Health Care Collector - Kluwer Law International
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<strong>Health</strong> <strong>Care</strong><br />
<strong>Collector</strong><br />
The professional’s guide to success in health care collection<br />
August 2010 • Vol. 24, No. 3<br />
JoAnn Petaschnick, Editor<br />
ABNs Present Problems<br />
for Providers<br />
Fix process or suffer losses<br />
T<br />
he<br />
Advance Beneficiary Notice (ABN) is<br />
meant to provide Medicare beneficiaries with<br />
advance notice of the possibility that a procedure<br />
or service may not be covered by Medicare. The<br />
revised ABN includes a mandatory field for cost estimates<br />
of the items or services at issue. There is also a<br />
beneficiary option whereby the beneficiary may choose<br />
to receive a service and pay for it out of pocket rather<br />
than submit a claim for Medicare coverage.<br />
For a patient to be held responsible for noncovered<br />
Medicare expenses, providers are required<br />
to have a signed and dated ABN in the patient’s<br />
file prior to any service provided by a physician or<br />
health care provider. The ABN must be delivered far<br />
enough in advance that the beneficiary has time to<br />
consider the options and make an informed choice.<br />
I NSIDE THIS ISSUE<br />
Days of Revenue in Medical Records Slides 3<br />
Biller’s Corner 5<br />
Medicare Advantage Appeal<br />
Process Flowchart 7<br />
Helping Patients Understand<br />
<strong>Health</strong> <strong>Care</strong> Costs 9<br />
Collection Tips and News 11<br />
Problems with Procedures<br />
For a variety of reasons, providers may have difficulty<br />
getting the ABNs signed up front by patients,<br />
which means that providers may face losses that are<br />
hard to recoup. The reasons can include the many<br />
points of access for patients and the lack of appropriate<br />
staff training, according to <strong>Health</strong> <strong>Care</strong> <strong>Collector</strong><br />
sources.<br />
“As is sometimes the case with billing issues, we have<br />
had our share of problems regarding the ABN,” says<br />
Jeffrey Shutak, Director of Patient Accounts for The<br />
Memorial Hospital in North Conway, New Hampshire.<br />
If an ABN is not signed, a patient cannot be billed,<br />
and this was creating problems, Shutak explains. “Due<br />
to heavy losses in the Oncology Department over the<br />
past two years, we initiated a strict policy regarding<br />
the issuance of ABNs. This policy was designed from<br />
the CMS guidelines regarding Medicare coverage and<br />
reimbursement for certain high-end costs, including<br />
chemotherapy drugs. Coverage for certain drugs was<br />
being denied because the patient did not meet the<br />
clinical requirements for those drugs. It is not our<br />
policy to refuse treatment, and we were absorbing<br />
the cost of these drugs, which is in the three to six<br />
thousand dollar range,” he says.<br />
Since implementation of the new ABN policy,<br />
losses in Oncology have all but disappeared, according<br />
to Shutak. “Once the patients began to talk to<br />
their primary care physicians, the doctors began to<br />
document more carefully and we used that documentation<br />
to better support the billing. We follow similar<br />
See ABNs Present Problems … page 4
PAGE2<br />
EDITORIAL<br />
ADVISORY BOARD<br />
Chris Becraft<br />
President<br />
Collection Service Bureau, Inc.<br />
Scottsdale, AZ<br />
Frederic W. Burr<br />
Attorney at <strong>Law</strong><br />
Senior Partner<br />
Burr & Reid, LLP<br />
Vestal, NY<br />
Kempton S. Smith, CPAM<br />
Director, Patient Financial<br />
Services<br />
Baptist <strong>Health</strong> System<br />
Pensacola, FL<br />
Ted M. Smith<br />
President<br />
<strong>Health</strong> Services Program<br />
ACA <strong>International</strong>, Inc.<br />
Minneapolis, MN<br />
Toni Shamblin<br />
Manager<br />
Summa <strong>Health</strong> System<br />
Accounts Receivable<br />
Cuyahoga Falls, OH<br />
Linda Thompson<br />
Business Officer Manager<br />
Mark Reed Hospital<br />
McCleary, WA<br />
Judy I. Veazie, CPAM<br />
Senior Consultant<br />
Forum <strong>Health</strong>care<br />
Portland, OR<br />
EDITOR’S PERSPECTIVE<br />
Dear Subscribers,<br />
As we usually do in the <strong>Health</strong> <strong>Care</strong><br />
<strong>Collector</strong> , we focus this month on some<br />
of the ways that hospitals can avoid losing<br />
the dollars that they having coming<br />
to them.<br />
Hospitals can<br />
lose money in a<br />
number of ways<br />
that are beyond<br />
their control,<br />
but some of<br />
them are at<br />
least partially<br />
controllable.<br />
Contacts in the industry have told<br />
us that they have had ongoing problems<br />
with writing off costs because<br />
of problems with their Advance<br />
Beneficiary Notice procedures. This<br />
can happen for more than one reason,<br />
as you likely know. One patient<br />
accounts director tells us how they<br />
were losing money due to write-offs<br />
and how they made changes to turn<br />
that around. We hope that you will<br />
find the story interesting and helpful.<br />
In the Biller’s Corner, Judy Veazie<br />
presents part two of her article about<br />
appealing Medicare Advantage plan<br />
denials. These plans cover more services<br />
than traditional Medicare and<br />
there are different rules for appealing<br />
claim denials. She explains the<br />
different appeals and how they work,<br />
including those that beneficiaries<br />
can make on their own or with the<br />
help of a provider.<br />
Included is a flowchart that shows<br />
in graphic detail how the appeal process<br />
should work. This should work<br />
for those of you who want to set up<br />
a procedure for your office, keeping<br />
in mind that those providers who are<br />
contracted with MA plans have no<br />
appeal rights (unless they are acting<br />
on behalf of a patient).<br />
Also in this month’s issue, we<br />
look at the amount of receivables<br />
delayed in Medical Records. It’s<br />
another common problem for<br />
hospitals and it can be tough to<br />
overcome. We get some advice<br />
from one of our editorial advisors<br />
about what providers can do about<br />
establishing a policy—including<br />
teaming with the policy medical<br />
staff in developing that policy—to<br />
make sure all coding is completed<br />
within a specific timeframe. Then,<br />
the specific delays can be tracked by<br />
physician.<br />
As always, we are looking for your<br />
comments about these topics. Let us<br />
know if these stories are helpful to<br />
you and your staff. If there’s a topic<br />
that you would like covered, please<br />
let us know. Please send your comments<br />
to me at jmpeta@aol.com.<br />
Best Regards,<br />
JoAnn Petaschnick, Editor<br />
AUGUST 2010<br />
HEALTH CARE COLLECTOR
Days of Revenue in Medical<br />
Records Slides<br />
Providers seek to fill gaps<br />
F<br />
or<br />
the third time in as many quarterly financial<br />
reporting periods, the average number<br />
of days of revenue in the Medical Records<br />
department fell. In the first quarter of 2010, the average<br />
number of days of revenue held up in Medical<br />
Records was reportedly 5.24. This was down from<br />
the fourth quarter 2009 figure of 6.39 days. And, the<br />
average number of days was also down a tad over the<br />
second (6.93 days) and third quarters (6.32 days). See<br />
Exhibit 1.<br />
Hospitals with 100 to 199 beds responding to the<br />
HARA Report on First Quarter 2010 survey indicated<br />
6.70 days of revenue in Medical Records. This was the<br />
highest figure reported in the first quarter. Hospitals<br />
with zero to 99 beds followed closely with 6.40 days.<br />
See Exhibit 2.<br />
Facilities with 200 to 399 beds reported only 4.00<br />
days, the lowest figure. And, the larger hospitals with<br />
400 to 699 beds were quite a bit higher at 5.61 days in<br />
Medical Records. See Exhibit 2.<br />
Reasons for Delays<br />
Obviously, patients’ accounts get bogged down in<br />
the cycle, but why? Industry consultant Steve Chrapla<br />
of Revenue Cycle Partners in Billings, Montana,<br />
provides some insight into the problem of Medical<br />
Records delays. He offers the following reasons why<br />
accounts are delayed:<br />
PAGE3<br />
Exhibit 1. Days Revenue in Medical Records—Last Four Quarters<br />
2nd Quarter 2009 3rd Quarter 2009 4th Quarter 2009 1st Quarter 2010<br />
6.93 days 6.32 6.39 5.24<br />
Source: HARA Report on First Quarter 2010 , vol. 24, no. 2, Aspen Publishers, Inc. (2010).<br />
Exhibit 2. Days Revenue in Medical Records—By Hospital Bed Size<br />
0–99 Beds 100–199 Beds 200–399 Beds 400–699 Beds 700+ Beds National Average<br />
Number of days 6.40 6.70 4.00 5.61 n/a 5.24<br />
Source: HARA Report on First Quarter 2010 , vol. 24, no. 2, Aspen Publishers, Inc. (2010).<br />
<strong>Health</strong> <strong>Care</strong><br />
<strong>Collector</strong><br />
© 2010 Aspen Publishers.<br />
All Rights Reserved.<br />
Editorial Inquiries:<br />
JoAnn Petaschnick<br />
Phone: 414/545-1150<br />
Fax: 414/545-1255<br />
Email: jmpeta@aol.com<br />
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Senior Managing<br />
Editor<br />
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George<br />
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Marketing Director<br />
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HEALTH CARE COLLECTOR AUGUST 2010
PAGE4<br />
1. Physicians don’t sign attestations on Medicare<br />
accounts or provide the documentation necessary<br />
for coding; and<br />
2. Coding is not completed in a timely fashion. This<br />
is usually the major reason for delays since coding<br />
can sometimes be done with the information in<br />
the record prior to discharge.<br />
“In addition, there is usually a suspense period<br />
for late charges, from two to five days depending<br />
on facilities. But this is often included as part of the<br />
delay,” Chrapla explains.<br />
How to Prevent Delays<br />
Hospitals can prevent or at least combat the problem<br />
of revenue being held up in the Medical Records<br />
department, according to Chrapla. He recommends<br />
the following ideas to avoid late charges and Medical<br />
Record delays.<br />
Late Charges<br />
To prevent late charges the facility should:<br />
1. Establish policies indicating that late charges are<br />
not acceptable; all charges need to be posted<br />
within 24 hours of service;<br />
2. Establish controls and monitor sources and reasons<br />
for late charges;<br />
3. Develop corrective actions specific to each department<br />
to prevent late charges; and<br />
4. Reverse late charges against the revenue of the<br />
department that is causing the revenue delay.<br />
Medical Record Delays<br />
To prevent Medical Record delays the facility<br />
should:<br />
1. Establish policy (include medical staff in policy<br />
development) to make sure all coding is completed<br />
within a specific timeframe;<br />
2. Track reasons and type of delays by physician;<br />
3. Report to physicians and medical staff leadership<br />
about the physicians who are noncompliant with<br />
this policy;<br />
4. Monitor coding delays by account type and coder<br />
backlogs;<br />
5. Establish goals for daily coding performance;<br />
6. Ensure staffing levels of coders are sufficient.<br />
If not, get more resources and outsource if<br />
needed;<br />
7. Provide for flextime for coders and allow them to<br />
work remotely from home;<br />
8. Determine when concurrent coding can be done<br />
on inpatients;<br />
9. Ensure all outpatient procedures have codes<br />
prior to services being performed; and<br />
10. Evaluate what level of chart completion is required<br />
to allow coding to be performed. Workflow needs<br />
to be designed with coding as a priority. ■<br />
Reader’s Resource<br />
For more data and key indicators, see the HARA<br />
Report , published by Aspen Publishers, Inc. Call<br />
800-234-1660, or see www.aspenpublishers.com.<br />
AUGUST 2010<br />
ABNs Present Problems ...<br />
continued from page 1<br />
requirements in radiology and lab procedures. Our<br />
highest success rate in obtaining ABNs is for lab<br />
services,” he says. “Better case management and<br />
documentation has been key.”<br />
Working Toward Change<br />
Hospitals try to make sure that prior to providing<br />
services, the service is covered as a medical necessity,<br />
says Deborah E. Shapiro, President and CEO of WFS<br />
Services, Inc., in Secaucus, New Jersey. “Sometimes, they<br />
are wrong. For example, the severity of the diagnosis<br />
does not match a procedure that is performed. When<br />
Medicare denies the claim due to medical necessity or<br />
as a non-covered service and the patient has signed an<br />
ABN, the patient can be billed,” she says.<br />
Sometimes, patients will elect to have a noncovered<br />
service and they will understand that they<br />
have to pay for it. “For example, some new types of<br />
wound care with artificial skin are not covered by<br />
Medicare,” Shapiro says.<br />
Source of Problems<br />
“Problems can arise when claims are submitted<br />
and providers should have known that the<br />
HEALTH CARE COLLECTOR
PAGE5<br />
procedure was not covered. Procedures may not be<br />
properly investigated and screened prior to service<br />
in order to make sure that an ABN is signed,” says<br />
Stephen Chrapla, Director of Third Party Solutions<br />
for Revenue Cycle Partners, LLC, in Billings,<br />
Montana.<br />
“Claims should be also be checked prior to submission<br />
and, if the service is not covered by Medicare,<br />
the claim should not be submitted. The charge would<br />
have to be written off. If the claim is submitted, it<br />
could potentially be considered an abusive billing<br />
practice and subject to fines under Medicare Fraud<br />
and Abuse regulations,” Chrapla says.<br />
Shapiro concurs. “There is no ‘back end’ procedure<br />
for ABNs. If you have provided the service without<br />
the patient being informed or signing off on the<br />
charge, you may not bill. Anything other than that is<br />
called fraud,” she says.<br />
That is why getting the ABN signed during the registration<br />
process is so important. “What often creates<br />
a problem is not that the patients don’t sign, but that<br />
they sign and are not aware of having done so. During<br />
inpatient and outpatient registration, there are<br />
so many forms for people to sign; they may not really<br />
register having signed the ABN. Because ABNs are<br />
for Medicare patients, and the majority of Medicare<br />
patients are elderly, you may have a confusion factor<br />
anyway,” Shapiro says.<br />
The Appeal<br />
“If a patient has not signed an ABN or even if<br />
they have signed it but the hospital deems that the<br />
service should be covered, then they have to appeal<br />
Medicare’s decision to pay due to medical necessity,”<br />
Shapiro says. “Of course, the ABN cannot be signed<br />
after the fact when services have been rendered, but<br />
appeals can be made. Once the service is provided,<br />
the ABN is irrelevant in the appeal process,” she<br />
says.<br />
In the appeal process, the physicians are asked to<br />
provide additional diagnoses and information to get<br />
a service approved. “ABNs state that if the patient<br />
receives non-medically necessary and/or non-covered<br />
services, they are required to pay for the service. If<br />
they receive a service that Medicare deems not necessary,<br />
the provider might be able to end run the<br />
process by changing the diagnosis to something that<br />
Medicare will cover. This does not mean having<br />
the patient sign an ABN after the fact of service—it<br />
means changing the facts of service so that it would<br />
be covered,” Shapiro says.<br />
These appeals are very difficult and time consuming,<br />
Shapiro says. “The process requires coordination<br />
among the different departments, such as IT, registration,<br />
and patient accounts, so that future issues don’t<br />
arise. Because it is so difficult, some hospitals just<br />
write off the smaller amounts rather than take the<br />
time,” she says. ■<br />
Biller’s Corner<br />
Why You Need to Understand<br />
Medicare Appeals, Part II<br />
Medicare Advantage Plans<br />
Judy I. Veazie, CPAM<br />
A<br />
Medicare Advantage plan is a health coverage<br />
choice for Medicare beneficiaries<br />
besides traditional Medicare. Medicare<br />
Advantage plans, sometimes called “Part C” or “MA<br />
plans” are offered by private companies approved by<br />
Medicare. Through a bidding process, these private<br />
payers must submit plans and assurances that they<br />
can meet the established standards and rules for<br />
processing claims under the Medicare system. Under<br />
these rules, the Centers for Medicare & Medicaid<br />
Services (CMS) intend to reassure the beneficiary<br />
and the provider that they can count on fair treatment<br />
by the MA plans.<br />
When a beneficiary joins an MA plan, the plan<br />
assures that it will provide all Part A (hospital<br />
HEALTH CARE COLLECTOR AUGUST 2010
PAGE6<br />
AUGUST 2010<br />
insurance) and Part B (medical insurance) coverage<br />
to that beneficiary. MA plans must cover all<br />
the services that traditional Medicare covers except<br />
hospice care.<br />
The lure for many beneficiaries is the “advantage”<br />
that MA plans can offer extra coverage, such as<br />
vision, hearing, dental, and/or health and wellness<br />
programs. Almost all MA plans include Medicare<br />
prescription drug coverage. Because patients pay<br />
one monthly premium (in addition to their Part B<br />
premium), they often view the program as a simplified<br />
alternative requiring less paperwork.<br />
But MA plans bring an element of risk to the<br />
marketplace. These plans often seek to balance their<br />
risk by passing extra costs on to the provider and<br />
indirectly to the patient. Unlike traditional Medicare,<br />
MA plans add additional levels of authorizations and<br />
medical records requests that delay payment. In one<br />
survey, some providers reported that they can expect<br />
payment from Medicare within 25 days while MA<br />
plans take over 50 days to pay the same claim.<br />
While MA contractors will see cuts in premium<br />
levels from CMS, MA plans will remain a choice for<br />
beneficiaries under health care reform. Regardless of<br />
premium amounts, the contractors cannot cut core<br />
benefits to the beneficiaries. The risk for providers is<br />
that the MA plans will continue to balance their budgets<br />
by taking their “savings” from providers.<br />
Beneficiary Choice and Consequence<br />
Patients often think that an MA plan will administer<br />
their benefits while simplifying the paperwork.<br />
When patients choose an MA plan, they don’t factor<br />
into their decision the restrictive policies that exist<br />
under these plans. But CMS makes it very clear in<br />
their official beneficiary handbook, Medicare & You<br />
2010 , when they state:<br />
Medicare pays a fixed amount for your<br />
care every month. These companies follow<br />
the rules set by Medicare. However, each<br />
Medicare Advantage Plan can charge different<br />
out of pocket costs and have different<br />
rules for how you get services (like whether<br />
you need a referral to see a specialist or if<br />
you have to go to only doctors, facilities, or<br />
suppliers that belong to the plan). . . .<br />
If you get health care outside the plan’s network,<br />
you may have to pay the full cost. . . .<br />
Make sure you understand how a plan works<br />
before you join. Not all plans work the same<br />
way, so before you join, find out the plan’s<br />
rules, what your costs will be, and whether<br />
the plan will meet your needs. . . .<br />
It is important that you follow the plan’s<br />
rules, like getting prior approval for certain<br />
services when needed. . . .<br />
It is questionable how many patients have conducted<br />
a thorough review of their MA plan, and<br />
whether they fully understand that they have given<br />
up the flexibility of a full choice of providers. For<br />
more mobile beneficiaries, they may not realize the<br />
financial impact of seeking care outside their service<br />
area. This is often a big shock to patients who travel<br />
or who split their time between summer and winter<br />
homes. While emergent services are covered, the routine<br />
care is not. It falls upon the provider to inform<br />
patients that they may not be covered for the services<br />
they need.<br />
MA plans often seek to balance their<br />
risk by passing extra costs on to the<br />
provider and indirectly to the patient.<br />
When patients are unprepared for the additional<br />
responsibility they take on when they sign up for an<br />
MA plan, the provider must take an active role in<br />
advocating for their patients so that their patients get<br />
the most out of their benefits. Part of this is about<br />
educating the patient. If the patient was not fully<br />
informed about the risks and limits of the MA plan,<br />
the patient can request to un-enroll in the plan. In<br />
the Medicare & You 2010 handbook there are instructions<br />
for patients who are already in MA plans who<br />
need to switch to traditional Medicare.<br />
Risk Points<br />
Indeed, gaps in provider documentation have<br />
promoted the image that MA plan savings come<br />
from preventing what they deem to be unnecessary<br />
care. In most cases, despite these documentation<br />
gaps, the care follows the standard courses<br />
of treatment. However, much of the payer savings<br />
are recouped in other risk points. The provider<br />
is vulnerable in a number of areas and these are<br />
the very points that the MA plan claims processor<br />
exploits to gain profits. Some examples of these<br />
risk points are:<br />
• The point of service. Providers have difficulty identifying<br />
MA plan coverage vs. Medicare coverage,<br />
authorization requirements, notification requirements,<br />
and care management requirements.<br />
(Utilization review nurses and doctor intervention<br />
is needed to prevent gaps.)<br />
HEALTH CARE COLLECTOR
PAGE7<br />
Medicare Advantage Appeal Process Flowchart<br />
STANDARD<br />
EXPEDITED<br />
Pre-service: 14-day time limit<br />
Payment: 60-day time limit<br />
Pre-service: 72-hour time limit<br />
Payment requests cannot be expedited<br />
60 days to file 60 days to file<br />
<strong>Health</strong> Plan Reconsideration<br />
Pre-service: 30-day time limit<br />
Payment: 60-day time limit<br />
First-Level Appeal<br />
<strong>Health</strong> Plan Reconsideration<br />
72-hour time limit<br />
Payment requests cannot be expedited<br />
60 days to file Automatic IRE Review<br />
60 days to file<br />
(if plan upholds denial)<br />
IRE Reconsideration<br />
Pre-service: 30-day time limit<br />
Payment: 60-day time limit<br />
Second-Level Appeal<br />
IRE Reconsideration<br />
72-hour time limit<br />
Payment requests cannot be expedited<br />
60 days to file<br />
Third-Level Appeal<br />
Administrative <strong>Law</strong> Judge<br />
Office of Medicare Hearings and Appeals<br />
AIC over $120*<br />
No statutory time limit for processing<br />
60 days to file<br />
Fourth-Level Appeal<br />
Medicare Appeals Council<br />
No statutory time limit for processing<br />
60 days to file<br />
Fifth-Appeal Level<br />
Federal District Court<br />
AIC over $1,220*<br />
AIC = Amount in Controversy<br />
ALJ = Administrative <strong>Law</strong> Judge<br />
IRE = Independent Review Entity<br />
*The AIC requirement for an ALJ hearing in federal court is adjusted annually in<br />
accordance with the medical care component of the Consumer Price Index.<br />
• The billing rules process. MA payer staff has fragmented<br />
understanding of uniform billing (UB)<br />
rules and codes, and, thus, often falsely deny<br />
claims when they misread or fail to properly<br />
interpret the claim information provided by the<br />
UB codes.<br />
• Demands for additional information or records. MA payers<br />
request records and conduct medical review at<br />
double the rate of Medicare.<br />
MA payers are also known to reject claims based<br />
upon a “technical denial” at excessive rates compared<br />
HEALTH CARE COLLECTOR AUGUST 2010
PAGE8<br />
AUGUST 2010<br />
to traditional Medicare. These technical denials<br />
include medical necessity, DRG assignment, length of<br />
stay denials, pricing reviews, etc.<br />
MA Appeals<br />
As if CMS anticipated the potential abuse of the<br />
claims payment process, a solid appeal structure was<br />
established to offer recourse to damaged providers<br />
and concerned beneficiaries. Providers and patients<br />
should view the MA appeals process as a way to hold<br />
MA plans accountable, ensuring that good payers are<br />
rewarded for their investment in meeting expected<br />
standards and bad payers are driven out of the<br />
marketplace. Unless this occurs, the bad payers will<br />
unfairly benefit from their poor compliance with billing<br />
rules, enabling them to reap profits, even reduce<br />
premiums, to gain more market share. The appeals<br />
process is the best way to ensure fair trade practices<br />
among the MA payers.<br />
When patients are unprepared<br />
for the additional responsibility they<br />
take on when they sign up for an MA<br />
plan, the provider must take an active<br />
role in advocating for their patients<br />
so that their patients get the most<br />
out of their benefits.<br />
Providers may not be using the opportunity to<br />
appeal MA claim denials as extensively as they might.<br />
At a recent appeals workshop conducted by the<br />
American Association of <strong>Health</strong>care Administrative<br />
Management (AAHAM), Medicare consultant Diana<br />
Smithson outlined the options for appealing traditional<br />
Medicare and Medicaid Advantage plans. (The appeals<br />
process for traditional or original Medicare in discussed<br />
in the July 2010 issue of <strong>Health</strong> <strong>Care</strong> <strong>Collector</strong>. ) 1<br />
As Smithson outlined the steps to appeal claim<br />
denials and other payment barriers, I realized that<br />
the majority of the audience had not used their<br />
appeal options with Medicare or the MA plans. I<br />
asked my fellow audience members how many had<br />
successfully filed MA appeals. One audience member,<br />
Seattle’s Northwest Hospital Business Office Director,<br />
Janet Walthew, reported that she had a great appeal<br />
success rate. One reason for Janet’s success is her<br />
confidence in the appeals process, in part because<br />
she previously worked for an MA plan and she has an<br />
insider’s view of the process. She also understands the<br />
importance that CMS places on the appeals process<br />
to ensure balance in the marketplace.<br />
Beneficiary Appeals<br />
Medicare beneficiaries have appeal rights, too.<br />
When a beneficiary disagrees with a coverage or<br />
payment decision made by an MA plan, the beneficiary<br />
can appeal for a variety of reasons, which are<br />
explained in the Medicare & You 2010 handbook. In<br />
addition to fee-for-service denials, beneficiaries can<br />
also file appeals for:<br />
• Organization determinations to not authorize services.<br />
This can include, but is not limited to:<br />
— Specialist referrals;<br />
— Service denials; and<br />
— Refusal to authorize durable medical equipment<br />
(DME);<br />
• Out-of-area services that the MA plan does not<br />
consider urgent or emergent;<br />
• Non-authorized, out-of-network services that the<br />
MA plan does not consider emergent; and<br />
• Out-of-area dialysis services.<br />
CMS also provides recourse for patients who need<br />
assistance with an appeal. While contracted providers<br />
have no appeal rights, the appeal options for the<br />
beneficiary could include appointing the provider<br />
as a representative. Providers can secure a signature<br />
from the patient authorizing them to take their place<br />
in the appeal.<br />
Expedited Review<br />
A patient can also request a “fast appeal” under<br />
the Expedited Review process. If the patient is receiving<br />
Medicare services from a hospital, skilled nursing<br />
facility, home health agency, rehab facility, or<br />
hospice, and the patient thinks his or her Medicarecovered<br />
services are ending or ending too soon,<br />
the patient has the right to an immediate appeal<br />
response under the Expedited Review, process. With<br />
an Expedited Review, an independent reviewer,<br />
the Quality Improvement Organization (QIO), will<br />
decide if the services should continue.<br />
Editor’s Note: For an overview of both the MA<br />
Standard Appeal and the Expedited Appeal, see the<br />
Medicare Advantage Appeal Process Flowchart.<br />
Provider Appeals<br />
Providers contracted with an MA plan have no<br />
appeal rights, as mentioned, but non-contracted<br />
HEALTH CARE COLLECTOR
PAGE9<br />
providers may appeal. However, they must agree to<br />
waive payment if the appeal upholds the original<br />
decision. Providers start by asking for a “reopening.”<br />
Requested by the provider, the appeal can be<br />
based on a factor outside the provider’s controls that<br />
changes the perspective of the claim, such as late<br />
medical documentation or clerical errors. Appeals<br />
must be made within a year unless the provider can<br />
prove “good cause” for delay.<br />
Special Appeals Under LCD and NCD<br />
Local coverage decisions (LCDs) made by the<br />
Medicare administrative contractor can result in coverage<br />
or non-coverage in different localities. A littleknown<br />
option built into the LCD as well as national<br />
coverage determination (NCD) rules is that CMS<br />
allows for exceptions to the decisions that adversely<br />
impact patients in one US geographic region vs.<br />
another.<br />
For example, some procedures that are excluded<br />
for West Coast residents under LCDs are approved<br />
under East Coast LCDs. Thus, CMS allows for a<br />
patient to appeal this limitation. Appeal rights only<br />
apply to beneficiaries and are filed when an LCD or<br />
NCD is involved and the patient is adversely affected<br />
in accessing care.<br />
Indeed, there may be some common ground in the<br />
LCD and the recourse under expedited appeal cases.<br />
While appeals may be made to the CMS Regional or<br />
Central Office, it is acceptable to ask for congressional<br />
intervention in those cases where variances in local<br />
jurisdiction impact a beneficiary and his or her care.<br />
In the next Biller’s Corner, we will explore the<br />
anatomy of a Medicare Advantage appeal by examining<br />
some case studies and outcomes involving Seattle’s<br />
Northwest Hospital. Its Business Office Director, Janet<br />
Walthew, shares her tips for providers. ■<br />
Note<br />
1. Volume 24, no. 2, Aspen Publishers, Inc.<br />
About the Author<br />
Judy I. Veazie, CPAM, has over 30 years of experience<br />
in the health care industry. She has consulted<br />
extensively on revenue cycle management; she is an<br />
instructor in HIM and medical practice management,<br />
and a frequent speaker to professional organizations,<br />
as well as former editor of the <strong>Health</strong> <strong>Care</strong> Biller<br />
newsletter (Aspen Publishers, Inc.). Contact her at<br />
judyveazie@yahoo.com.<br />
Helping Patients Understand<br />
<strong>Health</strong> <strong>Care</strong> Costs<br />
Helen Osborne, M.Ed., OTR/L<br />
W<br />
illiam Shrank, MD, MSHS, knows a lot<br />
about health care costs, especially the<br />
copays (out-of-pocket expenses) that<br />
patients spend on prescription medications. Shrank<br />
is not only a practicing physician but also an instructor<br />
at Harvard Medical School and at the division<br />
of pharmacoepidemiology and pharmacoeconomics<br />
at Brigham and Women’s Hospital in Boston. As a<br />
researcher, Shrank looks at the big picture of health<br />
economics and studies how the cost of prescription<br />
medication affects physicians, pharmacists, and<br />
health care systems. And as a physician, he sees the<br />
more personal side of how out-of-pocket expenses<br />
can have an impact on a patient’s health.<br />
Shrank talks about a patient he is treating who has<br />
several chronic conditions. He has prescribed numerous<br />
medications for this patient but recently learned<br />
the patient does not always fill them. It turns out that<br />
the patient is on a fixed income and, despite having<br />
health insurance, must sometimes choose whether to<br />
pay for rent, food, or drugs. Shrank says that when<br />
faced with these choices, “drugs don’t always win.”<br />
The Value of Opportunity<br />
The situation Shrank describes is all too common<br />
in health care today. What is unusual is that Shrank<br />
and his patient talked about it. Once Shrank learned<br />
of the choices his patient had to make, he changed<br />
his patient’s prescriptions from nonpreferred drugs<br />
(with the highest copays) to less costly generic and<br />
preferred ones.<br />
While many providers agree it is important to talk<br />
about health care costs, they are not equally clear<br />
about whose job it is to do so. Shrank thinks that<br />
all health professionals can help. Below are suggestions<br />
he offers for ways to get started. Many of the<br />
HEALTH CARE COLLECTOR AUGUST 2010
PAGE10<br />
AUGUST 2010<br />
examples that follow apply to the cost of medication.<br />
But the principles are the same whether you are<br />
talking about transportation to and from the office,<br />
arranging daycare for an elderly parent, or participating<br />
in patient education programs. Patients often<br />
need to be encouraged to talk about health care<br />
costs. And when they do, it’s important to listen to<br />
their concerns and help them explore their options.<br />
Editor’s Note: As more hospitals are publishing<br />
information about the cost of their services, managers<br />
or employees working with patients in billing and collections<br />
are often called upon to talk to patients about<br />
the cost of services—and about their patients’ insurance<br />
coverage. Educating patients about billing and<br />
services are two big issues for the patient accounting<br />
staff. <strong>Health</strong> <strong>Care</strong> <strong>Collector</strong> editors believe that<br />
Osborne’s patient education/communication tips are<br />
valuable no matter what the topic.<br />
Ways to Approach Discussing <strong>Health</strong> <strong>Care</strong><br />
Costs with Patients<br />
Know the basics of health care costs. Almost every<br />
day, there seems to be new information about health<br />
care costs. It can be hard to keep up to date. Patients<br />
are likely to have an even more difficult time understanding<br />
the complexities of cost structures and payment<br />
options.<br />
It’s important to learn the basics of health care<br />
costs and then to teach this information to patients<br />
in ways they can understand. One example would be<br />
to explain drug formularies. As defined by Medicare<br />
Part D, this is “a list of prescription medications that a<br />
drug plan will pay for.” Most insurers offer three tiers<br />
within a formulary:<br />
• Generic (lowest cost);<br />
• Preferred (middle cost); and<br />
• Nonpreferred or brand name (highest cost)<br />
drugs.<br />
But just explaining drug formularies is not sufficient.<br />
You also need to teach patients that there<br />
can be several options within each tier as well as<br />
cost differences when purchasing prescriptions at<br />
the pharmacy or by mail. In my health plan, for<br />
example, a one-month supply of a generic drug<br />
costs $5 while a nonpreferred drug costs $40. When<br />
patients understand what is available to them when<br />
it comes to filling prescriptions, they can discuss cost<br />
saving options in the provider’s office and with the<br />
pharmacist.<br />
Open the Lines of Communication<br />
In most purchasing situations, buyers want to talk<br />
with sellers about ways to save money. Admittedly,<br />
health care transactions are more complex, but the<br />
principles remain the same—one party has to pay<br />
for services and goods rendered by the other. Shrank<br />
says there are a couple of reasons why patients and<br />
health care providers seldom have conversations<br />
about costs.<br />
For one thing, patients rarely initiate conversations<br />
about expenses. In part, Shrank says, this may<br />
be due to patients feeling embarrassed or ashamed<br />
about financial concerns. Time is also a factor. In<br />
a brief office visit, patients, like their doctors, are<br />
usually more concerned about diagnosing health<br />
problems than about talking about how they plan to<br />
pay for treatment.<br />
Likewise, physicians and other health care providers<br />
seldom start discussions about costs. In a recent<br />
survey, Shrank found that almost all physicians agree<br />
it is important that patients’ out-of-pocket costs be<br />
managed. But only about one third of physicians surveyed<br />
believe it is their job to do so.<br />
Physicians and nurses can help open lines of communication<br />
by routinely asking patients if they are<br />
taking their prescribed medications. This might be<br />
done when taking a patient’s health history or vital<br />
signs. If you ask, “Are you taking (x) medications?”<br />
and the patient says no, follow up with a question<br />
about why. If the answer has to do with money,<br />
encourage patients to ask about less costly options.<br />
Another example: In the instance of patients who<br />
may not have the financial resources to cover costs,<br />
but are embarrassed to mention it, financial counselors<br />
can bring up the issue.<br />
Use Plain Language<br />
Many health plans now mail patients letters about<br />
the cost of prescription drugs. These letters often<br />
include a statement along the lines of “You are currently<br />
charged (x) for this medication and there is a<br />
generic for (y) that will cost less.” Shrank knows of<br />
no research about the effectiveness of these letters<br />
and wonders, from a health-literacy perspective, how<br />
well this information is being communicated. You can<br />
help by offering to review the readability of these letters<br />
and advocating for them to be rewritten in plain<br />
language.<br />
Explore the Use of Technology<br />
Find out what tools there are that can help<br />
patients understand and get a handle on their health<br />
care costs. Once you learn about them, you can then<br />
HEALTH CARE COLLECTOR
PAGE11<br />
work with patients to make sure they know how to use<br />
them. One important step in this process would be to<br />
ask about access to the Internet:<br />
• Does the patient have Internet access at home?<br />
• Is there someone who can help the patient learn<br />
how to use the Internet if the patient doesn’t<br />
already know?<br />
• Can the patient go to the library to get online?<br />
Other tools patients might use include videos<br />
they can borrow from the library for exercise or<br />
diet instruction rather than pay fees to join a class.<br />
Instruction in how to join an email support group<br />
can save a patient the expense of transportation to<br />
meetings while at the same time providing access to<br />
a community of individuals who share the patient’s<br />
concerns.<br />
Editor’s Note: If your offi ce or hospital has<br />
a Web site, advise patients about it. Help them get<br />
signed up so they can take advantage by asking questions<br />
or making payments online.<br />
Consider the Human Costs<br />
Everyone agrees that it is expensive being a<br />
patient. A recent study looked at patients’ nonmedical<br />
costs at three phases of cancer care. These costs<br />
included time spent traveling to and from care, waiting<br />
for appointments, and receiving consultation<br />
from providers. They totaled hundreds to thousands<br />
of dollars per year. By talking with your patients about<br />
these costs, you can help them find ways to reduce<br />
those costs and relieve part of the stress involved in<br />
getting good health care. ■<br />
Reader’s Resource<br />
William Shrank, MD, MSHS, is an instructor at<br />
Harvard Medical School and at the division of<br />
pharmacoepidemiology and pharmacoeconomics<br />
at Brigham and Women’s Hospital in Boston. You<br />
can reach him by email at wshrank@partners.org.<br />
Source: Article reprinted with permission from<br />
the author and On Call Magazine and published<br />
by Boston.com/Monster , a division of Boston Globe<br />
Media. On Call is available online at http://www.<br />
boston.com/jobs/health care/oncall.<br />
Collection Tips and News<br />
Fine Tune Your Payer Collections Strategy<br />
How well do you know your payers? Start by developing<br />
a profile of each payer and identifying how<br />
each payer’s process works. Then, check it against<br />
your employees’ procedures for working with that<br />
payer. You may find that your employees use<br />
the same procedure from one payer to the next.<br />
But one process does not fit all payers. First,<br />
assess what your staff currently knows about the<br />
payer. What information and phone numbers do<br />
they have? To begin, a payer profile should include<br />
the names and phone numbers of the key payer<br />
contact staff, including:<br />
• Customer service;<br />
• Customer service supervisor and manager;<br />
• Claims department;<br />
• Claims department supervisor and manager;<br />
• Mailroom supervisor;<br />
• Medical review manager;<br />
• Medical officer;<br />
• Legal counsel;<br />
• Compliance officer;<br />
• UR manager;<br />
• Appeals manager;<br />
• Provider rep; and<br />
• Provider rep manager.<br />
Tip: Find out how much authority each<br />
provider rep has to resolve claims issue. If<br />
reps have no authority, you can move on to<br />
the next level.<br />
Source: Judy Veazie, CPAM.<br />
HEALTH CARE COLLECTOR AUGUST 2010
PAGE12<br />
When to Refer an Account to Collection<br />
Unless you are using a collection agency on an<br />
early out basis, it is typical to place an account with<br />
a collection agency or attorney 90 days after the<br />
invoice date if there has been no response from the<br />
debtor after routine statements and efforts to contact<br />
the debtor. The debtor’s silence may mean he<br />
or she doesn’t care or is unable to pay; but in either<br />
case, there is a problem. In any of the following<br />
situations, creditors may want to consider earlier<br />
placement with an agency:<br />
• Two or more broken promises of payment;<br />
• The debtor’s phone is disconnected or is now<br />
unlisted;<br />
• The debtor makes repeated requests for documentation,<br />
a common stall tactic;<br />
• The debtor claims he or she can’t pay and refuses<br />
to discuss a date for payment, or a payment<br />
schedule;<br />
• The debtor says he or she will take care of the<br />
account, but won’t commit to a payment plan; or<br />
• The debtor adopts a confrontational attitude<br />
or raises disputes regarding the account after a<br />
lengthy period of silence during routine billing.<br />
Consider these situations to be red flags that<br />
indicate potential problems with this patient. If<br />
your staff is limited, your collection agency or<br />
attorney may be better equipped to address these<br />
difficult situations.<br />
Question? Comment? Suggestion? Idea?<br />
Your ideas are outstanding and we want to<br />
know what you think. Please contact us via email at<br />
jmpeta@aol.com or fax at (414) 545-1150. If we use<br />
your story idea or tip, we’ll give you a gift! ■<br />
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