One of the first steps to optimizing the revenue cycle for a Pediatric Practice is to develop and incorporate a consistent Billing Processes, Procedures and Policies Manual for the practice. This manual should be customized to the practice based on how the revenue cycle is managed for the Pediatric Practice. Some items to include in this manual are:
• Payment Plan Agreement
• Examples of letters that will be used for final collections, payment plan, etc.
• List of responsibilities for front desk team members
• Registration forms
• Notices such as privacy policy
For all of our new billing clients we develop or edit the Billing Processes, Procedures and Policies Manual to the needs of the practice. This written document helps to provide clarity to all parties involved related to the Processes, procedures and policies for managing the revenue cycle of the Pediatric Practice. Developing and implementing this manual is an important first step to optimizing the revenue cycle for the Pediatric Practice. If you develop your own manual, recommend you obtain assistance from either a Pediatric Practice consultant or from another Pediatric Practice Administrator to identify if the manual is within the current standards of the industry. We have obtained new clients that were managing the practice based on revenue cycle rules of the late 1990s. In some of these cases, the practices were missing thousands of dollars a month in unrealized revenue due to outdated practices and processes.
Pediatric EMR software
Does Your Pediatric Practice have a clear and consistent Billing Policy Manual?
A Virtual Accountable Care Organization (ACO) and the link to Pediatric Practices
With Healthcare costs increasing at a rapid rate in the United States, there are a number of payment models being investigated that look to encourage preventative care while reducing costs. Although most practices generate the majority of their revenue from Fee for Service insurance products, there is much talk as well as movement related to Accountable Care Organizations (ACOs). The concept of ACOs is that an organization manages a large group of providers and hospital systems to provide patient care. The ACO and the providers would be compensated for management of a population. The leaders in this field are exploring many different methods for payment – a set fee per patient for all care, bundled payment per episode of care as well as other risk sharing arrangements. ACOs are most thought about as hospital systems that purchased provider groups (e.g. Integrated Delivery Systems) and form an ACO entity. In this case, the Pediatric Group would need to be owned by the hospital system to participate in the ACO.
Although the Medicare Shared Savings Program ACO sponsored by the Centers for Medicare and Medicaid Services (CMS) has the most publicity, the commercial payers are beginning to experiment with ACO payment models as well. The Medicare Shared Savings Program ACO shares the savings of ACO effort between the ACO and CMS (the providers continue to receive Fee for Service payments at this time).
There is another type of ACO model known as the Virtual ACO or community ACO. This model would be an organization that is the contracting agent with payers and would like to privately owned practices. For example, ABC Pediatrics (privately own), could participate in a virtual ACO without selling their practice. The virtual ACO would develop the guidelines on how to participate as well as the payment stream. There is much question as to how this will impact Pediatrics. The good news is that private practices should not be required to sell their practices as the ACO model evolves.
Practices and practice managers should continue to keep an eye on the payment methods in the field. Improper coding as well as low collection rate continues to be a very common issue with Practices that if managed appropriately, optimize the revenue to the practice. In Pediatrics, this requires a team that receives routing training in Pediatric coding, systems that gain intelligence as payers change reimbursement policies and consistently reporting and follow-up. So although there is much talk and experimentation with new payment models, most practices need to look how to appropriately manage the revenue cycle in today’s payment system.
Delay of ICD-10 until October 2014 is good news for Pediatric Practices
A few days ago, Health and Human Services secretary Kathleen Sebelius issued a press release related to delaying ICD-10 implementation from October of 2013 to October 2014. There is much controversy related to ICD-10 codes. The proponents state that ICD-10 is a more precise method of coding since there are over 65,000 codes compared to over 14,000 for ICD-9. The protesters state that 14,000 codes are more than enough codes and there will be much confusion and cost to the healthcare system by moving from 14,000 to 65,000 codes. Since the Healthcare system would like to move toward ‘bundled payments’ for services, moving to a more complex coding system does not seem in alignment with the movement to bundled payment. Delaying ICD-10 by at least a year is a good idea for Pediatric Practices as well as other areas of Medicine. I believe the leaders of Policy, like Kathleen Sebelius, see the benefit of delaying this decision as well. With the changes of additional Medicaid lives and Health Exchange lives in the next few years, there is uncertainty as to how this will impact primary care pediatrics.
Adding the burden of Pediatric offices needing to identify how they should be coding with a new ICD-10 system as well as introducing millions more lives into the Health system might have a negative impact such as a major shortage of Pediatricians to patients. How many Pediatricians want to go home after seeing 20-30 patients in a day and read about 50,000 additional codes? Do we want our primary care Pediatricians focused on these details versus how to optimally diagnose and treat patients? The good news is that currently ICD-10 is over 2 years away. Much can happen in two years that should help the decision makers evaluate if we should migrate to ICD-10 at all or decide to delay again. Most Pediatricians are losing thousands of dollars per year due to improper coding, lack of systems that track each claim as well as the wide range in abilities of Pediatric offices to manage the revenue cycle. Pediatricians do not deserve to be under paid due to these controllable issues.
Consumer Directed Health Plans (CDHP) in Pediatric Practices
What is a Consumer Directed Health Plan (CDHP)?
A CDHP is a health plan option for which the family usually has a high deductible of $1500, $2500, $3000 or higher. The individual that has this high deductible is ‘trading’ the high deductible for lower Health Insurance Premiums. Additionally, a family might save money in a health care savings account for use when in the deductible phase. The family can roll over money from year to year in the Healthcare Savings Account.
Do all CDHP plans have a high deductible for well visits at a primary care Pediatric Office? No. Many CDHP plans cover well visits which usually includes vaccines. In most cases, the deductible/co-pay is $0.
How common are CDHP plans?
CDHP plans, due to the ability to save the employer and employee cost on the premium are growing in popularity. It is estimated that approximately 50% of small employers offer this option and between 20-30% of Medium to large employers. Many employees prefer to work with the ‘known’ and therefore select the traditional HMO and PPO plan. In Pediatrics, parents usually try to offer a plan that has more coverage due to the need to treat their sick kids. We evaluated some of our Pediatric groups and noticed that CDHPs are significantly below 10% currently.
How might CDHP Plans impact my Pediatric Practice?
Studies show that patients whom are insured using CDHP plans have between a 10% and 20% utilization rate of outpatient care. These studies do not look at the impact of Pediatrics versus specialists and other forms of outpatient care. Parents with this type of insurance are much more knowable of what their policy covers versus parents whom have traditional HMO/PPO coverage. Many will check to see what the plan covers as well as request generic medications versus branded medications.
How might CDHP Plans impact my collections and AR Rate? If a pediatric practice did not have strong patient responsibility follow-up as well as a high penetration of CDHP plans, the practice might see the collection rate reduced as well as an increase in AR days. The Medical Group Management Association as well as other organizations provides benchmarks for collection rates and AR days. The average collection rate is around 95% of the contract amount with 97% used by many groups as a benchmark. Achieving well above 99% consistently should be the minimum benchmark for each Pediatric Practice. Related to AR days, a pediatric group should have AR days less than 30 (less than 30 days of Accounts receivable) with the goal of being at 25.
Although CDHP plans are just starting to penetrate the market place they will continue to be an offering as the country struggles with rising healthcare costs. Monitoring and Management of CDHP plans is one component that will help improve the success of a Pediatric Practice.
