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How offshore billing services will impact your practice’s bottom line

Posted by on May 4, 2016 in Latest News | Comments Off on How offshore billing services will impact your practice’s bottom line

By Cody Raich, Executive Data Analyst During the past five years, we have seen many billing companies lower their cost for services.  When this trend is examined, it becomes apparent that the lower cost is available because these billing services are offshoring their services. As medical billing companies increasingly look to offshore their services, many health care providers are now weighing the potential savings of going with an offshore company against the familiarity offered by onshore billers. However, rather than forcing health care providers to choose a side, Vachette Pathology and Stark Medical Auditing & Consulting predict the move toward offshore billing will force onshore billers to lower their rates to remain competitive. I’m often asked, “How do these offshore companies compare?”  This is always an interesting question. I usually tell the client what really matters is not where your billing is done, but how much you actually make.  Now if you want to raise the American flag and tout patriotism while driving your 35 percent foreign car, watching your Korean TV and chatting on your Chinese iPhone I can respect that. But, the bottom line is what actually is going into your American wallet. With your wallet in mind, let’s take a look at an example. Group A is a hypothetical U.S.-based provider whose services totaled $14 million in annual charges for 2015.  Let’s say payments received for charges were $2.7 million and the provider’s charges for onshore billing cost 7 percent of their payments, or $189,000 per year.  Conversely, let’s say offshore billing costs merely 4 percent, or $108,000 per year. Offshore billing cost = 4 percent * ($2.7 million) = $108,000 per year. Onshore billing cost = 7 percent * ($2.7 million) = $189,000 per year. Onshore – Offshore = $81,000 in annual savings (all outside variables held constant). The obvious initial conclusion is that Group A will save $81,000 for the year if they do their billing offshore. As noted in the accompanying graph, if all variables remain constant over a ten-year period, the group would realize a savings of nearly $810,000 by switching to an offshore billing service. However, for a group as large as this, a mere half a percentage point drop in collections will lose a surprising chunk of change ($70,000). In some situations a change in billers can lead to a 2 to 5 percent increase in collections after a switch. Collection % = $2.7 million / $14 million (Percent of charges that were actually collected in payments) For example, 2.7 / 14 = .192 or 19.2% But what if the biller increases the collection percentage?  Based on our projections, that could equal huge gains ($140,000 for every 1 percent increase in collections plus the initial $81,000 would equal a potential of $221,000 more for that year alone). This is the “double whammy” possibility that offshoring your billing presents. Taking this chance and receiving this result could be atypical, but not completely outside the realm of possibility.  If the right dominos fall, doctors and their practices could have a financial bump without additional charges. So why aren’t more practices utilizing this opportunity for savings?  The fact is, many billing services are moving offshore. Sure, they’ll still maintain an office in the U.S., but the actual billing is being done elsewhere.  Still,...

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Vachette Pathology President Mick Raich featured in Part B News!

Posted by on Apr 27, 2016 in Latest News | Comments Off on Vachette Pathology President Mick Raich featured in Part B News!

Trying to decide if an underperforming insurance plan is doing your practice more harm than good? Check out the April 18 issue of Part B News for input from Mick Raich, President of Vachette Pathology & Stark Medical Auditing and Consulting, and other experts who offer up five ways to help determine the overall worth of a plan before cutting ties with it.   Click here to view the article online. (Note: reading the full article requires a subscription to Part B...

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A quality conundrum: How changing CMS reimbursement rates affect patient care

Posted by on Apr 25, 2016 in Latest News | Comments Off on A quality conundrum: How changing CMS reimbursement rates affect patient care

By Jake Vugrinac, Director of Business Development We all read different things for different reasons.  Whether for business or pleasure, our taste in literature is diverse and unique.   Some of us enjoy immersing ourselves in the adventures of boy wizards, the love life of vampires or the impending doom that zombies pose to civilization.  I am not one of those people; I am a numbers guy.  I prefer curling up next to the fire with a riveting essay on sabermetrics in baseball.  And I realize I am in the minority here.  Most “normal” people don’t experience the warm embrace of contentment that can only come from your credits matching your debits.  I feel for people who will live a life devoid of the joy that only regression analysis and data sets can bring.  But today, I will try to bridge the gap between “numbers” people and “normal” people.  Regardless of your reading preferences, we all need to know the consequences that changing reimbursement rates have on health care. 2012 study of nationwide hospital reimbursement data shows higher Medicare reimbursement rates led to an increase in length of care for enrollees. CMS needs to take a good look at their payment structure and reevaluate how it calculates reimbursement rates to eliminate the discrepancy in length of stay between hospitals. Reimbursement changes will continue to send shock waves through hospitals and physicians nationwide and those in the position to make these changes need to be cognizant of that. I recently read a thesis, “Medicare’s Prospective Payment System: Do Differences in the Reimbursement Rate Affect Quantity of Care Delivered and Hospital Billing Practices?”, by Russell Hollis, a graduate of Duke University’s economics program.  This thesis investigated the correlation between changes to reimbursement rates and the quantity of health care received by length of stay.  The scope of this research included 470,000 patients in 2,696 hospitals in 2012.  In order to eliminate variables that could skew the results, the scope was limited to major replacement or reattachment of the lower extremity, DRG 470 (no complications) and DRG 469 (with complications) (Hollis, 2). The question posed is an important one: What effects do changing reimbursement rates have on patient care?  Changes in reimbursement rates are an unavoidable variable.  CMS is running out of money.  Because of this, they are changing the way they pay for hospital care.   By rewarding hospitals for delivering services of higher quality and higher value, they intend to drive down costs.  But to what degree will changes in CMS compensation to hospitals affect the treatment of the Medicare enrollees?  To find this answer, we will have to research how the treatment of patients differs by various hospitals receiving different compensation in Medicare reimbursement for the same diagnosis.  Finding the analytical answer to this question is where it gets a little…dry.  For the convenience and dwindling attention span of my audience, I will skip to the results and leave you to explore the delicate whimsy of regression analysis on your own time. The study found that a 1 percent increase in reimbursement led to a .007 percent (James Bond’s favorite percentage) increase in the length of stay for DRG 470 and a .057 percent increase for DRG 469 (Hollis, 33).  This data shows that even though the correlation may seem small,...

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Case studies: Delayed Medicaid payments, unassigned codes and more

Posted by on Mar 28, 2016 in Latest News | Comments Off on Case studies: Delayed Medicaid payments, unassigned codes and more

Below are some of the latest case studies from the team at Vachette Pathology & Stark Medical Auditing. Case No. 1: Unassigned codes affect annual bonus Problem: A hospital-employed group has a clause in its contract that grants the group a bonus each year if the physicians meet a certain relative-value unit (RVU) threshold. However, the physicians were informed they narrowly missed the threshold in both 2014 and 2015 despite believing they had met their goal. Process: As part of a contract with the group, Stark tracks the RVU threshold on a monthly basis. While examining data in the reporting from their third-party biller back down to the CPT code level, we identified four codes that were not assigned an RVU in 2015 and therefore were not being counted toward the goal. The error was uncovered while the group’s client manager was reviewing a monthly report that showed zero work RVU’s calculated for the codes in question. The find on was then verified by using Medicare’s “Fee Lookup” tool to confirm there were work RVU’s assigned for those codes. After following up to ensure the missing codes were retroactively assigned with RVUs, we expect the group will meet its bonus threshold for 2015. The CPT detail for 2014 also is under review in case similar errors were made. Recommendation: Perform quarterly audits to ensure the integrity of data reporting from your biller. Consider a third-party auditor to verify results. If a group relies on reporting from its biller to submit data for bonuses similar to this, it has only the biller’s assurances that the data is correct. A third-party auditor can track this data regularly to discover reporting issues before they begin affecting your revenue.   Case No. 2:  Delayed start for state managed Medicaid causes payment gaps Problem: A behavioral health provider in Iowa was not receiving Medicaid payments because of the delayed start of the state’s managed care program. Process: The transition from traditional Medicaid to a managed Medicaid product is causing headaches for many behavioral health care providers, as the Iowa provider undergoing this transition can attest. Although CMS planned to launch Iowa’s managed care program in January after terminating the previous managed care organization’s (MCO) Medicaid contract in December, multiple start-date delays from CMS have led to a months-long payment gap. The Iowa provider is part of an association that’s working aggressively to develop contracts with the new MCOs. However, the delay in the start date for the new MCOs created issues because the state program itself (Iowa Medicaid Enterprise) did not create a contingency plan for this delayed start. Because of this lack of foresight, IME is now handling all of the behavioral health care claims processing on a rather outdated technology platform with limited staffing. On top that, IME has been providing different directions for claim filing to each provider, which has required the providers to restructure internal systems to get claims processed efficiently and out the door. “It’s been a huge issue and many providers are just now starting to see payments here in March,” said Jessica Jankowski, executive client administrator for Vachette and Stark. “However, several of their services still aren’t being paid for various reasons that IME has yet to explain.” Recommendation: Start preparing for change now if you know...

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Practices still struggling to get payments from failing insurance co-ops

Posted by on Mar 22, 2016 in Latest News | Comments Off on Practices still struggling to get payments from failing insurance co-ops

By Mick Raich, President, Vachette Business Services Recently, it was noted by Healthcare Finance News that many of the non-profit health insurance co-ops developed under Obamacare have failed to the tune of $1.2 billion.  Yes, this is over a billion dollars lost, never to be seen again. Health care providers throughout the country are owed more than $700 million for services provided to patients of these failed insurance co-ops — the vast majority of which they likely will never see. This makes it more crucial then ever to ensure your practice is diligently tracking payments from co-ops you are contracted with. Where did this money go? Well, it didn’t go to our clients. Many of our groups are owed substantial amounts of money from these failed ventures. For example, the Kentucky Health Co-Op currently is not paying its claims at all. As the practice manager for this client we reviewed the contract and found we cannot balance bill the patients for this service and that the plan is basically bankrupt. So if the providers didn’t get the money, where did it go? The government planned on some of these co-ops failing, but they failed at a rate four times higher then they predicted.  Is anyone going to be held accountable for this? And what about the people who signed up for these plans? Some estimates say 740,000 people lost their initial plans and had to sign up for other plans. What about the inconvenience for these people? There is more than $700 million owed to providers for these services which will never be paid. How do you run a business if you don’t get paid when you deliver services? Who is investigating this for your practice? Why not hire an expert? Call Stark Medical Auditing/Vachette Business Services at 517-486-4262 and ask for Mick Raich. Or, email Mick at...

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Video: Health network consolidation, MIPS signal big changes for private practices

Posted by on Mar 18, 2016 in Latest News, Videos | Comments Off on Video: Health network consolidation, MIPS signal big changes for private practices

Vachette President Mick Raich shares his thoughts on the recent news that the Obama administration plans to begin rating health care networks based on the number of physicians and hospitals within a network and also discusses the new Merit-Based Incentive Payment System that will be used to grade physicians starting next year. Check out our video to learn why these changes are expected to have a major impact on health care providers in the world of private practices and what Vachette can help you do to prepare. If you’re looking for more information on MIPS, click here to download our free white...

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An interesting week in payment thinking

Posted by on Mar 10, 2016 in Latest News | Comments Off on An interesting week in payment thinking

Last week’s health care headlines revealed some interesting trends regarding the ongoing shift toward alternative payment models. Some examples: “HHS hits goal of shifting 30% of Medicare payments to alternative models” — Beckers Hospital Review, March 3, 2016. — Takeaway: As of January, CMS estimates that roughly $117 billion out of a projected $380 billion in Medicare fee-for-service (FFS) payments are tied to an alternative model. “Only 3% of providers feel ready for pay-for-value, HIMSS survey finds” — Healthcare Finance News, March 4, 2016. — Takeaway: A 2016 HIMSS cost accounting survey revealed few providers feel they are “highly prepared” to make the value transition. “Fee-for Service Still Dominates in United States” — Medscape, March 8, 2016. — Takeaway: According to the article, 95 percent of all provider visits are paid via the FFS model, which is actually a 1 percent increase from 2013. Bottom line: Medicare thinks they are receiving 30 percent of payments through alternative payment models even IF these are fee-for-service models. Most practices are actually getting FFS payments — 95 percent, in fact — and everyone feels they are not quite ready for the future. Contact Mick Raich, president of Vachette Pathology and Stark Medical Auditing, at 517-486-4262 or at to learn how our consultants can work with you to make sure your practice is prepared for the ongoing shift toward APMs....

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White Paper: Preparing for the Merit-Based Incentive Payment System

Posted by on Mar 4, 2016 in Latest News, White Papers | Comments Off on White Paper: Preparing for the Merit-Based Incentive Payment System

Medicare Part B providers throughout the country should be preparing to have their performance graded by the new Merit-Based Incentive Payment System (MIPS) starting in January 2017. Understanding each of MIPS’ components ahead of time will be crucial when you’re competing with your peers to earn Medicare reimbursement bonuses and avoid penalties. Check out our free whitepaper to learn the potential financial impact MIPS will have on providers, who is exempt from the program, when CMS is expected to finalize the rules governing MIPS, and much more! To download the white paper, please join our mailing list. We promise not to share your email or send you spam, and you can unsubscribe at any time. First Name (required) Last Name (required) Your Email...

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CMS reiterates physicians must report Medicare overpayments, finalizes timeline for discovery

Posted by on Feb 29, 2016 in Latest News | Comments Off on CMS reiterates physicians must report Medicare overpayments, finalizes timeline for discovery

By Alex Mitchell, Director of Information and Content After years of speculation regarding the 60-day time frame healthcare providers have to identify and return Medicare overpayments, CMS has finalized the regulation in an attempt to bring clarity to the matter. CMS finalizes its 2012 draft regulation on the process for returning Medicare overpayments. Clarifies 60-day limit to return overpayments begins once an overpayment is found, or on the date “a corresponding cost report is due, if applicable.” Notes provider liability if sued for overpayments includes $11,000 fine for each claim, among other penalties. However, it’s doubtful the finalized ruling — which clarifies Part A and Part B providers must notify CMS and return overpayments within 60 days of discovering the error or risk being sued by the federal government under the False Claims Act — will do much to assuage healthcare providers’ fears that this task will require a significant administrative commitment that could cut into doctors’ other duties or expose them to financial liabilities. The potential financial ramifications, particularly, should be physicians’ biggest area of concern. CMS will not only seek to recover damages, but will also tack on $11,000 per claim, seek civil monetary penalties and may exclude the offending provider from future participation in Medicare and Medicaid programs. At that cost, even just a handful of undiscovered Medicare overpayments could add up quickly, meaning some providers may be tempted to forgo monitoring for these overpayments strictly out of fear of what they may find. If providers aren’t searching for overpayments, then they’ll never be responsible for returning any findings to CMS, right? Of course not. The CMS regulation incorporates an already existing provision of the Affordable Care Act which requires providers to actively work to self-identify and return Medicare overpayments. Numerous medical providers and advocacy groups, including the American Medical Association, objected to this rule when CMS released a draft of this regulation in 2012, particularly taking issue with language stating providers have a “perpetual duty” to monitor for overpayments. The finalized ruling does offer a minor concession to providers by noting they’re only responsible for identifying overpayments within a 6-year time frame, down from the 10-year period initially proposed by CMS. But, in the eyes of many providers, the order to monitor and self-report overpayments has created an unfunded government mandate. Concerned physicians have also noted this increased administrative burden placed could reduce their face time with patients. CMS, however, offers an opposing viewpoint. The agency has stated previously that it believes self-audits, compliance checks, and other types of research necessary to track Medicare payments are simply sound business practices that should already be in place, and therefore, do not represent an unfunded mandate. “We disagree that this rule creates a requirement for any formal compliance plan or audit strategy,” CMS said previously. “Rather, it requires that providers and suppliers maintain responsible business practices and conduct a reasonably diligent inquiry when information indicates that an overpayment may exist.” Regardless of the viewpoint, it’s clear CMS expects providers should be able to identify overpayments through routine audits. That’s a significant problem for providers who don’t currently have these safeguards in place. Ignorance of the rule won’t save you if CMS discovers overpayments on its own and comes calling to reclaim them. To ensure compliance with the...

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Anthem BCBS Adopts CMS Rules for Clinical Pathology Billing

Posted by on Feb 16, 2016 in Latest News | Comments Off on Anthem BCBS Adopts CMS Rules for Clinical Pathology Billing

Anthem BCBS takes a cue from CMS regarding payments for clinical pathology New rules look at modifier and place of service, essentially cutting payments Billing for anatomic pathology is unchanged The states of Indiana, Kentucky, Missouri, Ohio and Wisconsin are affected Anthem Blue Cross and Blue Shield of Indiana, Kentucky, Missouri, Ohio and Wisconsin has adopted CMS rules concerning billing for the professional component of clinical pathology. This policy puts into place edits that pay or deny a claim based on the modifier and the place of service. Billing for anatomic pathology will not change, but any payment being made for clinical pathology will be subject to the new rules. Essentially the policy looks like it stems directly from the Medicare guidelines, which is why clinical pathology is so greatly affected, as Medicare does not pay the professional component for CP. According to  Anthem’s Network Update: When CMS National Physician Fee Schedule Relative Value File (NPFSRVF) designates that modifier 26 is applicable to a procedure code (PC/TC indicator of 1 or 6), and the procedure (e.g., laboratory) has been reported by a professional provider with a facility place of service, the procedure code must be reported with modifier 26 or it will not be eligible for reimbursement. When the NPFSRVF designates that the concept of a separate professional and technical component does not apply to a laboratory procedure (PC/TC indicator of 3 or 9), and a professional provider has reported the laboratory procedure code with a modifier 26, the laboratory procedure code will not be eligible for reimbursement. When a laboratory procedure with a PC/TC indicator of 3 or 9 is reported by a professional provider with a facility place of service, the laboratory procedure code will not be eligible for reimbursement since, in this case, the facility will bill for performing the laboratory procedure. When a professional provider bills the global code (no modifiers) with a facility place of service, the code will not be eligible for reimbursement. When one provider reports a global procedure and a different provider reports the same procedure with a professional component (26) or a technical component (TC) modifier, only the first charge processed as approved by the Health Plan will be eligible for reimbursement and the subsequent charge processed will not be eligible for separate reimbursement. In short, it is well known that Anthem Blue Cross and Blue Shield has tried hard to cut payments for clinical pathology, and these adaptations make their stance much stronger. If you have questions you can contact Mick Raich at Vachette Pathology, 517-486-4262 or at...

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