Avoiding Healthcare Service Reimbursement Gaps

Date: Jun-12-2012Healthcare Chief Financial Officers (CFOs) cannot do much about the reimbursement rates that Medicare has set, but they can make sure their organization is paid for all services provided, says Lloyd R. Vaughan, Founder, Vaughan Holland Consulting, Inc.

From a solution provider company at the upcoming marcus evans National Healthcare CFO Summit Fall 2012, in Dallas, Texas, October 21-23, Vaughan discusses how to maximize reimbursement for healthcare services through better billing practices.

How has the reimbursement environment changed in recent months?

Recovery Audit Contractors (RACs) are placing a lot more emphasis on finding overbilling and taking money back from hospitals, causing a lot of consternation and demanding a lot of time from hospital folks to come up with the requested records and to challenge take backs. This is definitely a strong trend that has picked up in the last year.

Medicare intermediaries that process bills are also becoming more difficult to work with. We help hospitals submit corrected bills and are constantly facing road blocks, of intermediaries making us submit paper documents that pretty much disappeared 15 or 20 years ago.

How could hospitals avoid reimbursement errors from the start?

Healthcare CFOs need to be more vigilant with what types of patients are admitted as inpatients. RACs are challenging many inpatient claims, saying that they could have been done on an outpatient basis. There are specific guidelines to determine who should be admitted as an inpatient, with some level of judgment involved, but it takes experienced case managers to guide patients to the right setting. If this is done right on the front end, it would help hospitals avoid disputes with Medicare.

Secondly, when RACs take money back, hospitals are allowed to appeal. Some hospitals are challenging every single case, while others are not. I think they should challenge all of them aggressively and put RACs on notice, so if they do submit adjustments, they make sure to be right about them.

Should certain services or types of patients be prioritized to maximize reimbursement? How can they avoid services falling through the reimbursement gap?

First, they need to know what their services cost and have a good cost accounting system. In order to know what to charge and how much reimbursement to pursue, they must know what the services cost and how much Medicare and other payers actually pay for them. In some cases, reimbursement may be too little compared to the time and effort that would need to go into it. Hospitals may need to re-evaluate some of their services. Outsourcing certain services or collaborating with other organizations might be better.

It is hard for any hospital, no matter how big or sophisticated, to provide every service in a way that is cost effective, so CFOs have to be more open minded about the alternatives.

Any final thoughts?

CFOs cannot do much about the rates that Medicare has set, but they can make sure their organization is paid for all services provided. That requires someone to come in and take a look at the claims, and make sure they are paid for everything.

Courtesy: Medical News Today Note: Any medical information available in this news section is not intended as a substitute for informed medical advice and you should not take any action before consulting with a health care professional.