Patient Payment Collections

Even before the enactment of the ACA patient responsibilities were increasing.  However with the ACA plans we are seeing them climb ever higher.  It is not uncommon to see $40 or $50 co-pays and $2500 deductibles.  With patient responsibilities rising it is becoming crucial for providers to improve their patient payment collections.

In the past when most of a visit was paid by insurance this was not as important.  Now it is not uncommon for the entire allowed amount to be the responsibility of the patient so providers cannot afford to not collect the patient portions.

With the technology available, providers now have more options.

  1. Most important is sending patient statements on a regular monthly basis
  2. Co-pays should be collected at the time of service and should not require sending a statement except in unusual situations
  3. Patient statements can now be sent by email cutting down on costs
  4. Statements can be sent with a place for the patient to enter credit card information to pay the balance.
  5. A patient portal can be set up on a website to accept electronic payments over the internet.
  6. If time allows in the office patients should be called to remind them of past due balances and an attempt should be made to set up payment arrangements
  7. Providers can consider using “soft collections” through a collection agency where the collection agency makes several calls and sends letters over a brief period of time attempting to set up payment arrangements.

People are more accustomed to making payments by EFT or paying bills online with a credit card.  It is important that providers give patients convenient ways to make their payment.


Initial Encounters and Diagnoses Codes

Many practice management systems allow the storage of a patient’s diagnoses codes in their record.  Then when a claim is created the diagnoses codes are automatically populated.  This can be a huge short cut in some cases.  For example, a patient being seen for outpatient psychotherapy usually has the same diagnosis code visit after visit.  So every time the a claim is generated the diagnosis code is automatically entered saving the biller the need to add it.  However this can cause denials is certain situations.

Some diagnosis codes must be changed depending on whether it is an initial encounter or a subsequent visit.  For example; if a patient is seen for a right sprained ankle and the initial visit ICD10 diagnosis code of  S93.01XA is used, subsequent visits would be billed with ICD10 code S93.01XD.  The S93.01XD code is specifically for subsequent visits while the S93.01XA is specifically for an initial encounter.

So if a PMS system that allows storage of diagnoses codes is used make sure to check the claims over for accuracy.

Avoid denials for unspecified codes

ICD10 Grace Period Ending October 1, 2016

Hard to believe that it has been almost a year since ICD10 was implemented.  Have to admit that from our point of view the implementation went fairly smoothly with just a few bumps.  But we were warned that Medicare and other commercial carriers were going to allow a grace period of one year for non-specific ICD10 codes.  After one year claims with unspecified ICD10 codes will be denied.

That one year grace period ends October 1st.  We have actually already seen a few denials for unspecified codes but we are expecting that number to rise after October 1st.  We have been reminding our providers to be as specific as possible when coding.  Providers that are using the unspecified codes as primary diagnoses will probably see many denials one the grace period ends.

There are things that can still be done to prevent this.  If a provider is still using a superbill make sure the codes on the superbill allow them to indicate the specifics.  For example, if a patient has a sprained ankle make sure the provider can indicate if it is the right or left ankle.  Also, is this the first visit for the sprain, or is this a subsequent visit?  Is it a subluxation or a dislocation?  All of this information is required in order to use a non specific ICD10 code.

Most EHR systems help with this issue by giving the options when the provider is documenting the visit.  If the provider is using an EHR program, make sure it allows for them to pick the specific code when documenting.

Educate your providers.  Let them know that if they don’t use specific codes or provide the information so that specific codes can be assigned they will disrupt the cash flow.  Many times the provider is still unaware that it is important to indicate right or left, or other specific information needed to select the correct ICD10.

The biggest thing is don’t wait.  Take a look at the situation now and try to prevent the denials.  Check the billing currently going out to see if unspecified codes are being used.  Identify the areas that need to be improved and implement systems to fix them now before the denials start to come.  This will prevent the disruption to the provider’s cash flow.

Our Biggest Sale Ever of Our Online Medical Billing Courses

   We want to give our readers a special “Summer Sale” on our Medical Billing Courses”  All ten of our regularly priced $129.00 courses are now on sale for only $79 each.  Use the coupon code SUMMER for this discount.  Don’t miss this opportunity to learn medical billing or just increase your knowledge in specific areas.

Hurry!  Don’t wait for this extraordinary offer to end.

Here is more information on our available online courses.

If you are interested in a bundle call our office directly at
800-207-4222 X100 for pricing and purchase.

Shop here for ebooks. 
Shop here for online courses.

Here is a list of all our online courses.

  1. Introduction to Health Insurance and the Medical Billing Process
  2. Understanding Coding and Modifiers
  3. Life Cycle of an Insurance Claim
  4. Billing Medicare, TRICARE and Medicaid
  5. Billing Blue Cross/Blue Shield, Commercial, Workers Comp and More
  6. HIPAA, HITECH and Regulatory Issues
  7. Reading EOBs, Handling Denials and Filing Appeals
  8. Working with a Practice Management System
  9. Operating a Medical Billing Business
  10. Marketing a Medical Billing Company


Ignoring MACRA Can Be a Costly Mistake

In April of 2015 President Obama signed the Medicare Access and CHIP Reauthorization Act also known as MACRA into law.     CHIP stands for Children’s Health Insurance Program.    Basically in a nutshell MACRA is going to change Medicare’s traditional fee-for-service method of reimbursement into a value based methodology.    This could have a huge impact on how providers are reimbursed.

MACRA’s implementation will begin in 2019 but it will be based on the reporting year 2017.   The problem is that many in the billing community do not understand what MACRA is or how it will impact their practice.  Even though the implementation is still two and a half years away, the data that will be used to determine a provider’s fee schedule will be based on information reported in 2017 which is only six months away.

Many providers and their staff are totally unaware of the changes that will be implemented.  These changes can greatly affect their cash flow and income.  Ignoring MACRA could be a costly mistake.

So what exactly is MACRA?  Basically the government wants to reimburse providers based on quality of care, not quantity.  Currently providers are reimbursed on a fee for service basis.  They see a Medicare patient and they are reimbursed for that service based on the Medicare fee schedule.  The fee schedule amounts are determined by the SGR formula or Sustainable Growth Rate.  MACRA will replace the SGR formula.   Physicians will no longer be reimbursed based on volume of patients but on value of care.

Experts estimate that there are billions of dollars wasted due to wasteful, redundant and inefficient care.   The SGR formula became too difficult to manage and needed to be replaced.  MACRA will basically allow each provider to have an individual fee schedule based on their performance.  Under MACRA providers will have two options:

Option 1:  MIPS or Merit Based Incentive Payment System.  MIPS combines parts of PQRS (Physician Quality Reporting System), VM (Value based payment modifier) & EHR (Electronic Health Records) incentive program into one program.  Most physicians will be reimbursed based on MIPS.

Option 2:  APM or Alternative Payment Model.  APM provides ways to pay health care providers for the care they give to Medicare beneficiaries by sharing the risk.  Accountable Care Organizations (ACOs), Patient Centered Medical Homes, and bundled payment models are examples of APMs.  From 2019-2024 health care providers that qualify for APMs will receive a lump-sum incentive payment.

Most Medicare providers will fall under Option 1 or MIPS.  There are four components of MIPS:

1.    Quality – PQRS (50%)
2.    Advancing Care Information (ACI previously known as EHR/meaningful use) (25%)
3.    Clinical Practice Improvement Activities (CPIA) (15%)
4.    Resource Use (10%)

MIPS defines the financial impact on providers by creating a composite score for each provider.  The composite score will be between 1 and 100 and will be based on the four components above.   This composite score will lead to each provider having their own individual fee schedule.

Composite scores will be posted on a CMS (Centers for Medicare and Medicaid Services) public website know as Physician Compare.  CMS hopes that this will motivate providers by having an effect on their reputation.

Providers who are not reporting PQRS measures receive a 2% penalty for 2016.  Many providers choose to accept this penalty.  Once MACRA is implemented PQRS could have a greater impact on a provider’s reimbursement.  PQRS counts for 50% of a provider’s composite score.

The following is a chart of possible payment adjustments for providers based on their composite score:

•    2019:  +/- 4%
•    2020:  +/- 5%
•    2021:  +/- 7%
•    2022:  +/- 9%

Based on this chart, a provider with a low composite score may receive a payment adjustment of – 9%.  This could have a big impact on a provider’s income.

Currently MU or Meaningful Use is an all or nothing program.  This means that a provider either passes, or meets the requirements for Meaningful Use of EHR, or they fail by not meeting those requirements.   Under MACRA, MU or ACI will no longer be all or nothing.  In the past, a user with 31% was just as compliant as user with 75%.  Under MACRA ACI (previously MU) will account for up to 25% of a provider’s composite score.  The provider will receive credit for the amount of Meaningful Use they demonstrate.

The higher a provider’s composite score, the more they will be reimbursed for services provided to Medicare beneficiaries.  Provider can choose to suffer the penalties but a low composite score will result in low reimbursement for services.  They can also choose to mitigate or reduce the penalties by reporting PQRS and demonstrating meaningful use to increase their composite score.  They can also compete for incentive dollars to improve their fee schedule.

From 2015 to 2019 there will be an automatic 0.5% increase to the current Medicare physician fee schedule.  However this increase can be offset by penalties.   2019 to 2025 the reimbursement will be determined by MIPS or APM depending on what option the provider chooses.

It is urgent that providers prepare now so that their reported information in 2017 will not hurt their income in 2019.  They will have to decide how much time and energy their office will devote to the process.  Software companies are trying to make it easier for providers to reduce penalties by doing back end work to help reporting PQRS and ACI.

Many providers are still not reporting through the PQRS system.  The current penalty does not impact them enough to make a difference.  Many are also not demonstrating meaningful use.  With MACRA PQRS and MU will count for up to 75% of their composite score so it will not be so easy to ignore.

In order to limit the financial impact of MACRA providers will have to report using PQRS, demonstrate MU or ACI, and balance compliance with financial prudence.  It is important to start preparing now.

Two Day Training in Our Office

This week we were privileged to meet and work with two sisters from Massachusetts who started their medical billing business 4 years ago after purchasing our “Medical Billing Business in a Box” book package.  It was so interesting to hear about the progress they have made and to give them ideas and suggestions for further building their business.  It was a very humbling time we spent with them when they told us about their experience as children going to an underground church in Bulgaria.  They knew of a young family who were arrested and imprisoned and sent to hard labor for being Christian.  They were medical students and lost that status.  The worst part was that their father turned them in for not being Communist.  We take so much for granted in this country including the right to go to church.

Brani and her sister came for our two day training and had this to say.

   “The 2 days of training provided by Michele and Alice at their offices of Solutions Medical Billing Inc, were the best investment of time and money we made for our medical billing business.

The training was very intensive and packed with extremely valuable information which empowered us to take our business to the next level.

Before the training, they had prepared a customized agenda, tailored to fit our needs and questions.  From the warm welcoming, to the pleasant environment, to answering all of our questions and providing us with printed materials, Alice and Michele were very professional.

We strongly recommend this training to everyone who intends to start their own medical billing business and get hands-on experience, or to grow their business.  The training far exceeded our expectations.”

Our special 2 day training in our office is designed for anyone starting or wanting to grow their medical billing business.  We work personally with you on any parts of the business you need help with.

Find more information on our two day training here.

MACRA – Medicare’s New Payment Plan

Why does our government have to make everything so difficult?  Seriously the first two articles I read simply identified MACRA as the Medicare Access and CHIP Reauthorization Act of 2015 signed into law on April 16, 2015.  Both articles then went on to say that MACRA was going to be a “potential game changer” of our current health care system.  But neither explained why.

I had to dig around quite a bit before I could really get what I would call any understanding of what MACRA is myself.  So this is my layman’s version of MACRA:

•    MACRA repeals the SGR formula (Sustainable Growth Rate) that used to threaten substantial pay cuts to physicians.
•    MACRA will begin being implemented in 2019
•    There are basically two options for eligible providers.  A.  EPs can participate in MIPS, or Merit-Based Incentive Payment System.  MIPS is a modified fee-for-service model which consolidates PQRS, meaningful use, and value-based modifiers.  B.  If they qualify they can participate in the Alternative Payment Models or APMs.  Participation in APM is entirely voluntary.  APMs are new payment and delivery models approved by CMS.
•    MIPS is supposed to promote better care and smarter spending by evaluating EPs.  Evaluations will be based on quality of care, resourse use, clinical practice improvement activities, and meaningful use of EHR
•    There will be incentive payments for qualifying EPs

I will continue to gather information on MACRA and we will include more articles in the future.  For now there is still time for us to figure out how this will impact providers.  There is also time for them to delay the implementation which seems to be common with all new legislation in the medical field.