How I got paid…

By Erik Youngblood

featuring the Cash Money All Stars

Objectives

Definition of terms Relate patient encounters with payment

(Coding Billing Reimbursement) Develop an awareness of “pitfalls” in the

system (How you didn’t get paid). A primer on the Medicare Fee Schedule Develop a fundamental understanding of

the basis for salaries in Family Medicine

Get your “Game Face” on Medical Professionals

have tolerance (to provide for patient needs despite circumstances)

Tolerance is generally NOT associated with profit in business

Bottom line: seek an understanding of the business of medicine

Definitions RVU RBRVU CPT ICD 3rd Party Payor Superbill Overhead Bundling Fixed cost Variable cost

Does anyone know my cousins J-Bo and Sean Paul?

Coding

You GET PAID based on your Current Procedural Terminology (CPT) coding

International Classification of Diseases (ICD) codes help you to justify to payors the reported CPT code

Patient visit Services Documentation Codes Bills Payment…

Coding Ideally you should

have an intimate understanding of documentation and coding

Prevents unjustifiable coding errors

Gives you the ability to connect your services with reimbursement

Billing How does a CPT code become a bill? Your “Superbill” is transcribed onto a form for

submission to the payor (with whom you contract) This can be facilitated by a billing company with

or without do-it-yourself software Bottom line: know who ensures your bills are

getting reimbursed correctly (GET PAID)

Billing Pitfalls Timing -- 10-15% of claims are denied for timely

filing deadlines (e.g. usually you have 90 days to submit a claim)

Code/Bill correctly -- another 7% of claims are denied for cause. (this means you didn’t follow the rules of coding and billing)

A growing threat to bottom line is post-claim recovery (2%). This is when the payor “reviews” the records in their favor and you then owe them the mistake. This NEVER works in your favor, interestingly.

Add it up and it’s up to 25% of your potential revenue down the tubes if your not aware of these “pitfalls.”

Getting Paid

Most reimbursement is based on the Medicare Fee Schedule (MFS).

If you are into GETTING PAID, you need to have a basic understanding of this (see handout).

Private (3rd Party) payors usually pay better than Medicare (110-140%), but base their payments on the MFS (in some form or another).

Paging Dr. Google…Dr. Google

Examples Let’s pretend you are not an

employed physician (resident) at Exempla but out on your own

Remember your overhead is (average) 60% of your earnings in Family Medicine

Also pretend all reimbursement is from Medicare only and not other payors.

Your morning schedule, doctor:

Low back pain (established patient) URI (established) WCC (established) Newborn per Dr. Schmidt (new) F/U Diabetes (established) WWE (established)

Chief complaint, CPT, ICD, $LBP 99213 724.2 $51.63

URI 99213 465.9 $51.63

WCC (+shots) 99392 V20.2 $86.56

Newborn 99381 V20.2 $102.10

F/U DM (+HTN, +lipids)

99214 250.00, 401.9, 272.4

$80.87

WWE 99396 V70.0, V72.31 $95.65

Next you go to lunch…

You add up the sum from you morning and discover you made $467.44.

You forget about overhead (because you get excited) and go on to your afternoon clinic.

Colpo/Sports Med/Procedure!

Colposcopy Left arm pain Broken per Dr. McClanahan Mole removal (Snoop Dogg, new patient)

Chief Complaint, CPT, ICD, $Colposcopy (+ECC +BX)

57454 622.10 $151.30

Shoulder Pain

(+ injection)

99213-25

20553

719.42 $66.24

Wrist Pain (+fracture mgmt)

25500 719.45 $229.14

Mole removal (+closure)

11600 +

12031

172.5 $168.23

Uh oh! Overhead So, you made $614.91 in the

afternoon, plus $467.44 in the morning for a total of $1082.35

You multiply that by 190 working days/year and you get $205,646.50

You practice manager reminds you the average overhead is 60% in Family Practice (2003 data)

You go home with $82,258.60 (gross income, no taxes withheld)

Let’s crunch the numbers…

So why are all the private attendings saying we need to see 20+ patients per day to “make a living.”

Estimate $90/pt visit x 20 pt/day = $1800/day $1800/day x 4day work week = $7200/wk $7200/wk x 48 wks/yr = $345,600 $345,600 x 40% (overhead) = $138,240/yr The average first-year annual income offered to

family physicians in 1999-2000 was $135,000

First You Pay the Piper

“Associate” partners usually “cough up” a percentage of their earnings to the partners

Most practices offer full partnership within 2 years

Pay yourself by seeing extra patients (outlast the fixed costs of the practice)

Feeling Lost?

ResourcesFamily Practice Management

Medical Economics

www.physicianspractice.comBayard M, Peeples CR, Holt J. An Interactive Approach to Teaching Practice Management to Family Practice Residents. Family Medicine. Oct 2003:622-624

Borglum K. 10 Ways Family Practices Lose Money. Family Practice Management. June 2003:51-56.

Crites GE, Schuster RJ. A preliminary report of an educational intervention in practice management. BMC Medical Education. Sept 2004.

Johnson SE, Newton WP. Resource-Based Relative Value Units: A Primer for Academic Family Physicians. Family Medicine. Mar 2003:172-176

Kesselheim AS, Brennan, TA. Overbilling vs. Downcoding – The Battle between Physicians and Insurers. NEJM. Mar 2005:855-57.