How to Detect Insurance Underpayments

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Jason: Thank you for everyone who joined us today and we’re gonna get rolling with our topic today. We touched on this topic really a few months ago, but we’re coming back to it, on how to manage collections in your office, very specifically, with measuring collections. There are two ways that we recommend as best practices. I’m not sure there is a third or fourth way to measure collections. Number one is, that all your visits get paid, and number two is, that they get paid the right amount. So today we’re actually focusing on that second portion of, “How do you know if your visits got paid the right amount?”

So that will be our topic of discussion and we’re going to make some disclaimers here at the beginning. Is the right amount is specific when it comes to all the insurance companies that you’re in network with, and a little more of the guesstimate, when we’re talking about all of the pairs that are out of network. So we’re gonna go through, to the best of our ability, our options. But if you know a number that you should be getting paid for an insurance company, we’re gonna talk about how you can make sure that we are going to, number one, identify an underpayment. Number two, create workflow that will assign that underpayment to a specific person. And then number three, make sure you can follow up on it and know that you got paid the right amount.

So practices are constantly concerned and worried about whether or not their collections are what they’re supposed to be. And it’s a challenge to try and come up with some formula, or algorithm to make sure you got that. So I wanna talk about, first of all, measuring collections. And then, you know, second, whether or not you guys can utilize the tools that we’re talking about to measure your underpayments or potential underpayments. So, collections, when we are talking about a practice and you look at a number in the upper right-hand corner here. And I’ll make it slightly bigger, and now we can use a few of our tools here to help annotate this. You know you’ve got collections…

Jessica: Oops, I’m gonna select the color.

Jason: You’re looking at, you know, the theory up here of $27,000 that you’re going to get paid, you know, in this month. How do you know that’s the right number? Well, each and every time that you look at that, you have to be saying to yourself, “Could I be getting more?” Every doctor I talk to thinks, or practice owner thinks they could be getting more. If all of your business have been paid and you check out that every single one of your date of service has had a payment posted to it. The next laudable question is, “How do I know that, that got paid the right amount?” Oh, how do I get rid of that?

Jessica: Go to top first.

Jason: Back to the top, perfect. And, today, we’re gonna bring you over to a couple of other accounts, and we’re gonna show you two reports that will work and help you understand, the first is your billing staff’s report. Your billing statistics report will help you run some trend analysis. And what I’ve done here is I’ve opened up our billing statistics report under billing analytics, billing steps. And the first thing that I’ve done is selected a date range. For this particular report, I selected all the way from January 1st to December 31st of 2015. So looking at the entire calendar year.

And there is a lot of useful information that comes in the billing statistics report. Not every single column or piece of information will be something you wanna look at each time. But I’ve selected two metrics to marry together for this particular report. You’ll notice that I’ve sorted this into a month over month range, as I’m doing month of service. So what this means is, all of the dates of service that happened in that particular month. So I don’t care if you billed it out late, you could have billed a January date of service in April, but it would still be counted here for the month of service of January. And then I chose CPT codes, because…any of you providers that are in network with an insurance company, your contractual agreements will be either paid by visit or paid by CPT code. Here we’re focusing on paid by CPT code. And we can see here that you’re going to have a total number of claims of 567, you know, $50,960 billed out. But more importantly, you can see how much is, on average, paid by charge for each one of those months, for the CPT code of 9711O. And you can see here that it’s not a consistent number, month over month. All right?

So what courses this fluctuation? Obviously there are balances left in some of these months, and any time there is a balance, means you’ve been paid zero for that particular type of line item. So that kind of drives your average down. But this will give you a ballpark estimate and your average of getting paid $48.28 for each visit that you had a 97110 is something you can look at. But to take it a step further with another way displays the information. How much am I going to get paid for a 97110? I run the same exact billing statistics report, but it shows three columns of information to choose.

So, not only am I looking at month of service, CPT code. But now let’s just say I wanna look at my Blue Cross Blue Shield claims. Why do I wanna look at the Blue Cross Blue Shield claim? Because if I have a contract with Blue Cross Blue Shield, I should be consistently getting paid the same amount for a specific CPT code. We can look at this information, track it, and then see whether or not you’re getting the right amount, month over month, for those CPT codes. And if you look at this from this perspective, here we’re looking at still a lot of fluctuation from $50.45 to $64.31.

This is the traditional way that practices go about tracking how much they’re getting paid. They run reports based on what’s getting paid. I would submit to you here, this is not the most efficient way of doing this. We have come up with a better way of going about this. This range of $50.45, all the way up to $64.84, how are you supposed to make heads or tails? And if you wanna get real information, you’re gonna have to dig into each claim. This is too laborious for any practice to do consistently or over a long period of times, you’re gonna get frustrated. You’ll run out of steam, you’re gonna run out of gas. You’re not gonna keep this up. So we figured out a much better way of going about this. Because running a… I’ve begin, I can speak for any other system. But, you know, we do have people that transfer over from other systems, and they do have these very manual ways of going about things. And, yeah, we can get this information for you. However, we took a snapshot of some real data from one of our practices.

And so, in this particular case, we’re gonna look at that. Just from a demo perspective, we didn’t want to include real practice information. And we wanted to give you an exact idea of what type of information, and how we as a company can partner with you as our clients or anybody who is considering us, to make sure that we take care of avoiding any underpayments and making sure your visits get paid the right amount, not necessarily in real-time. But we can identify an underpayment immediately. So we’re gonna walk you through this tool that we have and we can show you how to access it on our demo account. But here is some real information for a real practice, that just so happens to be here in New Jersey, and this has run for the last few months for them. Jess, do you mind walking them through, what this means and how they can utilize it?

Jessica: Sure. So what this report is going to show you is the allowed amount that you have been given back from insurance. It is broken down by the rendering practitioner, which we actually have cut off on the screen. Then for each rendering practitioner you have a CPT, the payer, and how many units were billed out during the date range. There is a date range down at the bottom, we can do 90 days at a time. Right now we’re only doing a month, but it does go up to 90 days.

And then you can see that the total amount that was charged out, the price per unit of that procedure. And then the system calculates for you the minimum allowed and the maximum allowed that you’ve received on those claims, during that time period. And then we also give you the average amount allowed on those claims. So this allows you to get the information to let you know, how much have you been receiving? What’s the lowest you’ve ever received? What’s the most you’ve ever received? And what’s your typical allowed amount for this CPT, for this rendering practitioner, for this payer?

And then in the last field, which is actually a text field, right now we only have two fields filled in. But this allows you to enter, “What’s the amount you’re expecting to be allowed for that CPT, from that payer?” That way if the system detects, ever, that we have a claim that went out, and that CPT that you have field in an amount in as minimum expected column, if we receive an allowed amount that’s less than that, the system will automatically flag it.

Now, the system is only going to flag claims for this minimum, expected amounts. If this minimum expected amount has been entered before that claim was sent out, the claim actually records the minimum expected amount at the time of creation. So if you go in and fill this in right now, any claims you sent out in the past couple weeks, past couple months, it’s not going to have that minimum expected amount on the claims. So it won’t be flagging anything. But going forward the system will be able to automatically detect those lower allowed amount, and reject those claims, so someone can follow up with insurance and determine why the allowed amount is less than you were expecting.

Jason: Well, allowed amounts are interesting, because a lot of providers just say, “Why can’t we put in the payment amount I’m expecting to get?” Well, for a lot of reasons we can’t do that. I’ll go over a couple of the big ones here and Jessica you’re free to complement this, if you feel that it’s not complete. But there are different plans within an insurance company, you can be in or out of network with an insurance company. But if you put in the expected amount that you wanna get paid, is that paid by insurance or is it paid by the patient? We could go that direction. But the total amount that you should be allowed to get paid for this particular CPT code, rendering physician, and insurance company combination. It’s specific for those ones that you’re in network with. Whether or not they’re gonna pay 70% of it and the patient is gonna pay 30%, or whether or not they’re gonna pay 80% of it and the patient is going to pay 20%. We don’t necessarily know that at the time that the claim is being created. However, we do know if the allowed amount comes back lower, there is no way you’re going to get the right amount of money.

So we’re going to flag this claim as you’re gonna be underpaid automatically, whether or not some of the patients and/or the insurance company. We put that allowed amount in there, and we’ve been calling it a report, but I guess it’s not really fair to call it a report, because not only does it report over a 90-day period the number of units that were billed out, but it takes that average. You can also set thresholds for that allowed amount, if it goes below it, that we will then create workflow. That workflow is going to automatically reject the claim.

It’s going to send it to the billing team work bench, and the billing team will then have the instruction to call up the insurance company, and ask why they have the audacity to give you an allowed amount that was lower than what your agreed upon amount is, so. And this is going to not only help you detect them, but it also gives direction and assigns work to an actual person to help you rectify this particular situation. And, you know, we’ve caught a lot of underpayments over the years. And, actually we’ve done some pretty extensive analysis on this. They underpaid almost any code, but we noticed that the codes for your [inaudible 00:13:46], like your old codes, and your braces, are underpaid on a much higher frequency than your therapeutic exercises, your adjustments, your annual therapy, things like that. So keep that in mind. Those are your higher ticket items, generally. And those are the ones that they’ll often underpay, and whether or not they’re doing it maliciously or accidentally, I will leave for you to decide. And Jess will obviously open up her mouth if she wants to chime in on the nature of insurance companies. But we wanna make sure that you’re not spending time looking at reports, making sure your visits are getting paid the right amount.

And, especially if you’re in network, we can take your contractual amounts, enter them in here for the payer CPT code, physician combinations, and have the system do the work for you. That way when you look at the reports, you simply get a confirmation that you’re getting paid the right amount. Or, if you don’t see that confirmation, you’ll be able to see the fruits of the labor of our team, who is going after the insurance company, making sure that they’re not gonna get away with the underpayments.

But that brings us to the next point, and that is, “Can I use this for my out of network payments?” Well, there are two answers to that, and I’m gonna be really definitive here. I feel like I’m running for office. Yes and no. If you accept allowed amounts and you send claims out, or you’re going to accept allowed amounts, the answer is, yes. If you’re not accepting allowed amounts, then, really whatever you’re billing the insurance company, whatever the payment you receive from the insurance company, the expectation is that you’re gonna balance bill your patient.

You can put an amount in here even if you’re out of network. If you’re consistently getting paid, you know, $50 for your 98943 out of network, from Blue Cross Blue Shield, and you wanna make sure you get flagged on anything below that amount, you can put that in there. You can put your out of network claims and it will flag it, if that allowed amount drops below $50.00. Asking the question, “Hey. You’ve done this before, what changed now? Why did you reduce my allowed amount on my out of network claims now?”

So, that answer, yes or no, again, recapping. Yes, exactly for your out of network claims where you’re accepting allowed amounts. No and yes for your out of network claims where you’re not. If you don’t have a high volume it may not make sense to put that allowed amount in there. But if you have a high volume and you know what the allowed amount should be, we can still enter that in there, and equips you guys to detect underpayments for your out of network claims. So really this tool is out there and I’ll show everyone how to get to it at this point. So…

Jessica: [inaudible 00:16:55].

Jason: Yup. You head over to reports, billing analytics. I will just make this a little bigger. Over to reports, billing analytics, and your payer allowed amount. And you’ll have to put in a date range, and this is a dormant account. So we’re not going to have any data in here. So you put this in, and if you did have line items in here, you could sort, filter, you can also export two Excel, should you want to, by clicking in the lower left-hand corner for what looks like an Excel spreadsheet. It will put it in a CSV value for you to enter into either Google sheets, Excel, into a spreadsheet program.

So, to recap, underpayments are going to happen. If they haven’t happened to you already, they’re going to happen to you in the future. We record a fees [SP] to 5% to 7% cash rates on underpayments. Sometimes they are both positives, both positives will happen, especially, you know, if there is some odd plan that comes in for an insurance company that isn’t mapped. We will sometimes, you know, flag a claim. However, most of the time, it’s really an underpayment and we really need to figure out why. And I suggest that we get aggressive as possible with this, because the second an insurance company sees that you’re not paying attention, is where they can really take advantage.

And that’s today’s topic. I’ll open it up to any sort of questions you guys have. Feel free to type them in, on how you can utilize this type of tool in your practice.

Jessica: Yeah. So on the left-hand side of your screen, you should see a chat box. If you cannot see it, there is a button up at the top that will say show chat. And there will be a textbox down at the bottom where you can enter any of your questions.

Jason: You know, we had a couple of conversations about some J codes. I mean, it’s got a lot of our practices that are doing trigger point injections. And the J code for one type of drug is different than J code for another type of drug. And when…they’re so different in one aspect, because you know, you’re performing the same exact procedure for all of your different patients. But they’ve got very different insurance companies, and Blue Cross Blue Shield will pay, you know, $200 per unit, but that they will only pay $35.

So it’s not like these things are uniform across the board, where they’re all getting paid about the same amount. Somebody puts an allowed amount in there of $35 on your…your one rate, expect $200, then you’re missing out on a lot of money. So we have to get real specific with these things, and we see it happen with the higher ticket items all the time. So we’ll keep this open for a few more minutes. Anybody is welcome to type in or ask any question about pretty much any topic, right now. We’re happy to help. We’ve updated the rejection notices as well to be more specific here recently. Because it seems with better instructions, so that they know exactly what to do.

Jessica: We’re actually working on a help page for the underpayments right now.

Jason: All right. All right, guys, if there are no other questions, we’ll end for today and we will be back next week. Thank you so much.