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For other articles and previous issues click here. October 4, 2004 Deflated
by Denials Pump dollars into your coffers by taking the necessary steps to ensure full and proper reimbursement. Medical billing errors are inevitable. They are a fact of medical billing, even with the advent of electronic medical records (EMRs). Nothing is standardized in hospitals, clinics, pharmacies, or doctors’ offices. Hospitals often deal with 40 or 50 different insurance companies, each with its own protocols, billing system, and payment format. And it’s not only coding errors—faulty keystroke is just as damaging. Causes of Errors Joe Thear, vice president, product management, revenue cycle, QuadraMed Corp., explains that denial is often the case for billing that requires additional documentation or has improper authorization, such as when a patient is ineligible for certain services under his or her insurance plan. Medical billing errors are caused by a wide variety of factors, such as clerical error, incomplete information, and incorrect coding. “The most common medical billing errors include failing to complete required fields to satisfy insurance carriers’ regulations, using the incorrect coding to describe the type of services and conditions being treated, and inserting basic human clerical errors that happen in a medical office, including unbilled charges and receipts inside or outside the office,” explains Tyler Patterson, vice president of product management, Misys Healthcare Systems, Raleigh, N.C. Rachel Couwenberg, president, Physician Billing Partners, LLC, Seattle, cites a few other causes. “The most common medical billing errors are billing to the wrong insurance—insurance card on file is out-of-date/invalid; billing with incorrect codes—codes supplied by medical staff are incorrect/codes are transposed during data entry; matching payments to incorrect charge—data entry error; failing to bill patient where appropriate—misreading EOB [Explanation of Benefits] from the insurance carrier, lack of attention to detail; and missing or invalid information on claims—data entry error/information not supplied by reception/medical staff,” she says. Tresa Thomas, physician support analyst at The Washington Hospital, Washington, Pa., says they have minimal billing errors in their physician practices. “Each practice has its own charge entry staff who have standardized training and are kept up-to-date on payor changes that can occur on a daily basis. Of course, we are all human, and with that said, there are times that an invalid code is entered for a specific procedure or a modifier should have been entered for specific procedures and are either missing or inaccurate. Something as simple as typographical errors while entering in a charge or procedure code can also become an issue. Many times a patient changes their insurance plan but does not submit the new card to the office to update the data in the billing system. This causes delays in processing, therefore delays in reimbursement from the correct carrier,” she explains. Mistakes have become so common that an organization, Medical Billing Advocates of America (MBAA), has formed to help patients decipher their bills. The 30 independent nationwide consultants in MBAA work for large self-insured companies, state governments, and patients to root out errors in medical billing and insurance reimbursements. MBAA’s Nora Johnson says errors occur on both sides—provider and hospital. “Medical billing errors on the provider side include charging for global and incidental services that are included in other services, according to the Correct Coding Initiative. Providers may not be knowledgeable of federal billing guidelines. Upcoded evaluation and management levels are routine,” she says. “Common hospital errors are billing for routine supplies, services, and equipment to increase revenues; and ambulatory surgical center errors include billing unbundled services to recoup OR [operating room] charges.” Finding Errors When They Occur Couwenberg points out that facilities can reduce billing and clerical errors by ensuring that source data from reception and medical staff are complete and correct. She says billing and medical records personnel need to keep up-to-date with the latest rules, regulations, and coding issues so they can recognize incorrect data. Paying attention to detail is another way to reduce errors, and she advises medical institutions to use a good billing system that checks for errors. Johnson believes that medical billing errors can be reduced greatly by following federal billing guidelines. “A lot of payors mimic Medicare guidelines for their own baselines because the Medicare guidelines are a good framework for medical billing and coding,” Thear agrees. “Many times Medicare will come out with a rule and a year or so later other insurance companies adopt it. There is a move now in the past 12 months to extend compliant solutions as far up the revenue stream as possible [to minimize errors and billing conflicts].” Thear cites an example of a person contacting a hospital to schedule a surgical procedure or medical test—the scheduler can, and should, find out if that procedure or test will be covered by the person’s insurance provider. “It’s good public relations to let the patient know well ahead of time that a procedure will not be covered,” he says. The patient has time to either cancel the procedure or find another way to pay for it, or the doctor may realize that he or she could add or change a diagnosis code so the insurance provider will pay for the procedure. EMRs’ Influence on Billing
Errors Patterson says no. “Prior to electronic billing, an office had someone who either handwrote or typed claim forms to insurance companies. This included information about the current visit and also basic demographic information that was the same for each claim. This scenario increased the risk of human error,” he explains. “Through electronic billing systems, the information is stored in the computer and is mapped to complete the current formats for electronic and paper claim billing to insurance carriers. Even after HIPAA, some carriers still require a specific uniqueness due to their state or specialty regulations. Having a computer system that can identify the specific needs of a specific carrier and complete the insurance claim form is much more efficient than relying on medical office personnel to recognize each unique situation.” Couwenberg agrees that electronic billing has reduced medical billing errors. Most billing systems will recognize if information is missing or invalid and flag the user at the point of data entry, she notes. Thomas stands by electronic billing, saying, “With the built-in edits with the Practice Partner billing system [that she uses at Washington Hospital], errors are caught prior to getting out the door to the carrier. Even after the file has been submitted to the carrier, there is another level of edits they check for. We also use a clearinghouse for our commercial claims and they also provide edits prior to submitting the claims to the carriers. We are able to modify the error immediately and submit the claim for payment.” Thear has noticed a “greatly reduced amount of rejection on the back end” of the billing cycle because of the checks and alerts contained in medical billing software. “Procedure codes, diagnosis codes, and charge codes are all being scrutinized and evaluated by the software before they ever appear on a bill,” he says. “Logic is built into an automated billing system; for example, you can’t bill for these two procedures on the same day—change the code to do so. The automated billing system avoids rejection, denial, and having to rework a claim.” According to Thear, a recent study by The Healthcare Advisory Board and the Healthcare Financial Management Association found that every time a claim needs to be reworked by a hospital for denial or rejection, it costs that facility an average of $25 per claim. “So, we try to move as many of the billing processes up in the billing cycle to give the software time to ‘scrub,’ or review, them before the bills are sent out,” he says. Johnson disagrees, noting that electronic billing masks billing for routine supplies, equipment, and services. “When revenue codes 27X totals are reported on a UB-92, those items are for ancillary supplies and services. In fact, they are loaded with routine supplies and services already calculated into the room or unit charge. This cannot be detected from an electronic bill but is only identifiable from an itemized statement. In essence, this constitutes double billing for all payors. Even though CMS [Centers for Medicare & Medicaid Services] reimburses by DRG [diagnosis-related group]/APC [ambulatory payment classification], children’s hospitals and cancer centers excepted, facilities still include these double charges in their cost reports justifying a cost-to-charge increase for the next year,” she says. Minimize Billing Errors The CMS has issued initiatives to improve the medical billing process because it found that many billing errors are caused by medically unnecessary procedures being performed on patients. Electronic billing software can provide solutions to this type of error because it will alert users that a particular procedure is not covered by a certain diagnosis, according to Thear. Some software can also alert coders that Medicare or Medicaid will not cover a specific medical treatment or procedure. HIPAA regulations have had an effect on medical billing errors as well, reducing them by standardizing billing procedures and codes, notes McBrierty. Thomas offers practical, straightforward advice for minimizing billing errors. “Keep staff trained on the latest billing requirements, whether it be by memo or in-service. Each user who is responsible for any aspect of the billing process should sign off that they have attended the in-service or read the memo. Give the users billing guides in order to establish standards that they can keep at their desk and easily review if they should have questions,” she recommends. “Perform audits and follow up on any discrepancies with the users so they are aware that someone is reviewing and validating their work. Update the encounter forms on a regular basis so inactive codes are removed and eliminate the potential of accidentally using the wrong codes.” Patterson says practices can reduce their medical error rates in a number of ways. “Education of the staff on state and national insurance requirements, such as HIPAA and state LMRP [local medical review policies] and CCI edits, as well as establishing great office policy and procedures are a great start. Working with the practice’s chosen computer vendor to build their system to alert them of both billing and coding compliance issues is a very important step. At Misys, we have a team of implementation specialists throughout the U.S. that bring their expertise into the practice and allow them to develop a system that meets all these criteria,” he says. Couwenberg says healthcare providers need to confirm patient insurance and contact information every time the patient is seen and update the file as necessary. “Ensure that new patients provide complete information when registering. Check all charge slips before sending to billing personnel to make sure all appropriate authorizations/diagnoses/procedures are listed,” she advises. Medical records personnel can minimize billing errors, says Johnson, by following guidelines and documented procedures. “Medical records personnel should be sure records are legible and properly documented to substantiate correct billing. Guidelines should conform to federal billing compliance and not hospital billing policy,” explains Johnson. “Nurse auditors for hospitals should not allow charges to remain on a contested bill that are not documented according to the hospital’s own policy, yet they do. If internal documentational inadequacies result in thousands of dollars of medications being billed, yet not initialed with noted time of administration, the nurse auditor will be damned by her employer for noting them and taking them off the bill. She won’t last long working for that hospital, and the nursing staff will feel the administrative heat and blame the auditor for making waves. The result is that thousands of dollars are billed without proper supporting documentation.” According to Patterson, practices can effectively decrease the number of medical errors caused by transposition from the inability to read or interpret physician notes through the increased use of electronic medical records. “The computer, via the physician’s documentation at the point of care, maps the correct procedure and diagnosis codes and passes those chosen codes directly into the medical billing system. Then, the medical office personnel can complete the process by reviewing the information on screen prior to finalizing the information in the computer,” he says. Financial Effects — Laura Gater’s medical and business trade articles have been published in Medical Imaging, 24x7, Podiatry Management, Veterinary Forum, Corrections Forum, and other national and online publications. |
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