Coding and Billing
This coding expert answers common coding
questions to help you run a more efficient practice.
July 2003
W hen it comes to billing and gauging account receivables, what benchmarks and formulas are best to follow? This month, I’ll discuss some easy ways to measure your success in these areas so that you can keep things on track in your practice. In addition, I’ll look at billing for follow-up visits when treating patients for actinic keratoses.
Q: I’m interested in getting a handle on my practice’s insurance billing. I’ve been trying to convince my physician employers that I have my billing department under good control, but I need to know what national benchmarks I should achieve. If you could put something in writing, then I can show them I’m on the right track and I can assure myself and my staff that our efforts are paying off.
A: As the owner of two national dermatology specific billing services, I belong to an association of professional billing service owners called the Healthcare Billing and Management Association (HBMA). We use their benchmarks of excellence to make sure we’re doing our best for our clients. Of course, one must look at the big picture and understand that there are always seasonal variations and unique determinants that could effect the final statistics, but overall we think their figures make sense. Keep in mind that the benchmarks are for insurance only, and they don’t include patient-owed balances.
We aim to have no more than 1.5 months of total gross charges in the account receivables (AR). That means if the practice generates $100,000 per month in gross charges, the total AR shouldn’t be more than $150,000.
Of that amount, the goal should be to have no more than 10% of that over 90 days. It’s useless to track over 90 days versus over 120 days versus 150 days and so on. If the money is over 90 days, it’s old and needs to be either collected or written off (if all appeals and review processes have been exhausted). So, for the above $150,000 practice, the over-90-day amount should be $15,000 or less.
Many practices have unusually high over
90-day totals because they refuse to write off bad debt. If a plan goes bankrupt, don’t carry that total. Write it off using a unique write-off category. If you get some payoff down the road, you can reverse post against that write-off category. Also, acknowledge if you’re not going to get paid by a carrier. Don’t keep trying. Usually, two appeals are plenty. Your AR must be “clean” for the benchmarks to make sense.
How long should it take to turn over your AR? On the average, you should be able to collect your money in 45 days from the date filed.
Lastly, as far as collection ratios are concerned, you should strive for 96% to 100% after your contractual write-off. This means that if you have an average adjustment ratio of 25% and you bill out $100,000, you should be able to collect between 96% to 100% of $75,000.
Q: My patient-owed balances keep increasing. Last month, I ran 1,200 statements for a total of $41,208. This month I ran 1,400, and my total is $49,500. Any insight on how to get control of this component of my revenue?
A: First, be sure that you send no more than two statements. That’s the national trend. If a patient doesn’t pay after two statements, sending three or more isn’t going to increase your chances of getting paid. (Actually, it will decrease your chances of collecting since the patient can move, change phone number, etc.)
After the two consecutive no-payment statements, write the balance off whether or not you turn them over to collections. Don’t keep bad debt patients in your running totals.
Review your time-of-service (TOS) collection procedures. Are you balance billing for $5 or $10 co-payments, or are you collecting the amount while the patient is in your office and it doesn’t cost you anything to collect. Also, make sure you have credit and debit card payment options available for your patients.
Finally, consider outsourcing your patient statement function. Most professional statement services cost you far less than doing this in-house, and they do it efficiently. The statements are patient-friendly and they employ easy-to-use self-mailers.
Q: We have patients come into the office for treatment of extensive actinic damage and multiple actinic keratoses. We have the patient apply 5-FU (for example, Efudex or Carac) and then what deeper lesions remain we treat with liquid nitrogen. For some patients, we even apply the 5-FU for them. Obviously, we need to closely follow-up with them during the treatment because the treatment can be painful and some of the lesions ooze and appear infected. Can we bill these services using the 17000-17004 codes? Another office I know uses the chemical peel codes. I want to get paid for my service, but I don’t want to select the incorrect codes.
A: As I’m sure you know, the treatment of individually identified and destroyed actinic keratosis lesions is billed using the 17000-17004 codes (depending on the number of lesions documented). Application of 5-FU, whether you apply the medication for the patient while they’re in the office or you write a prescription and the patient applies it at home, is billed using the appropriate E/M visit code.
If you look at the 2003 CPT book under the heading of Destruction, you can see under paragraph two various indentations. Look at the fifth indentation and you’ll see the following phrase: “For initiation or follow-up of topical chemotherapy (e.g., 5-FU or similar agents), see appropriate office visit.” The answer is clear: You can only bill an E/M visit.
W hen it comes to billing and gauging account receivables, what benchmarks and formulas are best to follow? This month, I’ll discuss some easy ways to measure your success in these areas so that you can keep things on track in your practice. In addition, I’ll look at billing for follow-up visits when treating patients for actinic keratoses.
Q: I’m interested in getting a handle on my practice’s insurance billing. I’ve been trying to convince my physician employers that I have my billing department under good control, but I need to know what national benchmarks I should achieve. If you could put something in writing, then I can show them I’m on the right track and I can assure myself and my staff that our efforts are paying off.
A: As the owner of two national dermatology specific billing services, I belong to an association of professional billing service owners called the Healthcare Billing and Management Association (HBMA). We use their benchmarks of excellence to make sure we’re doing our best for our clients. Of course, one must look at the big picture and understand that there are always seasonal variations and unique determinants that could effect the final statistics, but overall we think their figures make sense. Keep in mind that the benchmarks are for insurance only, and they don’t include patient-owed balances.
We aim to have no more than 1.5 months of total gross charges in the account receivables (AR). That means if the practice generates $100,000 per month in gross charges, the total AR shouldn’t be more than $150,000.
Of that amount, the goal should be to have no more than 10% of that over 90 days. It’s useless to track over 90 days versus over 120 days versus 150 days and so on. If the money is over 90 days, it’s old and needs to be either collected or written off (if all appeals and review processes have been exhausted). So, for the above $150,000 practice, the over-90-day amount should be $15,000 or less.
Many practices have unusually high over
90-day totals because they refuse to write off bad debt. If a plan goes bankrupt, don’t carry that total. Write it off using a unique write-off category. If you get some payoff down the road, you can reverse post against that write-off category. Also, acknowledge if you’re not going to get paid by a carrier. Don’t keep trying. Usually, two appeals are plenty. Your AR must be “clean” for the benchmarks to make sense.
How long should it take to turn over your AR? On the average, you should be able to collect your money in 45 days from the date filed.
Lastly, as far as collection ratios are concerned, you should strive for 96% to 100% after your contractual write-off. This means that if you have an average adjustment ratio of 25% and you bill out $100,000, you should be able to collect between 96% to 100% of $75,000.
Q: My patient-owed balances keep increasing. Last month, I ran 1,200 statements for a total of $41,208. This month I ran 1,400, and my total is $49,500. Any insight on how to get control of this component of my revenue?
A: First, be sure that you send no more than two statements. That’s the national trend. If a patient doesn’t pay after two statements, sending three or more isn’t going to increase your chances of getting paid. (Actually, it will decrease your chances of collecting since the patient can move, change phone number, etc.)
After the two consecutive no-payment statements, write the balance off whether or not you turn them over to collections. Don’t keep bad debt patients in your running totals.
Review your time-of-service (TOS) collection procedures. Are you balance billing for $5 or $10 co-payments, or are you collecting the amount while the patient is in your office and it doesn’t cost you anything to collect. Also, make sure you have credit and debit card payment options available for your patients.
Finally, consider outsourcing your patient statement function. Most professional statement services cost you far less than doing this in-house, and they do it efficiently. The statements are patient-friendly and they employ easy-to-use self-mailers.
Q: We have patients come into the office for treatment of extensive actinic damage and multiple actinic keratoses. We have the patient apply 5-FU (for example, Efudex or Carac) and then what deeper lesions remain we treat with liquid nitrogen. For some patients, we even apply the 5-FU for them. Obviously, we need to closely follow-up with them during the treatment because the treatment can be painful and some of the lesions ooze and appear infected. Can we bill these services using the 17000-17004 codes? Another office I know uses the chemical peel codes. I want to get paid for my service, but I don’t want to select the incorrect codes.
A: As I’m sure you know, the treatment of individually identified and destroyed actinic keratosis lesions is billed using the 17000-17004 codes (depending on the number of lesions documented). Application of 5-FU, whether you apply the medication for the patient while they’re in the office or you write a prescription and the patient applies it at home, is billed using the appropriate E/M visit code.
If you look at the 2003 CPT book under the heading of Destruction, you can see under paragraph two various indentations. Look at the fifth indentation and you’ll see the following phrase: “For initiation or follow-up of topical chemotherapy (e.g., 5-FU or similar agents), see appropriate office visit.” The answer is clear: You can only bill an E/M visit.
W hen it comes to billing and gauging account receivables, what benchmarks and formulas are best to follow? This month, I’ll discuss some easy ways to measure your success in these areas so that you can keep things on track in your practice. In addition, I’ll look at billing for follow-up visits when treating patients for actinic keratoses.
Q: I’m interested in getting a handle on my practice’s insurance billing. I’ve been trying to convince my physician employers that I have my billing department under good control, but I need to know what national benchmarks I should achieve. If you could put something in writing, then I can show them I’m on the right track and I can assure myself and my staff that our efforts are paying off.
A: As the owner of two national dermatology specific billing services, I belong to an association of professional billing service owners called the Healthcare Billing and Management Association (HBMA). We use their benchmarks of excellence to make sure we’re doing our best for our clients. Of course, one must look at the big picture and understand that there are always seasonal variations and unique determinants that could effect the final statistics, but overall we think their figures make sense. Keep in mind that the benchmarks are for insurance only, and they don’t include patient-owed balances.
We aim to have no more than 1.5 months of total gross charges in the account receivables (AR). That means if the practice generates $100,000 per month in gross charges, the total AR shouldn’t be more than $150,000.
Of that amount, the goal should be to have no more than 10% of that over 90 days. It’s useless to track over 90 days versus over 120 days versus 150 days and so on. If the money is over 90 days, it’s old and needs to be either collected or written off (if all appeals and review processes have been exhausted). So, for the above $150,000 practice, the over-90-day amount should be $15,000 or less.
Many practices have unusually high over
90-day totals because they refuse to write off bad debt. If a plan goes bankrupt, don’t carry that total. Write it off using a unique write-off category. If you get some payoff down the road, you can reverse post against that write-off category. Also, acknowledge if you’re not going to get paid by a carrier. Don’t keep trying. Usually, two appeals are plenty. Your AR must be “clean” for the benchmarks to make sense.
How long should it take to turn over your AR? On the average, you should be able to collect your money in 45 days from the date filed.
Lastly, as far as collection ratios are concerned, you should strive for 96% to 100% after your contractual write-off. This means that if you have an average adjustment ratio of 25% and you bill out $100,000, you should be able to collect between 96% to 100% of $75,000.
Q: My patient-owed balances keep increasing. Last month, I ran 1,200 statements for a total of $41,208. This month I ran 1,400, and my total is $49,500. Any insight on how to get control of this component of my revenue?
A: First, be sure that you send no more than two statements. That’s the national trend. If a patient doesn’t pay after two statements, sending three or more isn’t going to increase your chances of getting paid. (Actually, it will decrease your chances of collecting since the patient can move, change phone number, etc.)
After the two consecutive no-payment statements, write the balance off whether or not you turn them over to collections. Don’t keep bad debt patients in your running totals.
Review your time-of-service (TOS) collection procedures. Are you balance billing for $5 or $10 co-payments, or are you collecting the amount while the patient is in your office and it doesn’t cost you anything to collect. Also, make sure you have credit and debit card payment options available for your patients.
Finally, consider outsourcing your patient statement function. Most professional statement services cost you far less than doing this in-house, and they do it efficiently. The statements are patient-friendly and they employ easy-to-use self-mailers.
Q: We have patients come into the office for treatment of extensive actinic damage and multiple actinic keratoses. We have the patient apply 5-FU (for example, Efudex or Carac) and then what deeper lesions remain we treat with liquid nitrogen. For some patients, we even apply the 5-FU for them. Obviously, we need to closely follow-up with them during the treatment because the treatment can be painful and some of the lesions ooze and appear infected. Can we bill these services using the 17000-17004 codes? Another office I know uses the chemical peel codes. I want to get paid for my service, but I don’t want to select the incorrect codes.
A: As I’m sure you know, the treatment of individually identified and destroyed actinic keratosis lesions is billed using the 17000-17004 codes (depending on the number of lesions documented). Application of 5-FU, whether you apply the medication for the patient while they’re in the office or you write a prescription and the patient applies it at home, is billed using the appropriate E/M visit code.
If you look at the 2003 CPT book under the heading of Destruction, you can see under paragraph two various indentations. Look at the fifth indentation and you’ll see the following phrase: “For initiation or follow-up of topical chemotherapy (e.g., 5-FU or similar agents), see appropriate office visit.” The answer is clear: You can only bill an E/M visit.
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