Electronic Medical Billing Software and Service Compliance in Physical Therapy Office

Published: 2007-12-15 01:29:44
Author: Yuval Lirov, PhD

Over the course of the past two decades, federal and state enforcement agencies have investigated medical billing incidents and brought multiple enforcement actions against healthcare practices. The list of agencies tasked with billing compliance enforcement includes federal Department of Justice, the Office of Inspector General (OIG) at the Department of Health and Human Service, state Medicaid fraud control units, and others.

The number of medical billing fraud investigations and enforcement actions has been steadily growing. For instance, according to BillingWiki, seventy four articles and news items were published on the topic of medical billing fraud during November of 2007 (cf. thirteen article only in November of 2006). In addition to growing frequency of incidents, the severity of penalties has also escalated from relatively non-adversarial audits and occasional return of payments to fines, suspension or loss of license, and imprisonment.
The growing frequency of audits and increasing severity of penalties are symptomatic of inadequate attention to billing compliance at the health care office, including physical medicine offices, such as chiropractic, physical therapy, rehabilitation, or physiatry.

An insurance company typically performs post-payment audit by soliciting medical notes for a random sample of paid claims during the previous year. Next, the proportion of inadequate medical notes defines the overpayment percentage. The total amount of overpayment is then calculated by applying the overpayment percentage to all payments over the past six years.

Billing compliance is doctor's responsibility and ignoring it often results in practice ruin. To avoid billing audit risks, some doctors have elected to work on cash-only basis, collecting cash payments directly from the patients instead of submitting medical claims to insurance agencies. However, such tactics does not help avoid the potential audit because patients submit requests to pay the claim to the healthcare insurance company on their own.

Since the top two reasons for post-payment audits are over utilization of certain CPT codes and hot line calls by patients and staff, the best strategy to manage post-payment audit risk has three prongs:

1. Formal compliance program,
2. Competent management of medical notes, and
3. Continuous monitoring of potential audit triggers.

First, the existence of a compliance program may determine whether the payer can routinely handle the matter as an innocent overpayment mistake or it must be investigated by the OIG as a potentially fraudulent act.

Next, careful management of medical notes is a basis for a successful audit defense, which often reduces the damages significantly and helps avoiding a repeat audit a few years later.

Finally, audit trigger monitoring ensures compliance of both cumulative service patterns across multiple patients and individual treatments. Real-time juxtaposition of histograms of CPT code frequencies between practice and national averages compares service patterns and alerts of potential compliance infringements.

Individual treatment compliance is ensured when no specific CPT code exceeds its monthly limits, such as billing a 9894X on each visit, or billing a 97140 manual therapy in place of a manipulation code because it pays more, or charging for 97149 together with 9894X, while both procedures linked to the same diagnosis. In the latter example, performing both an adjustment and a soft tissue manipulation in the same part of the body for the same complaint is illegal and a repeat submission of such a claim may trigger an audit.

An environment of high volume of patient encounters creates thousands of possibilities to deviate from normal distribution of services and trigger an audit. Therefore, real time analysis requires powerful technology infrastructure and competent legal coverage. Such infrastructure must handle all compliance aspects together, which necessitates modern Vericle-type integrative approach, combining physical therapy billing, monitoring, and medical record management components in a single and comprehensive system.

Yuval Lirov, PhD, author of Practicing Profitability - Network Effect for Revenue Cycle Control in Healthcare Clinic and Chiropractic Office: Scheduling, SOAP Notes, Care Plans, Coding, Billing, Collections, and Audit Risk (Affinity Billing) and Mission Critical Systems Management (Prentice Hall), inventor of patents in Artificial Intelligence and Computer Security, and CEO of Vericle.net - Distributed Billing and Practice Management Technologies 

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