Medical Coding Audit Prevention for 2024
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Medical Coding Audit Prevention for 2024

With Q4 of 2023 coming around the corner, it’s time to start looking at plans for 2024. It might not seem like it should make your short list of priorities, but medical coding audits should be on the mind of your leadership team today – specifically looking for ways to get in front of them. 

Healthcare providers will be in a much better position next year if they take the remainder of 2023 to step back, look for current issues, and devise ways to prevent and respond. You might feel prepared since you recently reviewed your strategy around medical coding and medical coding audit processes – but I want to stress the fact that the healthcare landscape is much more volatile than it has been in the past. Issues around COVID and labor shortages mean that taking another, updated look will likely be highly beneficial to your long-term organizational health. I see this broadly playing out from three potential angles:

Early Action
If an organization starts early in identifying issues like upcoding (billing for services that weren’t provided) and employee supervision issues, they’ll be able to make smart adjustments to revenue cycle processes and outsourcing strategies. These should be aligned with current and coming challenges – and these coming challenges aren’t just hypothetical. CMS is sending multiple signals that providers should expect an increase in medical coding audits.  

Program Design
We can look to CMS’ 7 core compliance requirements for some guidance on taking action. Element VI is Suggest an Effective System for Routine Monitoring, Auditing, and Identification of Compliance Risks. The agency highlights the importance of internal monitoring and audits, including external audits to keep up with compliance with CMS requirements and general compliance program effectiveness. 

Billing and Outsourcing Strategy
To prepare for 2024, most providers will also need to turn their medical coding teams and departments into “centers of excellence” – investing in staff training, smart KPI creation and monitoring, process improvement, and in many cases, tapping into the type of outsourcing relationships that fit their unique needs. 

Remember, revenue cycle management has changed. We’re now functioning in a volatile environment where ongoing adjustments are necessary. Thankfully, providers have never had so many tools and options at their disposal. 

Hemant Apte, Chief Executive Officer in

Hemant Apte, Founder & Chief Executive Officer of 3Gen Consulting, is a seasoned executive leader with deep domain expertise in US healthcare management practices. He founded 3Gen Consulting in 2006 and has been instrumental in offering thought leadership to his clients and providing services and solutions that are unique in the market.

CFPB Medical Billing
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CFPB Medical Billing Changes Mean a Need to Focus on Insurance

Government actions often mean that providers need to adjust how they address medical billing – recent news out of the White House is no different. 

The federal government has long been trying to address the state of patient payments and medical billing services and has made new moves in terms of credit cards and financing. For providers, this could mean a direct impact to your cash flows and a need to look for stability from insurance payments as the patient side continues to adjust and adapt. 

What’s Happening with Patients and Medical Billing
In May, the Consumer Financial Protection Bureau (CFPB) published a report on the state of specialty financial products that impact medical billing. This included medical credit cards and installment loans. The report makes the claim that these options are more expensive for patients than others such as regular credit cards – something providers should be aware of if a large portion of their revenues come from patient pay. The report goes on to outline risks to consumers and a background on the products [1]. 

Providers who are concerned about having to rely more on insurance payments for a healthy revenue cycle will want to pay attention to the section of the report that covers marketing to providers. It outlines how financial firms market these products to hospitals and other providers and how these firms also provide training and promotional materials to help providers offer the products to patients. It also covers the incentives these firms use including promises of reduced costs, shorter payment times, and minimizing financial risk. The agency claims that these can be a deterrent to providers to give details on alternatives like zero-interest repayment options and legally mandated financial assistance programs. 

One area of particular interest to providers should be the increased burden on their staff when informing patients of terms and risks. Providers need to spend time explaining products to patients, meaning staff have to be trained on how to explain complex concepts like deferred interest plans if they don’t want to rely solely on the training and marketing materials that come from financing companies. 

What This Means for Providers and Medical Billing
For providers who want to stay on top of this trend in changes to the patient financial experience, there are a few things to keep in mind:

  • You should stay up to date: The bureau hosted a hearing on medical debt and payment products on July 11th. You can get more details on that on their website [2]. 
  • Review your current processes: As things stand now, are you using any of these products? What percent of your revenue do they take up? If the government were to make changes in how they’re handled, how would you be impacted? 
  • Prepare for future investment: It’s very likely that these actions at the federal level will eventually translate to changes for you. Do you have the cash flows to invest in additional training for your staff?
  • Assess your history: How often are you encountering junk plans now? Are they more prone to medical billing denials and do they require more effort to appeal? Have you been documenting the impact on your cash flows?  If not, now is a good time to set up KPIs to monitor activity and how future changes could impact the health of your revenue cycle. 
  • Shore up your insurance side: This announcement from the CFPB doesn’t stand alone. It’s part of a trend of actions from multiple areas of government to protect patients as they take on a greater share of the cost of care. But the road will not be smooth. Providers will need to make sure that their revenue cycle processes in medical billing on the insurance side are as stable and efficient as possible to get them through any future disruption. 

Other Government Actions That Impact Medical Billing
Providers should also be aware of actions happening elsewhere in the federal government. The Biden administration recently anointed its plans to target short-term or “junk” health insurance plans. The rule is in response to the previous administration’s expansion of plans with skimpy coverage. They are also known as Association Health Plans (AHPs) and short-term plans. 

These plans allow small businesses as well as self-employed people to form associations to purchase insurance the same way a larger employer would. These policies might cover fewer treatments and services than patients are aware of. They are designed to fill temporary coverage gaps and last a maximum of 12 months, being allowed to be renewed for up to 36 months. Under the Affordable Care Act, they do not fall under the definition of individual health insurance coverage, which means they could possibly discriminate against patients with pre-existing conditions and are not required to provide coverage for things such as prescription medications, maternity services, and mental health services. 

As these plans are under threat, providers will need to take a different approach to medical billing services. This level of uncertainty in the future of insurance means that having an external partner who understands the potential changes and risks will be critical as the future unfolds. To learn how we can be that medical billing partner for your organization, start here.

 

References
[1] A. Carobus, “CFPB Targets Specialty Financial Products Used to Pay for Medical Care,” Ballard Spahr L.L.P., 30 May 2023. Available: https://www.consumerfinancemonitor.com/2023/05/30/cfpb-targets-specialty-financial-products-used-to-pay-for-medical-care/.
[2] CFPB, “CFPB Hearing on Medical Billing and Collections,” 11 July 2023. Available: https://www.consumerfinance.gov/about-us/events/archive-past-events/cfpb-hearing-on-medical-billing-and-collections/.

Physician Medical Billing Is Critical to Practice Health
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Why A New Look at Physician Medical Billing Is Critical to Practice Health

Challenges in physician medical billing have changed. 

From the impact of a pandemic, to shifts in government, to changes in patient demographics, practices have seen the factors that shape their physician billing services turn upside down in recent years. This means that many practices are in a position of playing “catch up” in their physician billing services. But while the path forward might be unclear, there are ways that practice revenue cycle leaders can make changes to remain healthy and align their physician billing strategy with modern challenges. Here is a look at the issues you face as well as how to get past them. 

Modern Challenges Complicating Physician Billing Services
Post public health emergency, many practices are faced with an opportunity to assess the environment they’re functioning in for better understanding of how to move forward. Here are some key challenges to look out for at your practice [1]. 

Manual Processes Are Slowing You Down
Are you still relying on paper as the backbone of your physician billing services? Many practices are sending paper bills to their patients, despite the fact that under 10% of patients want to pay a bill using a paper check. 

Beyond this, paper statements are often confusing for patients and don’t clearly communicate how much they’re owed. Manual processes slow down patient payments, with 70% saying it can take more than 30 days after a patient visit to collect. But paper isn’t only a problem with patients. Managing appeals via manual processes can slow down your cash flows from insurance companies as well. 

You Aren’t Thinking Digital
Before the COVID-19 pandemic, technology for collection was a “nice to have”, but today, it’s a necessity. Surveys have found that as many as three out of four providers still use paper despite consumers wanting online payment at about the same rate. Unfortunately, 40% of providers believe that billing and collection practices have no impact on the patient experience. 

If you aren’t open to using digital in both patient and payer collection in physician medical billing, you’re falling behind the curve and are missing out on revenue from patients and insurance companies. 

You Don’t Understand Patient Payment Trends
High deductible health plans might have dropped in use between 2020 and 2021, but the deductibles themselves have increased. The same issues apply to traditional insurance where copays and deductibles are growing. Medical practices should be paying attention to hospital trends, where balances are getting higher, and patients are demonstrating increasing difficulty in meeting their financial obligations. 

This is a challenge to physician medical billing, especially if you aren’t tracking trends and haven’t adjusted for changes to your approach to collections since before the pandemic. 

How to Adjust Your Physician Billing Services
Now is an excellent time to look at your approach to physician medical billing and make changes that will sustain you even through future upheaval. Here are some places to start. 

Ensuring Funds Are Available For Growth
As you move forward, you will have multiple decisions to make in terms of where to invest for growth and sustainability – and many of these will require financial investment. This means that your first step will be making room in your budget for potential future opportunities. 

For example, this could include things like new practice management software, training for staff on how best to collect from commercial insurance, and bonuses to retain personnel who are the most effective and who will best support your practice as new challenges arise. Keep in mind that this is a long-term need. Modern challenges in physician medical billing will continue to evolve and to stay healthy, your practice will need to keep up on an ongoing basis. 

Investing in People
There is an ever-increasing amount of technology available to help you get past manual processes and keep up with patient payment trends. But this doesn’t mean you can skip investing in people. 

Your staff will need ongoing training on things like medical billing and coding, new technologies, process improvement, and maintaining a positive patient experience as you work to keep your practice healthy. This level of focus has to happen at the strategy level, with commitment from your practice to prioritize people from now on. 

This is more than just an internal question. Many practices see benefits from expanding their access to trained staff who understand the specialized needs of their practice by partnering with external experts. Know that, as challenges become more complex, the less an individual practice will be able to handle physician billing services alone and the more they will need to consider solutions like outsourcing to access knowledge and flexible talent. 

Attracting top leadership who are up to the task
Physician owners are often in a difficult position and sometimes, they aren’t really running their practices with a business mindset. This isn’t always a choice. They could very well be open to ideas to improve practice health, but don’t have the people underneath them that they need. 

This is where strong leaders on the administrative side come in. As practice management becomes increasingly complex, practices will need leaders who are up to the task of today’s challenges, and not just those who have demonstrated past successes. 

In today’s fast-changing environment, every practice needs access to a partner who understands physician billing services and can help them adapt multiple aspects of their business to meet the issues of the future. To learn how we can be that partnership for you, contact us today.

References
[1] B. Crotty, “4 Key payment trends impacting physician practices,” MJH Life Sciences, 23 November 2022. Available: https://www.physicianspractice.com/view/4-key-payment-trends-impacting-physician-practices.

Hospitals Are Shifting to Outpatient Services What This Means for the Hospital Revenue Cycle
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Hospitals Are Shifting to Outpatient Services: What This Means for the Hospital Revenue Cycle

You can expect major changes to hospital billing this year thanks to the pandemic and shifts in patient behavior – but one of the most important that hospital revenue cycle and health system leaders should pay attention to is changes in use of outpatient services.

An analysis from the Guidehouse Center for Health Insights and Healthcare Financial Management Association (HFMA) addressed hospital and health system leaders including CEOs, CFOs, COOs, and other executives from 182 hospitals for insights into what they expect in the near future. It found that a full 95% of the executives surveyed expected higher outpatient volumes in 2023. As much as 40% of leaders expected increases of 10% or more.

But this shift isn’t happening on its own and those in charge of hospital coding and billing should pay attention. 41% of the leaders surveyed expected lower inpatient volumes at the same time, with 17% expecting that drop to be 10% or higher [1].

What’s Behind the Shift in Hospital Revenue Cycle

Hospitals and health systems have been navigating this flow of patients from inpatient to outpatient since the beginning of the COVID-19 pandemic – a period where patients were avoiding hospital emergency departments and many providers postponed or even canceled elective surgeries to slow the spread of the virus. HFMA has found that leaders believe that emergency department visits will increase, along with elective procedures, both at a rate of 10% or more. This is to be expected since, as things stand now, many providers still haven’t returned to pre-COVID patient volumes.

But many leaders will find themselves unprepared since they are still navigating issues with staffing and workforce problems. A full 96% of survey respondents said that their workforce issues are having a negative impact on growth strategy, and this impact isn’t minor. Among those who are having these issues, 62% report that the impact is significant. And while these problems are most prevalent on the clinical side, many are having issues on the administrative side also. Almost three out of four of the executives surveyed are looking for hospital revenue cycle, coding, and IT experts this year.

How to Adapt Hospital Billing to the Shift to Outpatient

As the “new normal” emerges, hospital revenue cycle leaders should be taking steps to adapt so that you stay ahead of the competition and in front of any future challenges you might face. 

Assess Your Current State in Hospital Billing

Now is the time to look at your current revenue cycle processes and determine your baseline before you begin to make any changes. For example, does your staff understand outpatient billing well? Will they need additional training? Do your current workflows meet the needs of increases in outpatient billing and coding?

Now is also an excellent time to determine whether your approach to measurement will be sufficient to evaluate any changes you make in your hospital revenue cycle staffing and procedures. You might want to consider creating new KPIs to make sure you have solid insights into your decisions around outpatient changes. 

Know that you’ll be doing the work of creating your own standards for using data to track outpatient claim statistics. There isn’t much of an industry standard and you’ll find considerable variation by payor and possibly even patient type, so a custom approach is best. 

Improving Your Clean Claim Rate

When deciding on goals and standards, your outpatient clean claim rate will be a useful place to start. Most hospital revenue cycle departments aim for around 95%, so if you aren’t hitting that number now, it’s a good time to start investigating ways to improve your processes and numbers. 

One of the first steps should be a focus on education and training, ensuring that your team on both the coding and billing sides understand what constitutes a clean claim for all payers on outpatient contracts. If you begin this process and realize that you have a significant amount of work to do to get your team up to the necessary standards, consider working with a medical billing and coding partner to supplement your hospital coding and billing needs. 

Dive Into Denial Management

During times of change like these, denial management only becomes more important. Having a clear strategy to measure, identify, prevent, and address denials will be immensely helpful in developing a hospital outpatient billing strategy that keeps cash flows healthy and creates a positive work environment for your hospital billers and coders. 

Know that denials are currently increasing and many hospitals and health systems are bleeding revenue as a result. But at the same time, the vast majority of denials are preventable. By appealing a majority of claims and aiming for a denials rate under 5% (or even lower), you can get a handle on outpatient billing issues before they even start. 

Stay dedicated to identifying and rectifying root causes, and filling in with outside support where needed, and you’ll walk into a future of increasing outpatient volumes with confidence. 

Consider Outsourcing Hospital Billing

Hospital leaders shouldn’t take on this type of unprecedented change alone. Many of your competitors are taking advantage of options in outsourced billing and coding to fill in gaps and create efficiencies that would be too difficult to achieve internally. They understand that outsourcing can stabilize revenue and reduce risk even while improving the patient experience. 

When you’re ready to take a fresh look at your approach to outpatient hospital billing and coding, we would love to share our expertise and insight. Just contact us here to get started. 

 

References

[1] J. LaPointe, “Hospital Execs Expect Greater Shift to Outpatient Care,” RevCycleIntelligence, 2 March 2023. Available: https://revcycleintelligence.com/news/amp/hospital-execs-expect-greater-shift-to-outpatient-care.

 

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