Collecting Dilemma of Anesthesia in 2016
Arne Pedersen, MBA, FACMPE
Vice President of Practice Management, Anesthesia Business Consultants, Jackson, MI
When most practice administrators started in anesthesia billing operations, collecting for services was markedly different than it is today, even if you are relatively new to the special. There are a variety of factors including government regulations, The Patient Protection and Affordable Care Act of 2009 (ACA), bundled payments, high deductible health plans, out-of-network payers and new plan designs, to name a few.
The Patient Protection and Affordable Care Act
“THE GREAT RACE TO THE BOTTOM”
The Patient Protection and Affordable Care Act (ACA), or the ‘Great Race to the Bottom’ as some have coined it, brought massive change to the insurance market. Since the signing of this 2,000- page law in March of 2010, thousands of pages of regulations have been written and implemented. Moreover, additional regulations are on the way as the law gave the Secretary of the Department of Health and Human Services vast latitude to implement the law.
What the law did to the insurance distribution channel has changed the job of the insurance agents. Prior to the ACA even being introduced, agents were already using online tools to shop group insurance.
The ACA forced all plan designs to include birth control as an example. These types of additions do not take into account the various needs of the American consumer at large. The law forced coverage, meaning that you have to pay a penalty if you do not buy insurance. The insurance companies needed ‘forced coverage’ in order to spread the risk. In other words, younger, healthier people pay premiums to offset the risk of older, sicker people.
The ACA married preferred provider organization (PPO) and health maintenance organization (HMO) features into one type of insurance with various levels of patient responsibility. The outcomes for many previously covered American consumers are higher premiums, higher deductibles, higher coinsurance&emdash;especially for out-of-network services; limited options, and narrow networks. The provider community is beginning to feel the effects of lower reimbursements for the health exchange plans. Providers are also experiencing more bureaucracy, especially with frequent changes to quality programs and more procedures being denied for payment.
While the concept of all having health insurance is noble, the execution of the concept via the ACA is not working well for all parties.
Advance Beneficiary Notice of Non-Coverage
Your practice may discover you have provided services in which the procedure is not covered. For these situations, it is important to implement a program of Advance Beneficiary Notice of Non- Coverage (ABN). Medicare has identified specific steps along with a form on the CMS website to ensure you can collect for these services.
In terms of practical application of ABN, it is important for your practice to work with the facility (hospital or ASC) to have preregistering patients contact the anesthesia office. This is not just for Medicare patients but also for private insurance carriers as well. Another tip is to monitor procedures or codes for which you would expect denial and concentrate on collecting ABNs for these.
Of the key points in the ABN form, three are important to address.
- The first is that the patient will have some options and will need to select which option they wish your practice to pursue.
- Secondly, if the patient wants you to file an appeal with the carrier due to payment denial, your practice must submit a claim. If not, you cannot file an appeal.
- Finally, it is important to ensure that the patient and family member(s) have read, understood and completed the ABN form.
One example of the use of an ABN form is for denial of anesthesia for pain,
Current Procedural Terminology (CPT®) codes 01991 and 01992. On the private insurer side, the intent is that patients will complain about it not being covered and ultimately, influence their specific private insurer to cover it. Handled correctly, the practice will be in position to get paid by the patient for these procedures.
The following is directly from the Medicare website:
“If you have Original Medicare and your doctor, other health care provider, or supplier thinks Medicare probably (or certainly) won’t pay for items or services, they may give you a written notice called an “Advance Beneficiary Notice of Non-coverage” (ABN).
The ABN lists the items or services that Medicare isn’t expected to pay for, an estimate of the costs for the items and services, and the reasons why Medicare may not pay.
The ABN gives you information to make an informed choice about whether or not to get items or services, understanding that you may have to accept responsibility for payment.
You’ll be asked to choose an option box and sign the notice to say that you read and understood it. You must choose one of these options:
Option 1: You want the items or services that may not be paid for by Medicare. Your provider or supplier may ask you to pay for them now, but you also want them to submit a claim to Medicare for the items or services. If Medicare denies payment, you’re responsible for paying, but, since a claim was submitted, you can appeal to Medicare.
Option 2: You want the items or services that may not be paid for by Medicare, but you don’t want your provider or supplier to bill Medicare. You may be asked to pay for the items or services now, but because you request your provider or supplier to not submit a claim to Medicare, you can’t file an appeal.
Option 3: You don’t want the items or services that may not be paid for by Medicare, and you aren’t responsible for any payments. A claim isn’t submitted to Medicare, and you can’t file an appeal.
An ABN isn’t an official denial of coverage by Medicare. You have the right to file an appeal if payment is denied when a claim is submitted.”
Figure 1 shows ABN form samples covering both Medicare and commercial insurance. The Medicare form can be found out on the aforementioned website. For the commercial side, there are sample forms on the internet similar to the sample shown below. Ultimately, it is recommended to have an attorney familiar with ABN’s, evaluate and make recommendations to the practice.
Employee Retirement Income Security Act of 1974
As it relates to health plans, Employee Retirement Income Security Act of 1974 (ERISA) plans are required by law to follow the plan document. Approximately 80 percent of plans in the market are employersponsored and are covered by ERISA unless they are exempt. Exemptions include government or religious organization plans. The balance of the plans are governed by state insurance laws.
The following is an excerpt from the ERISA website that covers the definition of ERISA in short order and then provides information on two important and familiar amendments.
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.
Two important amendments expanding the protections available to health benefit plan participants and beneficiaries include:
(COBRA) Provides some workers and their families with the right to continue their health coverage for a limited time after certain events, such as the loss of a job.
(HIPAA) Provides important new protections for working Americans and their families who have preexisting medical conditions or might otherwise suffer discrimination in health coverage based on factors that relate to an individual’s health.
State insurance laws vary widely, but most states have prompt payment laws designed to require insurance carriers to pay claims in a timely manner. Some states even have statutory interest assigned to insurance companies for failure to pay within the time limit. Furthermore, states may also address balance billing in their regulations as well as surprise billing, which can be taken care of with an appropriate ABN form or an assignment of benefits form, depending upon the situation. As it relates to surprise billing, a number of other states have laws limiting balance billing by out-of-network providers in certain circumstances. Some of these laws apply only to certain types of health plans (HMO vs. PPO) or only to certain types of providers or services (for example, for ambulance providers or emergency care services.). It is important to know state-specific laws and be prepared to address their requirements for your practice. For the author, being a Hoosier, it was natural to review the Indiana code regarding insurance, in particular, the prompt payment law. In it, the provider is required to submit a clean claim. The insurance carrier determines the definition of a clean claim. Therefore, it is important to know not only the state insurance laws, but also to understand the implications for your practice.
Knowledge of plan documents is important especially with regard to limits on filing times, appeal times, appeal levels, etc. Maintaining a spreadsheet grid with an outline of procedures and the rules of each insurance carrier (payer) contract may provide a tool to manage the payment challenges. Documenting and time-stamping communication with the insurance carriers (payers) is also helpful. In general, ERISA allows 30 days for the insurance carrier to respond with very specific details about how/why a claim is denied. While it is easy to make a general statement about insurance carriers violating ERISA, it is important to note the specific details for each case/claim and the rules of the road. In some cases, insurance carriers blatantly violate ERISA. In these cases there are options for action and details that can be explored by an ERISA attorney. Additional information on ERISA plans may be found at: https://www.dol.gov/general/topic/health-plans/erisa.
As a strategy, is it a good idea for an anesthesia group to be out-of-network (OON)? It is a strategic discussion worth having. There are a few points to remember as the practice considers going OON with a payer.
Facilities (hospitals and ASCs) want all of their physician groups in network and usually have a requirement to that effect in writing. If a group is not in network, that group could feel political pressure from the facility. In this case, the group may be cashing in political chips that could be used for other negotiations.
Insurers view it differently. Some insurers truly do not care due to re-pricers in the market place, such as Multiplan. Some insurers utilize the re-pricer network to process claims, which has the potential to drive down reimbursement for the anesthesia practice.
For chronic pain, you may not have a choice. There are saturated markets in which the chronic pain practices are so prevalent the insurers may not offer a group a contract to come in network, whether a chronic pain-only practice or a chronic pain practice as part of an overall anesthesia practice.
Being OON is a double-edged sword. On the one hand, it can be very profitable to a group to go OON with a major payer. Anecdotally, my experience has taught me that this is true in certain situations. As an example, a large payer was not willing to negotiate and the practice decided to go out of network. We laid the groundwork politically with each of the facilities and surgeons prior to going out of network. The result was an increase in yield per unit since we had no contract with that payer. That remained in effect until our health system put pressure on the practice to get in network. In this case, it worked out well for the practice. That is not always the case. Conversely, an insurer may decide to pay you their version of the “market rate” leaving you to balance bill the patient and collect from them. In these cases, it is important to know the state laws regarding balance billing. As noted above, balance billing laws vary by state and may be onerous.
As for Blue Cross Blue Shield (the Blues) plans, and perhaps other large payers, the patient will receive the reimbursement check and the practice has to run it down, resulting in additional time and money expense. Again, anecdotally, my experience has taught me to never go out-of-network with the Blues. Terminating the contract with the Blues to negotiate is plausible. However, actually going OON with the Blues is detrimental. There have been situations when groups have been successful in going OON with the Blues and other payers. In these cases, the groups established a strategy and a plan to collect the monies from the patient or responsible party prior to terminating the contract as well as the political work with the facilities and surgeons.
Another consideration concerns co-insurance rules. Typically, OON providers have patients with higher coinsurance amounts. Moreover, the OON provider is now the more expensive provider with the exchange plans. As alluded to earlier, these plans have much higher OON co-insurance amounts. In some cases, the patient owns 100 percent of the responsibility unless it is an emergency. A great example of that comes from Aetna (emphasis added):
“Some plans do not offer any outof- network benefits. For those plans, out-of-network care is covered only in an emergency. Otherwise, you are responsible for the full cost of any care you receive out of network.”
Two final considerations for an OON strategy concern policies. The first policy is the prompt payment policy. A group may offer a discount (while still billing the full amount) if paid prior to surgery or within the 30 days of the dates of service. State laws vary on this, and it is important to check with a healthcare attorney.
The other policy is the “payment plan policy” which establishes a process for patients to pay anesthesia bills in an established, periodic manner. The group determines the length of the payment plan, the amount required monthly and the penalty for failure to remain current. Depending on the total amount owed, the length of the payout may run from six months to a year. Again, state laws vary and it is important to check with a healthcare attorney.
Assignment of Benefits
An Assignment of Benefits (AOB) is a document that a patient signs upon intake or admission. The precise language within the assignment of benefits form becomes critical when a non-participating provider files suit against the insurance company in a reimbursement dispute.
According to U.S. Legal, the definition of an AOB is, “Assignment of benefits in the context of health care refers to an agreement or arrangement between a beneficiary and an insurance company, by which a beneficiary requests the insurance company to pay the health benefit payment directly to the physician or medical provider. The patient or guardian signs the assignment of benefits form so that reimbursement checks will be sent directly to the doctor or medical provider.”
If AOB is not permitted, the medical provider will not receive payment from the insurance company. In terms of specific language to include in the anesthesia group’s AOB, a healthcare attorney can help to craft the proper terms.
A sample AOB form is shown in Figure 2 below.
Underpayments can become an issue as well. Bundled payments and Medicare Local Coverage Determinations (LCDs) are two types of which to be wary.
There are times when an insurer claims a bundled payment for certain combination of procedures. An example might be when the insurer does not pay for fluoroscopic guidance because they state that the payment went to the facility. It is important to have good relationships with the facilities and understanding of any contracts they have that might impact the practice. Of course, tracking and documenting each instance by insurer will be helpful.
Another type of underpayment can come from a LCD or a private payer policy. These typically come out on a regular basis and describe procedures that will be denied outright or denied without certain documentation. These are typically done on a state basis. With the procedures that are denied without certain documentation, it is important to note what the details of the denial is and what steps need to be taken to get reimbursed. As a practical matter, keeping track of these in a spreadsheet is quite useful.
In conclusion, group administrators have much to be on the lookout for when it comes to collections in 2016. The good news is that a strong billing operation and good tracking and monitoring processes can assist. With an engaged team of billing operations and practice administration the obstacles will be predictable and can be managed.
Arne Pedersen, MBA, FACMPE, serves as Vice President of Practice Management for Anesthesia Business Consultants. He works in the client and consulting services and is a Practice Executive. Mr. Pedersen is also a Fellow with the American College of Medical Practice Executives (FACMPE), a distinction among peers in the Medical Group Management Association. Previous experience includes a variety of roles including strategic sourcing, eBusiness, and new product development including teams that developed and rolled out the HRA and HSA products. Prior to joining ABC, Mr. Pedersen was a highly decorated commissioned officer in the United States Army and is a Desert Storm Veteran who earned a Bronze Star Medal. Mr. Pedersen earned his Bachelor of Arts degree from Indiana University earning distinguished military graduate honors and his Master of Business Administration, cum laude, from the University of Notre Dame. Mr. Pedersen can be reached at Arne.Pedersen@AnesthesiaLLC.com.