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Taking a bite out of billing, coding errors

July 2002
Karen Titus

Billing is costly. And not just for the person receiving the invoice.

The cost is particularly high for laboratories that make billing and coding errors—which would be just about everyone, says Bama C. Saltzman, who delivered an eye-opening talk on the most costly errors in pathology billing and coding at The Dark Report’s 2002 Executive War College in May.

Saltzman knows her stuff. As director of billing operations at Pathology Service Associates, LLC, Charleston, SC, she’s privy to just about every sort of billing and coding error a laboratory can make. PSA is a network of about 400 physicians, representing some 70 group practices—50 of which are billing clients. "That’s where I come in. I do their billing for them," Saltzman said. She also sees more money being tossed away than a croupier.

Saltzman likes to start—and end, for that matter—by asking questions. Though the questions may sound obvious, even mundane, in billing, as with most endeavors in life, it’s the little things that add up.

A good place to start is by asking questions about documentation of services. First up: Did you get a specific reason for the ordered service?

A pathologist may receive a gastric biopsy from an in-hospital surgeon, for example, and be asked to rule out cancer. "You look at all the specimens and say, ’Negative, negative, no significant finding,’ " Saltzman said. Such a finding "is great for the patient—but when it goes over to the billing office, there’s nothing we can code." At this point, billing staff has to pester the surgeon for the information. "That’s not going to help you as far as productivity, and it’s also going to aggravate that surgeon when he has to stop his processes to take care of a billing issue for you," she said.

Pathologists also receive specimens from outside referral sources.

Pap tests are common—and so is lack of documentation for the test. Too often Pap test requisitions contain only bare-bones clinical history: last menstrual period was _____. "They don’t tell you whether it’s screening, they don’t tell you what else is going on with that patient," Saltzman said. "You’re stuck. The laboratory can process the specimen and give a report, but when it gets to the billing office, there’s nothing we can do with that requisition. We have to stop there and call the referring doctor and find out whether it was sent for screening or sent for diagnostic, because Pap tests have to be coded according to why the exam was taken. You do it any other way, if you make any assumptions, you’re out of compliance."

In other words, no matter what the laboratory does right, if the billing isn’t right, "then you’re not going to get paid," Saltzman said bluntly.

Laboratories then need to start poking around to determine if they lack the proper support dictation for the service. "So we’ve gotten the service performed, we’ve processed the service, and now we think we have all the information needed to actually bill it," Saltzman said. Far too often, however, laboratories stumble over an old billing adage: Not dictated, not performed.

"If you’ve been in the billing arena at all, you know that if it’s not on that piece of paper, then we can’t code it. We’ll send it back to you." But every doubling back deep-sixes billing’s profit margin.

The solution? Every practice should ask, "When was the last time I reviewed a full day of reports? When did I sit down with the person who does the coding and with the pathologist who actually performed the service, and look at it and go over it?" Says Saltzman: "It’s worth the time and the effort to do it."

Saltzman has a suggestion. Take one day of reports and ask yourself these questions:

  • Did you code it, but not dictate it? "That’s truly easy to do," Saltzman warned.
  • On the flip side, "Did you dictate it and not code it?" she asked. "If you dictated a decalcified bone specimen as received, but you didn’t code that decal, then you’ve lost revenue."
  • Did you code services that are bundled? Look carefully, Saltzman advised. "It is not in compliance to code bundled services separately."
  • If it is a bundled service, did you use a 59 modifier? "Sometimes we do perform services that are considered bundled, but we have truly done them at separate times on the same day," she said. "We can apply 59 modifiers to those and get reimbursed appropriately."
  • She offered as an example the 88104 with 88108 codes. "If you file these without anything, the insurance company’s going to assume that it’s a bundled service and send it back to you with payment only on the first one."

  • Did you miss any quantities of service? If you do a bone marrow and the cell block, did you code for both 88305s? "You’ll be amazed, when you go back and look at your coding, at how quantities can be missed," said Saltzman.
  • Did you perform the surgical procedure, but not clearly state on the report that you dictated that you performed it? "When you perform it, that’s a surgical procedure, which has a nice reimbursement," Saltzman said. But if you don’t dictate it well enough, and your billing division fails to code that you performed it, "then that’s definitely a missed service," she said.
  • In which case, a nice phrase to plop into the report would be, "personally performed by." "Make sure that you actually get that into the report," she insisted.

Once the reporting errors are cleaned up, it’s time to take on coding problems.

The first step is to review the layout of your reports. "We do billing for 50 clients, and believe me, they all do it a little bit differently." And that’s fine. But no matter how it’s laid out, Saltzman said, the report needs to make it easy for the person doing the billing to spot all the services performed. "We all know that we can count the specimens and code those, but are we missing any add-on codes, for example, special stains or immunos?

"I know people are thinking about placing pictures on their reports and changing their report layouts," she continued. "While you’re doing that, look at how it’s dictated. Make sure that it’s clear and concise when it goes over to the billing office."

Also make sure to report amended or additional reports for additional charges. If a referral source asks you to review a case, and you decide to do additional stains during the review, "How does that information flow to your billing office?" Saltzman asked. Does the amended report get mistaken for a duplicate—and therefore not get billed? Does an additional report even get sent to billing? "That’s another place you can look to pick up additional charges. Because you performed them, you’re liable for them."

Quality assurance is a must for checking CPT coding, since even the best medical coders are human. "No matter who puts it into the system, there is room for error," she said. "And when you talk about human error, that could be up to five percent." Dropping the error ratio by even one or two points adds to the bottom line.

In Saltzman’s office, the people who do the inputting are trained in basic CPT coding, so they can double-check their efforts. "They’ll look at that report and say, ’He did three specimens, and we’re keying three specimens. He performed three stains, and we’re keying three stains.’ By doing that," said Saltzman, "we hope we can pick up that five percent that might have been missed because we’re human."

Gone are the days when a pathologist could say, "This person has been doing my coding for 20 years—she doesn’t need any training." Codes change constantly, and pathologists need to make sure their staff can respond.

It doesn’t have to be complicated. Start by making sure the coding staff has both volumes of the current coding books. "Don’t laugh," Saltzman said. "You’ll be surprised at how many people are working with an old book. But every year there are changes." Likewise, make sure staff has Internet access, so they can log on to Web sites with current coding information.

Inconsistent and incorrect coding are the bane of the billing office. Cheerfully admitting that she’s climbing on her soapbox, Saltzman said: "We can’t code assumptions. We can’t code ’probable.’ And we can’t code ’rule out.’ If you put those in your report, that’s great for the referring physician—that’s helping lead him to a diagnosis. But for a coder, it’s a dead end."

Such phrases can’t be avoided, of course. But when you use them in your report, "please go back to the clinical history and make sure there was some kind of presenting symptom or sign that we can bill for that patient. The presenting symptom is a valid diagnosis, which we can bill and get paid."

Claim entry and processing need intense scrutiny. "We can always have improvement in these areas," Saltzman said.

It’s not enough to do what she already suggested—pore over a whole day of reports. "Now I’m going to ask you to print a whole day of your claim forms," including those that are filed electronically.

The aim is to compare the report showing the procedures you performed with the claim entered into the system. Was it entered correctly? Was everything entered? Were the proper modifiers used?

Then, look at conversions and defaults, which can change codes. "Most of us have probably had our computer system for a while, which has computer codes that were written over the years. If you enter an 88305 into your system, and for some reason it prints out on a claim form as an 88307, there’s something in your system that’s making those changes to those codes," Saltzman said. That’s a compliance issue, and it needs to be addressed.

Other questions to ask about the claim format:

  • Is the name of the interpreting doctor printed on the claim? It can take the billing office anywhere from two to three months to enroll a physician with all his contracted carriers. "If he’s not enrolled, we’re going to have to hold those claims and file them later," she said. "So if you know you have a new physician coming onboard, make sure you give your billing entity at least a 90-day lead time."
  • Are your claims formatted according to the carrier’s preferences? "Wouldn’t it be nice if everyone wanted them exactly like Medicare? But if you bill, you know that’s not the truth."

    For example, "Medicare says, if you do two 88305s, then you’re going to put 88305, and in the quantity box you’re going to put a two. But if you go to a different carrier, they want you to list 88305, with a quantity of one, and on the next line they want you to put 88305 with a quantity of one. And if you don’t do it, you won’t get paid. The carrier’s system doesn’t recognize the format, and it will deny."

  • Is your referring physician’s UPIN correct? Sounds like an easy one. "But anytime we take over a new group, we find claims sitting out there because the carrier doesn’t know who the referring physician is."
  • Do your tax ID and group name match? If the tax ID and name on your claim forms don’t match your IRS forms, then insurance companies can withhold up to 31 percent of your payment—and you can’t get that money back unless you remember to ask for it on your tax return. "I bet that doesn’t happen very often," Saltzman said. "So, for your staff, the first time they see anything that says the word ’withhold’ on it, that’s not a contractual adjustment, make sure that those are brought to management’s attention."
  • Are you tracking your accession numbers? Every single specimen that comes into the laboratory gets an accession number. "But how many of you know if your billing company actually tracks your accession numbers after they’re billed?"

If you follow only one piece of her advice, this is it: "Ask if the billing entity tracks the accession numbers. Ask, ’When your accessions come in, how do we track to make sure that everything that you put your name on, and that you’re liable for, actually gets into the system?’ "

In Saltzman’s office, "We have a report at the end of each month—it looks like a bank statement—and it lists every single accession keyed for the month." Deviations in numbers are marked with an asterisk, and missing accessions are noted and reviewed for billing.

Start doing this now, said Saltzman, "and I can tell you, from real-life experience, that you can collect more money."

Let’s say, for argument’s sake, that you’ve managed to send out an error-free bill. Coding, dictation, quantities of service, QA, claim entry, formatting—you name it, it’s all right on the money.

So why are you being denied payment?

Lack of weekly denial review is one of the biggest reasons pathologists aren’t paid for their services. "You have your staff that’s actually going to take those pieces of paper, and they’re going to post it in the system. That way the patient’s going to get a bill," Saltzman said. "But who looks behind them?"

"Though I know there’s probably not a conspiracy out there against billing entities," she said, "I think the insurance companies change their rejection codes every week to keep us on our toes."

Saltzman pointed to five denials that consistently remain unresolved, clogging up accounts receivable and keeping pathologists from their payments. By scrutinizing denials, "you can improve your cash flow by tackling these on the front end, rather than letting them come at the back end."

Timely filing. "If you’re getting this denial, something’s wrong," she said. While the problem can lie with the laboratory or the carrier, either way it needs to be fixed.

The industry standard for filing is 90 days. It’s a short time period, Saltzman conceded—but one laboratories must meet if it’s in their contracts. "So if we’re not meeting the filing deadline and we’re getting this denial, we need to look at our process from the time that report came into the system"—and to ask, What kept the claim from reaching the carrier on time?

On the flip side, Saltzman noted, laboratories should look at the filing window when negotiating contracts with carriers. Standard wording will call for a 90-day filing period, but Saltzman urges labs to fight it. "I don’t think you should have anything less than 180 days. Most of the time insurance companies are not going to question your change to 180 days—they’re just going to go forward with the contract. But that gives you some breathing room if you have gotten incorrect information on the front end."

Nonparticipating physicians. "That’s a biggie," Saltzman said. "Take it to management immediately."

The reasons for this type of denial vary. If the carrier shows one of your physicians as nonparticipating, you need to enroll your physician.

The other piece of the puzzle is recredentialing by insurance companies. "They don’t give you a schedule for recredentialing. They’ll just slip a letter out and hope you miss it." Recredentialing is time-consuming. So the first time you receive a response that says, "Your physician’s not participating," you need to call the carrier, obtain their recredentialing package, and reactivate the provider in the group.

"If you don’t catch this very early, it becomes a snowball rolling down the hill," Saltzman cautioned. "It clogs up the claims."

Place of service problems. What if the denial says, "You cannot bill for these services at this place of service"? Saltzman advises reviewing your printed claims. Were you enrolled properly with each carrier? If you’re an independent lab, are you identified as such?

Uncovered codes. This could be one of two things, Saltzman said.

"It could be one where you didn’t perform the service, in the report it looked like you performed the service, and your coder sent it out as if you personally performed it," she said. "But actually, the surgeon performed it."

On the other hand, the clinician’s coder may mistakenly appropriate a pathology code. Citing the Pap test, Saltzman said, "If you were the OB/GYN, his medical coder may think that the 88150 code was for him. So when you turn around and submit your 88164 or your 88142, it’s going to bump against that 88150, and you’re not going to get paid." However, the OB/GYN likely did receive payment. "So at that point you need to go to the OB and explain to him that that’s actually your code. If that doesn’t work, you can call the carrier, and they will call the physician."

Duplicate service. "If your staff is getting a denial that says ’duplicate service,’ you can’t assume anything," Saltzman said. "You really have to pick up the phone and call the carrier." Every carrier interprets the term differently, but generally it means the carrier has already paid or denied the claim—usually the latter. "It could be that we missed the denial when we were posting denials," Saltzman said. "Or, it could be that they have a system problem," which is more often the case. "By bringing this to the carrier’s attention, it helps resolve the issue."

Saltzman offered one last tidbit on insurance followup errors. Her company prints what it calls a "bad boy" report, which lists accounts receivable by carrier. "We’ll list them carrier by carrier. Our system will automatically highlight any of those carriers that have not paid within 60 days."

The majority of carriers do pay within 60 days, and several that don’t—Medicaid, for example—have their own standard turnaround time. "You can check them off and move on." But other laggards must be tracked down. "You need to call the carriers with a list of patients who are over that [the payment window]."

Also, look at your contracts with these carriers. Laboratories aren’t the only ones required to file within a specific time. "Sometimes there is language in the contract on how long they have to process a clean claim," said Saltzman, who’s guided by the adage, The older the claim, the harder to collect. "So we want to get it as quickly as we can."

Pathologists also need to give contracting errors the heave-ho.

Surprisingly, most groups fail to thoroughly review contracts before signing them.

"The insurance companies are sneaky, so we can’t take all the blame ourselves," Saltzman said. UnitedHealthcare, for example, recently sent contracts to all her clients, thanking them for taking the time to talk to the carrier and asking them to return the signed contracts. "Well, they talked to an office employee. But it leads you to think someone in your office has been working on this, and all you have to do is sign it and send it back.

"Look at it," she continued. "The fee schedule is well below Medicare."

Most groups have a contracting officer. "But it’s good to have two members of your group looking at a contract before it’s signed. Two heads are better than one. Sometimes we get busy, and we don’t look at it thoroughly—just the main points. Have someone make sure you have that 180 days [to file a claim], make sure you didn’t forget to look at the reimbursement for a particular code."

Which brings Saltzman to her next bit of advice, one that would work equally well at a car dealership: "Don’t ever take the first fee schedule they send you. Granted, you may not always get a higher fee schedule, but at least you’ll know, if you finally sign the contract, you tried for everything you can get."

Even if carriers won’t negotiate an entire fee schedule, pathologists should look at individual, high-volume codes. "If you perform a high volume of Pap tests, pay particular attention to your 88142s, the ThinPrep. Make sure your proposed allowable is acceptable."

Finally, said Saltzman, laboratories should realize they need to spend money to make more money. Think staff here. "Staff appropriately for coding, claims filing, and insurance followup. Don’t skimp in this area," she said. "If you feel like they’re overworked, they probably are overworked, and they’re not getting to those things that can truly bring in money."

You may cringe at paying your billing staff healthy salaries. "But if they can bring you four times the revenue that you pay them, it’s definitely worth adding that extra person—although you think you can’t afford them."

In reality, she said, pathologists can’t afford to ignore billing and coding errors. "Review your practice now. You must watch over it every day to make sure you receive everything you deserve."

Karen Titus is CAP TODAY contributing editor and co-managing editor.