Business Briefs

Revenue Challenges: Don’t Be Your Own Worst Enemy!

October 2021

Information regarding coding, coverage, and payment is provided as a service to our readers. Every effort has been made to ensure accuracy. However, HMP and the author do not represent, guarantee, or warranty that coding, coverage, and payment information is error-free and/or that payment will be received.

While contemplating the “Revenue Challenges” theme for the October Today’s Wound Clinic articles, this author felt compelled to share the fact that many revenue challenges for wound/ulcer management professionals and providers are self-imposed. Following are some of the major revenue cycle process challenges that can be easily rectified.

The Insurance Benefit Verification Process

No matter if your wound/ulcer management business is a hospital owned outpatient provider-based department (PBD) or a physician office, you should assign one or more of your most meticulous employees to handle your insurance benefit process. This process should begin before the patient presents for his or her first visit. Not only should you verify the patient’s primary and secondary insurance, but you should also verify if the PBD and/or the physician/qualified healthcare professional (QHP) is/are an in-network provider. Then you should verify if the patient’s plan covers the top 5–10 services, procedures, and products that you typically provide to your patients. In addition, you should verify if the patient is also receiving Medicare Part A–covered care from a home health agency or a skilled nursing facility (SNF).

Failure to include this process into your workflow and to have it performed by a meticulous employee can seriously affect your revenue. For example: If a physician in a PBD performs selective debridement on a patient’s ulcer and the patient is currently in a Medicare Part A–covered SNF, both the PBD and the physician will most likely receive Medicare payment for their work. Then when the SNF submits its Medicare Part A claim for that patient, Medicare will 1) recognize that the work the PBD and the physician performed is included in the SNF’s consolidated bill and will 2) take a repayment from the PBD and the physician. Unfortunately, this scenario is repeated many times per week throughout the U.S. It can be easily prevented by conducting thorough insurance benefit verifications.

The Contract Negotiation Process

Many PBDs and physicians/QHPs do not take the time to read payer contracts before they sign them. Then when they provide needed services, procedures, or products for their patients, they either do not receive adequate payment or do not receive any payment. For example, this author has seen payer contracts that 1) pay a flat “per encounter” rate, 2) do not pay for PBD clinic visits, 3) do not pay when certain professionals provide the service, 4) never pay for an evaluation & management service when a procedure is performed—even when a separately identifiable new problem is identified and managed, 5) pay a flat fee for all cellular- and/or tissue-based products (CTPs) for skin wounds regardless of their average sales price, etc. Physicians/QHPs and PBDs can prevent these unfortunate revenue losses by reading their existing and potential new payer contracts and by working with their contract managers to prove why their wound/ulcer management outcomes deserve equitable payment rates.

In addition to payer contracts, physicians/QHPs and PBDs should work with their contract managers to negotiate contracts with all the SNFs that request wound/ulcer management services from them. See the example in the Insurance Benefit Verification Process above. These contracts should allow the physicians/QHPs and PBDs to be appropriately paid when they perform services and procedures that are included in SNFs’ Medicare consolidated billing.

Similarly, PBDs should work with their contract managers to negotiate contracts with all the home health agencies (HHAs) that request wound/ulcer management services that are included in the HHAs’ Medicare consolidated billing. For example: If the patient needs an application of a disposable negative pressure wound therapy pump (dNPWT), which is included in the HHA consolidated billing, and the agency does not wish to purchase and apply it, the PBD can purchase and apply it, but the PBD must charge the HHA rather than the Medicare program. If the PBD does charge the Medicare program, it will most likely be paid. Then when the HHA submits its claim to Medicare, Medicare will realize that the PBD’s application of the dNPWT was included in the HHA consolidated bill: Medicare will then take a repayment from the PBD. These unfortunate revenue losses can be prevented by negotiating payment contracts with SNFs and HHAs.

The PBD Staffing Process

Many PBDs provide wound/ulcer management nurses to the inpatient hospital, to the hospital-owned SNF, and/or to the hospital-owned HHA. All of that labor cost is often charged to the PBDs. Then at the end of the year, the PBDs’ costs significantly outweigh their revenue. There is nothing wrong with sharing wound/ulcer management expertise throughout the health care system. However, the cost of that staffing should be charged to the respective cost centers rather than to the PBD.

The PBD Claim Submission Process

For some unfounded reason, PBDs submit each patient’s encounters for an entire month on one claim. Then many of the claims are denied due to lack of medical necessity. The PBDs immediately think the service, procedure, or product was not covered when, in reality, the diagnosis code on the claim did not provide a medically necessary reason for the work that varies from week-to-week. For example: At the beginning of the month, the physician was still treating a patient’s infected diabetic foot ulcer. Although the infection had resolved in the second week of the month, the diabetic foot ulcer had not shown progress for the past 6 weeks. In the third week of the month, the physician decided to apply a CTP. At the end of the month, the primary diagnosis on the batched claim was for the infected diabetic foot ulcer. You guessed it! The application of the CTP was denied because CTPs are not indicated for infected ulcers. When the application of the CTP was denied, the coding and billing department told the PBD to stop using that CTP because it was not covered. In reality, the problem was the monthly bill which did not accommodate the diagnosis code for each encounter.

This loss of revenue could have easily been prevented by submitting “per encounter” claims that included the diagnosis code that aligned with the work performed. Some PBDs report that their hospital believes that Medicare requires monthly bills for PBDs. That is simply not true. In fact, the PBDs are paid by the same Medicare payment system as hospital emergency departments, that always submit “per encounter” claims. Other PBDs report that their hospitals do not want to change their billing process for the PBD because it may require extra resources. None of this make sense. In fact, many hospitals that switched from monthly claim submission to “per encounter” claim submission have reported fewer denied claims and large revenue increases.

The Physician/QHP Place-of-Service Tracking Process

Wound/ulcer management physicians/QHPs work in various sites of care throughout their work week. In fact, some physicians/QHPs work in several places in one day. Medicare requires physicians/QHPs to report the correct Place-of-Service (POS) code on each claim. Therefore, physicians/QHPs should implement a clear process for documenting the site of care where each encounter occurred. Everyone in the revenue cycle should know where the site of care is documented. Then the POS code reported on the Medicare claim should match the documented site of care.

Many physicians/QHPs tell this author that they always report the office POS code because their office staff processes their claims. Upon audits, that process causes large repayments because work performed in facilities has a lower Medicare payment than work performed in physician/QHP offices. Because no one likes to repay money that they already received, establishing a POS tracking process is an excellent way to prevent repayments.

When this author discusses POS codes with physicians/QHPs and their coders and billers, many of them do not realize that many specific POS codes exist, and do not know where to find them. POS codes are two-digit codes placed on health care professional claims to indicate the setting in which a service was provided. These codes are easily found in the front of the current year’s Current Professional Terminology (CPT^®)¹ codebook or on the Centers for Medicare & Medicaid Services website here. When physicians/QHPs review the list of POS codes, they will recognize the importance of clearly understanding the exact site of care where they perform each patient encounter. See Table I for a few common places of service where wound/ulcer management physicians/QHPs work. For some helpful POS code instructions, please see the resource links at the end of this article.

Summary

This author could write an entire book about revenue challenges that can be improved by implementing sound workflow processes. If the processes discussed are not part of your revenue cycle process, now is a good time to make these refinements. Don’t be your own worst revenue enemy!

Kathleen D. Schaum is a founding member of the Today’s Wound Clinic editorial advisory board and oversees a consulting business. She can be reached for consultation and questions by emailing kathleendschaum@bellsouth.net.

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References

2. POS Code Resources: Revised and Clarified Place of Service (POS) Coding Instructions. Last accessed September 21, 2021.

3. New Place of Service (POS) Code for Place of Employment/Worksite. Last accessed September 21, 2021.