Medical Billing | The Facts | Obama Healthcare Package | What is Coding for Medical Necessity?

The Medical Billing Problem: Still Paper?

Medical billing has long been an issue for hospitals, healthcare services and dentistry. The process is overly complex, requires a lot of paper work, filing and adjudication. Based on the type of insurance, or no insurance at all, certain procedures are considered allowed or not. There are partial pays, credits and denials – which are typically and notated on an Explanation of Benefits (EOB) or superbill. Since there are thousands of insurance carriers, the task of standardizing the transport and format of EOB’s and medical claims is unrealistic.

In most cases Medicare (government sponsored health program for citizens 65 or older), Medicaid (government sponsored healthcare program for low income families) , Blue Cross and Blue Shield as well as some of the larger carriers transmit claims electronically through EDI. This typically accounts for approximately 75% of all claims processed. The remaining 25% of claims are received in pape- based format.

Many healthcare organization may have a defined person that processes insurance claims on behalf of a patient visit or may outsource the billing practice to a 3rd party. Either way the process is tedious, error prone and data entry intensive.

When processing medical claims, the Square 9 Advanced Capture solution utilizes text recognition and analysis software, which can determine document types, classify images, and capture or extract data for adjudication and archival.

The Healthcare Paper Problem: The Facts

•It costs nearly $250 billion to process 30 billion healthcare transactions each year

•The average ratio of staff handling paperwork to doctors can be as high as 1:12

•86% of mistakes made in the healthcare industry are administrative

•Three of every 10 tests are reordered because results cannot be found

•Patient charts cannot be found on 30% of visits

•Providers need to fill out an average of 20,000 forms every year

•Organizations, on average, make 19 copies of each document, spend $20 in labor to file each document and lose one of every 20 documents

Obama team sees stimulus advancing health reform

In the legislation passed late Friday, Congress approved spending about $19 billion over the coming years on electronic health records and an additional $1.1 billion on research comparing which treatments work best for a particular disease.

"This represents the beginning steps of the president's health reform vision," said Jenny Backus, a spokeswoman for the Health and Human Services Department. "It's designed to get relief to people who need it most and to do everything we can to bring down the cost of health care, and improve access and quality."
AP Press article: http://www.google.com/hostednews/ap/article/ALeqM5i5l6XyoVxqyli-VkTOiQHJJPyiCwD96B8LIG0

What is CODING FOR MEDICAL NECESSITY?

Assessment and coding from patient medical records; securing the correct physician documentation; coding an operative report; selecting and coding diagnoses and procedures from case studies and sample records.

Medicare and private payers recognize medical necessity as a deciding factor for claims payment. Though each payer might have its own definition, the overall rules are similar. According to section 1862(a)(1)(A) of the Social Security Act, Medicare will not cover services that "are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. "

When a claim is submitted by a physician on behalf of a patient and the accompanying documentation is not received, the claim is likely not to be approved, causing delays and administrative costs.

Utilizing a document management system (DMS) workflow strategy along with medical necessity or CMN (certificate of medical necessity), will provide seamless processing of claims once the capture documentation has arrived in the DMS.

For instance, a hospital patient billing department submits an insurance claim for a participating physician. Prior to the submission of the claim, an integrated workflow process waits until the CMN or other documentation has been received from the physician before the claim is executed. If the paperwork is delayed, so will be the claim. But with defined workflow rules, exception reports can be automatically sent to claim administrators notating physicians that have failed to submit CMN’s as well as date math rules to notify the physician.

According to the New England Journal of Medicine, “the U.S. Healthcare System wastes up to 24 cents out of every dollar on administrative and billing costs, or in excess of $6 billion annually.” By augmenting standard billing procedures with integrated document management workflows, you tie the paper or electronic claim, along with the necessary physician documentation through a seamless process.

Sources:
•HEALTHCARE FINANCIAL MANAGEMENT ASSOCIATION
•WOODWORTH , GLENN, “THE YEAR OF MEDICAL PAPERWORK SIMPLIFICATION,” JOURNAL OF HEALTHCARE INFORMATION MANAGEMENT
•A HEALTHY SYSTEM,” TECHNOLOGY CEO COUNCIL, 2007
•PRICEWATERHOUSECOOPERS