Tips for Department Improvements and
Maximizing Revenue
October 21-24, 2014
Robert H. Tessier
Senior Reimbursement Consultant
HBP Services
11 Research Drive , Suite 2
Woodbridge, CT 06525
203 397-8000
rtessier@hbpworld.com
www.hbpworld.com
Third Party Strategy
1.
Review all contracts with reimbursements based on historically high
technical/global payments for 88305 and other major codes such as 88342.
This assumes that the best payers allow 2x Medicare, for example:
88305-26
$60
+
88305-TC
$80
=
88305 (Global)
$140
2.
Re-negotiate the rates at the earliest opportunity. Don’t wait for current
term to end.
3.
Lock in these rates and offer a modest adjustment over a multi-year time
frame. While a one year/ 3%+ increase might have been acceptable in
the past, our mantra is “Go Long”.
2
Third Party Strategy
4.
Many payors are willing to write multi-year contracts if the adjustments
are favorable to them.
5.
Depending on the level of activity billed globally (vs PC only), your
Practice proposal might include:
Year 1
Year 2
Year 3
Year 4/5
+3%
+2.5%
+2%
+1.5%
This approach protects the critical baseline reimbursement for technical
services.
3
Third Party Strategy
6.
Present favorable rates paid by other payors as blinded data.
88305-26
88305-TC
88305 (Global)
Current
45.00
60.00
105.00
Payor A
Payor B
Payor C
Workers Comp
Average
60.00
55.00
48.00
84.48
61.87
80.00
72.00
68.00
80.99
75.25
140.00
127.00
116.00
165.47
137.12
7.
Also suggest selective codes for “carve-out” . Request ten codes, settle for five.
Accept area-wide usual and customary for other codes when calculations indicate
this as the best strategy.
8.
Consider current “Run Rate”, if different from CY 2013. Use to Practice advantage
4
Department Fund –Dividend Re-investment
Set up a Department Fund to seed innovative programs
Fund income
Pathologists make charitable contributions to this Fund at their discretion
Performance Based Part A – % of “dividend reinvestment” into the
Department
Hospital should match the Performance Based Part A, up to an agreed level
Other sources - Seek outside donors such as charitable organizations,
corporate donors and individuals
prepare a list and rationale for specific improvements in
the Department.
5
Department Fund – Income
Pathologist
Contributions
Hospital
Contributions
Other
Contributions
Performance
Based Part A
6
Department Fund - Expenses
– Seed new Department initiatives
– Strategic planning for Programmatic Expansion - Molecular
– Department promotion, including public relations
• sophisticated Annual Report
– Website development and improvement of contents
– Enhanced learning and education tools (Department Library)
– Outreach promotion
– Marketing collateral
7
Department Fund - Expenses
– Non-funded clinical research
– Training opportunities for Lab Staff
– Travel to explore best practices at other sites
– Consulting services to provide objective guidance
– Electronic Medical Records (EMR) Connectivity and Training
– Distinguished Lecture Series
– Supporting the Hospital Cancer Center
8
Department Fund - Other Considerations
‾ “Other purposes”, as the Department Chairman may designate
‾ All expenses will be submitted by the Chairman
‾ Each expense requires Administrative approval, which will not be
unreasonably withheld, as long as they are within the stated
purposes of the Fund.
‾ A report showing all activity will be prepared by Hospital/Medical
School Finance on a monthly basis. An Annual Report should be
prepared by the Chair and submitted to Administration.
9
Dividend Re-Investment
–
“Dividend” re-investment by the Pathologists is critical
Administration and Finance complain that Hospitalbased physicians (not only Pathologists) have exclusive
arrangements that earn income for inpatient/outpatient
work but they don’t give anything back to their
Departments/Hospitals
• Even modest contributions are respected
• These can be in the form of Expertise (if carefully
documented) as well as Financial Support
• A contribution, should be considered
– This can be a tax exempt charitable contribution to a
Department Fund from each of the Pathologists
10
Dividend Re-Investment- Pathologist Talent
• Another “dividend” is the Pathologists’ expertise that
extends beyond Department requirements AND IS NOT
PAID AS PART A
Serve on a Hospital wide group for IT initiatives
Work on committees, such as credentialing, IRB
and fund raising
Become an Officer of the Medical Staff
Join the Board of the local PHO
State Path Society Leadership
This time needs to be quantified and presented.
11
Dividend Re-investment
–
–
There are many other ways this can be presented but it must
be measured:
• Free Services
Clinic or Indigent patients
• Deep Discounts
Mandated by Hospital contract
requirements
One approach to this investment would be to base it on the
Pathology FTEs
12
PCCP Billing
Professional Component of Clinical Pathology (PCCP) billing has a wide range of
acceptance throughout the US. (none-30%+)
Whenever possible, we recommend the following elements to maximize income:
1. Set up a separate entity to bill for these services.
2. An LLC is usually the best structure.
3. With a separate tax ID it is possible to bill for these services as “non-par”
Participation status is typical when billing for anatomic pathology .
4. As a non participating provider there is less of a requirement to submit bills to
patients for deductibles and co-pays.
5. Avoid billing patients and the negative PR consequence.
13
PCCP Billing
6. Don’t be shy about the level of professional fees.
7. Recent analysis of many groups billing payers as both “par” and “non par”
reveals that Practice charges are often discounted automatically by 20/30% then
payment is made at 70/80% of the reduced amount.
8. If this is true, an adjustment in fees may lead to an automatic increase in
reimbursement.
9. While this is not always the case, average fees in the range of $18-$20, when
increased to $25+ have resulted in a significant increase in payment.
14
Part B Reporting Focus
1. Hospitals and Medical Schools utilize accrual accounting.
2. Most billing system reports provide data on charges processed and cash posted.
3. For a busy Chair /PDAS the best focus is on reports that puts everything in focus
by month of service.
4. This should start with the Hospital Division accessions showing those that are
billed as professional only.
5. The Referred Division, assuming services are billed globally, should always be
kept separate.
15
Part B Reporting Focus
6. The best report format will display processing in columns showing each month of
service.
7. Keep these in quarterly blocks for ease of reading and focus.
8. The Power of the Pyramids allows the Chair to track activity and see problems at
a glance.
9. Your Billing Manager should expand this report to also focus on adjustments:
Contractual discounts
Collection agency write offs
Timely filing denials
Charge reversals for coding errors
10. This is not recommended for a high level overview.
16
MONTH OF SERVICE
PRIOR
Jan-14
Feb-14
Mar-14
TOTAL
PROCESSED
ACCESSIONS
Surgicals
919
930
923
62
55
56
Non Gyn Cytology
CHARGES
January (02/05/14)
89,323
February (03/04/14)
211,808
301,131
89,694
206,459
296,153
March (04/02/14)
732
(1,180)
90,865
187,335
277,752
April (5/02/14)
201
5,434
13,198
106,354
125,187
1,868
2,215
4,279
13,440
21,802
(938)
0
260
(504)
0
1,615
May (6/03/14)
June (7/02/14)
July (08/04/14)
August (09/03/2014)
Total by MOS
569
(678)
1,680
1,798
1,106
632
203
3,739
94,491
307,635
315,433
309,207
1,026,766
69%
65%
61%
% of Charges Processed
In Current Month
GOAL = 70%
CASH RECEIPTS
January (02/05/14)
82,368
14,099
February (03/04/14)
27,914
51,318
4,215
March (04/02/14)
7,026
23,379
64,927
5,879
101,211
April (5/02/14)
1,363
5,628
19,601
69,908
96,500
May (6/03/14)
1,718
3,710
5,802
26,235
37,465
June (7/02/14)
1,250
2,796
5,314
10,574
19,934
July (08/04/14)
5,817
5,235
4,242
2,827
18,121
August (09/03/2014)
REFUNDS
Total by MOS
Collection %
BUDGET = 34%
Variance
861
(3,266)
128,317
718
(1,795)
96,467
83,447
604
248
2,431
(505)
(993)
(6,559)
105,088
104,200
114,678
34%
33%
37%
104,596
492
107,247
(3,047)
105,130
9,548
ACCOUNTS RECEIVABLE
3,805
14,758
5,769
17
MONTH OF SERVICE
PRIOR
Jan-14
Feb-14
Mar-14
TOTAL
PROCESSED
ACCESSIONS
Surgicals
623
459
629
37
25
28
Non Gyn Cytology
CHARGES
January (02/05/14)
16,836
213,508
February (03/04/14)
(1,088)
75,863
230,344
145,849
220,624
(1,375)
0
47,903
178,297
April (5/02/14)
(230)
252
1,822
79,815
81,659
May (6/03/14)
(865)
0
4,796
21,397
25,328
June (7/02/14)
(1,872)
0
145
(1,008)
(2,735)
July (08/04/14)
(1,719)
504
0
August (09/03/2014)
(2,588)
March (04/02/14)
Total by MOS
7,099
% of Charges Processed
In Current Month
(2,065)
(1,180)
0
(547)
288,062
199,335
277,954
74%
73%
64%
224,825
(1,215)
(6,380)
772,450
GOAL = 75%
CASH RECEIPTS
145,497
5,598
February (03/04/14)
20,022
80,218
3,462
March (04/02/14)
11,022
53,288
71,638
7,463
143,411
April (5/02/14)
7,559
11,889
20,803
90,959
131,210
May (6/03/14)
5,180
2,891
4,653
31,597
44,321
June (7/02/14)
2,991
2,398
5,885
16,143
27,417
July (08/04/14)
5,152
5,192
6,887
9,510
26,741
August (09/03/2014)
1,012
1,198
1,642
January (02/05/14)
(648)
REFUNDS
Total by MOS
Collection %
BUDGET = 57%
Variance
198,435
151,095
(669)
103,702
1,434
5,286
(1,425)
(2,742)
162,024
114,301
155,681
56%
57%
56%
164,195
(2,171)
113,621
680
158,434
(2,753)
ACCOUNTS RECEIVABLE
4,367
5,136
8,097
18