Practice Management: New Solutions for Old Problems

If you follow Oscar Wilde's admonition that “Good resolutions are simply checks that men draw on a bank where they have no account,” then you're not likely, just because the calendar has flipped over, to promise to lose weight, exercise more, or stop taking that last cup of coffee at work without refilling the pot. For you, the biggest challenge come January 1 might be deciding whether to call the new year “twenty-ten” or “two thousand ten.”

But the start of a new year is a time when physicians ought to give careful thought to practice management. Changes to coding and billing essentially require you to refocus on the finances of practice, anyway. The way you run your practice will have to be different in 2010 because outside forces compel you to do so. The consultation code is a thing of Medicare's past, and shrinking profit margins require you to rethink your business. Here, we take a look at a few solutions you can implement to ensure a happier new year.

Understand Consult Code Changes
The big coding change in 2010 is the elimination of the consultation codes by Medicare. Specialists can no longer bill Medicare for consultations and must therefore code either a new or established patient visit, which typically means a lower reimbursement. Importantly, this is currently a change in Medicare, which eliminated the consultation codes from the CPT. Private payors sometimes pay differently, and it is not yet clear that most are also abandoning the consultation codes.

CMS says that it has a rationale for the change. It says this measure, together with refining practice expenses and revising the treatment of malpractice premiums, would increase payments to general practitioners, family physicians, internists, and geriatric specialists by between six and eight percent. This can feel like sitting down to a holiday meal and watching your brother-in-law reach across the table to swipe a slab of your cherry cobbler. He's technically family, but that's your slice of the pie.

“The goal of increasing payment to primary care has merit. The solution they have taken is ill-conceived,” says Marc Nuwer, MD, PhD, Professor of Neurology at UCLA School of Medicine and chair of the AAN Medical Economics and Management Committee. “I think that Medicare is working from false premises for a part of the perceived problem. They have set up a series of requirements for a visit to qualify as a consult. For neurologists, there are 42 required elements of a consult note levels 4 or 5. All too often someone forgets one of those.” As a result, auditors claim that it does not meet the Medicare documentation requirements for a consult. The office consultation codes in 2009 from levels 1-5 pay $48.69, $90.89, $124.79, $184.30, and $226.50, respectively.

With that said, the definition for billing a consult is much different than for a new patient. CMS offers more on its motive: "The major effects of the provision may actually simplify coding because physicians will use the office and hospital visit codes in place of consultations and will not have to determine whether the requirements to bill a consult are met." Meanwhile, the basic E/M code reimbursement is increased a bit for 2010. New and established outpatient levels 4 and 5 RVUs will go up six percent, and inpatient initial and subsequent day visit RVUs will go up three to four percent.

Clean Up Billings
The key to practice success is to ensure three elements of claims submissions. The first is that claims are clean. Second is that you are submitting electronically as much as possible. Finally, says Teri Romano, RN, MBA, CP-C, a consultant for the Sage Group, “The most important thing is to code and use modifiers correctly...In our experience, when practices start understanding modifiers, within six months they see their payments increase and the A/R decrease.” Practices also must evaluate their clearing houses to be sure that they are processing claims properly and to assess costs of services.

“Still, payors are going to come up with denials, be it rational or illogical. That's why every practice needs a strategic appeals process in place,” Ms. Romano says. Importantly, practices should always handle and process appeals by payor. Practices with multiple billing staff members should assign certain payors to each individual, so that he or she can get to know and understand the rationale and processes at each payor. And Ms. Romano notes practices should not appeal every denial, as some are not likely to be reversed, and pursuing these represents as misallocation of resources.

Practices should also prepare for the possibility of an audit, as there is clearly a commitment on the part of payors to get back money from providers, Ms. Romano points out. For its part, Medicare has rolled out RAC and ZPIC audits, and private carriers are following suit. “A given practice has a greater chance of an audit today than even a year ago,” she observes. Just as it is the vested interest of insurance companies and CMS to scrutinize the dollars coming out of their bank account, it's in yours to watch what you're taking out. It's better to be proactive and have an internal audit before facing an actual audit from a carrier.

Review Contracts
Another common oversight is failure to review contracts, Ms. Romano says. “Most doctors offices do not get all fee schedules for all payors so cannot be sure that payments are paid as indicated by contract. Most carriers do not pay properly.”

Someone from the practice must be assigned to check all EOBs and payments for all patients against the appropriate payor contract to ensure that claims have been paid properly.

One simple but overlooked strategy to improve billings is to pre-register every patient prior to the visit—contact their insurer to ensure the visit is covered and determine whether a referral is required. “This avoids any problem of having a patient who comes in with an insurance card that is not current,” Ms. Romano says. There are three ways practices can pre-register. Forms can be posted online for patients to complete and fax or mail to the office, forms can be mailed to the patient to be sent back to the office, or pre-registration can be done by phone at the time the appointment is made.

Embrace E-prescribing
E-prescribing represents an opportunity for revenue growth right now, and failure to participate could lead to lost revenues in the future, Ms. Romano says. The current two percent bonus on Medicare billings translates to a payment of about $2-3 thousand per physician, as a general rule. “Do it now while it's voluntary; Make it second nature and you'll be all set to go,” when it's mandatory, Ms. Romano urges.

Consider PQRI in 2010
Amid suggestions of cost cutting and increasing cost efficiency, the Physicians Quality Reporting Initiative (PQRI) offers a chance for a tangible check at the end of the effort. PQRI is a voluntary reporting program that provides an incentive payment to identified eligible professionals (EPs) who satisfactorily report data on specific quality measures for covered professional services furnished to Medicare Part B fee-for-service beneficiaries and paid under the Medicare Physician Fee Schedule (MPFS).

PQRI was first implemented in 2007. For calendar year 2010, participants may earn an incentive payment of two percent of the EP's estimated total allowed charges for Medicare Part B covered professional services under Medicare Part B provided during the reporting period. While paying out at 1.5 percent in 2008, the average incentive amount for individual professionals was over $1,000, with the largest payment to an individual eligible professional totaling over $98,000.

Key changes in the MPFS final rule with comment period for CY 2010 will:

• Add 30 individual PQRI measures and six measures groups on which individual eligible professionals may report (see Table for neurology-specific measures).
• Implement provisions of the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA) that will enable group practices to qualify for a 2010 PQRI incentive payment based on a determination at the group practice level, rather than at the individual EP level.
• Add an electronic health record (EHR)- based reporting mechanism to promote the adoption and use of EHRs and to provide both eligible professionals and CMS with experience on EHR-based quality reporting. Under the rule, CMS will begin accepting data from qualified EHR products on ten individual PQRI measures. In 2010, CMS will, for the first time, allow EPs to count their submission of EHR-based measures toward their eligibility for a PQRI incentive payment. Specifically, the final rule provides that EPs who satisfactorily report data on at least three of the ten EHR-based individual PQRI measures are eligible for an incentive payment. In previous years, EHR-based measure submission has been on a voluntary or “pilot” basis and has not counted towards an EP's eligibility for an incentive payment.
• Add a six-month reporting period, which begins Jul. 1, 2010, for claims-based reporting of individual measures. In prior years, the six-month reporting period was available only for measures group reporting or for registrybased reporting.

Some options require data on quality measures to be submitted by Dec. 31, 2010. However, EPs who submit data through registries will not be required to submit data on quality measures until 2011.

The program appears to be increasing in popularity along with payouts: The number of eligible professionals who earned an incentive payment increased by one-third from 2007, when 56,700 eligible professionals earned an incentive payment. More than 85,000 physicians and other eligible professionals who satisfactorily reported qualityrelated data to Medicare under the 2008 PQRI received incentive payments totaling more than $92 million, compared to $36 million in 2007, according to CMS.

In the initial program years, physicians and other eligible professionals who satisfactorily submitted quality information for covered professional services furnished in the applicable reporting period were able to receive incentive payments of 1.5 percent of the total estimated allowed charges under Medicare Part B for covered professional services.

Round-Up
CMS also announced several other changes to their payment structure. Most hospitals will receive an inflation update of 2.1 percent in their payment rates for services furnished to Medicare beneficiaries in outpatient departments. CMS will also reduce the update by two percent for hospitals that did not participate in quality data reporting for outpatient services or did not report the quality data successfully, resulting in a 0.1 percent update for those hospitals.

While incentives like the e-prescribing bonus and PQRI offer enhanced revenues for physicians, the elimination of consultation codes by CMS and other cuts from Medicare and throughout the healthcare system are sure to have an impact. In light of these changes, Ms. Romano encourages all practices to undertake a long and careful general assessment of costs. Look at all expenses, like the phone system, answering services, inventory control, and other charges. Determine your true expenses and how much is absolutely necessary. “In today's economy, it's worthwhile to save even small amounts that all add up in the long run,” Ms. Romano says.