Three Steps to Better Reimbursement for Oncology Practices

Elaine Kloos, RN, NE-BC, MBA; Teri U. Guidi, MBA, FAAMA

April 2013, Vol 3, No 3 - Reimbursement


The American healthcare system is clearly evolving. Although dramatic changes are likely, these changes will be neither instant nor universal. Thus, to optimize revenue, it remains extremely important to understand the current reimbursement situation.

Step 1. Know Thy Payer

There are currently 2 major types of insurance contracts—fee for service and percent of charges. The latter usually only exists for hospitals. To achieve optimal reimbursement under either type of contract, the provider must understand the payer’s rules and policies.

Edits. These rules, established by the payer, restrict the specific items that may be billed and under what circumstances. For example, most payers will not accept charges for a port flush on the same day as an infusion, and many payers will only accept intensity-modulated radiation therapy (IMRT) charges for selected diagnoses.

Utilization limits. These rules may limit the number of times that a particular service may be billed either at a single encounter or over a complete course of treatment. Port films would be an example of this type of rule.

Coding details. Most payers accept the traditional Healthcare Common Procedure Coding System (HCPCS) and Current Procedural Terminology (CPT) codes, but in some cases payers require the use of alternate codes—for example, J2405 ondansetron 1 mg versus S0119 ondansetron 4 mg. Using the payer’s preferred codes is vital to avoiding nonpayment. In addition, modifiers can be payer-specific, as with the use of the JW modifier to indicate billable drug waste or the use of a modifier for twice-daily radiation treatment.

Time limits. All payers have established limits for the timely filing of claims. Medicare permits billing (either initial or amended) for up to 1 year from the date of service. Other payers are often far less generous.

Coverage. Payers are largely at liberty to determine what services will be reimbursed, so it is crucial for physicians’ office staff and hospital staff to check first by obtaining precertification and/or preauthorizations. Approvals may stipulate limits on items such as the number of treatments or the number of days that are approved.

Payer processes. Because each payer is unique, all staff handling the payer process must be familiar with the various processes for filing, amending, and appealing claims.

In terms of billing and reimbursement, much remains to be seen. Although the emerging “bundled payment” systems may not retain many of the current requirements and payer-specific rules, the use of HCPCS/CPT codes is not likely to cease, because they provide a means of tracking the kind of details that would be necessary in shared savings or in similar approaches.

Documentation

Clear, complete, and compliant documentation is also de rigueur under the current system. Without appropriate documentation, an external “unfriendly” audit could easily result in significant repayment and/or substantial penalties.

Orders. Even when the ordering physician is external to the treatment department (eg, infusion or radiation), the treating entity’s chart must include documentation that the treatment was ordered by a qualified provider, and that it is medically necessary. For infusion therapy, this includes drug, dose, route, and duration. For radiation therapy, this includes prescriptions and requests for special physics consults.

Furthermore, the documentation for specific radiation modalities (eg, IMRT, image-guided radiation therapy) must include sufficient patient-specific information to ensure that medical necessity is clearly established. Whether for infusion or radiation, there must be “source documentation” (ie, something directly from or signed by a qualified physician) of all applicable clinical diagnoses, as well as back-up documentation explaining the medical necessity, such as a history and physical examination or progress notes.

Drugs and infusions. In cases where it is acceptable to bill for wasted drug (Table 1, page 12), the patient’s medical record must include documentation (by either pharmacy or nursing) of the amount of drug wasted and the reason for the waste. Nursing documentation of the actual drug delivery must include the drug name, the dose administered, the route, and the duration of administration. The latter should always note both the start and stop times for all intravenous infusions, regardless of the drug (eg, chemotherapy, biologics, supportive medications) and regardless of the total duration (even for short infusions of less than 15 minutes).


Table 1

Step 2. Reduce Nonpayment

The provider’s processes can make or break the provider’s financial performance. The 2 most im­portant processes at the front end are the chemotherapy/radiation pause and the financial advocate.

Chemotherapy/radiation pause. Before a patient receives any services, there must be time for staff to verify that the patient has insurance, and that the planned care is covered. This includes obtaining preauthorizations and precertifications at the most detailed level possible so that the staff can keep track of when the patient’s insurance benefits run out. Whenever possible, these preapprovals should be obtained in writing to reduce the risk of future misunderstandings.

Financial advocate. Even with insurance coverage, patients generally must bear some financial responsibility for their treatment. Addressing this responsibility with the patient before the therapy begins is not only good business but is a courtesy to the patient. In addition, if the patient’s responsibility is large, the provider and the patient can benefit by working together to obtain financial assistance for the patient. That assistance can come from numerous sources, such as charitable patient-assistance foundations, application for Medicaid or other supplemental insurance, and pharmaceutical drug replacement programs. Recognizing the importance of the role of a financial advocate, the Association of Community Cancer Centers (ACCC) has developed an educational program and tool kit for financial advocates for its members (accessible to members at http://accc-cancer.org/education/Finan cialCounseling-Toolkit.asp).

Back-end processes. Of equal importance, the back-end processes include monitoring and tracking payments to ensure that insurers are adhering to the contract and to identify any patterns of nonpayment that can be altered by a change in processes, such as ensuring that the correct diagnosis code finds its way to the claim.
Note that many payers use the term “not covered” on the explanation of benefits or remittance advice rather than using the term “denied.” Any unpaid item on a claim should be examined before simply writing it off. If the nonpayment can be corrected by providing more accurate information, the claim should be resubmitted. If the nonpayment seems inappropriate upon a review of the payer’s policies, an appeal should be filed. The ACCC tool kit mentioned above includes sample letters and other information regarding appeals, as well as tracking forms, sample scripts, job descriptions, and more.

Step 3. Eliminate Missed Charges

Excellent documentation not only ensures compliance, it is also the source of information for charge entry. If billable items and related information is not well documented, the appropriate charges cannot be captured and charged. Furthermore, if the automated software (ie, a claim-scrubbing program) rejects charges entered into the system, billers need to be able to research the issue and perhaps add a modifier or obtain an additional physician-assigned diagnosis. Therefore, it behooves providers to pay close attention to their processes, to ensure that each task is assigned to the most knowledgeable individual. In our experience, we find that the selection of billing codes is best assigned to coders who know how to read clinical documentation rather than having clinical staff members identify the billable codes.


Table 2



Table 3

Most providers believe that they are doing their utmost to ensure perfect results, but an independent external audit will nearly always find items that, although seemingly small, can add up to substantial missed revenue given the recurring nature of oncology services. Table 2 lists the most frequently missed radiation charges. For example, when we reviewed 16 radiation treatment courses for one of our clients, we found erroneous charges representing $2663 of Medicare reimbursement that should be corrected. If these errors were corrected, the missed charges would total $9640 (again, defined as Medicare reimbursements). Alone, this does not seem particularly significant. However, assuming that these 16 treatment courses were relatively representative of all the courses delivered in 1 year, and with an annual volume of 832 treatment courses, this represents an opportunity to improve revenue by $501,280 annually.

The most frequently missed or most erroneous infusions are listed in Table 3. For example, consider a recent audit of 32 treatment encounters. With $291 in erroneous charges/payments and $1390 in missed and corrected charges/payments at a very busy center (with more than 15,500 encounters annually), the annual revenue increase totaled $673,281. In addition, for just these 32 encounters, the unbill­ed drug waste totaled $4417.
In short, even the smallest “systemic” glitch, such as missing an injection charge 1 time in 4 encounters, can add up very quickly: the Medicare payment for an injection is $39.13 in the hospital outpatient department and $75.87 in the freestanding office, so a hospital-based center providing just 1000 treatment encounters annually misses out on $9782.50 each year and a freestanding center misses out on $18,967.50 annually.

Elaine Kloos is a Senior Consultant, and Teri Guidi is President and CEO of Oncology Management Consulting Group, in Pipersville, PA.