Medical Billing - DME Software Item Inventory

In this installment of medical billing and DME software, we're going to cover the topic of item inventory. We're going to explain how the inventory functions work, what information inventory tables contain and how this all ties in with the medical billing of a claim.

Item inventory is a very large part of the DME system. Because DME billing is for durable medical equipment, thus the name DME, a lot of items get dispensed to the patient. These items range from small things like test strips for diabetics, to large items like wheelchairs, beds and oxygen concentrators. Some of these items are sold and some are rented. There alone lies a big distinction and the reason why the inventory tables have to be broken up into what are called purchased items and serialized items. Purchase items are pretty well self explanatory, but some explanation is needed for why rental items are referred to as serialized items.

Rental items are referred to as serialized items because each item that is rented has a unique serial number attached to it. This serial number is tracked for the purposes of billing monthly rentals, which is usually how either the patient or insurance company pays for these items. If a rental item has to be replaced because it is defective or broken, then a new item has to be issued and its serial number noted for future billing. The old item is then put back in inventory and either fixed or thrown away and deleted from inventory.

The information that is contained in inventory is more than what most people realize. It is more than just the description of the item. For purchase items, it includes how many of the items are in stock, how many sales of the item were made, so that companies can track how well an item performs, reorder points so that they don't run out and a number of other things. For rental items, the information includes when the item was rented, how many months of billing have occurred, when the item is scheduled for maintenance and a host of other items. Most normal inventory records contain anywhere from 30 to 100 fields depending on how much information the company wants to track and the capability of the software itself.

How does this all tie in with medical billing? Well, the biller has to know how each item needs to be billed. So for starters, they have to know if it is a rental or purchase item. They have to know the price of the item. They have to know when maintenance is due on a rental item so they can send a bill for that maintenance. They have to know when an item is low so that they can notify inventory, just in case they're not aware of it, which they should be. If a biller has to replace an item, they have to know what replacement items are available. The list of things that a medical biller needs in relation to inventory is endless.

Without item inventory tables, the medical billing process would be a total nightmare because billers wouldn't know where anything was, what it cost and if it was even in stock.

Michael Russell Your Independent guide to Medical Billing

BCBS MI Heads Chiropractic Office Billing Software Precision Index For 2nd Month - BPI Drops 3.5%

Blue Cross Blue Shield Michigan heads Chiropractic Office Billing Software Precision Index (BPI) for the second month straight. Overall, May 2007 BPI dropped 3.5%, bringing the index from 14.6 down to 18.1, below the national average of 17.7%. May BPI replaced three BPI participants on the list of top ten performers. BPI guides chiropractic office managers and helps the development of both chiropractic billing software and billing performance standards.

BPI = 18.1 means that the average of ten top performing payers working with Billing Precision clients have 18.1% of Accounts Receivable beyond 120 days. BPI is a key billing performance characteristic, as it is a proxy of the claims that are never paid. Obviously, the lower is the index the better is billing performance. The table below also lists the top ten performing payers and their relative index as recorded in the Billing Precision's system.

• Billing Precision Index 18.1
• Blue Cross Blue Shield Michigan 3.2 (same)
• GHI 11.5
• Humana 11.8 (down from 7.9 in April)
• Blue Cross Blue Shield Colorado 12.3 (down from 6.8 in April)
• Medicaid Pennsylvania 15.1
• Assurant Health 15.4
• Blue Cross Blue Shield Illinois 16 (down from 11.1 in April)
• United Health Care 22.6 (down from 13.9 in April)
• Medicare New Jersey 20 (down from 16.4 in April)
• Cigna 24.1 (down from 15 in April)

May BPI dropped three participants since April:

• Blue Cross Blue Shield Texas 20
• Great West 22
• Aetna 22.1

No payer improved its index since April.

Six participants lowered their indexes with respect to April BPI:

• Humana 11.8 (down from 7.9 in April)
• Blue Cross Blue Shield Colorado 12.3 (down from 6.8 in April)
• Blue Cross Blue Shield Illinois 16 (down from 11.1 in April)
• United Health Care 22.6 (down from 13.9 in April)
• Medicare New Jersey 20 (down from 16.4 in April)
• Cigna 24.1 (down from 15 in April)

May BPI added three new participants since April:

• GHI 11.5
• Medicaid Pennsylvania 15.1
• Assurant Health 15.4

Coverage

BPI is rule-based, i.e., payer participation in the index is defined by dynamically rules at the time of computation and not by a static listing of specific payers. Therefore, any specific payer may start or discontinue participation in the index, dependent on satisfaction of rule's conditions.

Current selection of payers for participation in the BPI is based on fifty top-volume providers across all United States that have received Billing Precision services for more than six months and have more than two hundred claims in their current Accounts Receivable.

Update Cycle

BillingPrecision.com updates BPI on a monthly basis.

Volume Weighting

BPI is volume weighted, which is important to accommodate future growth of provided information, index combinations, and sensitivity across multiple indices.

Information Provided

BPI computes the percent of Accounts Receivable beyond 120 days. Note that national average across all medical specialties of percent of accounts receivable beyond 120 days is 17.7%.

Summary

Chiropractic Office Billing Software Performance Index helps the development of both chiropractic office billing software and billing performance standards. Chiropractic office managers can use the index to benchmark their billing performance and guide its improvement over time. Rule-based index definition allows for automated inclusion and exclusion of payers in the index based on payer attributes, such as numbers of processed claims, accounts receivable distribution, certain mix of CPT codes, or patient demographics.

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

Chiropractic Office Billing and Patient Relationship Management Software

Return patients generate approximately 80 percent of clinic's revenue. Patient Relationship Management (PRM, also known as CRM, for Customer Relationship Management outside of healthcare) can enhance financial performance of the clinic by helping retain current and attract new patients. Effective PRM uses integrated data using patient travel card (SOAP notes), frequency recommendations (care plan), and billing (charges, payments, and balance).

PRM is a data-driven and patient-focused methodology to strategic practice building and effective patient relationship development. PRM helps identifying new service needs and then designing care programs and office and billing processes to meet the needs.

PRM also helps providing timely, patient centered, and efficient care, emphasizing preventive instead of reactive care. A basic PRM system captures patient information during entire period of the care plan in terms of functional health improvement, care plan implementation, and billing.

Patient Relationship Management Principle

PRM includes a travel card (TC), treatment frequency measures, and billing balance. PRM system tracks changes in the travel card, in Frequency Recommendation summary, and in billing balance, and generates reports to alert office management about lists of patients reaching important thresholds. The office manager or the doctor can review such reports and respond according to practice development strategy, using call centers, Internet, direct mail, or personal conversations during office visits.

Electronic Travel Card

An electronic equivalent of a paper travel card (Electronic Travel Card, or ETC) contains complete information about patient's health and care history. It is similar to electronic medical record and subject to same HIPAA compliance regulations. ETC includes:

 

• Numbers and dates of visits
• SOAP notes for each visit
• ICD-9 and CPT codes
• Care frequency recommendation summary
• X-rays and posture images

Frequency Recommendation

Frequency recommendation summary presents an interpretation of patient's compliance with doctor's recommendation in concise form and allows specification of PRM thresholds. Specifically, it has four parts:

 

• Weekly treatment frequency recommendation, typically a single digit between 1 and 3
• The number if weeks when the patient complied with the recommendation
• The total number of weeks for a given recommendation
• Care plan start date
• Number of missed appointments along with documented reasons for missing an appointment

For instance, a frequency recommendation summary [3X: 3/13] means that treatment is recommended three times per week for thirteen weeks, and the patient complied three weeks out of thirteen.

A treatment plan then is a list of such frequency recommendation summaries, for instance, [3X: 3/13], [2X: 15/15], [1X: 4/12].

In summary, Patient Relationship Management (PRM) can become a major differentiating factor in building successful and competitive chiropractic clinics. It requires integrated systems combining data about patient's health, care plans, and billing.

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