Chapter 7
Visit Charges & Compliant Billing
lecture 2
OT 232
OT 232 Ch 7 lecture 2
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Strategies for Compliance (cont’d.)
• Use modifiers appropriately
– (CPT
• Current Procedural Terminology)
– -25
• Yes, same day. Yes, same physician. YES, clearly separate
event did occur!
• E/M
• Ex, pg 215
– -59
• Not E/M
• Ex, pg 215
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Strategies for Compliance (cont’d.)
• Use modifiers appropriately (cont’d.)
– -91
• Repeat test or procedure really was performed on the
same day for patient management purposes
• Should not be used due to lab errors, quality control, or
confirmation of results
• Ex, pg 215
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Strategies for Compliance (cont’d.)
• Professional Courtesy
– All or none billing
• Discounts
– Have to be clear & equally distributed
– Not on a case-by-case basis
– If any money collected, payer (if there’s insurance) gets
percentage
• Maintain Compliant Job Reference Aids &
Documentation Templates
– Cheats sheets
– Commonly used codes in office
– CAC – Computer Assisted Coding
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Audits (dum Dum DUM!!!!)
• Formal examination of a representative
sample to reveal whether erroneous or
fraudulent behavior exists.
• External
– By private payers or gov’t investigators
• Prepayment
– CCI edits
• Post payment
– IRS
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Audits (cont’d.)
• Internal
– Part of compliance plan
– By practice staff or hired consultant
– Done to reduce the chance of an external auditor
finding problems
• Prospective (concurrent)
– Done before claims are sent
» Can reduce number of rejected claims
• Retrospective
– Done after remittance advice (RA) is received
» Can see which codes (or people) are problems
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Comparing Physician Fees & Payer
Fees
• Sources for Physician Fee Schedules
– Physicians should establish ‘Usual fees’
• Charges to most patients most of the time under typical
conditions
• Always exceptions
– Workers’ comp
• Nationwide databases are published that show what
percentile your fees fall under
– Figure 7-6, Page 224
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How Physician Fees Are Set &
Managed
•
•
•
•
Geographic
Competitive
Payers – Billing Tip, page 224
PMP
– Practice Management Program
– Adjusted accordingly based on report that can tell
what percentage of claims are paid in full or reduced
• Paid in full?
– Fee is lower than the max in insurance company will pay, so too
low
• Reduced?
– Fee may be set too high
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Payer Fee Schedules
• Charge-based fee structure
– Based on fees for similar services charged by
providers of similar training & experience in
geographic area
– Create a schedule of UCR fees
• Usual, customary & reasonable
– What a particular doctor usually charges
– 50% range of physicians with similar training & experience in
geographic area
– Whichever is lower!
– The lower fee of what a physician usually charges and what is
customary for physicians of similar training/experience in a
geographic area is considered reasonable.
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Payer Fee Schedules (cont’d.)
• Resource-Based Fee Structure
– Built by comparing factors
• How difficult the procedure is to perform
• How much overhead expense the procedure involves
• The relative risk the procedure presents to the patient and
provider
• Very logical
– Relative Value Scale (RVS)
• Hybrid of the two (resource and charge)
• Is some comparison involved for charges
• Group of related procedures are assigned a relative ‘value’ in
relation to a base unit – the higher the value, the more
difficult the procedure
– The base unit is assigned a conversion factor (dollar amount). To
calculate the price of a service, the RVU is multiplied by the
conversion factor.
– Example, page 226
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Payer Fee Schedules (cont’d.)
• Resource-Based Relative Value Scale (RBRVS)
– Used by Medicare
– Replaces charges with what each service really costs to
provide
– Three nationally uniform values are determined for each
procedure
• Work (difficulty, time)
• Overhead
• Cost of malpractice insurance (risk)
– Each value is adjusted for location
• GPCI
– Geographic Practice Cost Index
– Values are multiplied by a nationally uniform conversion
factor that is kept up to date with cost-of-living increases
• RBRVS fees are considerably lower than UCR
• 15% difference
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Payment Methods
• To pay providers, payers use
– Allowed Charges
• An amount set as the most the payer will pay for the
procedure
– If the physician’s usual fee is lower, will pay that; otherwise
will pay the allowed charge
• Provider’s status in the plan
– PAR vs. nonPAR
» PAR providers agree to accept lower allowed charges than
their usual fees
» What’s in it for the PAR?
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Payment Methods (cont’d.)
• The payer’s billing rules
– NonPAR providers can always ‘balance bill’
» Bill the patient for the difference between their fee and
the payer’s allowed charge
» The difference between a usual fee and the payer’s
allowed charge must be ‘written off’ if the payer does not
allow balance billing
• That amount is never collected
• If coinsurance is involved, it is based on the allowed
charge
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Payment Methods (cont’d.)
• Contracted Fee Schedule
– Fixed fee schedules with participating providers
• Capitation
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