The health of your medical practice depends on good quality coding and billing work. One of the most important roles in the medical office that impacts compliance—and your bottom line—is the coding and billing function.
“Coding and billing is the lifeblood of the practice; it’s the income,” says Michael J. Sacopulos, JD, founder and president of Medical Risk Institute.
“From a business perspective you want it to be correct, from a reputational standpoint you need it to be correct, and from a legal perspective you have host of laws that require the efforts to be compliant,” he explains. “Outside of providing good medicine, what could be more important? After providing good care this is [the] mission critical part of any practice.”
With that in mind, it’s critical to have the right people who are well trained and knowledgeable about compliant coding and billing practices. Here’s what you should consider before hiring in-house staff to perform your billing and coding functions or outsourcing those functions to a billing company.
1 Hire the right billing and coding staff
“Step 1 is make sure you have quality people,” advises Sacopulos. A lot of people come across well in the interview and have a good letter of recommendation, he says. But they may not have the right skills for your medical office’s needs. Or, worse, Sacopulos warns “they could have two felony convictions for identity theft.”
So do background checks. Sacopulos advises that your medical office’s providers “are turning over their livelihoods to these people. The sole source of income is coding and billing. So it’s worth a background investigation.” Sacopulos says such background checks often don’t happen, especially in smaller practices that are short on staff and thus face time pressures and need to hire more quickly.
Next, after you do the background check, check their skills. “Experience doesn’t translate to brilliance,” warns Karen Zupko, president of Karen Zupko & Associates, Inc. While it’s smart to look for staff who have some “level of preparedness,” she explains, just because someone has 15 years of experience doesn’t mean they have kept up with their training and what’s been changing in the industry. You also have to ask applicants how they’ve kept up with new developments, Zupko advises.
Zupko designs for her clients customized assessments to test applicants’ knowledge about coding for their practice specialty. She recommends practices give each applicant the same assessment or quiz to test their coding knowledge. You can create your own using true and false questions or asking the applicant how they would code a real life scenario.
Sacopulos agrees, suggesting you can de-identify a chart or record of service and ask the applicant to code it. “It’s the modern day equivalent of a typing test,” he quips, and “it’s fair, because you’re testing them on what they will do.”
2 Be diligent with billing services
Some offices may find it better meets their needs and resources to outsource billing and coding to a different entity rather than handle it in-house.
Sacopulos cautions that too often people think that outsourcing the task means they aren’t responsible anymore. “They think they’ve taken their problem and made it someone else’s,” says Sacopulos. But that billing company is legally your agent, doing things on your behalf, he warns. So you can’t say it’s all their fault if something is done incorrectly. “Legally you are responsible for the acts of your agent,” advises Sacopulos. With that in mind, here are some tips Sacopulos offers when selecting an outside entity to handle your coding and billing:
- Do a background check on the company. That includes a litigation search to see if they have been sued, as well as a search with the Better Business Bureau. You can also check with your secretary of state to see if complaints or issues exist with regard to this company.
- Make sure you have “a good written agreement with them that indemnifies you if there’s a problem.”
- Just because the contract says you are indemnified doesn’t necessarily guarantee you are protected. You also need to make sure the company has the resources to make good on that indemnification, warns Sacopulos. So make sure they are bonded and have appropriate insurance coverage, he advises. Be sure the entity has the financial resources to cover their commitment to you.
3 Establish a plan
Whether billing is done in-house or outsourced, providers are legally on the hook for how coding and billing is handled by employees or the billing service. So you don’t want either coding and billing entity to act independently and make ad hoc decisions. There should be clear expectations, written protocols, and a process for how coding and billing issues or concerns will be addressed.
This starts with a plan, says Sacopulos. It could be part of your medical office’s general compliance plan or it could be a specific coding and billing policy or procedure. But every medical office should have “an actual written document that everyone can look at and be on same page,” recommends Sacopulos. Don’t think just the coding and billing staff need to be aware of and familiar with this plan. “It needs to address the whole group—it must show everyone’s responsibilities,” he says.
For example, your written plan should address how to handle a question about what code to use or how to handle billing in a specific situation, suggests Sacopulos. Tell staff where to go for advice. For example, you could suggest consulting the entity paying the bill being submitted. Government and private insurance carriers do have procedures for handling such requests, says Sacopulos. “If you get the opinion of the entity you are submitting the bill to it also takes away the argument that you are trying to intentionally defraud them,” he advises.
You also need to address what to do if an error is discovered. “Sometimes it looks like people are doing things wrong intentionally but often it’s a mistake or ignorance,” says Sacopulos. Things are constantly changing so mistakes can happen. Your plan needs to answer the question “How do we deal with something that was paid inappropriately?” he advises. Your professional society, private consultants, and your lawyer can help you devise a plan.
4 Monitor compliance of coding and billing
Remember, even if you pick the right people, the providers in your medical office are “entrusting them with their livelihood and their liberty” and “people can get your providers into big, big trouble, intentionally or otherwise,” warns Sacopulos. So you’ve got to monitor the work your coding and billing staff does. The Office of the Inspector General (OIG) includes in its seven elements of successful compliance program regular auditing and monitoring. So you should be periodically auditing and monitoring your coding and billing systems.
Periodically pull charts and check that everything is coded correctly, Sacopulos advises. Once or twice a year should be sufficient to give you a level of comfort that your team knows what they are doing, he says. You can also engage a consultant to perform audits, he adds.
Zupko’s firm performs such audits for clients and also suggests medical offices annually compare their E/M (Evaluation and Management) code usage data to the Medicare data available by specialty for their state. She recommends doing so to assess the risk of being audited. If your E/M coding patterns fall outside the range of what other practices in your state and nationally are doing, it could raise red flags to the government, she explains.
Doing this comparison provides great documentation if there’s a problem later on, adds Sacopulos. It tells the government that your medical office monitors coding and that you are making a real effort to comply. Another way to ward off potential compliance liability and spot risk issues is to keep your eye on what the Office of the Inspector General (OIG) is interested in. Every year the OIG issues an Annual Work Plan that details the issues it considers a problem.
As the OIG is the entity enforcing billing and coding violations, this Annual Work Plan is like “a teacher giving you the test in advance,” says Sacopulos. “Shockingly, few practices have any idea about the Work Plan,” he observes.
It’s not just your own staff you need to monitor—if you outsource, you should be checking on the third party handling your coding and billing. “You just want to make sure they aren’t overly aggressive or overly conservative,” says Sacopulos. “A lot of the time practitioners don’t know what to expect – what’s a good return and what’s average or below average,” he adds. So use benchmarks such as Medical Group Management Association (MGMA) data to see if your billing company is achieving average collections for your state, suggests Sacopulos. “Benchmarks will throw up red flags that there’s a problem somewhere,” he says. Note that it could be a sign there’s a problem with not just the coding and billing but possibly with your providers’ documentation.
Finally, note that auditing and monitoring your coding and billing isn’t just good for compliance and avoiding liability, it’s good for your bottom line too. Remember that coding and billing are the “lifeblood” of the practice so it makes business sense to be checking on it. “If we were in manufacturing, you wouldn’t turn on the assembly line and never check what’s coming out the other end,” says Sacopulos. He explains that auditing and comparing your coding and billing to benchmarks from Medicare or the MGMA for example can give you an idea not only whether you are billing incorrectly and risk liability but also if you are billing too conservatively or not effectively collecting claims, which leads to lost revenue. You might also consider including benchmarks for collections in the terms of your contract with outside billing companies, imposing a penalty on the billing company if the collections are below certain benchmarks, adds Sacopulos.
5 Always be alert for red flags
You don’t need an audit to spot problems. Even a manager that isn’t hands-on involved in coding can ask intelligent questions that can reveal red flags, suggests Zupko. For example, Zupko suggests looking at the write-offs, where staff could be “burying the bodies” of inaccurate or flawed coding and billing. If you look at what is being written off and see patterns in claim denials, maybe your office isn’t submitting claims correctly or isn’t following up on appeals, says Zupko. Looking for red flags like significant write-offs or adjustments or a pattern of write-offs can help find problems that affect your compliance and your medical office’s revenue.
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