How to protect yourself against an ugly little practice that's costing O.D.s lost revenue.
by Gil Weber, MBA
Adapted with permission from Optometric Management
© Copyright, 2000. All rights reserved.
Across the nation, as more optometrists expand their involvement in managed care, they now face the prospect of new, more difficult struggles to collect money owed by HMOs and vision plans. In years past, when your participation was limited to providing refractive exams and eyewear, coding and claims submissions were relatively straightforward and claims payment was relatively issue-free. You submitted paperwork, and the payer mailed a check. Differences between the two types were relatively few.
Now, as O.D.s increasingly contract to provide services beyond the "routine" vision exam (using CPT codes to differentiate service intensity — therefore opening it to interpretation), they're exposed to problems traditionally faced by physicians.
One of the most troublesome of these problems is "downcoding." This is a process by which payers unilaterally change submitted claims to lower-valued codes so they can pay less. Another significant issue is the timeliness of final and accurate claims settlement.
In many cases, payers aren't processing claims promptly, or paying them as submitted, or sometimes paying them at all.
Problems around the country
Obviously, collecting the proper amount in a timely manner is essential to maintaining a healthy practice, so anything a payer does to affect that is worrisome. Payment problems have surfaced up and down the East Coast, particularly with New Jersey and Florida HMOs, and with independent practice associations (IPAs) in the Southwest.
These problems have become such an issue that legislators in 27 states have adopted prompt payment laws. The legislation varies widely. The toughest laws are in Georgia and Nebraska, which require payers to pay or deny a claim within 15 days and to request additional information within 15 days before downcoding. In Florida, which is considered to be the nation's managed care snake pit by many, a recent law allows 35 days for payment of "clean" claims and 120 days for disputed ones.
But payers are getting around the laws -- even ignoring them and absorbing fines as the cost of doing business. Why? In part, because the fines, when imposed, haven't been sufficient to alter behavior. For example:
- Modern Healthcare reported last June that New York regulators fined 16 healthcare plans a total of $188,000. That's an almost laughable sum when the fine is divided among 16 payers.
- Last July, The Miami Herald reported that Physicians Healthcare Plans of Tampa was fined $13,500 and ordered to reprocess its Medicaid claims.
- It's difficult not to be skeptical when you hear about such slaps on the wrist.
The latest tactics
The new reality is that many payers have learned to use downcoding as a simple, yet highly effective, cash flow tool. Beneath the entire process of downcoding and associated claims delay is the fact that payers can cause a claim to be unpayable or underpaid by declaring it not "clean"; that is, saying data are missing or information is insufficiently documented to justify the service level indicated.
Unfortunately, a clear definition of "clean" slipped through the cracks when prompt payment laws were adopted. Without a standard to which all plans in a state are held accountable, optometrists and office managers have to deal with numerous plan-specific requirements.
As you probably know, just getting your claims to the payer can be an arduous task. One doctor wrote: "At least two insurers have changed their post office box numbers without notifying the post office of the change. My claims get returned after 10 to 15 days, delaying the payment. One company changed its phone number as well, so I can't even call to find out where to send claims."
And when the claims arrive on the claim examiner's desk, they still may not get paid quickly. The same doctor I quoted above told me: "Even if I receive a paper referral by fax or by mail, the insurer won't pay if the claim . . . arrives before the primary care physician (PCP) can get his copy of the referral sheet to (the insurer) so (the insurer) can 'authorize' it.
I've called the medical director of the culprit insurer, and he's agreed to pay some claims, but he's getting tired of my calls. It was easy to get him on the phone last month. It's not so easy now."
More horror stories
Once the claims examiner has the claim and any necessary referral, downcoding (or denial) rears its ugly head. One doctor wrote to me: "XYZ health plan will pre-authorize a visit based on a patient's initial complaint. Then, when an exam is completed and a medical diagnosis is provided, they won't reimburse at that level. But they may reimburse just for a refraction 00001 code, which really doesn't exist.
Also, when we see patients in the hospital, they'll reimburse not as an inpatient consultation, but just for a routine visit. We're living a nightmare."
Another doctor wrote: "XXX subcontracts with ABC for medical eye care. A patient reports diplopia. A sensorimotor exam is done (92060). ABC says they don't cover a 92060 and no payment is made for this. How can diplopia (and diagnoses like esotropia or convergence insufficiency) not be covered? They've denied it several times and actually list it in the manual as a non-covered service."
And because many payers are bundling the refraction (92015) with both evaluation and management (E&M) codes and ophthalmic codes, one administrator is asking patients to sign a waiver that makes them financially responsible for their refractions if their insurers don't pay for them.
What can you do?
Third-party payers continue to act in their own best interests, particularly if they're for-profit, publicly held companies concerned about Wall Street performance and quarterly reports. Many turn to aggressive downcoding and payment delay tactics whenever possible.
You're not completely helpless in the face of all this. You can take some action. However, no simple solutions exist to force change or quickly make this payment nightmare go away. Until legislators and regulators step in, providers are pretty much on their own.
For now, these strategies can help you collect the reimbursement you're due in a timely, accurate manner.
Get it in writing. Ask plan administrators to send written descriptions of their requirements for various levels of service. Be certain that such requirements are tied to the provider agreement. If the payer can't or won't provide written documentation, be prepared for unending downcoding disputes.
Find out who's reviewing your claims. If the payer is using an outside agency to review claims and make downcoding decisions, demand written documentation of the standards that the outside agency uses to judge the validity of your claims.
Get a definition of a "clean" claim. It should be included in your provider agreement or, at least, a document incorporated by reference. If it's not defined now, try to have your provider agreement amended as soon as possible.
Bring your staff up to speed. Make sure that your employees who do billing know the requirements for each plan. It may be helpful to create a submission matrix for each plan and have your claims software automatically flag any required field not completed according to a payer's standards.
Use electronic billing. This can be very helpful when your billing system is integrated with a software program that flags questionable information or empty fields. Such an approach should speed up the process and reduce chances for mischief.
Document every claim denied, downcoded or delayed. Report all outrageous behavior to your elected representatives and to your state department of insurance.
Keep accurate records of claims not paid within stipulated time frames. If you're asked to provide additional information, document whether the request is reasonable and if it's made in a reasonable amount of time. Keep records of the additional documentation you provide. (State prompt pay laws require that payers, when disputing a claim, must request additional data within a defined time frame and then resolve the claim quickly.)
Pay attention to your provider agreement. Far too many agreements are signed without payment timing provisions, leaving the door open for payer mischief. Payers can use all sorts of tricks -- including wording such as "Health plan will use its best efforts to pay all claims by the 10th of the month." How can you prove that the payer isn't using its best efforts to pay claims?
Be prepared to walk away from a provider agreement. If my suggestions don't work and a payer continues to frustrate your staff, then consider dropping the plan.
Remember, no deal at all is better than a bad deal.
Is the Tide Turning Against HMOs?
As the downcoding issue heats up around the nation, there are glimmers of hope that HMOs will soon have to pay the piper. Here are some current examples of favorable actions.
Humana vs. Florida physicians. The Florida Medical Association (FMA) and Humana Inc. have reached an agreement on how to handle Humana's controversial practice of downcoding. The debate centers on a theory held by health industry experts, who say that insurers (who are losing record amounts of money) are turning to tactics such as downcoding to wring out savings. On the flip side, insurers are claiming that the purpose of their downcoding is simply to make sure that they aren't overpaying doctors.
The present agreement rests on Humana, which will provide 1,500 previously chosen Florida doctors, whose bills are now targeted for automatic review, with a detailed explanation of what they can do to get off the list. The company will also provide help for these physicians. The insurer and the medical association will jointly conduct free educational seminars for doctors and their office staffs on how to submit claims. In the event that Human needs additional documentation, doctors will have 35 days to submit information proving that their claims are valid.
Follow-up meetings between the FMA and Humana will be held to assess the effectiveness of the agreement.
Largest HMO fine in Georgia history. Principal Health Care of Georgia Inc. (now known as Coventry Health Care of Georgia Inc.) has been ordered to pay $262,700.20 for failing to pay its claims on time. According to a Georgia Department of Insurance spokesperson, the penalty is the largest department fine in the state's history against a Georgia HMO.
Coventry's COO Thomas McDonough says that the company intends to appeal the fine. He says that Coventry's own audit shows it to be 96% compliant with the law. He also believes some parts of the state law are vague. The prompt payment law in Georgia states that health insurers must pay a claim for medical benefits to healthcare providers within 15 working days of receiving it. If an insurer misses a payment, it must mail a notice explaining why it hasn't paid. If the insurer misses the deadline on an undisputed claim, the company must pay the provider 18% interest.
The Georgia insurance commissioner's penalty against Principal Health Care (Coventry) comes in the wake of other fines against Georgia HMOs, resulting from financial exams and market-conduct exams.
Putting Teeth into Your HMO Contract
Try to negotiate specific payment due dates and penalties into your contracts.
Don't be reluctant to raise the issue of late payment penalties, especially in states with prompt payment laws. You can't afford to let a payer misuse your money as its float fund -- especially when payers arbitrarily downcode and then force you to submit additional data to support a claim. Negotiate specific language such as: "Clean claims post-marked by the last day of any month will be processed and payments will be mailed to provider by the 25th of the following month." That's specific, it's tight and it's fair. You may also be able to get the payer to agree to surrender a contracted discount if payment is late by more than a specified amount of time. If a payer won't agree to write tight payment terms, it's showing you a yellow -- perhaps red -- flag. Be forewarned!
Special note: Employer-sponsored plans covered under the Employee Retirement Income Security Act (ERISA) are exempt from state managed care laws, probably including prompt payment. Check with a managed care attorney.
States With Prompt Payment Laws
(as of December 1999)
|Nevada||New Jersey||New York||N. Carolina||Ohio|
Gil Weber is a nationally recognized author, lecturer and practice management consultant to the managed care and ophthalmic industries and has served as Managed Care Director for the American Academy of Ophthalmology.