Technology: Reducing Denials in Oncology

Surely, your oncology practice remembers this well:

When the Medicare Modernization Act of 2003 was signed into law, the reimbursement rate for Part B drugs dropped from 95 percent of Average Wholesale Price (AWP) to 85 percent. And who could forget how, with the transition to the new Average Sales Price (ASP) payment methodology in 2005, Part B drug reimbursement further declined for most drugs?

Granted, you enjoyed a passing bit of relief when Medicare established its 2005 Demonstration of Improved Quality of Care for Cancer Patients and 2006 Oncology Demonstration Project - both of which provided a temporary source of new revenues for participating practices, thereby offsetting the reduction in drug payments. Still, what a major impact all this has caused, especially if you consider that drug revenues account for approximately 70 percent of total revenue in medical oncology.

What’s more, this continued focus on the difference between physicians’ cost for drugs and the reimbursement rate has resulted in a steady increase of private payers moving to an ASP payment methodology - a trend that is expected to continue. This means that margins on physician-administered drugs will continue to decline as more payers move to ASP.

Sounds very discouraging. But, believe it or not, you can improve your bottom line by improving your business operations through simple work flow and technology solutions. Read on for some strategies to achieve this.

Information management

Many claim denials are due to inaccurate patient demographics, so it’s critically important that you keep your patients’ demographic information current. Note that these inaccuracies occur surreptitiously, such as when a patient moves across town or changes his phone number and he forgets to tell you. Life goes on, but your claims won’t if you don’t keep on top of these sorts of changes.

Do you have a review process in place for keeping patient demographics and insurance information current? If not, establish one. With the high cost of new cancer therapies, many oncology practices are now verifying insurance information before every treatment. At a bare minimum, the information should be completely updated every three months. To minimize errors, limit the number of staff members who can initiate changes in an existing patient’s demographics. Also, identify specific staff members who should be notified of any changes made, in order to reduce billing/collection problems.

But what about uninsured/underinsured patients? How will you handle them? Will you treat these patients in the office? If yes, then decide on a financial liability limit that feels appropriate for your practice. Or will you limit indigent care? Establish a policy that determines how much charitable care the practice can afford, apply it, and then monitor it.

Charge capture

The importance of accurate charge capture can’t be overstated: You can’t get paid if you don’t bill for a service. Lost charges can occur when a service is not captured on the charge ticket, when the service is incorrectly entered on the charge ticket (wrong units, etc.), or the charge ticket itself goes missing. In essence, you’ve done the work for free, and who can afford to do that (except for planned charity care, of course)?

Just as in obsolete patient demographics, the losses can really add up. Consider that $200 lost every day from unbilled services for just one physician calculates to about $50,000 annually. Nothing will guard your oncology practice against such lost charges more than having processes and systems in place.

One way to lose charges is to lose the charge ticket itself. Charge tickets that are part of an EMR are less likely to be “lost,” but they’re subject to late billing if not signed off on in a timely manner. Paper charge tickets are easily misplaced and often never make their way back to the billing department.

Use your practice management and billing systems to help you keep track of it all: Likely, one of these systems has a built-in facility for minimizing the number of lost charge tickets, with each system-generated charge ticket assigned a distinct number. When your staff enters the charges after a patient encounter, they are posted to that distinct number. At the end of the day, generate a “missing ticket” report to flag any outstanding charge tickets.

Even if neither of these options is available, you can still manually verify that all charge tickets have been received. Check your practice’s appointment schedule against the charge tickets to verify that there is in fact a ticket for each patient.

You can also lose charges as a result of services either not captured or incorrectly recorded on the charge ticket. This is particularly common with drug charges. Drug inventory cabinets, such as the Pyxis system, offer functionality that will help your practice capture all drug charges, automate billing, and control and maintain inventory management. This system will print a daily transaction log that includes for each patient the drug administered and the drug wasted (when appropriate). You can then compare this report with the drugs marked on the charge ticket (or entered in the electronic billing record) to ensure that all drugs administered were billed properly.

Prior to sending claims out, run a report to make sure that all drugs were billed with the proper units attached. For even easier review, export the report to an Excel spreadsheet and then sort it by J-code. Many drugs have standard doses so it’s fairly easy to see if the units were incorrectly billed. For example, consider the antiemetic drug Aloxi, which has a billing code of J2469, a billing unit of 25 mcg., and a standard dose of 0.25 mg. Therefore, Aloxi should be billed at 10 units of J2469.

Code and bill correctly

Proper coding and billing for services is undoubtedly the surest way to reduce denials and underpayments. For drugs/fluids and their administration you must know:

1. What was administered/wasted - hydration, therapeutic, or chemotherapy drugs;

2. The route of administration - injection, infusion, IV push;

3. The order of administration - sequential or concurrent (Note: Piggy-backed drugs must be in separate bags to be billed concurrently); and

4. The length of administration.

Also, make sure you understand the billing rules and regulations for Medicare and private payers. Medicare information is on the Centers for Medicare and Medicaid Services (CMS) Web site and your local Medicare contractor’s Web site. Because these rules are publicly available, most practice management and billing programs contain built-in edits or claim scrubbers based on Medicare rules. Edit programs that are updated regularly for LCD, NCD, CCI, and code and modifier changes can be useful in identifying potential billing errors, such as bundled services, services requiring additional diagnoses, or modifiers.

And what about your private payers? Check each one. Some follow the NCCI edit guidelines. Others use third-party proprietary claims edit programs. Most private payers, however, do not explicitly specify the source or logic behind their claims editing program and process.

Hopefully, your private payer claims are adjudicated based on the AMA’s Current Procedural Terminology (CPT) guidelines and conventions. CPT codes are a HIPAA-designated code set by which you can bill and get reimbursed properly for the services you provided. The AMA develops and maintains the CPT codes, modifiers, instructions, and guidelines, with input from physicians, third-party payers, and government agencies. You can purchase the CPT codes, guidelines, and conventions listed above from the AMA for a nominal fee.

Recent class-action lawsuits filed by the AMA on behalf of physician groups against payers alleging improper bundling and downcoding, and rejecting correctly used modifiers have been successful in changing some payers’ inappropriate claims edits. Still, private payers continue to expand their claims audits and reviews, so your best defense is to have negotiated in the contract proper claim adjudication based on the AMA CPT guidelines, and then adhere to those rules when billing for services and procedures.

But all these rules and regulations are worthless if nobody in your practice knows when - not if - they change. Therefore:

• Have your billing manager establish and enforce a practice-wide communications protocol that ensures that everyone involved in billing and collecting receives all updates on billing rules and regulations in a timely manner.

• Hold regular office meetings to address specific billing and reimbursement problems, and to track progress on earlier identified issues.

• Make sure your billing staff reads the newsletters put out by your Medicare contractor as well as all private payer/provider bulletins and newsletters.

Squeaky-clean claims

To increase the odds that your claims will be accepted the first time around, consider giving them a spit-shine with claim-scrubber software. But before purchasing or using a claims edit program, verify what the software is basing the scrubbing and coding analysis on. Medicare edits? AMA CPT guidelines?

Some other third-party claims edit product? Ideally, the claim-scrubber software will contain Medicare edits and the AMA CPT guidelines, and it will apply the edits based on the particular patient’s primary payer.

Other considerations when choosing a claim scrubber:

1. Choose a program that is currently in use in your specialty; ask for references.

2. Look for a program that includes edit guidance with links to supporting documents (i.e., NCDs, LCDs, CCI edits, etc.).

3. Make sure you can get adequate initial and ongoing training; an unused or misused program is a waste of money.

4. Make sure the vendor updates and improves the product regularly (at least quarterly).

5. Give preference to software that can be automatically updated via the Internet - it’s usually more accurate, with updates that are less disruptive to the practice.

Maximize your collections

Most practice management systems will allow you to enter your expected payment. Therefore, loading contracted fee schedules into your software program should be a priority. While it can be challenging to get the complete fee schedules from payers, they are obligated to provide them. Furthermore, without the payers’ fee schedules (or reimbursement methodology), you won’t know what you have agreed to contractually, and you won’t know if you are being paid correctly.

Rank your payers according to volume and keep their information up to date, so you always know whether you’re being reimbursed according to your contract. The AMA reports that challenging inappropriate claims payments may lead to a positive change in the health plan’s business practices. And, by loading fee schedules into your system, you can also determine a very good benchmark for collections.

Make sure that the fee schedules are routinely updated. This takes little time once the figures are first entered, as most payers update their fee schedules quarterly, or even less often. Be aware that “bundling” issues will mean that some of the expected payment amounts associated with certain line items won’t be collectible. Nevertheless, you will have a good indicator of what should be collected.

Web-based reimbursement technology is gaining in popularity; RemitDATA is one such program. RemitDATA’s Reimbursement Pro uploads the Electronic Remittance Notices or Advices (ERNs or ERAs), ANSI-835 files from Medicare, Medicaid, and commercial payers into a secure Web account. You can then log into your account to retrieve your reports, which are numerous.

RemitDATA, for example, offers a claim summary by reason code and procedure. This report includes the procedures denied and the reason codes for the denials, allowing you to track which procedures are being denied, the frequency of the denials, and the reasons for the denials.

This is information that is often not accurately captured in our practice management systems, as most software programs default to a contractual write-off and it is up to the individual entering the data to choose the correct denial or write-off code (often not done). With RemitDATA, the information comes directly from the ANSI-835 file so the denial reason code is accurate with the Explanation of Benefits (EOB).

This information has real value: When you are able to accurately capture denial types and frequency, you can pinpoint actions to take to reduce future denials.

Other benchmarking reports offered by RemitDATA will allow you to compare your practice to other oncology practices so you can see how your collections and denials compare nationally (within RemitDATA’s clientele).

Finally, respond swiftly to requests for supporting documentation, denials, underpayments, and nonpayments. The Medical Group Management Association reports that the best performing practices have dedicated staff to handle these issues. If your practice lacks dedicated claims-follow-up staff, you may be putting yourself at risk of missing deadlines for submitting requested documentation and appealing denials and underpayments.

Getting paid fairly and completely is no small task these days. Stay informed and ever-vigilant of changes, and collect, collect, collect.

Risë Marie Cleland provides educational programs through national speaking engagements and oncology publications. She is the founder and president of Oplinc, Inc. She also works as a consultant and adviser for physician practices, pharmaceutical companies, and distributors. Contact her at mailto:Rise@Oplinc.com.

This article originally appeared in the April 2008 issue of Your Best Practice: A Practice Management Supplement for Oncologists and Hematologists.