Wednesday, August 30, 2006
How to Find GOLD in Coding and Billing
Are you leaving money on the insurance reimbursement table? Find out how to get the most out of medical billing.
The expansion of optometric practice into medical eye care has been exciting. Aside from being challenging, fun and necessary for the growth of our profession, medical eye care can be quite profitable. Optometric continuing education is replete with wonderful courses explaining the clinical side of eye care. What sometimes is missing is the final step - how to get paid. I'll use this article to help you with some of the fundamentals of medical billing and coding.
Noticing recurring themes
After presenting several medical coding seminars, a few things have become apparent.
* Doctors and their staffs are interested in learning proper medical billing and coding.
* Many doctors feel that they're leaving a ton of money on the reimbursement table.
* Many doctors feel intimidated by the process of medical billing and coding and therefore tend to under-bill for their work.
The following sections of this article will address these issues in greater depth.
O.D.s want to know
If you have any influence on your state association's continuing education agenda, then please consider yearly coverage of billing and coding topics.
A good role model for billing and coding information is the American Academy of Ophthalmology (AAO). Besides publishing a regular newsletter and sponsoring an Internet chat room devoted to billing issues, the AAO coordinates a yearly national lecture tour called CodeQuest, which is a full day packed with essential information on medical billing issues. Yes, they discuss what is new for the season, but they also review the basics every year because new staff and returning staff need to hear some things regularly. The AAO has responded to their members' needs for regular billing and coding information.
Revealing a common fear
From what I've heard, many doctors around the country are afraid that they're leaving money on the insurance reimbursement table. And after hearing samples of their fee schedules, I'm afraid they're correct. For example, let's say that you're a Medicare provider and that your fee for 92004 (new comprehensive exam) is $65. The average maximum Medicare payment for 92004 is $123.60. Therefore, each time you bill Medicare for 92004, you're leaving $58.60 on the insurance table.
Insurances put together what's called the insurance maximum allowable payment schedule. The maximum allowables are what insurance has determined to be a fair and reasonable payment for medical procedures.
When giving a billing and coding talk, I show attendees their local insurance maximum allowables. The typical reaction is surprise and concern over the huge disparity between their fees and the insurance maximum allowables. Not that optometric physicians are overcharging - they're actually undercharging terribly. Think of it this way: Insurances put the amount of money that they think your services are worth onto the reimbursement table. But all too often we say, "Oh, no, I'm not worth nearly that much." Ideally we should say, "Thanks for the payment, but I'm worth more than that and will look forward to a raise next year."
In at least two instances of which I'm aware, the medical plan has actually decreased its payment schedule after receiving billings that were significantly lower than what it calculated. Understandably, why would an insurance continue to offer more money than what most doctors want? To avoid the risk of insurances lowering their payment schedule, charge at least what they offer to pay.
Take the suggestion from the folks at AAO's CodeQuest: If you're being paid what you're billing, then you're not billing enough.
Learn the trade secrets
Hopefully by now you realize that it's in your best interest to:
* learn the insurance maximum allowable payment schedule
* charge at least as much as the insurance offers.
What if our fees are higher than the maximum allowables? Then great! That means that you'll be sure to collect 100% of whatever the insurance is offering. According to your insurance contract, you must write off any amount over the maximum allowable. Further, your patients won't be aware of your change in fees because their co-pay remains the same no matter what the fee. Yes, some insurances have the patient co-pay a percentage of the total allowable, yet a change of that small of a percentage typically goes unnoticed.
Now we have to find out what the insurance maximum allowables are for medical eye procedures. We also need a clear understanding of how Medicare calculates payments.
Meet the RBRVS system
Resource-Based Relative Value Scale(s) (RBRVS) is the foundation of medical insurance payment. With the help of the Harvard School of Public Health, the federal government created the RBRVS in the late 1980s, in part to apply a scientific methodology to calculating Medicare payments to physicians. Most insurances (e.x., Blue Cross-Blue Shield, Aetna, Medicaid [in most states], state workmen's insurance, etc.) have adopted the RBRVS to calculate physician payment.
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