Finding Balance in the Books

Evaluating and updating physical therapy billing practices can increase profits.

By Janet M. Shelley, PT, DPT

These are tough financial times for physical therapy practices. In addition to declining reimbursement, therapists deal with a mountain of paperwork and regulatory requirements to get paid. Evaluating your processes and changing to some best billing practices today can produce increased profits for a clinic. Here is what you need to consider:

• Eligibility: Ineligible patient insurance coverage is the most common cause of claim rejections and denials by payers. Patient submission of an insurance card at the front desk does not ensure that your physical therapy services will be covered under the plan. Benefits should be checked prior to delivering care with an emphasis on what portion the patient is responsible to pay. Benefits can be verified via the phone number on the patient’s insurance card, through the individual insurer’s website, or for the most time-efficient method, through automated eligibility subscriptions. Additionally, verifying Medicare status has risen in importance so there is an understanding of how many dollars have been applied to the therapy cap and if the patient has regular Medicare or a Medicare Replacement Plan.
  Best Billing Practice: Purchase an online eligibility verification subscription that will verify coverage and estimate patient payment responsibility in real-time format for multiple payers.
• Undercoding: Therapists frequently fail to charge for all the services performed in a visit. In an effort to boost patient attendance or fear of being audited, many therapists will not bill all the codes actually utilized in a visit. If your staff is routinely dropping units your bottom line will feel the impact.
  Best Billing Practice: Automate charge capture. Electronic medical records (EMR) can add to the accuracy of therapists charging for interventions that they actually perform and document.
• Timely Documentation: Historically therapists have submitted charges to the front desk when a patient exits, then complete the clinical note at a later time. Charges should not be submitted to an insurance company unless they are supported by clinical documentation, which creates a delay in billing. In an era of increased EMR utilization, most products are integrated with a billing platform and the charges will not flow into the billing arena until the note is complete. A delay in documenting means a delay in billing.
  Best Billing Practice: Complete your clinical notes daily whether they are handwritten or electronic, and create a system to detect incomplete documentation.

• Collecting Patient Responsibility: According to the National Health Insurer Report Card from the American Medical Association, patients are responsible for nearly one-quarter of their medical bill on average through the cost of copays, deductibles, and co-insurance.¹ Set the expectation that payment will be taken at the time of service by sharing the benefits verification information obtained with the patient. Estimate the payment per visit that is the patient’s responsibility.
  Best Billing Practice: Collect towards patient responsibility at every therapy visit. Resist patients’ attempt to pay multiple copays at the end of the week. What happens to the payment if they cancel their end-of-the-week appointment? Consider collecting copays for all scheduled visits at the beginning of the week or at the beginning of the visits rather than the end.
• Expand Your Payment Options: U.S. consumers will spend more than $300 billion online in 2016.² Therapists need to look at other industries that are successfully collecting payments from their customers online and incorporate those strategies. Statements can be emailed to patients saving supplies and postage. If the patient never opens the email or deletes the email without opening, then the system drops a hardcopy statement to be mailed to the patient. A web portal to pay a bill can be branded with the therapy practice name and logo and a convenient online bill pay link so the patient feels comfortable paying the bill directly to the facility.
  Best Billing Practice: Create online bill pay and electronic patient statements. Most clearinghouses offer these services and merchant fees are competitive with traditional swipe machines that are in most therapy offices.
• Minimum Payment Expectations: Out-of-pocket expenses for insured patients are expected to grow from $250 billion in 2009 to $420 billion by 2015.³ Therapists are allowing patients to pay off these larger balances over time through payment plans. As therapists rarely charge interest, they should require the patients to commit to a minimum monthly amount and agree to automatic collection of payments on a recurring basis in a compliant and secure way without the use of multiple paper statements and follow-up phone calls.
  Best Billing Practice: Have patients create a bank draft of a negotiated monthly amount until debt is retired. Automated Clearing House (ACH) credits are an inexpensive and reliable way to batch all of your payment-plan clients into one monthly bank transaction and from a security perspective, it’s safer than maintaining a patient’s credit card number.
• Claim Submission: America’s Health Insurance Plans (AHIP), recent survey notes that nearly 20 percent of all provider claims are not submitted electronically to payers, and more than one in five claims are submitted by providers at least 30 days after the delivery of care.³ Claims can also be delayed if a payer requires medical records to be attached to the claim. Increasingly Medicare and Review Contractors accept electronic submission of Medical Documentation (esMD).⁴ Most federal and commercial payers allow daily claim submission. (A few Medicare contractors limit billing of Part A services to monthly.)
  Best Billing Practice: Submit all claims and medical records electronically daily.
• Utilization of Technology: Commonly, therapists purchase EMR and billing systems and do not use them to their full potential. Practice owners often evaluate and purchase systems for ease of clinical documentation such as functional limitation reporting (FLR) and Physician Quality Reporting System (PQRS). Shop for systems that also allow you to program insurance-specific rules such as Local Coverage Determination (LCDs), noncovered items, and modifier requirements. Using technology in this manner allows correction of errors on a claim before submission, increasing the speed with which you get paid. Most systems have popup reminders that can be used for both clinical and administrative staff.
  Best Billing Practice: Set payment rules and scrubbers in EMRs, in billing platforms, and at clearinghouse levels to remind staff of regulatory requirements or insurance-specific payment rules.
• Contract Management and Payer Behavior: What timeframe does your contract with insurance companies or your state’s prompt payment laws mandate payment? Know the timeframe it takes your large payers to process a claim. Some Blue Cross Blue Shield (BCBS) plans will pay in four to seven days. Medicare pays within 14 days. Be sure you have a mechanism to followup on claims shortly after this timeframe if payment is not received. Large practices can utilize technology and collection modules to accomplish, but a small practice may be just as effective with a manual process.
  Best Billing Practice: Automate notification when claims exceed typical payment period.
• Denial Management: Centers for Medicare and Medicaid Services (CMS) estimates that 30 percent of claims are denied on first submission and 60 percent of those claims are never resubmitted. The most common reason for claim denials are: incorrect patient information (misspelled name, wrong birth date), terminated insurance coverage, noncovered services, services requiring pre-authorization, and timely filing. Corrections to a denied claim should be tracked and clinicians should be notified of any treatment patterns that are not permissible for a particular insurance payer. Resubmission or appeals will be necessary to recover payment. Appealing a claim denial must take place timely. Appeals should be detailed and submitted on the carrier’s appeal form with supporting documentation.
  Best Billing Practice: Review insurance correspondence daily, correct and resubmit or prepare for appeal. Communicate denial patterns to clinicians.
• Seek Automation: Insurers are required by the Patient Protection and Affordable Care Act (PPACA) to move toward Electronic Funds Transfer (EFT) and Electronic Remittance Advice (ERA). Combined with autoposting of payments, capturing revenue can be efficient and accurate. Banks now offer remote deposit services that eliminate staff traveling to make deposits and ensure deposits are made daily.
  Best Billing Practice: Enroll your practice to receive payments and remittances electronically and utilize autoposting features of the billing platform and clearinghouse. Investigate remote deposit options from your local bank.

Review current processes. Know the time it takes from the date of service to have claim data entered. Understand the time between data entry to error-free claim submission as well as the time from claim submission to insurance payment. Aberrations need explanations. Look at patient payments differently. Expand your payment options. Just as you would not be allowed to check into a hotel without a credit card to cover your incidentals, a pre-arranged method to pay for the patients therapy responsibility is the Best Billing Practice.

Janet M. Shelley, PT, DPT, is a PPS member and the chief executive officer of Medical Billing Center. She serves on payment policy committees for both the South Carolina Chapter and PPS. She can be reached at jshelley@4mbc.com.

REFERENCES

1. Mosquera M. Healthcare Finance News. www.healthcarefinancenews.com/news/ama-patients-pay-24-percent-doc-bill. Accessed November 13, 2014.

2. Marvin B. Latest Trends and Best Practices for CollectingHealthcare Payments HBMA Billing August 2013. www.hbma.org/news/public-news/n_latest-trends-and-best-practices-forcollecting-healthcare-payments. Accessed November 13, 2014.

3. America’s Health Insurance Plans (AHIP). http://ahip.org. Accessed November 13, 2014.

4. Centers for Medicare and Medicaid Electronic Submission of Medical Documentation (ESMD). www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/ESMD/index.html. Assessed November 13, 2014.