Medical Billing - The Internals Of Software

The things that medical billing people take for granted. Open up your software, push a button, login. Push another button, get a patient menu. Push another button, pull up a patient. Click, click, click and the process goes on and on. Medical billers have no clue what is actually going on behind the scenes of their software. In the following installments and this is mainly for you tech heads, we're going to show you exactly what goes on behind the scenes with your medical billing software with the main parts of the system. To cover everything would take a lifetime.

We'll be covering how patient files get put into the system and how they are ultimately access by a biller and placed into a work order to be billed. While this seems like a very simple process, it is actually quite complex and requires a lot of indexing and cross-referencing.

Another thing we're going to cover is how a claim gets sent electronically. This is one of the mysteries of medical billing as this whole process is actually invisible. While you can see a patient being pulled to a page, you can't see a claim file being transmitted. How does it go? Where does all that data come from when you have so many record specifications? How does the software know to interact with your transmitting device, which is usually your modem? These and other questions will all be answered.

We will also discuss how forms are printed. How does the software know exactly where to place that patient name and address? How do you choose a form, as there are so many of them? Where does the data get pulled from when all you see in front of you is a patient name?

If you're curious as to how security is set and how the software knows to lock somebody out of a certain part of the system, we're going to cover that too. The many options that you have to security systems make this part of the system mind boggling to say the least. We'll do a detailed walk through of a DME security system and show how it works.

Wonder how your software knows how to read those automated posting files that come from Medicare with all your money tied up in them? No problem. We'll dig deep into the auto posting system so you can see exactly what is going on behind the scenes there.

What about those add-ons? How does the system know that you even have them or not? Remember, they are not part of the standard package and have to be added later. So what is actually done by the software maker to let your system know that an add-on is there?

Finally, we'll show you how the software manufacturer can tell if you have a valid copy of the software and when it's time to pay your maintenance fee on it. This gets into some really low level programming.

The above topics will all be covered in future installments. So get a box of lightly salted popcorn and enjoy the show.

Michael Russell

Your Independent guide to Medical Billing

Medical Billing - DME Software Install Options

In this installment of medical billing and the DME industry, we're going to focus on the basic setup of the DME software starting with the installation options.

Installation options is the first place that the billing company goes to when first setting up the software to bill. The reason for this is because they want the software to have a certain look and feel for each biller. Plus, as is true with most software for any type of application, they're going to want to setup the software for the particular type of operating system they will be using.

Because most billing companies are fairly large, most DME software packages have the option to setup the software to run on just about any kind of network, whether it be Microsoft, Novell, or even a peer to peer network. However, there are some DME software packages that specifically say not to use on a peer to peer network. So please check with the software company before purchasing their product.

After the software is setup to run on the network, the next step is to customize the look of the software. This ranges from simple things like how the software looks when running to what options are actually shown to the billers. For example, let's say a billing company does not want billers to see patient's social security numbers. An option can be set in the installation options, usually through INI switches, that will make it so that a biller, when looking up information, cannot see a patient's social security number. Most software packages will make this option available for just about any field in the package itself. The most common fields are private information fields, such as social security numbers and credit card numbers and revenue fields, such as total costs. The biller may need to know how much the item bills for, but the company may not want that biller to know what they paid for the item so that the biller can't figure out the profit margin of the company.

Security is a big issue with DME software and this will be covered separately in another installment, but that is something else that is part of installation options. Each biller may have a different level of security.

Another part of the installation options is to designate what parts of the software will actually be used. Many DME software products are so huge that they provide options for a number of things, such as barcoding and purchase order, that many billers don't use. By going into installation options, these extra items can either be added or removed. This is also usually controlled by INI switches.

The final part of installation options usually involves the setup of printers and external devices used for billing and other things. These options are going to vary greatly depending on the capabilities of the software itself. For example. Some DME software will not allow you to use certain kinds of modems or don't support modems at all.

In our next installment of medical billing and DME software, we're cover security in more detail.

Michael Russell Your Independent guide to Medical Billing

VoIP Billing Software

VoIP is an acronym for Voice over IP (Internet Protocol), or in more common terms, phone service over the Internet. Basically, it's a set of common Internet standards that allows a user's voice to be converted into small packs of digital data which can then be sent over computer networks. At the receiving end, VoIP computers reassemble the data packets back into a conventional audio signal that can be heard just as if on a regular telephone line. This is an online scheme that has been bubbling around the Internet community for the past few years. A major advantage of VoIP is that it avoids the tolls charged by ordinary telephone services.

There is VoIP billing software also that handles billing and other processes. This software can be used by all kinds of businesses. It helps in keeping track of customers, the bills to be sent to them and other such details through a protocol. This software has features like broadband phone, PC to phone, wholesale (termination), traffic exchange, international callback and prepaid calling cards that meet your VOIP business needs.

VoIP billing is tightly integrated with popular gateways, gatekeepers, proxies and soft switches from vendors like Quintum, Cisco, Sylantro, Veraz, Nextone, IPtel, Mera, and other compliant devices. Most telephony billing systems currently used today are based on non-IP standards, making them not equipped to handle or accurately bill for IP services; hence, VoIP billing rose to prominence. The reasons why most of the service providers and enterprises chose the VoIP billing software to expand their business is that it integrates the core functions like authentication, authorization, and accounting with vital functions that facilitate the effective management of all billing-related processes, like customers, services, finance, service distribution, reporting, traffic partners, and user rights.

VoIP billing software allows service providers and enterprises to expand their business by including cost-effective VoIP services in their offerings. It also enables the pre-paid or post-paid billing options for call usage and provides the ability to offer flexible call plans.

VoIP Billing Software provides detailed information on Billing Software, VoIP Billing Software, Chiropractic Billing Software, Free Billing Software and more. VoIP Billing Software is affiliated with HIPAA Complaint Medical Billing Software

6 Worst Payer Trends That Impede Electronic Medical Billing Software and Service Performance

Healthcare insurance business continued to boom in 2006, mostly at the expense of both providers and patients. A review of recent healthcare insurance industry trends help identification of six payer activities that will impact medical billing and healthcare providers revenue in 2007.

Two key aspects dominated business background for insurers in 2006. They

 

1. Must meet tougher profit margin benchmarks. For instance, United Healthcare saw its earnings rise 38% in the 3rd quarter of 2006 alone. To keep its share value growing, United Healthcare will have to demonstrate still better performance in the 3rd quarter of 2007.

    

    

2. Approach the limit of their ability to grow premiums. Premiums increased significantly beyond inflation and workers' earnings growth in 2001-2006. For instance, health insurance premiums increased 65.8% between 2001 and 2006 while inflation grew 16.4% and workers' earnings increased 18.2% during the same period.

    

    

Therefore, in 2007, insurance companies will continue to pay less using the following six key strategies:

 

 

1. Add new denial reasons and increase costs of medical billing service and software because of growing complexity. In January 2007, thousands of physicians discovered they were having trouble getting Medicare to pay for services billed under the codes 99303 and 99333. The reason for denial was simple: Medicare deleted codes 99301-99303 from CPT in 2007, forcing the physicians to review the new 99304-99306 codes in an up-to-date CPT code book. The 99331-99333 codes also were deleted in 2007. Review the new codes, 99324-99328.

    

   The payer-related component of the medical billing process costs an average 8% to 10% of providers collections. It includes claim generation, scrubbing, electronic submission to payers, payment posting, denial identification, follow up, and appeal. By complicating the process, payers increase the likelihood of failing the payment and winning the subsequent appeal process. Providers face the lose-lose choice of expensive medical billing process upgrades or forfeiting denied payments.

    

2. Reduce allowed fees. Average physician reimbursement from billing Medicare and commercial payers dropped 17% in 2002-2006. From 2005 to 2006, allowed amounts for E&M visits alone dropped 10% nationally, 27% in the Northeast, and 20% in Northwest.

    

    

3. Underpay. Partial denials cause the average medical practice lose as much as 11% of its revenue. Denial management is difficult because of complexity of denial causes, payer variety, and claim volume. For complex claims, most payers pay full amount for one line item but only a percentage of the remaining items. This payment approach creates two opportunities for underpayment: the order of paid items and payment percentage of remaining items. Additionally, temporary constraints often cause payment errors because of misapplication of constraints. For instance, claims submitted during the global period for services unrelated to global period are often denied. Similar mistakes may occur at the start of the fiscal year because of misapplication of rules for deductibles or outdated fee schedules. Payers also vary in their interpretations of CCI bundling rules or coverage of certain services.

    

    

4. Increase leverage over providers through consolidation. It is harder to drop a contract with low allowed amounts when there are fewer remaining payers. Consolidation in the insurance industry reduces competition among payers for physician's services, allowing payers pay less to providers. Today, 73% of insured population are covered by 3 plans alone: the top ten health plans cover 106 million lives, while three plans, namely, United, WellPoint, and Aetna together cover 77.7 million lives. In 2006, consolidation rate accelerated. For instance, United Healthcare Group purchased 11 plans in 2006, including MetLife, PacifiCare, and Oxford. Turning down a contract offered by a payer that controls such a large portion of population results in giving up significant revenue from medical billing. Providers face the lose-lose choice of seeing fewer patients or accepting lower rates.

    

    

5. Drive providers into networks (which offer lower allowed amounts). United Healthcare has announced a new national policy to discontinue direct payment of medical billing to out of network providers. Effective July 1, 2007, under the "pay the enrollee program," United Healthcare will direct out-of-network benefit checks to the insured member rather then non-participating providers. This policy forces the providers to choose between chasing the patients for payments or joining the payer's network. In any case, provider loses some of earned revenue. Oxford Health Plans, a United Healthcare Company, implemented the Pay the Enrollee policy on April 1, 2006. According to the Oxford web site announcement, Oxford may refuse to honor the assignment of benefits for claims from non participating providers pursuant to language in the Certificate of Coverage. If enrollees choose to receive treatment out-of-network, the claim reimbursement may be sent directly to the enrollee. In such cases, the non-participating provider will be instructed to bill the covered patient for services rendered.

    

    

6. Return for refunds and penalties. Justice Department recovered a record of $3.1 billion in refunds and penalties in 2006. It is the largest amount ever recovered in a single year. Invariably, providers are in denial about their exposure, and insurers are quick to comfort them. They will tell you that medical billing audits are an unfortunate but necessary tactic for keeping fraud in check, implying that honest providers have nothing to worry about. But insurers are not crusaders for truth and justice. Providers need to understand that payer's motive is money, the means is a gargantuan statistical database, and that every provider is an opportunity. Healthcare finance insiders call this a Big Brother system and, setting aside the melodramatic implications of such a name, it is easy to see why. While executives have a soft spot for pretty charts, the true power of such a system is its ability to drill into the data and find outliers (when they talk about this type of tool, Information Systems specialists use jargon like data mining and On Line Analytical Processing, or OLAP for short). The system automatically pinpoints providers that are “easy audit targets: because they are:

    

    

   • Doing something differently from the pack,
   • Lacking infrastructure for systematic denial follow up,
   • Lacking compliant medical notes.

    

    

Having acquired the means to cost-effectively target providers, insurers have begun the hunt. It behooves providers to arm with powerful electronic medical billing software and fight back for improved revenue.

References

 

1. Neil Weinberg, “Envy Engines,” Forbes, March 14, 2005
2. “Fraud Statistics – October 1, 1986 – September 30, 2004”, Civil Division, U.S. Department of Justice, March 4, 2005
3. Capra, Lirov, and Randolph, “The “Business” of Healthcare Provider Audits - How Payers Are Getting Away with Practice Murder,” Today's Chiropractic, January 2007, pp. 60-62.
4. P. Moore, "Power to the Payers - Consolidation Puts Insurers in Charge," Physicians Practice, January 2007, pp. 23-30.

   Yuval Lirov, PhD, author of "Practicing Profitability - Network Effect for Revenue Cycle Control in Healthcare Clinic and Chiropractic Office: Scheduling, SOAP Notes, Care Plans, Coding, Billing, Collections, and Audit Risk" (Affinity Billing) and "Mission Critical Systems Management" (Prentice Hall), inventor of patents in Artificial Intelligence and Computer Security, and CEO of Vericle.net - Distributed Billing and Practice Management Technologies. Yuval invites you to register to the next webinar on audit risk at BillingPrecision.com.

Outsourcing Dilemma Of Electronic Medical Billing Software And Service

Statistics show that both in-house and outsourced billing services may deliver superior or inadequate billing performance. On one hand, only 5.66% of “better-performing practices” outsource their billing. In other words, the vast majority of “better-performing practices” achieve adequate billing performance in-house. On the other hand, less than 83% of payments are paid to an average practice within the first four months since the date of service. Worse, 59% of in-house billers do not review explanations of benefits and 55% of billers have never appealed a denied claim. In other words, the average medical practice delivers almost one fifth of its services for free because in-house billing fails to provide adequate payment performance.

Can an outsourced electronic medical billing software and service improve or expedite payments and reduce costs? This article revisits key arguments for and against billing outsourcing in light of increasing complexity and regulatory scrutiny of billing processes.

 

1. Arguments FOR outsourced billing service:

    

    

   1. Improved billing performance in spite of continuously reduced fee schedules, growing billing complexity, frequent audits, and payer consolidation into larger networks
   2. Extra time and focus on patient care and/or practice development
   3. Reduced operating costs

    

   Billing performance improvement is typically measured in reduced accounts receivable, faster median payment, and reduced underpayment and denial ratios. The practice owner uses the extra time for the family, patient care, or practice development. The cost gains are typically measured in salaries and benefits of reduced billing personnel. It is important to keep in mind that a 10% improvement in overall billing quality means ten times more to the practice bottom line than a 1% reduction in billing fees. Therefore, if an outsourced billing service provider is able to significantly improve billing performance, cost reduction may be marginal in comparison to a total contribution to the practice bottom line.

    

2. Arguments AGAINST outsourced billing service:

    

    

   1. Upcoding risk
   2. Deficient follow up

    

   If the billing service charges a percentage of total collections, then, according to the upcoding argument, the service has an incentive to code a CPT code with a higher return often contradicting medical notes on hand. As the practice owner is ultimately responsible for the medical claims, such a billing service exposes the owner to upcoding felony charges. On the other hand, the practice owner with in-house billing operation pays flat salaries to the billing personnel eliminating the incentive for upcoding.

   The deficient denial followup argument is a variation of a “zero-sum argument.” It is based on an assumption that billing service provider’s capacity for a followup process is limited and clients must compete for it. A win for one client must necessarily be a loss for another. By driving such followup activity down to zero, the billing service provider wins at the expense of every one of his clients. The larger is the client base of the billing service, the more it wins, while the payments to each individual client continue to shrink because of the increasingly bad follow up.

   In the extreme case, when the electronic billing software and service provider has no ability to follow up at all (for instance, when the service is offered at excessively low prices, such as 4%), the provider ends up losing twice, first, by paying a fee for the automatically paid claims, and then, by receiving no service on underpayments and leaving major part of earned compensation to the insurer. On the other hand, the practice owner with in-house billing operation has all of its billing capacity focused on followup for a single practice and so the in-house billing service will necessarily bring better results than the outsourced service.

    

3. Counter-argument analysis

    

    

   1. Upcoding argument is irrelevant for doctors that code themselves using an electronic or even paper superbill. Next, if the biller is expected to code, then the practice owner must ensure that its compliance process protects both the practice and the billing service. The penalties for noncompliance have been steadily escalating in the recent decade and today include financial, licensure, and imprisonment aspects. A practice without a compliance process faces a higher risk of failing a random post-payment audit and paying higher penalties than a practice with a formal compliance process in place. Once a comprehensive process is implemented fully and reliably, the practice owner eliminates major risk regardless of having billing service in-house or outsourced.

       

       

   2. Measuring billing quality exposes the fallacy of zero-sum argument. If a medical practice performing in-house billing demonstrates lower percent of accounts receivable beyond 120 days than the national average (17.7%) then its billers do have better followup performance and the comparative analysis reduces to comparing total in-house costs to billing office fees. Again, since a 10% improvement in overall billing quality means ten times more to the practice bottom line than a 1% reduction in billing fees, an outsourced billing service provider charging a percentage of total collections has a larger incentive to improve overall payment performance than to sell the service to another medical practice.

 

Recent progress made by industry leaders in terms of overall billing quality and included services confirms this analysis. Aggressive upfront claim scrubbing, real-time compliance analysis, automated denial followup are just a few of activities, provided by modern Vericle-type billing software to enable continuous improvement of billing performance in step with growing scale and number of clients. Other important developments include billing workflow integration with practice management tools, including patient scheduling, electronic medical records (EMR) or SOAP notes, and real-time reporting and alert generation.

In conclusion, abstract arguments for and against outsourced electronic medical billing are pointless as both sides can be shown right or wrong depending on specific and quantitative performance measures. Practice owners must establish objective performance and compliance criteria and use them systematically and within individual practice context when addressing the question of medical billing outsourcing.

Yuval Lirov, PhD, author of "Practicing Profitability - Network Effect for Revenue Cycle Control in Healthcare Clinic and Chiropractic Office: Scheduling, SOAP Notes, Care Plans, Coding, Billing, Collections, and Audit Risk" (Affinity Billing) and "Mission Critical Systems Management" (Prentice Hall), inventor of patents in Artificial Intelligence and Computer Security, and CEO of Vericle.net - Distributed Billing and Practice Management Technologies. Yuval invites you to register to the next webinar on audit risk at BillingPrecision.com.