Proposed changes to the “incident to services” rule in the 2016 Medicare Physician Fee Schedule are set to seriously impact how medical practices provide certain services, bill for them and share income from those services.
Incident to services are services or items that are furnished as an integral part of the professional services of a physicians or other practitioner in the course of diagnosis or treatment. 80 Fed. Reg. at 41785. They are billed to CMS as though the physician actually provided the service. One of the rule’s key requirements is that a physician directly supervise the performance of the services, which has meant that a physician who is part of the practice has to be physically present in the office when the services are provided. If, for instance, a physician in the practice was present when physical therapy or diagnostic imaging was provided to a patient, the services could be billed to CMS as though the physician actually provided the services, even though the service was provided by, for instance, a licensed physical therapist or imaging technician. Continue reading →
While your healthcare business may be compliant with billing regulations and coding, this does not mean that your payer is compliant and has paid you correctly per your contract. Providers know that Fraud and Abuse has been one of the largest areas of focus for payers and the government over the past 20 years. Due to this attention, many healthcare businesses engage auditors to audit their compliance of claims quarterly or annually. However, in addition to compliance audits, a provider should be auditing their payer interaction to create a dynamic blueprint of denial management and payment recovery. The AMA states that a 5% denial rate for an average family practice equates to about $30,000 walking of the door. A good benchmark for payer compliance would be a denial rate of 5-10%. Often times, practices and healthcare businesses operate with a much higher rate, and even in the 20-30% range without even knowing it.
When auditing the payer interaction, several components should be included in the review including:
Denial rate percentage
Aging of claims paid for 30 day, 60 day, 90 day, over 120 day period as an Aggregate
Aging of claims paid for 30 day, 60 day, 90 day, over 120 day period by each Payer
Claims denied categorized by denial reason as an Aggregate for previous 12 months
Claims denied categorized by denial reason by each Payer for previous 12 months
Claims that have been appealed, the date submitted, the date of the outcome, the outcome by each Payer
Claims not paid according to fee schedule as an Aggregate for previous 12 months
Claims not paid according to fee schedule by each Payer for previous 12 months
There is nothing readily understood about the term medical necessity. In healthcare it is the “overarching criterion for payment”. There is no payment for services or supplies if there is no medical necessity to support it. Today, every provider at some time is faced with a denial because of lack of medical necessity. Physician providers will usually hear that payors do not get in the way of the physician-patient relationship. Payors typically state that they never tell a physician how to practice medicine and a denial based on lack of medical necessity is for purposes of payment only. However, what provider, on a routine basis, will continue to order care and services which medically unacceptable and not supported for payment purposes?
The definition of medical necessity varies from one commercial plan to another. Federal law such as Medicare has its definition and so does state law under programs such as Medicaid. Various medical associations such as the AMA also define medical necessity.
Generally, medical necessity refers to services or supplies which are required for the treatment of an illness, injury, diseased condition or impairment and which is consistent with a patient’s diagnosis or symptoms and are in accordance with generally accepted standards of medical practice. Services or supplies must not be ordered only as a convenience to the patient or provider. Of course care and services which are investigational or unproven are not considered medically necessary. Continue reading →
Florida’s providers are buzzing with questions about value based care, asking why now? Is it a fad? Will it really ever be a widespread form of payment? Why does Florida seem farther behind the value based curve than other markets?
While there are more aggressive markets in other parts of the country, the bottom line is this: CMS changes are coming and they will not be stopped. The government has invested too much money to turn around at this point. Here are just a few examples of why:
The CMS Value Based Program with hospitals is already implemented;
Center for Medicare and Medicaid Innovation is piloting NUMEROUS programs covering many physician specialties
CMS expanded the Medicare Shared Savings Program to 3 tracks.
A new Merit-Based Incentive Payment for Physicians, Physician Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists will be apply to payments for services furnished in 2019.
The train has left the station. Providers will now shift from fee for service to value based payments with CMS. To be successful and still have a profitable business, clinical integration and quality improvements will need to be implemented to improve your practice whether you are hospital based or office based AND whether you are employed by a hospital or in private practice. These changes will be implemented for all of your patients as you will not distinguish in your level of service between patients with managed care as the payor rather than CMS. This essentially means that managed care payors will reap the benefits of these improvements in your practice. If you do not have a value based contract in place with the managed care payors they will not be sharing one dime with you. They will reap the benefits of your improvements AND keep the money! And by the time you get around to a managed care contract that is value based, the shared savings opportunities will be less than if you began those discussions now. Continue reading →
As the shift from fee for service to value based payment develops, one thing is crystal clear: volume is no longer king. Prior to 2010, medical providers were being paid on the amount of services that they rendered. The more patients that they treated, the more money they made. That certainty has disappeared with value based compensation and outcomes are now driving the compensation. To be successful, a provider must learn to bend both the quality and cost curve. In short, providers must increase quality while decreasing costs.
When contemplating negotiating or entering into a value based contract, the first thing to consider is the amount of financial risk that your practice or healthcare business can take on. The four main types of financial payments are:
The best way to determine which payment model best suits your needs is to hire a qualified financial healthcare analyst who will be able to generate financial risk modeling. A provider will then have a common starting point to negotiate as well as a better understanding of the issues, risks, and potential cost savings involved. Continue reading →
Like a scene from the popular Netflix series, House of Cards, Governor Scott has requested that State agencies list critical services in light of a possible government shutdown over a battle of the budget. It is important to note that Floridians relying on Medicaid could be impacted and shifting their care from the Primary Care Doctors back to the Emergency Departments. Lawmakers will have a special session from June 1-20 with the goal of passing a budget.
In the meantime, hospitals have responded to Governor Scott’s challenge for profit sharing and likening healthcare to baseball. The Florida Hospital Association responded equating the profit sharing to an additional tax on hospitals. The Florida Hospital Association stated that hospitals already contribute roughly $1.3 billion to Medicaid as supported by a report commissioned by the State. Governor Scott also drew criticism from State Senator Don Gaetz in a talk radio interview where he likened the Governor’s profit sharing to government price controls.
Has your practice implemented a compliance program or considered improving an existing one? Is it really necessary? Prior to the Patient Protection and Affordable Care Act (ACA), the necessity for physician practices to develop compliance plans was merely voluntary. However, the ACA will now require physician practices to have a fraud and abuse compliance plan in place as a condition of continuing to participate in Medicare or Medicaid programs. Because the government first published guidelines in the year 2000 for the voluntary use of compliance plans in physician practices and has subsequently enacted a mandate in the ACA for compliance plans, many physician practices are proactively implementing them. While this compliance plan mandate may be viewed by physicians as yet another administrative burden and expense to the practice, it can have many benefits as well. Implementing an effective compliance program can have the result of not only reducing liability risks, but can also allow a practice to reap monetary benefits. In fact, it could be more costly for the practice not to have one! Continue reading →