medical billing transcription supplier information

Hospitals are always looking for ways to improve operating margins. One reason for a drain in cash flow is due to payment denials because medical necessity is not met. Medical necessity denials are a significant challenge to hospitals not only because of lost revenue, but also because of the resources and time required to resolve denials. Organizations that have made strides in improving the management of medical necessity denials share one key characteristic: their priority is to prevent denials from occurring in the first place.

Hospitals have developed processes to avoid medical necessity denials in two general areas: at patient access (before providing the medical service) and in patient accounting (well after the patient has gone home, but before the bill is submitted for payment). These scenarios are typically referred to as preservice editing and postservice bill scrubbing, respectively.

* Before rendering service, checking to determine whether Medicare or the primary payer will pay for that item or service

* Ensuring there is proper documentation to support the order for the services

* Providing the patient an advance beneficiary notice (ABN) if the provider expects the claim to be denied by the payer for reasons of medical necessity, local standards of care, or similar denials. The ABN lets the patient know that the item or service is not covered by Medicare or the payer and that the patient may be financially responsible for that service.

Postservice steps involve:

* Processing UB92 and HCFA 1500 claims through a bill-scrubbing routine, either at the facility or at the claims clearinghouse

* Suspending the claim and returning it to the health information management (HIM) department to have the patient record checked for documentation that supports medical necessity, and adding new diagnosis codes, if applicable

* Writing off unbillable charges

Although these actions appear straightforward, they each present complexities providers must address.

Determining Medical Necessity

In the 1990s, the Office of Inspector General (OIG) and the Health Care Financing Administration (HCFA, now called CMS) began a series of investigations that dramatically altered the landscape of healthcare coding and billing. The goal was to determine the appropriateness of Medicare payments.

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A recent HHS Office of Inspector General (OIG) report highlights the continuing confusion among providers and vendors over Medicare consolidated billing--and its resultant costs. Under the SNF PPS consolidated billing provision, outside suppliers are supposed to bill and receive payment from the SNF rather than Medicare for services rendered to a beneficiary during a Part A stay. But because this process isn't always followed, Medicare frequently pays twice for the same service--once to the SNF under Part A prospective payment and again to an outside supplier under Part B--and some suppliers are even double-dipping, says OIG, by billing both SNFs and Medicare.

For calendar years 1999 and 2000, the OIG identified $108.3 million in improper Medicare Part B payments for services already paid for in PPS Medicare Part A payments made to SNFs. Moreover, beneficiaries were charged $33.1 million in coinsurance and deductibles for these erroneous payments.

The OIG cites SNFs' and vendors' lack of controls to prevent improper billing, as well as CMS's inability at the time to consistently detect Part B services subject to the consolidated billing provision, as reasons for the improper payments. Although CMS's claims-processing system was updated in 2002 to detect and prevent such payments, suppliers can still be paid improperly by Part B before SNFs submit their PPS claims, requiring costly postpayment recovery activities.

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Q.

Your April 2004 column in Geriatrics discussed charging Medicare patients a no show fee. The article stated that this is allowed if all non-Medicare patients are also billed. The article states that staff may not use an office visit code for such billing purposes, but can create an in-house code, such as "NOSHO." I have always understood that physicians are absolutely not allowed to bill Medicare patients as no-shows, according to the Medicare Compliance Manuals, and Medicare service representatives. My question--who is correct, you or Medicare?

A.

The answer is simple: not all the information you read or hear is accurate. In 2004 the Government Accountability Office conducted a study on Medicare customer service representatives. The government watchdog said: "During our test calls, Medicare customer service representatives typically provided incorrect and incomplete answers to the 300 policy-oriented questions we posed. Only 12 out of 300 responses were correct and complete."

We posed your question to Terrence Kay, director, division of practitioner and ambulatory care, Centers for Medicare and Medicaid Services. He writes, "CMS's policy is to allow physicians and suppliers to charge Medicare beneficiaries for missed appointments, provided that they do not discriminate against Medicare beneficiaries but also charge non-Medicare patients for missed appointments. The charge for a missed appointment is not a charge for a service itself (to which the assignment and limiting charge provisions apply), but rather is a charge for a missed business opportunity. Therefore, if a physician's or supplier's missed appointment policy applies equally to all patients (Medicare and non-Medicare), then the Medicare law and regulations do not preclude the physician or supplier from charging the Medicare patient directly."

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