Physician Revenue Cycle and Compliance Preparing for the OIG

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1 Physician Revenue Cycle and Compliance Preparing for the OIG 2014 Summer Institute Indiana Chapter, HFMA Katie Gilfillan Director HFP, Physician and Clinical Practice Sandra Wolfskill, FHFMA Director, HFP, Revenue Cycle MAP

2 Agenda A View of the Physician s World 2014 OIG Reports Metrics for the Physician Revenue Cycle Q & A 2

3 Physician World Small groups vs. large groups challenges: Administration and financial HIT infrastructure Ability to respond to health reform Options for the small groups Align/join larger groups Join a health system/ IDN Purchase by a hospital COMPLIANCE 3

4 Group Size Group Size Number of Providers Percent of Total 1 203, % , % , % , % , % , % , % , % , % 9 Total 889,274 Source: Physician Compare database of providers registered with Medicare; includes physicians and physician extenders Leavitt Partners, LLC, Physician Groups in the United States: A Look Forward, February, 2014 Rank 4

5 Integrated Delivery Networks Large Groups: > 25 physicians Affiliation with Integrated Delivery Network 59% Implications for: ACOs Bundled payments Medical homes VBP Demonstrations Small Groups: 25 or < physicians Affiliation with Integrated Delivery Network 23% 5

6 Conceptual View of the Patient-Centered Revenue Cycle Physician or patient identifies need for service; contacts office to schedule m Visit scheduled and preservice processing completed EHR Post service completion of activities required to successfully resolve the financial components for patient and provider Time of service activities- Patient arrival ; $$; Clinical services and documentation; Revenue capture, Coding & Patient discharge 6

7 Pre-Service Revenue Cycle Need for service identified; patient contacts provider to schedule visit Potential compliance issue(s): Visit scheduled Potential compliance issue(s): 7

8 Pre-Service Revenue Cycle Identification of current and prior balances Potential compliance issue(s): Discussion and resolution of financial issue(s) Potential compliance issue(s): 8

9 Pre-Service Revenue Cycle Collection of payment Potential compliance issue(s): Automated reminder call(s) Potential compliance issue(s): 9

10 Time of Service Revenue Cycle Patient arrival, check-in; collection of co-payment or other balance(s) Potential compliance issue(s): Clinical documentation Potential compliance issue(s): 10

11 Coding Time of Service Revenue Cycle Potential compliance issue(s): Charging Potential compliance issue(s): 11

12 Time of Service Revenue Cycle Additional services/testing ordered Potential compliance issue(s): Cash posted and bank deposit sent to bank Potential compliance issue(s): 12

13 Post Service Revenue Cycle Patient balance billed Potential compliance issue(s): Unpaid accounts sent to collection agency for processing Potential compliance issue(s): 13

14 OIG - (OMG) 14

15 The OIG alleged that SRMC submitted claims containing CPT codes 99204, 99205, 99214, and 99215, that it submitted for services provided by the physician that were upcoded and that the physician engaged in a pattern or practice of coding at a higher level that he knew or should have known would result in a greater payment than the code applicable to the services he was actually providing. CHICAGO Mobile Doctors arrested today on federal health care fraud charges warrants to seize up to $2.568 million in alleged fraud proceeds from various bank accounts. The charges allege a scheme of fraudulent upcoding. Physician pays $17, for allegedly violating the Civil Monetary Penalties Law. The OIG alleged improper billing of Medicare for: (1) new patient E&M office visits for pre-existing patients; (2) upcoded E&M office visits; and (3) services provided by nurse practitioners that were billed under physicians provider number when he was not in the office. 15

16 Office of the Inspector General Report Review of Medicare Part B claims for E/M services Found $6.7 billion on improper payments in 2010 Represents 21.4 % of all E/M payments 16

17 Previous Report: 2006: OIG reports 75% of E/M consultations did not meet Medicare coverage requirements leading to $1.1 B in improper Medicare payments

18 Previous report: OIG reports increased billing of higher level E/M codes 18

19 Previous Reports 2012 Survey: 57% of physicians who provide E/M Services used an EHR system 75% use EHR system to document E/M services 88% of Medicare physicians assign codes manually 12% have codes assigned by staff or professional coders 19

20 Current Report: Methodology High Coding Physicians Top 1 % Two highest codes Other Physicians Not high coding Requested medical records from a sample of physicians from each strata. Reviewers determined whether the E/M service documented in the medical record for each sampled claim was correctly coded/sufficiently documented. 20

21 Findings 42 % of claims were incorrectly coded Upcoded Downcoded Other % of claims lacked documentation Insufficient Documenation Undocumented 21

22 High coding physicians more likely to incorrectly code High Coding Physicians Other Physicians

23 Recommendations from Report and CMS response Educate physicians on coding and documentation requirements for E/M services. Continue to encourage contractors to review E/M services billed for by highcoding physicians. Follow up on claims for E/M services that were paid for in error. 23

24 Other Areas of Focus Upcoming Report: Documentation vulnerabilities of E/M services using EHR systems. Outpatient E/M services billed at the new patient rate Place of Service Coding Errors Ophthalmologists and Anesthesiologists Diagnostic Radiology and Electrodiagnostic Testing Schedule II controlled substance prescribing Meaningful Use Audits by CMS 24

25 Strategies for Physician Offices Develop and Implement a Compliance Program Now required under PPACA Include 7 Steps recommended by OIG 25

26 7 Steps to OIG Compliance Plan 1. Conducting internal monitoring and auditing through periodic audits. 2. Implementing compliance and practice standards through the development of written standards and procedures. 3. Designating a Compliance Officer or contact(s) 4. Conducting appropriate training and education on practice standards and procedures. 26

27 7 Steps to OIG Compliance Plan 5. Responding to detected violations through investigations of allegations 6. Developing open lines of communication among staff regarding fraudulent conduct 7. Enforcing disciplinary standards through publicized guidelines 27

28 Strategies for Physician Offices E/M audits should be part of your overall compliance program Consult Evaluation and Management Services Guide Consult OIG and CMS Resources for Physicians 28

29 Metrics Physician Revenue Cycle 29

30 Physician Practice KPIs Common metrics that provide strategic-level month over month data Ability to select and report on a variety of peer comparisons Developed by HFMA and industry experts Monitored and updated to meet emerging needs 30

31 Benefits of Benchmarking Provides performance context Aids discovery of improvement opportunity Helps identify the right performance targets Supports the identification of practices with proven positive outcomes 31

32 Just How Above Good Do You Need to Be? To optimize improvement efforts, you need to first understand what a change in performance will mean Industry accepted You need targets that are: Measurable and quantifiable; timely Defined by true peer groups 32

33 Example: Days in A/R Consider a practice where Days in A/R improved to 38.7, and performance has been sustained most months for the past year: JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT Days in A/R 38.7 IMPROVED & SUSTAINED 33

34 Example: Days in A/R Meanwhile, Days in A/R for the organizations peers have dropped even more DAYS IN A/R AMONG PEER GROUPS OF SIMILAR REVENUE, PAYER MIX Peer Case Example Practice 38.7 Peer Peer Source: Analysis of HFMA's MAP App SM, 34

35 Custom Peer Group Options State Two letter abbreviation of state in which practice is located (MAP App utilizes A/B Mac Jurisdiction to group states) Number of Sites Total number of sites/locations physicians are practicing by physical address (#) Number of Practices Total number of MAP App Practices being reporting Academic Affiliation Practice s affiliation with major teaching hospital (yes/no) Net Patient Revenue (monthly average) Net Revenue of practice (= annual net patient revenue / 12 months). Use last fiscal. Options Buckets 35

36 Custom Peer Group Options * Primary Count: number of FTE physicians that are Family Practice, Internal Medicine and Pediatrics, OB/GYN, and hospitalists * Specialty Count: number of FTE physicians that are all other Total Number of FTE Physicians * Specialty Percent - will be calculated for you * Physician Extender Count: number of FTE physician extenders; includes CRNA, PA, NP, and Midwife. * Physician Extender Percent - will be calculated for you * Total Physicians - will be calculated for you Note: FTE is defined as greater than 32 patient care hours Options Buckets 36

37 HFMA MAP Keys Clearly defined Measurable Discerning Comparable 37

38 Sample of an HFMA MAP Key Indicator Purpose Value Calculation Net days in A/R Trending indicator of overall A/R performance Indicates revenue cycle efficiency Net A/R Net patient service revenue See the list at 38

39 Physician Practice Management Keys 14 Individual Keys 4 Categories Patient Access 2 keys Revenue Integrity 1 keys Claims Adjudication 2 keys Management 9 keys Similar concept to hospital side with other keys unique to physician practice management 39

40 14 Physician Practice Management MAP Keys 1a. Primary Physician Practice Operating Margin Ratio 1b. Specialty Physician Practice Operating Margin Ratio 1c.Net Income/Loss per Primary FTE Physician 1d.Net Income/Loss per Specialty FTE Physician 2. Practice Net Days in Accounts Receivable (A/R) 3. Practice Cash Collection Percentage 4a.Total Primary Physician Compensation as a Percentage of Net Revenue 40

41 14 Physician Practice Management MAP Keys 4b. Total Specialty Physician Compensation as a Percentage of Net Revenue 5. Percent of Patient Schedule Occupied 6. Professional Services Denial Percentage 7. Point-of Service (POS) Collection Rate 8. Total Charge Lag Days 9.Aged Accounts Receivable (A/R) by Payer Group as a Percentage of Outstanding Total A/R 10.Aged Accounts Receivable (A/R) as a Percentage of Outstanding Accounts Receivable 41

42 % Patient Schedule Occupied Peer Group: Nationwide Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Specific Region A/B MAC 5 & 6 Median Performance 90th Decile 75th Percentile 42

43 POS Collection Rate Peer Group: Nationwide 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 A/B MAC 5 & 6 Median Performance 90th Decile 75th Percentile Specific Region 43

44 Charge Lag Days Peer Group: Nationwide Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 A/B MAC 5 & 6 Median Performance 90th Decile 75th Percentile Specific Region 44

45 Practice Cash Collection Percentage Peer Group: Nationwide 160.0% 140.0% 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 A/B MAC 5 Specific & 6 Median Region Performance 90th Decile 75th Percentile 45

46 Practice Net Days in A/R Peer Group: Nationwide Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 A/B MAC 5 & 6 Median Performance 90th Decile 75th Percentile Specific Region 46

47 Aged A/R 90+ Peer Group: Nationwide 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 A/B MAC 5 & 6 Median Performance 90th Decile 75th Percentile Specific Region 47

48 A/R: Medicare Traditional 90+ Peer Group: Nationwide 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 A/B MAC 5 & 6 Median Performance 90th Decile 75th Percentile Specific Region 48

49 Payment Denial Rate Peer Group: Nationwide 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 A/B MAC 5 & 6 Median Performance 90th Decile 75th Percentile Specific Region 49

50 Key Indicator of a Revenue Cycle in Need of Help! Welcome to a meeting of the practice managers CFO CMO 50

51 Thank You! 51

52 Contact Information Katie Gilfillan Director, HFP Physician and Clinical Practice Sandra J Wolfskill, FHFMA Director, HFP Revenue Cycle MAP

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