Billing third-party payers for Workers' Compensation claims is tricky business. Not only do they require unique and specific language or codes in order to properly pay a claim, many—if not all—employ cost saving measures aimed specifically at finding ways not to pay the full amount of a claim, or to deny it altogether.
Pam Davis, president and founder of Advantage Claims Recovery Group, Inc. (ACRG), works to recover these incorrectly reimbursed or improperly denied claims for a myriad of healthcare providers: MDs, DCs, PTs, and OTs. Davis has over 15 years of successfully helping healthcare providers recover lost revenue, but she started her career working for the insurance companies. In her experience, these payment issues are primarily attributed to two things: miscommunication between the doctor and the billing department as to what care was provided and what gets documented, and aggressive cost containment measures employed by insurance companies.
"One of the largest issues we see is a breakdown occurring between the doctor providing care and the bill getting to the front office," says Davis. "For example, the doctor performs an x-ray, but the x-ray is not included in the bill to the insurance company. Without this component, the claim is lacking some of the justification for treatment, and therefore it gets reimbursed at a lower rate, or denied altogether."
Often offices submit their documentation and just accept what the insurance companies pay out, in an attempt to keep everything moving. Indeed, most practices have little time to revisit files, nor do they have the staff or expertise required to pursue these incorrectly reimbursed or denied claims. The result is that doctors are performing services for which they are not being properly reimbursed. But it is not all attributable to clerical error on the side of the healthcare providers: insurance companies put a lot of time, effort, and money into reducing payouts or denying claims.
"Rather than paying doctors for the services they perform, insurance companies are redirecting these resources to outside cost containment companies or to creating these departments internally," says Davis. "The cost containment company's job is to find ways to save money through down-coding or denying submitted claims. The cost containment company is generally paid per claim or based on a percentage of the savings, so they have incredible incentive to aggressively deny claims."
When a Workers' Comp claim is submitted to an insurance company, it generally follows the same path. First, the insurance company sends it to cost containment—either a third-party company, or an in-house branch—where the claim is carefully scrutinized to ensure that each piece is perfectly documented.
"If the claim doesn't meet one criterion, or one component doesn't line up, the entire claim is down-coded, and the payout is reduced," says Davis. "At the same time, the cost containment company may look at the other services rendered and require further documentation. Sometimes claims are even set aside at this point, and simply never get paid."
Once the cost containment company has scrutinized the claim, they send it back to the insurance company, who then pays the healthcare provider based upon the adjusted claim, or denies the claim outright.
"Because the insurance companies have a huge machine behind them that seeks to save them money by denying payments to doctors, it is important that doctors and clinics have an advocate on their side," says Davis.
When ACRG revisits a denied or reduced claim, they focus on documentation. The doctor's SOAP notes, proof of treatment performed, and other documentation are all collected, summarized, and used to produce the correct code for reimbursement.
"Good documentation is vital to proper coding and reimbursement," says Davis. "If the doctor has good documentation, then we are able to get better results. Treatment plans, proof of treatment, progress reports all come together to provide this information. For example, if the patient's range of motion is off, and this deficit can be shown on a report using objective measuring tools, it makes for a stronger claim. Functional capacity information always strengthens a claim, too."
Davis and her team at ACRG also provide their clients with a free practice analysis that greatly increases the practices' reimbursement rates. After highlighting the problems with coding or incomplete documentation and reporting, Davis finds that her clients effectively curb denials going forward.
"When we educate the client on using the correct CPT codes, or help them better document and report the need for treatment as well as the care provided, the reimbursement rates definitely improve," says Davis. "Each client is different, but we provide continuous education to help them improve in the areas that are lacking. We'd be doing a disservice to our clients if we did not share the information with them as to how they could be reporting their claims better."
The current climate demands this attention to detail and expertise, and Davis only anticipates that this trend will continue to grow.
"Insurance companies have started to require pre-authorization for treatment—which can be more easily received with strong documentation and objective functional assessments—and coding for Workers' Compensation also has increasingly become stricter and more stringent," says Davis. "In the end, insurance companies are always looking for ways to save money, often at the expense of healthcare providers."
For more information about Pam Davis and Advantage Claims Recovery Group, Inc., please visit their website at acrginc.com.