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Advice You - Underpayment Risk Management for Outsourced Electronic Medical Billing Service
Average medical practice may lose as much as 11% of its revenue due to underpayments. Underpayment identification is difficult because an underpaid claim falls outside the domain of clearly identifiable claims that are fully paid or
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
denied. The degree of underpayment adds further complexity to and exacerbates the difficulty of underpayment identification. Upon defining claim underpayment concept in more precise terms, this article roughly estimates recovery
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
potential at 5% of monthly claims volume. Quantification of recovery potential drives the design of a disciplined three-stage underpayment avoidance and recovery process.
Partial Underpayment
A procedure is partially unde
Partial Underpayment
A procedure is partially unde
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
rpaid if it is paid below its contractually allowed or "reasonable and customary" amount. Zero payment is a limiting case of partial underpayment. Some billing service providers estimate partial underpayments to make up 7% of claim
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
volume [Delinsky, 2006].
Zero Payment
In a claim with multiple procedures, one or more procedures may be paid at zero (zero payment) if the payer pays at least one of the multiple procedures and bundles unpaid procedures
Zero Payment
In a claim with multiple procedures, one or more procedures may be paid at zero (zero payment) if the payer pays at least one of the multiple procedures and bundles unpaid procedures
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
with paid procedures. Zero payments add yet another degree of complexity to underpayment identification and recovery. Some billing service providers estimate 4% of monthly charges paid at zero dollars.
Underpayment Recovery Po
Underpayment Recovery Po
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
tential
A claim runs a risk of underpayment in five typical situations, such as undercharging (charging below allowed amount or omitting a CPT code), charging for multiple procedures on the same claim, using modifiers to differ
A claim runs a risk of underpayment in five typical situations, such as undercharging (charging below allowed amount or omitting a CPT code), charging for multiple procedures on the same claim, using modifiers to differ
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
entiate between services, providing service during the deductible period, and in cases of more complex contracts. An overlap of several such conditions exacerbates the risk of underpayment.
A disciplined billing office manages unde
A disciplined billing office manages unde
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
rpayment risk in three ways, namely, avoids underpayment prior to claim submission, identifies underpayment upon review of explanation of benefits (EOB), and appeals underpayments. As a rule, every partially underpaid claim and majo
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
rity of zero payments must be appealed. Some billing service providers report 75% rate of zero payment appeals, or 3% of monthly charges. Therefore the total volume of appeals makes up 10% of monthly claims volume (7% for partial u
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
nderpayments and 3% for zero payments). If only half of the appeals succeed, the total potential for underpayment recovery adds up to 5%.
Underpayment Avoidance and Recovery Process
Underpayment avoidance and recovery pro
Underpayment Avoidance and Recovery Process
Underpayment avoidance and recovery pro
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
cess has three phases, including scrubbing, identification, and appeal. First, underpayment avoidance involves pre-submission scrubbing by comparing claim with Correct Coding Initiative (CCI) regulations, diligent review of modifier
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
s used to differentiate between procedures on the same claim, and comparison of charged amount with allowed amount according to previous experience or contract to avoid undercharging.
Next, underpayment identification involves compa
Next, underpayment identification involves compa
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
rison of payment with allowed amount, identification of zero-paid items, and evaluation of payment timeliness. The results of the second stage should be displayed in a comprehensive underpayment report sorted by payer, provider, cla
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
im identification, and the amount of underpayment.
Finally, appeal management includes appeal prioritization, preparation of arguments and documentation, tracking, and escalation. Note that CCI spells out bundling standards but th
Finally, appeal management includes appeal prioritization, preparation of arguments and documentation, tracking, and escalation. Note that CCI spells out bundling standards but th
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
e number of standard interpretations grows in step with number of payers. Therefore, CCI provides justification basis for an appeal and every appeal must be argued on its own merits, including medical notes.
Increasing volume of pa
Increasing volume of pa
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
tients necessitates computerized processing because of complexity of identification of underpayments, which requires individual comparison of every payment to its allowed or "reasonable and customary" fee for every CPT code and for e
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
very payer. Automation of appeal process reduces the cost of individual appeal management, enabling less selective prioritization and consequently, higher recovery potential.
In summary, underpayments make up significant proportion
In summary, underpayments make up significant proportion
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
of claim volume. Payment recovery potential is as high as 5% of total claim volume, justifying separate management focus. Underpayment management involves all phases of claims processing and requires powerful Vericle-like computin
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
g platforms for exhaustive comparisons of payments versus allowed amounts and subsequent appeal management.
Reference:
Delinsky, J., "Practice Management Lab: You Call That a Payment?" Physicians Practice, June 2006.
Reference:
Delinsky, J., "Practice Management Lab: You Call That a Payment?" Physicians Practice, June 2006.
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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