What it Means to Decrease Your Medical Practice Accounts Receivable by 33%

As the 21st Century begins to fully set in, so has reality with the state of medical practice revenues. Medical reimbursement has stagnated or decreased substantially in both real dollars as well as after inflation adjustment, making it more difficult for providers to cover their overhead adequately and have much left over. If a medical practice can continue its current patient care volume and medical billing, yet decrease its Accounts Receivable (AR) by 33%, what would that mean for the practice?

Let's look at a sample medical practice called All-City Medical. The practice utilizes an in-house medical biller with concerns over whether collections are being adequately pursued.

All-City had annual gross collections of 1.2 million dollars in 2009.

Their Accounts Receivable at the beginning of the year, 1/1/09 = $250,000 Their Accounts Receivable at the end of the year, 12/31/09 = $350,000 The average AR therefore is 250,000+350,000/2 = $300,000

The accounts receivable turnover rate is calculated as gross collections divided by average AR: 1,200,000/ 300,000 = 4 times. This means that in a full year the accounts receivables are collected and closed 4 times for the practice. How many AR turnover days will it take to complete one cycle of collecting and closing? 365 days/4 times = 91 days for AR to turn over. This means that in 91 days patients receive medical treatment, charges are posted and medical claims are processed through the clearinghouse, and payments are received from either the insurance companies or patient payments, with the receivable accounts closed. How does a medical practice decrease its AR? Once that goal is accomplished, what does that mean? The way to do it is to increase the turnover ratio. If All-City Medical increases the turnover ratio to 6 times, that means it will only take 61 days (365 days/6 times) for the AR to turn over. With this improvement All-City Medical's average AR outstanding decreases from $300,000 to $200,000! 1,200,000 collections/turnover ratio of 6 = $200,000 average outstanding AR The end result is that All-City Medical now has $100,000 more cash on hand to either: 1) Distribute to the Partners 2) Pay Expenses 3) Invest in Capital Equipment to make more money for the practice.

No matter which option the practice decides on, the bottom line is they have freed up hard money for the practice.

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Oncology Coding - Gear Up for New Transfusion-Reaction Codes

As you all know, ICD-9 2011 will go into effect on October 1, 2010. So if you have patients who get blood transfusions, gear up for some key changes to your diagnosis coding choices later this year. CMS has provided proposed updates for ICD-9 2011, and transfusion-reaction codes are everywhere.

Broaden your iron overload options

Right now, under ICD 2010, if you need to code hemochromatosis, you will need to code 275.0. But when ICD-9 2011 goes into effect, you will have more specific options to code hemochromatosis. This time ICD-9 intends to make 275.0 invalid and replace it with the following: 275.01, 275.02, 275.03, and 275.09.

When the ICD-9 2011 becomes official, you will have to pay close attention to any notes with the codes to ensure you're pairing your case to the right ICD-9 option for your Oncology practice. ICD-9 2011 also intends to expand the current 276.6 to include 276.61 and 276.69. Another proposal would expand 287.4 to include the 287.41 and 287.49. This change would allow precise reporting of posttransfusion purpura (PTP), which normally arises five to 12 days after transfusion of blood components. What's more, the addition of 999.83 has been proposed; this would have placed it under 999.8. However, the proposed rule lists 780.66 placing FNHTR under 780.6.

Apart from all these, a slew of other potential new transfusion-reaction codes add specificity to reporting incompatibility reaction type and timing (acute or delayed).

Acute: Acute hemolytic transfusion reaction (AHTR) is accelerated destruction of red blood cells less than 24 hours after transfusion. The proposed codes which specify acute are 999.62, 999.72, 999.77, and 999.84.

Delayed: On the other hand, delayed hemolytic transfusion reaction (DHTR) refers to "accelerated destruction of red blood cells which normally manifests 24 hours to 28 days after a transfusion." The proposed codes include 999.63, 999.73, 999.78, and 999.85.

So with more than 130 proposed new codes, there are chances you will need to use at least some of them for your patients. As such, you need to stay informed of all the ICD-9 2011 code changes. One way of doing so from the comforts of your office or meeting room is an audio conference. On signing up for such a conference, you also stand to acquire CEUs.

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How Hospital Billing Services Work

Hospital billing is the procedure that allows hospitals to collect payment from insurance companies. The process is fairly similar throughout the medical and insurance fields. In essence, the hospital sends lists of covered procedures, which then determines how much money they are required to pay on each claim. The company sends the payment to the hospital once all of the paperwork has been filed and documented properly. Medical billing is a growing field that can require certain levels of certification in some states.

Different Methods

As technology advances, the types of billing methods continue to increase. Hospital billers used to file all of their documents as hard copies that were mailed to the insurance provider through the regular mail. Computers have streamlined the process by allowing medical billing to be done through software portals. Several types of and coding software has been developed over the past few years to make the process more accurate and less time consuming. There are still companies that use manual coding and billing processes, but they are moving toward digital files as quickly as possible.

Understanding the Allowable Amount

Service providers need to have a solid understanding of the services that specific insurance companies will cover before submitting documentation to the insurance company for payment. In general, a medical biller will charge more for a procedure than the policy agreement is willing to cover. The amount that the company agrees to pay is called the allowable amount. For accurate physician billing it is important that the medical provider understands the proper codes and prices for each type of medical procedure. Most insurance agencies will send an explanation of benefits to the medical provider which explains the payments in detail.

How HIPAA Has Impacted Billing

HIPAA, or the Health Insurance Portability and Accountability Act, was recently put into place in the United States to provide an extra assurance of privacy for medical patients. The rules and regulations involved in the HIPAA law have had an impact on medical billing processes for insurance companies and medical facilities. The law calls for the electronic processing of all documents between the medical provider and the policy owner. HIPAA has created the need for several new documents and waivers that grant the medical provider permission to transmit patient information through electronic communications with the coverage provider. Software manufacturers have been working steadily to incorporate the new HIPAA regulations into their software so that the process can remain relatively quick and easy for all users. As more medical providers continue to upgrade to electronic processing methods, providers should have no trouble incorporating the new regulations into their systems.

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Medical Billing and Coding Training Can Do a Lot for Your Career

Life expectancy of the average individual has increased and the health care industry marches boldly into the 21st century. New medical developments, along with the latest software, means that well trained and qualified medical billing and coding specialists will be needed to keep pace with the increased demand for professionals who can convert detailed medical diagnoses and measures into precise standard codes.

Researches are always busy working behind the medical scene working on breakthroughs that vastly improve people's health and prolong life for many. Here are five potential game-changers that the world is watching.

A True HIV Vaccine: According to ScienceDaily.com., researches from the U.S. and abroad have shown a single-dose HIV DNA vaccine has the potential to induce long-lasting HIV-specific immune response in nonhuman primates. A Cure for Alzheimer's Disease: Is the loss of memory, due to defective enzymes in the brain, largely responsible for the onset of Alzheimer's. Can a new drug, Bryostatin, be the solution? Effective Treatment of Cancer: The medical world, according to ScienceDaily.com, is paying close attention to research that indicates exercise can significantly help lower the risks of cancer. A Method of Preventing Heart Attacks: The discovery of omega-3 fatty acids that yield protective cardiac effects, is cited by ScienceDaily.com

What do medical breakthroughs mean for individuals looking to pursue a career in the field of medical billing and coding? It means that the industry will have to keep pace with the advancement of medicine and continue to produce qualified medical billing coders who have the training, skills, and confidence to make a difference from the first day they're on the job.

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Individual NPI Number in Box 24J For Medicare Claims

When billing insurance claims to Medicare, it can get a little tricky. Medicare has many rules which are not required by commercial insurance companies. Since NPI numbers were required on all claims in 2008 there has been some confusion. All providers are required to have an individual NPI number and some are also required to have a group NPI number. Then they must be entered in the appropriate boxes on the CMS 1500 claim form.

In most cases it is mandatory to have the rendering provider's individual NPI in box 24J when submitting CMS 1500 forms. However, there are a few cases when box 24J needs to be left blank in order to prevent denial of the claim. Make sure you file your claims correctly according to Medicare's rules.

Most Medicare carriers require that box 24J be left blank if the billing provider is an individual provider. In that case, the provider's individual NPI, or type I NPI would be entered in both box 24J and in box 33a. If this NPI is the same, Medicare requires that the NPI is NOT entered in 24J but that 24J is left blank.

I truly do not know why they do this, but it is the rule. So if you are submitting paper claims to Medicare for an individual provider who bills under just an individual NPI, or type I NPI, and Medicare has been denying your claims, that may be why. If the provider gets paid under a group NPI then you would put the individual NPI of the rendering provider in box 24J.

Copyright 2010 - Michele Redmond - Solutions Medical Billing Inc

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Insurance Coverage for Mental Health Issues

In 1996, the Mental Health Parity Act was passed in order to protect the proper insurance coverage for Americans with mental concerns. For many citizens who receive Social Security and associated medical coverage through their work, receiving equal coverage for their mental concerns was problematic. The public perception of mental health issues is not equal to the perceptions of other bodily diseases. This varied opinion has been expressed through insurance coverage that provides limited coverage for mental issues. The Mental Health Parity Act works to redress that situation.

Many Americans suffer from mental issues that require medical attention, doctors visits, and prescription medication just like any other health concern. It is crucial that, if you receive medical benefits through your company, that your complete health concerns are covered as well. The Mental Health Parity Act worked to ensure that an equal annual or lifetime limit of expense is extended to cover mental concerns as well as medical health issues. This also includes other retained rights that may be associated with a general medical expense.

Though there are a few exemptions included in this Act, its purpose is to ensure that insurance providers and companies that may control that insurance do not reduce the benefits to their employees or former employees based on the nature of their illness. Mental concerns can be as detrimental to the life and happiness of a patient as medical concerns. One important restriction included in this act is an exemption for mental health-related concerns regarding substance abuse or chemical dependency.

For more information about all of your health coverage rights, please visit the website of the Indianapolis social security disability lawyers at the Hankey Law Office, P.C..

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