PayerView 2013: Getting Paid at Your Medical Practice

Even with technology that helps him track payer data, keeping up with denials is still the biggest challenge for emergency medicine physician John Kulin.

"It's something we've dealt with for a long time," says Kulin, medical director for urgent care at multispecialty practice Shore Medical Center in Somers Point, N.J. Because of the work involved in staying ahead of the curve, Kulin meets with his billing staff biweekly. But those meetings, combined with business analytics technology from his revenue cycle management vendor, athenahealth, makes it much easier to get paid promptly than when he worked with a private billing company.

"I love looking at the data," says Kulin. "It always tells a story for me. For example, more and more payers seem to give denials or delay payments on anything that's accident-related."

The software that Kulin uses, athenaClarity, leverages the data locked in Shore's practice management system to provide insight that allows managers to easily spot changes in payer policies that result in denials.

Shifting payer policies are becoming more common around the country as payers are increasingly requiring practices to fight for every last dollar, according to the latest PayerView report, athenahealth's annual ranking of insurers based on how easy - or difficult - they are for practices to work with.

To compile the PayerView rankings - found in part here, and in deeper detail on PhysiciansPractice.com - athenahealth examines data from the millions of claims it processes for its medical practice clients around the country. It runs the data through an algorithm it developed that measures payers' efficiency, using metrics such as average time it takes to pay a claim.

Over the next few years, the Affordable Care Act (ACA), ICD-10, and other regulatory and industry changes promise to shake up payer-physician relations, according to athenahealth's experts. Let's have a look at some of the numbers and what they mean for your practice.

*How are your payers performing? Find out with our in-depth national and regional data: / Major Payers / Blues / Medicare / Medicaid / Northeast / Midwest / South / West / Best Payers / Worst Payers. This information is also available at athenahealth.com.

Inside the data

The 2013 PayerView data revealed modest improvements in a number of metrics. The average denial rate declined slightly, to 7.2 percent. But insurers are cutting costs in other ways, for example, by asking more often for additional information before paying a claim. "It certainly continues to be a phenomenon, new requests for information for a claim to get paid," says Todd Rothenhaus, athenahealth's chief medical information officer. "I do think that if there is belt tightening on the side of the payers, there is a return on investment for policy changes that are going to lead to denials. Some of the best payers have particularly low denial rates, but what they were doing was paying everything. While denials are going down nationally, some payers are denying more."

Other metrics reflected a continuation of negative trends.

Higher deductibles continue to impact provider collection burden, a measure of how much of the patient's bill must be collected by the practice. Although this burden declined for the country's largest payer, Medicare Part B, it increased for most private insurers for the second straight year.

A more rapid acceleration of providers' collection burden is expected in coming years as new healthcare reform measures, such as the reform law's insurance mandate, go into effect.

"Patients are definitely recognizing more costs are being shifted to them," says Kulin. "It hasn't reached the tipping point yet, where it's dissuaded patients from seeking care, but it may soon."

Also noteworthy, first pass resolve rate, which measures how often a claim is "resolved" upon first submission, slightly decreased from 96 percent to 95 percent.

This can mainly be attributed to the slowdown when vendors and providers were required to upgrade their practice management technology to accommodate HIPAA Version 5010, says Rothenhaus.

Though practices can breathe a sigh of relief now that 5010 is over, the technology upgrade is just the beginning of many more regulatory-fueled shifts in healthcare.

Regulatory challenges ahead

The ACA is precipitating many changes in healthcare, but two provisions in particular could directly affect payments to doctors next year.

The first is the Medicaid expansion, which will cover individuals in participating states who earn up to 133 percent of the federal poverty level, or $15,282 for an individual in 2013. The Supreme Court has ruled that states may decline this expansion without pulling out of Medicaid altogether, and by late spring of 2013, 19 states were planning to decline to expand their Medicaid programs, according to The Advisory Board Company, a consulting firm.

In participating states, physician practices will see an influx of new Medicaid patients. But Medicaid pays poorly compared to other health plans. And as PayerView data has shown consistently since its inception in 2006, Medicaid is also slow and inefficient, sometimes abysmally so.

*For more on the Medicaid provision, see http://bit.ly/Med_influx_physicians.

The second ACA-prompted change is the requirement that virtually every citizen have health insurance. Many of those who are currently uninsured will purchase higher-deductible, lower-cost plans via online exchanges, placing a greater burden on practices to collect directly from patients who may be unable to pay their balances right away.

"What you need is more insight at the point of care so physician practices can collect their portion of the patient responsibility," says Tricia Andriolo-Bull, vice president of payer development for athenahealth.

Unrelated to healthcare reform but equally worrisome for practices is the quickly approaching conversion to ICD-10, the new alphanumeric code set that's more than three times the size of ICD-9.

To prepare his staff for ICD-10, Kulin has already started sending coding and billing staff to off-site training sessions. More are planned for the fall.

"It's a definite concern down the road," says Kulin. "I don't think it will slow payments overall. But I would expect to see, at least, probably with the first year or two with ICD-10, denial rates going up."

Practices should also make sure that their vendors are prepared for the code-set changes. When the industry shifted from Version 4010 to 5010, there were multiple payment delays and vendors were often the culprit.

"Because code mapping isn't seamless, it'll be more difficult to send a clean claim through," says Andriolo-Bull. "You should talk to your vendor to test claims. Providers should be ensuring they have vendors capable of transmitting ICD-10 standards."

Next steps

What can your practice do to improve its payer performance today and in the future, when regulations take effect?

While national data is a great starting point, you need to understand your own numbers, tracking key metrics such as denials or days in accounts receivable (A/R).

By isolating and looking at A/R data presented through its vendor's business intelligence application, Kulin's practice reduced days in accounts receivable from a high of 60 four years ago to a high of 27 last year.

Jeff Holm, administrator at Roanoke Rapids, N.C.-based Northern Carolina Orthopedics, says that using a business analytics technology has helped him gain more transparency into payer trends without having to fish for a payer's fee schedule.

"If I know going in that a patient has insurance with a high copay, I might be able to say, 'Mrs. Jones, I know this [physical therapy] is helping you a lot, but do you realize this will cost you $100 in a copay, per visit?'" says Holm, who uses the tool provided by his EHR vendor MTBC. "But if I don't have good data I can't get proactive and try to help the patient prepare for the expected bill and I would have difficulty empowering my employees to do the same."

Holm's experience touches on the challenge of payers cutting their fee schedules - in addition to the challenge of declining payment. This puts the burden on practices to make sure they are getting paid what payers are supposed to be paying.

Billing and collections expert Chastity Werner says that even if providers can get hold of their fee schedules, entering data into software can be a laborious, manual process.

"If entering contract fee schedules into the provider's practice management software is not feasible, a simpler solution may be to select several of their most utilized CPT codes," says Werner. "Once you have selected the codes, then compare the allowable charges to what was actually received by the payer. Auditing your payers to see if they paid according to contract is essential in a practice's financial viability."

P.J. Cloud-Moulds, a billing and collections specialist with consulting firm Turnaround Medical AR Recovery, says there are a number of small things practices can do to improve payer performance. Here are a few key actions.

1. Review speed of payments. "You want to know how quickly you're paid," says Cloud-Moulds, advising practices to look at how fast payments are being processed to see if any numbers are far behind. "There's an AMA National Health Insurers Report Card so you can compare your practice to industry standards." If certain payers are below industry standards, that is a trigger for further investigation.

2. Review your contract rate. Make sure you're getting paid for your exact contracted rate, not just close to it. Cloud-Moulds recalls one major payer a few years ago that shorted practices a few dollars on certain codes. "A few dollars here and there, it adds up," she says.

3. Make sure your payer mix is balanced. The common sense rule of not putting all your eggs in one basket applies to payer mix. "If one thing happens wrong - Medicare decides to hold payments in June - that's going to be difficult to catch up," she says.

4. Keep claims clean. "Make sure things are done correctly upfront," says Cloud-Moulds. For example, make sure a doctor's NPI number is on a claim, and that the patient's name on their insurance card matches the one on the claim. "If your patient's name is Julie May Smith, and her insurance says J.M. Smith, you better put down J.M. Smith or you won't get paid," says Cloud-Moulds. "Every time you get a denial, it takes another two weeks to get it right."

*How are your payers performing? Find out with our in-depth national and regional data: / Major Payers / Blues / Medicare / Medicaid / Northeast / Midwest / South / West / Best Payers / Worst Payers. This information is also available at athenahealth.com.

In Summary

Here's a glimpse at how well payers are doing, and how regulatory changes may affect your payer performance:

• Denial rates among major carriers saw a slight improvement this year, but that could change as the Affordable Care Act and regulatory changes take hold.

• First pass resolve rate decreased slightly, at least partially due to the switch to Version 5010.

• Provider collection burden stayed stagnant, but this burden is expected to increase.

• Understanding your own numbers - by tracking key metrics such as denials - is the first step to improving payer performance.

• Make sure your vendors are prepared for the switch to ICD-10.

Marisa Torrieri is an associate editor at Physicians Practice. She can be reached at marisa.torrieri@ubm.com.

This article originally appeared in the July-August 2013 issue of Physicians Practice.