billing & coding

Hang on to What You've Earned

The first of a two-part series explains how to keep insurance payments.

ALAN HOMESTEAD, O.D.

You provided the medical service for your patient, billed the patient's insurance company and received the payment check. Now, all is well, right? Well let's hope so. Two caveats (of many) in the medical-insurance world are:

1) Getting payment isn't proof of billing correctly; and its corollaryis.

2) You may have to refund what you've been paid, perhaps years later.

What is proof of billing correctly? The answers: studying the rules and billing in good faith? Submitting claims in the same manner as other physicians in the area? Following the advice of an instrument manufacturer to the "T"? Hiring a billing service? Applying guidelines learned at the last coding seminar?

None of the above. Proof of billing correctly is passing an audit. An audit of medical records is the only reliable indicator that you've done your billing job properly.

The ins and outs of audits

Medicare and other insurance companies typically retain the right to review your medical records to establish that the medical claims truly reflect the services rendered. Such a review is called an audit. Although people discuss audits more than they actually occur, it's prudent to maintain chart notes and documentation as if an audit were right around the corner.

The three kinds of audits: internal, external and insurance. Office staff typically execute Internal audits on a periodic (monthly or quarterly) basis. The purpose is to expose problems before anyone else (read: insurance auditor) does. The side benefit of an internal audit is that all members of the staff become experts in understanding insurance rules. By all means, don't allow yourself to audit your own records. In an insurance audit, doctors don't interpret their own chart notes. Notes must be legible and understood on their own.

An outside agency, that your practice hires, performs an external audit. The practice obtains an unbiased critique from someone already familiar with insurance rules. View an external audit as an introductory course on what is involved in an insurance audit. Use it as a model on which to base your own internal audit. An external audit is a good idea, when utilized as a learning tool.

The audit that really counts

The only kind of audit that really counts is the insurance audit. In the case of a Medicare audit, a nurse auditor may show up at your doorstep to analyze your records. The auditor passes judgments on whether you're allowed to keep the money you've been paid, and their judgment isn't limited to the most recent payment.

For example, I was involved in a case of a physician who owed a refund of $175,000. That didn't represent his most recent insurance check, nor did it represent the past 12 months of his billings. That sum represented his past three years of billings.

By reading the fine print of your insurance contract, you may discover that you're held accountable for claims submitted years in the past. No, auditors won't take the time to review every chart for the past three years. They use a shortcut. By looking at your pattern of billing for the past few months, they extrapolate backward for however many years are allowed by contract. Sadly, by the way, the $175,000 owed by the physician appeared to be a legitimate ruling based on the lack of chart documentation and incorrect coding.

To uphold fairness, an appeal process allows the doctor to formally disagree with the auditor's decision and have an impartial third person make the final ruling. Medicare rules provide for appeals in some cases to reach the level of a judge. A colleague has more than once taken a Medicare appeal to the highest level and has never lost a case. The lesson: When faced with an unfavorable ruling and your heart says you're right, don't hesitate to champion your point of view to the end.

One chance to make a case

On the other hand, non-Medicare plans may be their own final arbiter. You may have only one chance to make your case, and that is to an employee of the insurer. This process may appear less fair than Medicare's, but they're the rules to which we have agreed at the signing of the provider contract.

The consequences of violating medical charting protocol and insurance rules will vary from case to case.

Next month, we will take a look at those outcomes and how billing services affect your responsibility. We will also have special information regarding the much-advertised 2014 "deadline" for electronic health records in your office. OM