Your Practice 5 ways to regain control

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Your Practice 5 ways to regain control

• Steven A. Adams, CPC, CPC-H, COA

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Continuing Medical Education

• Faculty Disclosure - As an employee of MAG Mutual
  Healthcare Consultants, Inc., Steve Adams does
  not have a financial interest/arrangement or
  affiliation with any corporate organization
  offering financial support or grant money for
  this continuing medical education activity.

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The Question
Why am I Working Harder
But Making Less?
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Dont Work Harder
The Answer
Work Smarter
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A physicians approach to medicine defines their
clinical relationship with their patients
success
the physicians financial policies define their
business relationship with their patients.
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Cash Flow
Provide A Service
Select CPT/ICD Code
Submit A Claim
Receive A Check
Spend Money On Overhead
You Get Any Profit
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Most Providers
Provide A Service
You Get Any Profit
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What About...
Select CPT/ICD Code
Submit A Claim
Receive A Check
Spend Money On Overhead
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Regain Control
Youre going to learn more about your practice
than the payers.
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Five Ways to Increase Your Income

• Step 1 Understand the Reimbursement Process
• Step 2 Understand EOMBs
• Step 3 Reduce Claim Denials
• Step 4 Understand Revenue, Collections, and
  Overhead
• Step 5 Deal with Accounts Receivable

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1. Reimbursement Process
There are liars, damn liars, and statistics.
Mark Twain
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To Evaluate Reimbursement
Key Points

• Find out what you are doing
• What you are getting paid
• If not or not enough why
• Either way, correct it

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What Are You Getting Paid
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Are You Doing Everything Right?
Is Anything Missing From Your List?
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It's Your Money
Dont overlook ANY POSSIBLE source of legitimate
revenue
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To Evaluate Reimbursement
Key Points

• Find out what you are doing
• What you are getting paid
• If not or not enough why
• Either way, correct it

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2. Understanding EO(M)Bs
Not everything that can be counted counts, and
not everything that counts can be counted.
Albert Einstein
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Understanding EO(M)Bs
Key Points

• Show the fruits of your labor
• Explains reimbursement or lack in detail
• Shows co-pays, deductibles, etc.
• All contain reason codes

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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
2-10
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
Patients Name
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
Date of Service
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
Place of Service - office, hospital, etc.
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
CPT Code Billed
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
Your Charge
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
Medicares Allowable
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
Outstanding Deductible
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
20 Coinsurance
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
Payment / Denial Code
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
Paid to You
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Medicare EOMB
Name DOS POS Proc Billed Allowed Ded
Coin Code Payment
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Understanding EO(M)Bs
Key Points

• Show the fruits of your labor
• Explains reimbursement or lack in detail
• Shows co-pays, deductibles, etc.
• All contain reason codes

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3. Reducing Denials
I havent failed, Ive found 10,000 ways that
dont work. Thomas Edison
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Reducing Denials
Key Points

• Your staff hates working denials
• Working denials costs you PROFIT
• Denial reports should be mandatory
• When you find something wrong, fix it

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How They Occur
Usually a claim fails to pass a
computer edit
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Either way, they realize your staff probably wont
Work The Denial
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Nearly
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Of all claims are returned because of missing
information of CMS 1500 form
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Top 6 Denials In Georgia

• Duplicate Charge - Processed / Processing
• No UPIN number
• Wrong Medicare Number
• Code No Longer Recognized
• Incomplete CLIA Number
• Information Does Not Support
  Number of Services Provided

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The denial report is the report card for the
Office Manager
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It costs an average 5 - 10
in man-hours and supplies
everytime a claim is refiled
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Technique for Success

• File Routine Claims Daily/Weekly
• Remaining 10-15 Save To Discuss With Physician
  - modifier questions, place of service, date of
  service, two codes same day,etc.
• The Friday Meeting - Discuss questionable
  claims and recent denial report

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As Coding Improves
Friday Meeting
Meetings Decrease
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Appeals Process - 1964
Disagree
Insurance Commissioner
2-17
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Reducing Denials
Key Points

• Your staff hates working denials
• Working denials costs you PROFIT
• Denial reports should be mandatory
• When you find something wrong, fix it

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4. Revenue, Collection, and Overhead Ratios
Government, even in its best state, is but a
necessary evil in its worst state, an
intolerable one. Thomas Paine
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Ratios
Key Points

• Establish Goals
• Work to meet goals
• Monthly physician meetings are to be mandatory
• When you find something is wrong, fix it

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Revenue, Collections Overhead

• You Need 5 Pieces of Information
• Total Charges, Adjustments, Receipts, Aged A/R,
  and a Financial Statement
• Collection Ratios - Gross Net
• Office Overhead and Profit Percentage
• Months in A/R

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Establish Practice Goals to Measure Success
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Charges
575,831
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Receipts
348,668
348,668
2-18
575,831
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Charges - Adjustments
575,831 - 205,421
Receipts
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348,668
348,668
2-18
370,410
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Be very careful about staff making
Adjustments
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Financial Information
2-2021
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High Overhead
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• Low Revenue
• Poor Management
• High Staff Salaries
• Poor Contracts
• Lack of Budgeting

2-21
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Ratios
Key Points

• Establish Goals
• Work to meet goals
• Monthly physician meetings are to be mandatory
• When you find something is wrong, fix it

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5. Accounts Receivable

• Hide not your talents. They for use were made.
  What's a sundial in the shade.
• Ben Franklin

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Every dollar you earn, but fail to collect, is a
cost to your practice.
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A/R Balance
91,101
Average Monthly Charges
47,985
2.0
91,101
2-19
47,985
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Whats a Dollar Worth?
US Department of Commerce
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What is A/R Worth?

• 0-30 days
• 31-60 days
• 61-90 days
• 91-120 days
• 120 days

• 42,636
• 6,542
• 4,424
• 5,510
• 31,989

91,101
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What is A/R Worth?

• 0-30 days
• 31-60 days
• 61-90 days
• 91-120 days
• 121 days

42,636 5,887 3,539 3,857 12,795

• 42,636
• 6,542
• 4,424
• 5,510
• 31,989

15,987
Loss
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Why Use a Collection Agency?

• Exhausted internal resources
• 3rd party psychology
• Multiple information sources
• Specialized skills knowledge
• Concentrated effort

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A Patient Collection Policy That Works
Show Me The Money
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Revenue - Overhead Profit
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Think About This
On the financial statement, there are more than
30 lines showing us how we spend our money.
However, there is only one line that focuses on
how much we make. To me, thats the most
important number on the financial report, yet
nobody acts like they know how it is to be
addressed.
Now You Do!
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Cuts Expenses Codes Collects The Same
2-21
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Doesnt Cut Expenses But Codes Collects
Appropriately
2-21
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Work Smarter, Not Harder

• Because . . .
• 50 Overhead (average practice)
• With a
• 5 Increase in Revenue
• Or a
• 5 Reduction in Expenses
• Will result in

10 Gain in Your Salary