Now that many of you are aware that the Medicare pay rates have finally been settled for 2003, you’re probably still scratching your head and wondering, What’s the bottom line? After months of Congressional juggling, fee schedule and conversion factor revisions, physicians opting out of Medicare, changing their participation statuses, and Web sites flooded with practices trying to get the latest, final, fee schedules, the gavel has dropped and dermatologists now have the tools to guide them through the next three quarters of fiscal year 2003. In spite of the thirteenth hour increase, dermatologists and nephrologists still ended up on the losing end of the carrot — with an overall practice decrease of 2%, while all other specialties either ended up dead even with last year’s fee schedule or experienced slight increases. Q: Why the decrease in dermatology when Congress was supposed to adjust the fee schedule due to incorrect payments in 2002? A: The decrease is due to the fact that some key dermatology services experienced severe decreases in the RVUs (relative value units) in spite of the increase in the conversion factor to 36.7856 up from 36.1992 in 2002. Let’s look at the main CPT codes billed by dermatologists and see how 2002 Medicare allowables differ from 2003 rates. The Global Effect Some physicians feel that by limiting their Medicare patient base, they can avoid the 2% cut. This will be discussed in more detail later in this article. First, however, you need to look at the global picture. Most of the major managed care plans in the United States set their fee schedules based on a percentage of the Medicare rates. Some pay 100% of Medicare, some pay 50% while others may pay a significant percentage over Medicare. The bottom-line impact the 2003 pay cuts will have on your financial picture goes beyond the Medicare population in your practice. You must look at your major players like Blue Shield, Aetna, Cigna, United HealthCare (and so on), and see what they pay. Here are a few areas you need to find the answers for in determining where you stand with respect to non-Medicare carriers: 1. Does the carrier use Medicare as a role model? Many contracts actually spell out, “We pay X% of Medicare’s fee schedule.” 2. If so, what percentage of Medicare do they pay? 3. What year are they using as their base? Many plans are using old fee schedules. Even though the contract states they use a percentage of Medicare, frequently you’ll find that even though that is true, they are using a 1-year-old fee schedule. That fact many actually be beneficial for this year because of the reductions. My bet is that the carriers will be quick to make the adjustment this year since the 2003 fee schedule represents a reduction and works in the carrier’s best interest. 4. If your insurers don’t use Medicare’s fee schedule, you need to get some guidance of what conversion factor they use and how you can access the RVUs for the services that you commonly bill for. Once you know these facts, you can determine if your practice income will go up or down and make some realistic assumptions. Should I Limit Access to Medicare Patients? I have never understood the rationale behind this concept. Let’s first look at why you should love Medicare patients. 1. They are reliable. Most of these patients, rarely, if ever, miss appointments. 2. More than 80% of them have secondary insurance. So between the Medicare payment and the secondary payment, you can get paid for 100% of the allowable between the two plans. 3. Medicare patients almost always pay their bill. Unless they die. 4. Medicare patients produce more income per visit. Compare your average reimbursement for your managed care patient, for example, to the average reimbursement for a Medicare Part B patient. Be careful here. Keep your bundling and denial issues in perspective. Blue Shield or Cigna or Aetna may allow $100 for 99213 and $80 for 11100, but if 50% of the time they bundle (deny payment) for 99213, then how much are you really getting? Or consider how long you have to wait to get paid. How much staff time do you spend doing appeals and reviews? How many more months does it take to get that $180? And what about those unreasonable filing limits? You file a claim 3 months in a row. They state they never got it and then finally when they magically do get the claim, it has exceeded their filing limitations. They don’t accept your computer’s proof of timely filing. \Score: Insurance Company - One, Doctor’s Office- Zero! And consider all the inconsistencies. On one claim they pay for both the 17000 and the 11100, while on the next, they state the biopsy is included in the payment for 17000. They bundle excisions with repairs, disregard units, and ignore the -25 modifier. The list goes on and on. Medicare, on the other hand, doesn’t bundle (unless you don’t understand how to use the -59 modifier). They pay in 16 days, if you file electronically. You know exactly (to the penny) what you’re going to get paid. They apply the multiple surgical reduction rule consistently. You can correct claims on the phone. There’s a well-defined appeals and hearings process (that works). The list goes on and on. Making Managed Care Plans Profitable If you’re still addicted to those managed care plans in spite of this reality check, then now’s a good time to renegotiate. It’s not always an increased fee schedule that can make a contract profitable. Here are a few things you need to consider asking for if you get on the right side of the negotiation table: 1. Extension of the timely filing limit 2. No denials for E/M visits billed with -25 modifier 3. Repairs paid with excisions 4. Coverage for certain benign lesion removal 5. Fax submission of appeals 6. Acceptance of computer printouts as proof of timely filing 7. Surgical trays 8. Specimen handling fees 9. No surgical reductions past 50%. If fees are an issue, ask for an increase in just a few key CPT codes rather than asking for a global pay hike. Pick your top 15 procedures (e.g., 11100, 17000, 99213, 11642). Ask for an increase that is a significant percentage over Medicare. Have some EOMBs from other carriers that pay great on those codes as a bargaining tool. Be sure you are negotiating with the right person. It has to be a decision-maker — not some new rep who doesn’t have a clue and won’t be there next week. Practice Insight Of course, your practice can still be profitable in spite of the fee schedule decreases by running a tight ship. Pig farmers knew that there were two ways to keep the family fed: “Produce more pigs to sell, or find a way of raising the same number of pigs cheaper.” Think of all the ways your practice can save money and increase profit. 1. Stop giving away services. How many actinic keratoses do you treat each day that you don’t charge for? How many follow-up office visits are “no charges” when actually they are billable visits? 2. Delegate mundane tasks to staff. Physicians should avoid redundant tasks such as history-taking, applying dressings, explaining basic diagnosis and treatments, etc. All these time-consuming responsibilities can easily be transferred to a trained medical assistant. Such delegation frees the physician to see more patients while maintaining high patient satisfaction. 3. Get a handle on documentation time. Invest in a quality electronic medical record system. Until then, train staff to scribe using lots of good forms. 4. Review your practice overhead. There are hundreds of ways to reduce the cost of doing business. 5. Review your scheduling of patients. Track no-shows, cancellations and overbookings. There are many ways to enhance your physician per-hour/per-patient ratios. 6. Work your accounts receivables (A/R). You should have no more than 1.5 months of A/R with the maximum over 90 days at 10% of your total A/R. 7. Analyze your staffing needs. You may have too many or too few staff. Get rid of non-productive employees. Set standards for productivity. Retire staff members who are resistant to change. Don’t let your employees rule how you run your practice. Make the Changes Before It’s Too Late Physicians have a reputation for not having business savvy. However, the time has come to treat your practice like any other successful business. Your attention to the details will make the difference in the coming years between profit and loss, success versus failure or mere survival versus growth. Where you end up next year is totally dependent on you.
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This coding expert answers common coding questions to help you run a more efficient practice.
Now that many of you are aware that the Medicare pay rates have finally been settled for 2003, you’re probably still scratching your head and wondering, What’s the bottom line? After months of Congressional juggling, fee schedule and conversion factor revisions, physicians opting out of Medicare, changing their participation statuses, and Web sites flooded with practices trying to get the latest, final, fee schedules, the gavel has dropped and dermatologists now have the tools to guide them through the next three quarters of fiscal year 2003. In spite of the thirteenth hour increase, dermatologists and nephrologists still ended up on the losing end of the carrot — with an overall practice decrease of 2%, while all other specialties either ended up dead even with last year’s fee schedule or experienced slight increases. Q: Why the decrease in dermatology when Congress was supposed to adjust the fee schedule due to incorrect payments in 2002? A: The decrease is due to the fact that some key dermatology services experienced severe decreases in the RVUs (relative value units) in spite of the increase in the conversion factor to 36.7856 up from 36.1992 in 2002. Let’s look at the main CPT codes billed by dermatologists and see how 2002 Medicare allowables differ from 2003 rates. The Global Effect Some physicians feel that by limiting their Medicare patient base, they can avoid the 2% cut. This will be discussed in more detail later in this article. First, however, you need to look at the global picture. Most of the major managed care plans in the United States set their fee schedules based on a percentage of the Medicare rates. Some pay 100% of Medicare, some pay 50% while others may pay a significant percentage over Medicare. The bottom-line impact the 2003 pay cuts will have on your financial picture goes beyond the Medicare population in your practice. You must look at your major players like Blue Shield, Aetna, Cigna, United HealthCare (and so on), and see what they pay. Here are a few areas you need to find the answers for in determining where you stand with respect to non-Medicare carriers: 1. Does the carrier use Medicare as a role model? Many contracts actually spell out, “We pay X% of Medicare’s fee schedule.” 2. If so, what percentage of Medicare do they pay? 3. What year are they using as their base? Many plans are using old fee schedules. Even though the contract states they use a percentage of Medicare, frequently you’ll find that even though that is true, they are using a 1-year-old fee schedule. That fact many actually be beneficial for this year because of the reductions. My bet is that the carriers will be quick to make the adjustment this year since the 2003 fee schedule represents a reduction and works in the carrier’s best interest. 4. If your insurers don’t use Medicare’s fee schedule, you need to get some guidance of what conversion factor they use and how you can access the RVUs for the services that you commonly bill for. Once you know these facts, you can determine if your practice income will go up or down and make some realistic assumptions. Should I Limit Access to Medicare Patients? I have never understood the rationale behind this concept. Let’s first look at why you should love Medicare patients. 1. They are reliable. Most of these patients, rarely, if ever, miss appointments. 2. More than 80% of them have secondary insurance. So between the Medicare payment and the secondary payment, you can get paid for 100% of the allowable between the two plans. 3. Medicare patients almost always pay their bill. Unless they die. 4. Medicare patients produce more income per visit. Compare your average reimbursement for your managed care patient, for example, to the average reimbursement for a Medicare Part B patient. Be careful here. Keep your bundling and denial issues in perspective. Blue Shield or Cigna or Aetna may allow $100 for 99213 and $80 for 11100, but if 50% of the time they bundle (deny payment) for 99213, then how much are you really getting? Or consider how long you have to wait to get paid. How much staff time do you spend doing appeals and reviews? How many more months does it take to get that $180? And what about those unreasonable filing limits? You file a claim 3 months in a row. They state they never got it and then finally when they magically do get the claim, it has exceeded their filing limitations. They don’t accept your computer’s proof of timely filing. \Score: Insurance Company - One, Doctor’s Office- Zero! And consider all the inconsistencies. On one claim they pay for both the 17000 and the 11100, while on the next, they state the biopsy is included in the payment for 17000. They bundle excisions with repairs, disregard units, and ignore the -25 modifier. The list goes on and on. Medicare, on the other hand, doesn’t bundle (unless you don’t understand how to use the -59 modifier). They pay in 16 days, if you file electronically. You know exactly (to the penny) what you’re going to get paid. They apply the multiple surgical reduction rule consistently. You can correct claims on the phone. There’s a well-defined appeals and hearings process (that works). The list goes on and on. Making Managed Care Plans Profitable If you’re still addicted to those managed care plans in spite of this reality check, then now’s a good time to renegotiate. It’s not always an increased fee schedule that can make a contract profitable. Here are a few things you need to consider asking for if you get on the right side of the negotiation table: 1. Extension of the timely filing limit 2. No denials for E/M visits billed with -25 modifier 3. Repairs paid with excisions 4. Coverage for certain benign lesion removal 5. Fax submission of appeals 6. Acceptance of computer printouts as proof of timely filing 7. Surgical trays 8. Specimen handling fees 9. No surgical reductions past 50%. If fees are an issue, ask for an increase in just a few key CPT codes rather than asking for a global pay hike. Pick your top 15 procedures (e.g., 11100, 17000, 99213, 11642). Ask for an increase that is a significant percentage over Medicare. Have some EOMBs from other carriers that pay great on those codes as a bargaining tool. Be sure you are negotiating with the right person. It has to be a decision-maker — not some new rep who doesn’t have a clue and won’t be there next week. Practice Insight Of course, your practice can still be profitable in spite of the fee schedule decreases by running a tight ship. Pig farmers knew that there were two ways to keep the family fed: “Produce more pigs to sell, or find a way of raising the same number of pigs cheaper.” Think of all the ways your practice can save money and increase profit. 1. Stop giving away services. How many actinic keratoses do you treat each day that you don’t charge for? How many follow-up office visits are “no charges” when actually they are billable visits? 2. Delegate mundane tasks to staff. Physicians should avoid redundant tasks such as history-taking, applying dressings, explaining basic diagnosis and treatments, etc. All these time-consuming responsibilities can easily be transferred to a trained medical assistant. Such delegation frees the physician to see more patients while maintaining high patient satisfaction. 3. Get a handle on documentation time. Invest in a quality electronic medical record system. Until then, train staff to scribe using lots of good forms. 4. Review your practice overhead. There are hundreds of ways to reduce the cost of doing business. 5. Review your scheduling of patients. Track no-shows, cancellations and overbookings. There are many ways to enhance your physician per-hour/per-patient ratios. 6. Work your accounts receivables (A/R). You should have no more than 1.5 months of A/R with the maximum over 90 days at 10% of your total A/R. 7. Analyze your staffing needs. You may have too many or too few staff. Get rid of non-productive employees. Set standards for productivity. Retire staff members who are resistant to change. Don’t let your employees rule how you run your practice. Make the Changes Before It’s Too Late Physicians have a reputation for not having business savvy. However, the time has come to treat your practice like any other successful business. Your attention to the details will make the difference in the coming years between profit and loss, success versus failure or mere survival versus growth. Where you end up next year is totally dependent on you.
Now that many of you are aware that the Medicare pay rates have finally been settled for 2003, you’re probably still scratching your head and wondering, What’s the bottom line? After months of Congressional juggling, fee schedule and conversion factor revisions, physicians opting out of Medicare, changing their participation statuses, and Web sites flooded with practices trying to get the latest, final, fee schedules, the gavel has dropped and dermatologists now have the tools to guide them through the next three quarters of fiscal year 2003. In spite of the thirteenth hour increase, dermatologists and nephrologists still ended up on the losing end of the carrot — with an overall practice decrease of 2%, while all other specialties either ended up dead even with last year’s fee schedule or experienced slight increases. Q: Why the decrease in dermatology when Congress was supposed to adjust the fee schedule due to incorrect payments in 2002? A: The decrease is due to the fact that some key dermatology services experienced severe decreases in the RVUs (relative value units) in spite of the increase in the conversion factor to 36.7856 up from 36.1992 in 2002. Let’s look at the main CPT codes billed by dermatologists and see how 2002 Medicare allowables differ from 2003 rates. The Global Effect Some physicians feel that by limiting their Medicare patient base, they can avoid the 2% cut. This will be discussed in more detail later in this article. First, however, you need to look at the global picture. Most of the major managed care plans in the United States set their fee schedules based on a percentage of the Medicare rates. Some pay 100% of Medicare, some pay 50% while others may pay a significant percentage over Medicare. The bottom-line impact the 2003 pay cuts will have on your financial picture goes beyond the Medicare population in your practice. You must look at your major players like Blue Shield, Aetna, Cigna, United HealthCare (and so on), and see what they pay. Here are a few areas you need to find the answers for in determining where you stand with respect to non-Medicare carriers: 1. Does the carrier use Medicare as a role model? Many contracts actually spell out, “We pay X% of Medicare’s fee schedule.” 2. If so, what percentage of Medicare do they pay? 3. What year are they using as their base? Many plans are using old fee schedules. Even though the contract states they use a percentage of Medicare, frequently you’ll find that even though that is true, they are using a 1-year-old fee schedule. That fact many actually be beneficial for this year because of the reductions. My bet is that the carriers will be quick to make the adjustment this year since the 2003 fee schedule represents a reduction and works in the carrier’s best interest. 4. If your insurers don’t use Medicare’s fee schedule, you need to get some guidance of what conversion factor they use and how you can access the RVUs for the services that you commonly bill for. Once you know these facts, you can determine if your practice income will go up or down and make some realistic assumptions. Should I Limit Access to Medicare Patients? I have never understood the rationale behind this concept. Let’s first look at why you should love Medicare patients. 1. They are reliable. Most of these patients, rarely, if ever, miss appointments. 2. More than 80% of them have secondary insurance. So between the Medicare payment and the secondary payment, you can get paid for 100% of the allowable between the two plans. 3. Medicare patients almost always pay their bill. Unless they die. 4. Medicare patients produce more income per visit. Compare your average reimbursement for your managed care patient, for example, to the average reimbursement for a Medicare Part B patient. Be careful here. Keep your bundling and denial issues in perspective. Blue Shield or Cigna or Aetna may allow $100 for 99213 and $80 for 11100, but if 50% of the time they bundle (deny payment) for 99213, then how much are you really getting? Or consider how long you have to wait to get paid. How much staff time do you spend doing appeals and reviews? How many more months does it take to get that $180? And what about those unreasonable filing limits? You file a claim 3 months in a row. They state they never got it and then finally when they magically do get the claim, it has exceeded their filing limitations. They don’t accept your computer’s proof of timely filing. \Score: Insurance Company - One, Doctor’s Office- Zero! And consider all the inconsistencies. On one claim they pay for both the 17000 and the 11100, while on the next, they state the biopsy is included in the payment for 17000. They bundle excisions with repairs, disregard units, and ignore the -25 modifier. The list goes on and on. Medicare, on the other hand, doesn’t bundle (unless you don’t understand how to use the -59 modifier). They pay in 16 days, if you file electronically. You know exactly (to the penny) what you’re going to get paid. They apply the multiple surgical reduction rule consistently. You can correct claims on the phone. There’s a well-defined appeals and hearings process (that works). The list goes on and on. Making Managed Care Plans Profitable If you’re still addicted to those managed care plans in spite of this reality check, then now’s a good time to renegotiate. It’s not always an increased fee schedule that can make a contract profitable. Here are a few things you need to consider asking for if you get on the right side of the negotiation table: 1. Extension of the timely filing limit 2. No denials for E/M visits billed with -25 modifier 3. Repairs paid with excisions 4. Coverage for certain benign lesion removal 5. Fax submission of appeals 6. Acceptance of computer printouts as proof of timely filing 7. Surgical trays 8. Specimen handling fees 9. No surgical reductions past 50%. If fees are an issue, ask for an increase in just a few key CPT codes rather than asking for a global pay hike. Pick your top 15 procedures (e.g., 11100, 17000, 99213, 11642). Ask for an increase that is a significant percentage over Medicare. Have some EOMBs from other carriers that pay great on those codes as a bargaining tool. Be sure you are negotiating with the right person. It has to be a decision-maker — not some new rep who doesn’t have a clue and won’t be there next week. Practice Insight Of course, your practice can still be profitable in spite of the fee schedule decreases by running a tight ship. Pig farmers knew that there were two ways to keep the family fed: “Produce more pigs to sell, or find a way of raising the same number of pigs cheaper.” Think of all the ways your practice can save money and increase profit. 1. Stop giving away services. How many actinic keratoses do you treat each day that you don’t charge for? How many follow-up office visits are “no charges” when actually they are billable visits? 2. Delegate mundane tasks to staff. Physicians should avoid redundant tasks such as history-taking, applying dressings, explaining basic diagnosis and treatments, etc. All these time-consuming responsibilities can easily be transferred to a trained medical assistant. Such delegation frees the physician to see more patients while maintaining high patient satisfaction. 3. Get a handle on documentation time. Invest in a quality electronic medical record system. Until then, train staff to scribe using lots of good forms. 4. Review your practice overhead. There are hundreds of ways to reduce the cost of doing business. 5. Review your scheduling of patients. Track no-shows, cancellations and overbookings. There are many ways to enhance your physician per-hour/per-patient ratios. 6. Work your accounts receivables (A/R). You should have no more than 1.5 months of A/R with the maximum over 90 days at 10% of your total A/R. 7. Analyze your staffing needs. You may have too many or too few staff. Get rid of non-productive employees. Set standards for productivity. Retire staff members who are resistant to change. Don’t let your employees rule how you run your practice. Make the Changes Before It’s Too Late Physicians have a reputation for not having business savvy. However, the time has come to treat your practice like any other successful business. Your attention to the details will make the difference in the coming years between profit and loss, success versus failure or mere survival versus growth. Where you end up next year is totally dependent on you.
