Insurance Deductibles

Collecting deductibles is often a difficult task for any medical practice.  It is much easier to collect payment from a patient who is currently in the office to see the doctor, rather than a patient who receives a bill.  There are many patients who are unaware of what a deductible is, and refuse to pay the bill that they get in the mail, not matter what!  It helps to try to collect part of the deductible amount while the patient is in the office, and to have a notice placed in waiting room and front desk as to the practice's deductible policy.  Below is a notice that we gave to our practices to post in the waiting room/front desk area.

NOTICE



Welcome to the New Year.  As you know, with each New Year new insurance deductibles apply.  It is one of the more frustrating parts of medicine that with the arrival of each New Year, the application of deductibles replaces a significant amount of our insurance payments.  At this time of year, our cash flow is overly dependent on the collection of these deductibles.  As a practice, we utilize the best available online systems to determine our patient's individual obligations.  Unfortunately, this information is often incomplete.  It is the patient's responsibility to understand and honor this aspect of your insurance coverage.  Your deductible is due at the time of service.  If your insurance does not have a deductible, please be patient with our staff should they mistakenly ask you for a payment towards a deductible.

****Medicare Deductible for 2012 is $140.  Please be aware that many secondary insurance policies now have deductibles and/or do not pick up the Medicare deductible.

Medicare Payment Advisory Commission to Impose Pay Cut For Medicare Providers

The Medicare Payment Advisory Commission is charged with supervising $500 billion in Medicare cuts as a part of the Patient Protection and Affordable Care Act.  In September of 2011, MedPAC proposed that specialists will receive a 6% cut in their fees per year for three years followed by a 7 year freeze without any adjustment for inflation; general practitioners will face a 10 year freeze on their reimbursement fees, with no adjustment for inflation.  Despite overwhelming opposition from Medicare patients, Medicare providers, and many Health Organizations, they have recently gone ahead and voted to impose these drastic pay cuts on all doctors that accept Medicare as of January 1, 2012.

These cuts and pay freezes will equate to a 50% real pay cut for specialists and a 30% real pay cut for general practitioners over the next 10 years.  This assumes that inflation stays at a very low 3%.  Obviously, higher inflation would make the cuts in real pay even more drastic.

Consequences of this decision:

1)  Many physicians, and most specialists, will refuse to treat patients with Medicare as their primary insurance.  There are certain costs that physicians assume by practicing medicine and treating patients.  These include the obvious business overhead expenses, such as: rent, utilities, malpractice insurance, medical supplies, salaries of employees/nurses, etc.  Why would a physician want to treat a Medicare patient when they know that the reimbursement for treating that patient may not cover their expenses?

2)  More medical care will be turned over to nurses, nurse practitioners, and physician assistants.  Few people will ever get to see a doctor under the Medicare program.

3)  Medicaid will follow suit and cut their reimbursement fees as well.

4)  Many commercial insurance companies will also follow suit and cut reimbursement fees.

5)  The quality of health care in America will be drastically impacted because many students will choose to pursue careers in other fields.  The cost of medical school plus interest on student loans is always increasing.  Decreased future earnings to pay back these loans will prevent attending medical school from being a viable option.


If we do not take a stand, these cuts will drastically impact the health care industry in the United States.  I encourage you to write your Congressional Representatives and U.S. Senate Representatives to make your voice heard.

Denial Management 101

Every medical practice experiences denied claims, however some experience a far greater number of denials than others.  The best performing practices can have denial percentages as low as 5%.  Other practices are seeing claims denied 25-30% of the time.  It is key to understand that once a Medicare claim is denied and appealed correctly, it will take at least 1-3 months before the provider receives payment.  In tough economic times, this cash flow delay is unacceptable for most every practice.  Healthcare professionals are always looking for ways to improve their billing performance.  The best way to improve billing performance is to prevent many of these denied claims before they happen.

For those that have been involved in physician billing for over 20 years, we know that there was once a time when claims were submitted to the payers and we subsequently received payments.  It used to be much less sophisticated than it is today.  An individual claim processor manually reviewed, processed, and paid every single claim.  Over the last two decades, much of that work is now being done by a computer.  Programs are written to make sure that the medical practice/medical billing service is "dotting their i's and crossing their t's".  If there is any doubt, they deny it.  They assume that most medical practices will not go through the trouble of following up on denied claims.  This saves the payers money.

To ensure that you, as a provider, are not leaving money on the table, it is vital to be proactive as to what the root of the denials is.  Keep track of how many claims are denied every month, identify the reasons for denials, and track your denial performance over time.

1:  Determine your Denial Percentage at the end of every month.

1. Total # (and charge amount) of claims filed to a payer.
2. Number (and dollar value) of denied line items.
3. Calculate Percentage by dividing "number of denied line items" by the "total claims filed to payer"

This will enable you to track from month to month whether or not your practice is improving.  This should be tracked as a complete practice, as well as by individual provider, location, and by payer.  This will give you insight as to where and why problems may be occuring.

2:  Determine the main reasons for the claim denials.

• Registration error
• Charge entry error
• Lack of referrals & Pre-authorizations
• Insurance Company needs info from patient
• Duplicates
• Medical Necessity/CPT Code does not match ICD-9 Code
• Documentation
• Bundled/Non-covered  {ex)modifiers}
• Credentialing

This information will enable your practice to understand why claims are being denied, and where on the job training needs to take place.

3.  Track your denial performance over time.



The details about your claims denials will allow you to focus your energy on the most frequent reasons that claims are being denied.  The provider/practice management staff will know the most efficient ways to address the problem if they know the root cause of the why claims are being denied.  Every time you reduce your denial rate you bring more money to the bottom line of your practice.  Not only do you get paid correctly and timely, you have eliminated all the labor hours involved in reworking denied claims.

Medical Billing Services & Solutions