even a few cents can add up to hundreds or thousands of dollars over the course of a year. Make sure plans are not inappropriately bundling services together and that they recognize modifiers. Fight these plans and ensure they follow Medicare guidelines, which are viewed as a standard in the industry. You might be able to make a difference in your payments.

4. The Recovery Audit Contractors (RACs) won’t worry about me. They go after the big fish.

Not so fast, my friend. You may think this is true and there may be some truth to this, but don’t think for one minute that they aren’t going to find you eventually. It’s not a matter of if, but when they will decide to audit. In case you have been sleeping under a rock, RACs are contractors hired by the government to ensure providers are billing and coding appropriately. It is true that hospitals are being targeted because of the high amounts billed, but doctors have to be concerned that they will be audited as well. The RAC for Texas is Connolly Consulting. They are charged with identifying incorrect coding and billing practices and recovering dollars paid out incorrectly. The company receives incentives based on how much they recover, which ranges somewhere between 9 percent and 12 percent. That can add up to very large sums of money. They are paid even if they find an underpayment as well. Be afraid. Be very afraid.

5. I have a billing service do my billing. If I’m audited and owe money, the billing service will be responsible for repayment including penalties for sending false or fraudulent claims.

A lot of finger-pointing can lead to devastating results. If you leave responsibility of claim filing, coding and follow up to a service, don’t be surprised if you receive a letter from Medicare asking for records to review. Obviously, they are seeing if you truly provided the service and coded it correctly. If you are not periodically monitoring and ensuring the service is doing its job then it is only a matter of time until there will be problems that come back to haunt you. The doctor, not the billing service, is responsible for his or her own coding and billing. If the billing service did the entire process it wouldn’t make a difference. Doctors are responsible for billing codes and services properly to any insurance company and doctors are also responsible for paying fines. That is why I always say that if you are going to use a billing service you should ensure that they have coded and filed claims correctly. You also want to make sure they are following up on denials. This will ensure appropriate safeguards.

6. I don’t need to update my charges. Why should I? I have to discount so much money that it seems fruitless to even worry about it.

I had someone tell me that exact thing one day. I then started reviewing his EOBs. What I found was quite interesting. Many of his services were being allowed at the same amount as his billed charge. That is a key indicator that the practice is probably not charging enough. In one particular case, he was losing over $7 every time he provided 99214 because the insurance allowable was $87 and he was charging only $80. If you add that up over the course of the year, you could be talking about thousands of dollars. It is smart to ensure your charges are up to date in comparison to other practices in your area of the country. There are several sources on the market to determine reasonable charges. Routinely checking and updating your charges is very smart if you want to maximize your revenue.

7. I know all my patients by name and know they would never pretend to be someone they’re not. Red flag rules for identity theft don’t work.

How well do your really know your patients? Could it even be conceivable that a patient could steal someone else’s identity in order to get free services? You bet. Recently there was a person that had heart bypass surgery and pretended to be someone else so it would be covered under insurance. It’s happening more now and medical practices need to ensure that the person being treated is really the person on the insurance card. Identity theft is fraud committed or attempted by using the identifying information of another person without authority. In the context of a medical practice, identity theft may involve using a person’s name and/or insurance information without his or her knowledge to fraudulently obtain medical services or benefits.

New red flag rules go in effect Nov. 1. It should be the policy of every practice to implement an identity theft prevention program to detect, prevent and mitigate identity theft in connection with new and existing patient accounts. There are several sources of information on how to implement these rules. Contact me for more information.

Bradley K. Reiner, formerly with Texas Medical Association, is now owner of Reiner Consulting and Associates. He can be reached at (512) 858-1570 or e-mail at breiner@austin.rr.com.