Medical Billing Normalization Comparisons

Posted on November 11, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding Medical Billing Invoice Variations

Staff Reporters

Deviations in medical billing may often be detected through utilization data that the government or private insurance companies produce on all providers that submit a claim for payment of services. Uncle Sam and insurance companies track utilization through a variety of parameters, including CPT codes, ICD-9-CM, or number of referrals; etc.

Benchmark Differences

However, different programs utilize varying benchmarks to trigger a review. For example, a physician who sees patients in the office from 8:00 a.m. until 8:00 p.m., seven days a week and has the highest billing amounts in the region can be subjected to a review. This doctor’s activities would be scrutinized. The utilization review department would probably flag this doctor’s provider number and request more information on a sampling of his or her claims, based almost solely on the volume.

Doctors

Example:

Some other utilization review activities may occur due to the type of services that a doctor may offer. For example, if a cardiologist should suddenly start billing for a large number of incisions and drainage of foot abscesses, this might trigger a review, since that might not be a typical scope of service for this doctor in this locality. The same could be said for a pathologist, triggering a review due to the high volume of wound care or ulcer debridement.

Geographic Variations

Thresholds also vary from locale to locale regarding what triggers an audit. There are consultants who have suggested querying local carriers for medical provider specific information regarding utilization activity to compare against community performance. On the other hand, some Carrier Advisory Committee [CAC] representatives have indicated that this may bring undesirable attention from the Medicare program and trigger an audit.

Assessment

Now that the concept of medical billing normalization has been proposed, and we have some definitional clarity regarding potential variations, consulting professionals suggest obtaining current information with caution.

Conclusion

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Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

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Patients Challenging Medical Invoices and Bills

Posted on August 5, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Root Cause is Money, Failure-to-Disclose and Frustration

[By Staff Reporters]

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Patients are challenging their medical bills with lawyers and lawsuits, out of frustration about the lack of up-front disclosure over costs by doctors and hospitals.

Involve More than a Few Cases

For example, after being charged $82,282 for a 23-hour stay in doctor-owned Westfield Hospital for two operations on her abdomen, a 56-year-old West Penn Township woman called the hospital and her insurer for an explanation.

Not satisfied with the response, she hired a lawyer and notified a reporter, after which Westfield officials said she was overcharged due to human error.

In another 2006 class-action Seattle lawsuit that was expected to have a ripple effect on consumers and hospitals, two patients of the Virginia Mason Medical Center filed suit against the center and won, after which Virginia Mason agreed to pay back an estimated $60 million to more than 3,200 patients who over six years had been charged ”overhead” for procedures performed in hospital-owned clinics – in some cases adding 60 percent to the price patients would have been charged for the same procedure performed by the same doctors in their offices.

Assessment

Although private legal action over medical bills is hard to track, the number of billing and coverage complaints filed with the Pennsylvania Attorney General’s health care unit has risen steadily, with the 2,000 or more complaints so far this year representing a five or six percent increase over last year; according to Morning Call, July 13, 2008.

Conclusion

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The Cure for Claims Campaign [CCC]

Posted on July 9, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Reducing Healthcare Administrative Burdens and Costs

Staff Writers

To help reduce the administrative burden of ensuring accurate insurance payments for physician services, the American Medical Association [AMA] recently launched the “Cure for Claims” Campaign [CCC] and unveiled the first AMA National Health Insurer Report Card on claims processing.

Goals

The goal of the AMA campaign is to hold health insurance companies accountable for making claims processing more cost-effective and transparent, as physicians divert substantial resources – as much as 14 percent of their total revenue – to ensure accurate insurance payments for their services.

The National Health Insurer Report Card [NHIRC]

The AMA’s new National Health Insurer Report Card provides physicians and the public with information on the timeliness, transparency and accuracy of claims processing by health insurance companies. Based on a random sample pulled from more than 5 million electronically billed services, the NHIRC examines the claims processing performance of Medicare and seven national commercial health insurers: Aetna, Anthem Blue Cross Blue Shield, CIGNA, Coventry Health Care, Health Net, Humana and United Healthcare.

Study Results

According to the June 16, 2008 AMA study: 

  • There is wide variation in how often health insurers pay nothing in response to a physician claim (from less than 3 percent to nearly 7 percent), and in how they explain the reason for the denial. There was no consistency in the application of codes used to explain the denials, making it expensive for physician practices to determine how to respond.
  • Health insurers reported to physicians the correct contracted payment rate only 62 to 87 percent of the time. When health insurers report an amount that does not adhere to the contracted rate, it adds additional, unnecessary costs to the physician practice to evaluate the inconsistency.
  • More than half of health insurers do not provide physicians with the transparency necessary for an efficient claims processing system.
  • There is wide variation among payers as to how often they apply computer generated edits to reduce payments (from a low of less than .5 percent to a high of over 9 percent). Payers also varied on how often they use proprietary rather than public edits to reduce payments (ranging from zero to as high as nearly 72 percent).

Assessment

The use of undisclosed proprietary insurance claims edits, only serve to inhibit the flow of transparent information to physicians, adding additional administrative costs to reconcile their health insurance claim issues.

Conclusion

Your thoughts and comments are appreciated. Will likely outcomes of the CCC and NHIRC be real, or illusionary?

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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