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9/13/2018
Honkamp Krueger & Co., P.C. 1
Filling the Payer Gap
Jon Thoms, CPAPartner
Steve Swanson, CPAAccounting Supervisor
Top 100CPA and business
consulting firm in the U.S.
(62nd out of 53,000+ firms!)
LargestIowa-based
CPA firm*Accounting Today, March 2018
50 states and thousands of U.S. cities served
Top 100CPA and business
consulting firm in the U.S.
(62nd out of 53,000+ firms!)
LargestIowa-based
CPA firm*Accounting Today, March 2018
50 states and thousands of U.S. cities served
Jon Thoms, CPAPartner
Over 20 years of experience assisting independent medical groups in maximizing profits, analyzing and improving practice productivity and revenue cycle management
Works with various medical groups to review, modify or create compensation structures for physicians and staff
Creates internal accounting and reporting procedures
Establishes enhanced financial reports specific to client needs
Review efficiencies within the financial data to ensure accurate and timely reporting
Steve Swanson, CPAAccounting Supervisor
Extensive experience in the following industries: health care, retail, service, nonprofit, manufacturing, agriculture, warehousing operations, construction and trucking
Specializes in accounting, auditing, general business consulting, management advisory services, corporate, partnership, individual and farm tax returns, financial planning, and internal auditing
9/13/2018
Honkamp Krueger & Co., P.C. 2
Today’s objective
Use your own data to:
1. Identify areas of improvement based on chargemaster
2. Identify key revenue lines to target in contract negotiations for higher reimbursement rates or other competitive advantages
3. Monitor billing and collections from third party payers
4. Understand how chart audits can improve your collections
5. Understand why patient collections at access point is critical
What is payer gap?
Shortfalls in practice receipts as a result of…
1. Insufficient charges
2. Improper reimbursements
3. Insufficient contract terms
4. Incorrect billings and codings
5. Patient collection problems (Weak controls at patient access point)
What is payer gap?
Data analysis will fill the gap.
9/13/2018
Honkamp Krueger & Co., P.C. 3
What tools are needed?
You will need… One motivated employee
One practice management system
One license to Microsoft Excel
Basic Excel knowledge or ability to learn
One supportive owner or boss
Time to pull, analyze and report on data within your practice
What is data analysis?
“Data is useless without analysis. Analysis is
impossible without data.”- Anonymous
“Data is useless without analysis. Analysis is
impossible without data.”- Anonymous
“It’s never too late to learn a new skill. That is, unless your employer needs
someone who possesses that skill in your position right now.”
- Anonymous
Report Running vs. DataMining
9/13/2018
Honkamp Krueger & Co., P.C. 4
Report running vs. data mining
It takes little skill to run a report and print
It takes thoughtful skill to extract report, test the data, archive the information for future use
Printed reports are static and are difficult to cross-check
Extracted data can be tested and tied to other reports electronically
Report running vs. data mining
Printed reports are difficult to archive and retrieve
Extracted data can be archived easily and retrieved instantaneously
Printed reports are usually “canned” and based on what someone else thinks you need
When extracted as data, reports can be manipulated and specified to your needs
Report running vs. data mining
04-2016
05-201606-2016
07-2016
08-201609-2016
10-201611-2016
12-2016
01-201702-2017
03-2017
04-2017
9/13/2018
Honkamp Krueger & Co., P.C. 5
Report running vs. data mining
04-2016
05-2016
06-2016
07-2016
08-2016
09-2016
10-2016
11-2016
12-2016
01-2017
02-2017
03-2017
04-2017
Starting with the basics
This table tells a story, but not the whole story
Which report or reports were run to obtain these numbers?
Are charges based on date of service or accounting date?
Are payments based on date of service or accounting date?
Are the variations in charges based on variations in volumes?
Medical Practice Charges and Payments
Oct‐16 Nov‐16 Dec‐16 Jan‐17 Feb‐17 Mar‐17 Apr‐17
Charges $288,225 $228,605 $268,934 $260,916 $257,680 $268,425 $288,345
Payments $86,954 $83,214 $145,526 $250,818 $180,170 $181,070 $153,742
Starting with the basics
Written, step-by-step documentation to include reporting specs
Addition of kept visits and a mathematical control measure automatically enhances the value of this report
Medical Practice Charges and Payments
Oct‐16 Nov‐16 Dec‐16 Jan‐17 Feb‐17 Mar‐17 Apr‐17
Charges $288,225 $228,605 $268,934 $260,916 $257,680 $268,425 $288,345
Payments $86,954 $83,214 $145,526 $250,818 $180,170 $181,070 $153,742
Kept Visits 1,478 1,166 1,358 1,352 1,328 1,398 1,491
Charges per Kept Visit $195 $196 $198 $193 $194 $192 $193
9/13/2018
Honkamp Krueger & Co., P.C. 6
Drilling Down
Drilling down / mining the data
Dt of Svc Proc Dt Name Pat Type Sv It Sv It Desc Unit Price Count Chg Amt Payer Name
01/03/2017 01/03/2017 Patient, Ima 99499O Chart Copy $0.00 1.00 $35.00 Self Pay
12/23/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 SISCO
12/23/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Medicare Iowa
12/23/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Blue Card Of Iowa
12/23/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Iowa XIX AmeriHealth Caritas
12/23/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 Iowa XIX UHC Community Plan
12/23/2016 01/03/2017 Patient, Ima Standard 95811 POLYSOMNOGRAPHY W/CPAP, BILEVEL VENTILATION, $2,024.00 1.00 $2,024.00 Blue Card Iowa
12/27/2016 01/03/2017 Patient, Ima Standard 95800 HOME SLEEP STUDY, UNATTENDED W/SLEEP TIME $497.00 1.00 $497.00 John Deere Choice
12/27/2016 01/03/2017 Patient, Ima Standard 95800 HOME SLEEP STUDY, UNATTENDED W/SLEEP TIME $497.00 1.00 $497.00 Blue Card Iowa
12/28/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 BCBS Iowa
12/28/2016 01/03/2017 Patient, Ima Standard 99244 OFFICE CONSULTATION $452.00 1.00 $452.00 United Medical Resource
12/28/2016 01/03/2017 Patient, Ima Standard 95886 MUSCLE TEST, EACH EXT., COMPLETE W/NCV $236.00 2.00 $472.00 United Healthcare
12/28/2016 01/03/2017 Patient, Ima Standard 95911 NCV Studies, 9‐10 $825.00 1.00 $825.00 United Healthcare
12/28/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Medicare Iowa
12/28/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 BCBS Iowa
12/28/2016 01/03/2017 Patient, Ima Standard 95886 MUSCLE TEST, EACH EXT., COMPLETE W/NCV $236.00 1.00 $236.00 GWH Cigna
12/28/2016 01/03/2017 Patient, Ima Standard 95910 NCV Studies, 7‐8 $700.00 1.00 $700.00 GWH Cigna
12/28/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 Medicare Iowa
12/28/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 BCBS Iowa
12/28/2016 01/03/2017 Patient, Ima Standard 95885 MUSCLE TEST, EACH EXT., LIMITED W/NCV $151.00 1.00 $151.00 Iowa XIX UHC Community Plan
12/28/2016 01/03/2017 Patient, Ima Standard 95909 NCV Studies, 5‐6 $550.00 1.00 $550.00 Iowa XIX UHC Community Plan
12/28/2016 01/03/2017 Patient, Ima Standard 99213 OFFICE VISIT, EST PT $160.00 1.00 $160.00 BCBS Iowa
12/28/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Medicare Iowa
12/28/2016 01/03/2017 Patient, Ima Standard 99214 OFFICE VISIT, EST PT $240.00 1.00 $240.00 Iowa XIX Amerigroup Inc
Plans are part of networks
9/13/2018
Honkamp Krueger & Co., P.C. 7
% Total Charges Network Charges
31.57% Medicare 3,974,117.22
29.10% Wellmark 3,663,168.50
17.91% United 2,254,237.20
4.32% UHC Medicaid 543,470.00
3.57% Amerihealth 449,498.00
3.19% Amerigroup 401,663.00
2.21% Aetna 278,561.00
1.22% Iowa Wellness 154,014.00
1.03% Iowa Medicaid 129,926.00
0.86% Patient Pay 108,202.45
0.71% Humana 89,533.00
0.56% CIGNA 70,055.00
0.49% Tri‐Care 61,889.00
0.44% QCCH 55,398.00
0.32% Health Alliance 39,907.00
0.21% Health Partners 26,173.00
0.18% Midland's Choice 22,176.00
0.16% BC/BS OOS 20,386.00
0.13% VA 15,800.00
1.82% Other 229,150.00
100.00% 12,587,324.37
Plans are part of networks
Total ties to summary report of charges for the year, also if you report gross charges on financial statements, should tie back. Doing so indicates you have a valid data set.
78.58% $9,891,523
Plans are part of networks
Total charges summarized by CPT code agrees to charges by network on previous page
6 of top 24 codes are E&M $3,651,623 29%
CPT Charges % of Charges
99213 $1,298,240 10.3%
J0585 $1,237,347 9.8%
95810 $1,231,285 9.8%
99214 $845,040 6.7%
99204 $844,130 6.7%
95811 $781,264 6.2%
96116 $705,900 5.6%
95909 $457,050 3.6%
99244 $399,116 3.2%
95886 $396,480 3.1%
70553TC $307,671 2.4%
64615 $281,849 2.2%
95910 $250,600 2.0%
95911 $224,400 1.8%
95811SN $182,160 1.4%
J0475g $163,150 1.3%
99215 $160,531 1.3%
95819Off $152,625 1.2%
95810 OUT $148,630 1.2%
70553G $131,098 1.0%
95885 $120,649 1.0%
95908 $117,900 0.9%
95912 $112,320 0.9%
99205 $104,566 0.8%
All Others $1,933,323 15.4%
Total $12,587,324 100.0%
Utilizing your information for contract negotiations
9/13/2018
Honkamp Krueger & Co., P.C. 8
Putting It All Together
Pay attention to your chargemaster
Code Dollars Charge
Medicare($1,068,355)
Wellmark($1,256,865)
United HC PPO
($681,064)
United HC HMO
($227,021)
Aetna PPO ($192,968)
Aetna (Coventry) ($578,904)
Midland's Choice
($656,091)
99285 $1,964,466 $398 $208 $343 $270 $250 $281 $291 $304
99284 $1,669,796 $192 $142 $234 $184 $170 $191 $199 $207 (Summarized)
99283 $1,085,368 $163 $74 $122 $96 $89 $100 $104 $108 Network
99291 $705,489 $582 $338 $557 $439 $405 $456 $473 $493 Charges
99282 $458,568 $73 $50 $82 $64 $60 $67 $69 $72 $1,256,865
93010 $298,069 $25 $13 $22 $17 $16 $18 $18 $19 $1,068,335
12001 $193,745 $263 $152 $251 $198 $183 $206 $213 $222 $908,085
12002 $199,888 $317 $184 $303 $239 $220 $248 $257 $268 $771,872
12011 $129,927 $320 $185 $306 $241 $222 $250 $259 $271 $656,091
25600 $100,255 $956 $554 $914 $720 $665 $748 $776 $809 $557,678
23650 $98,111 $734 $530 $874 $689 $636 $715 $742 $774 $474,026
10061 $70,544 $590 $342 $564 $444 $410 $462 $479 $499 $402,922
92950 $45,854 $872 $505 $834 $657 $607 $682 $708 $738 $342,484
31500 $29,805 $316 $180 $297 $234 $216 $243 $252 $263 $291,111
99292 $19,373 $272 $150 $247 $195 $180 $202 $209 $218 $247,445
23500 $12,593 $636 $369 $609 $480 $443 $498 $516 $539 $210,328
26600 $8,185 $857 $497 $820 $646 $596 $671 $695 $725 $178,779
92960 $5,320 $582 $338 $557 $439 $405 $456 $473 $493 $7,366,021
27786 $3,458 $696 $536 $884 $697 $643 $723 $750 $782
Pay attention to your chargemaster
Code Dollars Charge
Medicare($1,068,355)
Wellmark($1,256,865)
United HC PPO
($681,064)
United HC HMO($227,021)
Aetna PPO ($192,968)
Aetna (Coventry) ($578,904)
Midland's Choice
($656,091)
99285 $1,964,466 $398 $208 $343 $270 $250 $281 $291 $304
99284 $1,669,796 $192 $142 $234 $184 $170 $191 $199 $207 (Summarized)
99283 $1,085,368 $163 $74 $122 $96 $89 $100 $104 $108 Network
99291 $705,489 $582 $338 $557 $439 $405 $456 $473 $493 Charges
99282 $458,568 $73 $50 $82 $64 $60 $67 $69 $72 $1,256,865
93010 $298,069 $25 $13 $22 $17 $16 $18 $18 $19 $1,068,335
12001 $193,745 $263 $152 $251 $198 $183 $206 $213 $222 $908,085
12002 $199,888 $317 $184 $303 $239 $220 $248 $257 $268 $771,872
12011 $129,927 $320 $185 $306 $241 $222 $250 $259 $271 $656,091
25600 $100,255 $956 $554 $914 $720 $665 $748 $776 $809 $557,678
23650 $98,111 $734 $530 $874 $689 $636 $715 $742 $774 $474,026
10061 $70,544 $590 $342 $564 $444 $410 $462 $479 $499 $402,922
92950 $45,854 $872 $505 $834 $657 $607 $682 $708 $738 $342,484
31500 $29,805 $316 $180 $297 $234 $216 $243 $252 $263 $291,111
99292 $19,373 $272 $150 $247 $195 $180 $202 $209 $218 $247,445
23500 $12,593 $636 $369 $609 $480 $443 $498 $516 $539 $210,328
26600 $8,185 $857 $497 $820 $646 $596 $671 $695 $725 $178,779
92960 $5,320 $582 $338 $557 $439 $405 $456 $473 $493 $7,366,021
27786 $3,458 $696 $536 $884 $697 $643 $723 $750 $782
9/13/2018
Honkamp Krueger & Co., P.C. 9
What’s the value?
Update and Monitor Your Chargemaster
Total Charges for this practice $7,366,020.00
Code 99284
Value of Charges Code 99284 1,669,796 Share of total Charges 22.7%
Wellmark Aetna (Coventry) Midland's ChoiceTotal Charges to $1,256,865.00 $578,904.00 $656,091.00
x 22.7% x 22.7% x 22.7%Estimated Dollar Value of Charges $284,917.52 $131,231.19 $148,728.64
Charge per Chargemaster $192.00 $192.00 $192.00Estimated encounters 1,484 683 775
Allowed per contract $234.00 $199.00 $207.00
Differential - "left on the table" [$42.00] [$7.00] [$15.00]
"Cost" of underbilled charges $62,325.71 $4,784.47 $11,619.42
above is 9 months - need to annualize $83,100.94 $6,379.29 $15,492.57
Total Value - 1 code affecting 3 networks $104,972.80
Charging 300% of Medicare reimbursement rate of $142 would be $426 and would easily capture full reimbursement value of each.
What’s the value?
Negotiating a Better Deal
Total Charges $7,366,020.00
Dollar Value of Charges of Top Code 99285 1,964,466
Representative percentage 26.7%
Charge for Code - Per Chargemaster $398 $398.00
Wellmark Reimbursement $343.00
UHC PPO Reimbursement $270.00
Difference Between Wellmark and UHC $73.00
Increase of $73 as a percent 27%
What’s the value?
However, what if you can negotiate an increase of $30 to $300?
This represents an increase of 11% $300.00
Total UHC PPO charges $681,064.00
Code 99285 share of total charges x 26.7%
Estimated dollar value UHC PPO charges for 99285 $181,635.00
Divide by charge per chargemaster $398.00
Estimated encounters 456
Value at current rate of reimbursement ($270 x 456) $123,219.73
Value at higher negotiated rate ($300 x 456) $136,910.81
Increase in receipts 1 code, 1 company $13,691.08
Again need to extrapolate to 1 year $18,254.77
9/13/2018
Honkamp Krueger & Co., P.C. 10
Filling in the gap
Reviewing and updating chargemaster $ 104,973(1 CPT Code 99284, 3 networks)
Negotiate reimbursements for largest volume codes $ 18,255(Negotiate with UHC for an increase for 1 code)
Document, document, document
Perform Chart Audits
The 2017 National Physician Fee Schedule Database lists nearly 15,000 codes
<1% of all codes are for E&M
Make up 18% of what is reported to Medicare
28.4% of payments from Part B
Document, document, document
2017 findings from Part B say, even still today, 9-11% of claims are in error:– 64% due to insufficient documentation
– 13% from coding errors
– ONLY .3% IS FROM UNDER-CODING
And most of those were under-coded…due to under-documenting!
9/13/2018
Honkamp Krueger & Co., P.C. 11
Document, document, document
Major types of errors reported in chart audits:– No documentation
– Insufficient documentation
– Medically unnecessary
– Incorrect coding
Don’t have the time?
– Hire third party chart audit every year/other year – economical
– Consider cost, energy, and time spent to defeat Medicare and insurance audits
Improve collections at patient access point
Higher deductibles
Larger co-pays
HDHPs shifting the burden of payment
Your patient is quickly becoming your largest payer.
Network Payments
Medicare 1,091,326.89 18.00%
Wellmark 1,989,930.73 32.83%
United 865,111.81 14.27%
UHC Medicaid 202,762.16 3.35%
Amerihealth 170,989.18 2.82%
Amerigroup 140,419.14 2.32%
Aetna 61,378.66 1.01%
Iowa Wellness 61,584.38 1.02%
Iowa Medicaid 77,987.17 1.29%
Patient Pay 1,074,391.06 17.72%
Humana 13,336.56 0.22%
CIGNA 39,056.10 0.64%
Tri-Care 28,191.27 0.47%
QCCH 21,383.81 0.35%
Health Alliance 14,256.86 0.24%
Health Partners 12,473.35 0.21%
Midland's Choice 4,596.36 0.08%
BC/BS OOS 9,730.33 0.16%
VA 8,260.30 0.14%
Other 174,382.03 2.88%
6,061,548.15 100.00%
Patient collections and AR
9/13/2018
Honkamp Krueger & Co., P.C. 12
Improve collections at patient access point
Practices and policies that can be corrected before or at the time the patient arrives at your reception desk:– Failure to verify insurance and check for eligibility
– Failure to secure preauthorization AND FOLLOW-UP CONFIRMATION
– Failure to collect copays/coinsurance at the time of arrival
– Inadequate focus on patient collections
– Failure to satisfy demands of patient consumerism –the Modern Experience
• “Give me a convenient way to pay”
Improve collections at patient access point
Work patient collections – collection realization of receivables reaching the 90-day mark is only about 30%
Check on patient deductibles, if deductible is not met, insist on the payment up front
By not properly collecting patient responsibility and working AR, on average, 40% of physicians fail to collect $31,700*
*Athenahealth 2016
Filling in the gap – adding it up
Reviewing and updating chargemaster $104,973(1 CPT Code 99284, 3 networks)
Negotiate reimbursements for largest volume codes $ 18,255(Negotiate with UHC for an increase for 1 code)
Chart audits (they were confident charts correct) $ 0
Patient access point – average from study $ 31,700
Value of the Payer Gap: $154,928
9/13/2018
Honkamp Krueger & Co., P.C. 13
What tools are needed?
You will need… One motivated employee
One practice management system
One license to Microsoft Excel
Basic Excel knowledge or ability to learn
One supportive owner or boss
Time to pull, analyze and report on data within your practice
Patience and PERSEVERENCE
Questions?
Thank you.
Jon ThomsPartner I jthoms@honkamp.com
Steve SwansonAccounting Supervisor I sswanson@honkamp.com
P: 888.556.0123
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