Communicate better to get paid faster
Most MCO payment delays can be avoided
Every provider doing business with managed care organizations (MCOs) has complained about slow payment. It isn’t uncommon for claims to sit unpaid for weeks only for the MCO to send the claim back because of missing paperwork or a dispute over services.
After the claim has completed its odyssey, the money, or perhaps only a portion of it, may have taken six months or more to make into the hospices’ account.
Hospice providers share the same reimbursement frustrations as other health care providers contracting with MCOs, but they also share some of the responsibility for their own delayed payment, say hospice administrators. If current managed care claims are sitting in accounts receivable for six to nine months, it’s a clear sign your hospice could benefit from improved communications between the clinical and billing sides of your organization.
Addressing communication issues can speed up payment by as much six months. While MCOs have their own processes that can lead to delays in payment, poor claims, denials, and appeals are largely the reason payment is delayed, says Jenny Schrom, RN, CRNH, director of Hospice Alliance of the National Capital Area in Falls Church, VA. The Hospice Alliance is a group of 13 Washington, DC-area hospices joined for the purpose of managed care contracting.
To speed up payment and improve cash flow, a hospice must examine its internal processes. What many hospices find, Schrom says, is within the hospice walls very little is known about managed care. Before your processes can improve, you must educate your staff about managed care. And, your Introduction to Managed Care class should be followed by an education on the specific managed care contracts your hospice signed with MCOs.
Schrom suggests hospice administrators explain the different types of MCOs and the various relationships that can exist between hospices and MCOs. For example, explain the differences between health maintenance organization (HMOs), preferred provider organizations (PPOs), independent practice associations (IPAs), and Medicare-risk plans.
Explain the subtle financial relationships that can occur, such as how a physician group may act as the payer for services provided to patients enrolled in an HMO, she suggests.
"There needs to be a better understanding of managed care," Schrom says. "When we talk about managed care we’re not talking about just HMOs. It’s a fairly complex monster these days."
Preparations prior to admission
If your hospice is negotiating a contract with an MCO, key staff should be kept abreast of the kinds of requirements the contract specifies. A billing department manager, for example, can provide the necessary input to facilitate error-free claims.
"I can’t stress this enough," says Mark Fields, chief financial officer for Hospice of Northern Virginia in Falls Church, VA, which is a member of the Hospice Alliance. "Clearly, whoever is negotiating contracts with a hospice may not be aware of the hospice’s billing capabilities. They could impose a fee schedule the billing department cannot follow."
If a hospice’s billing capabilities don’t meet the schedule required by the MCO, the hospice could be required to make costly revisions or bill manually, which could lead to errors.
Billing staff must become familiar with each contract’s language. They should also be involved in contract negotiations by questioning the payer about specific claims submission requirements. For example, billing staff should find out whether an HMO requires claims to be submitted on a Uniform Bill 1992 (UB92) or if the HMO has its own form, and what documentation must accompany the claim.
After the contract has been signed, billing representative should meet quarterly with the payer to discuss any system changes, address changes, and personnel changes that could potentially lead to a claims error.
Admissions staff is another example of key personnel that should be included in negotiations. Information from negotiations will provide admissions nurses with pertinent information, including:
• Whether the hospice is at risk for the cost of care.
• Whether that risk is shared with another provider.
• Whether the MCO is assuming financial risk.
Here is a scenario that could lead to payment delays:
Hospice A has a contract with Physician Group B to provide services to patients it refers to the hospice for end-of-life care. The patients are enrolled in Health Plan C which has entered into a capitation arrangement with Physician Group B to provide prepaid care to its enrollees. In this situation, Physician Group B becomes the payer, because it has assumed financial risk for the care of the patient.
Unfamiliar with Physician Group B’s contract, the hospice admissions nurse assumes that because the patient is an enrollee of Health Plan C, the MCO is the payer. She calls the case manager at Health Plan C for approval of services. The services fall under the health plan’s coverage guidelines. The case manager at Health Plan C approves the services and the patient is admitted. But when the time comes to submit the bill, it is rejected by the health plan because claims administrators learn that Physician Group B is at risk for the patient and has already received a per-member-per-month payment for any and all services provided to that patient.
The claim should have been sent to Physician Group B. On top of the already-delayed payment, the hospice faces further delays from Physician Group B because proper authorization for services was not obtained from its case manager.
Sending the claim to the wrong payer and other errors can be avoided if everyone understands the benefits and requirements of each MCO. To help inform staff about the requirements of each MCO, Schrom recommends developing a payer matrix that can be used by all staff members, especially the admissions nurse.
This is either a computer-generated or hard-copy chart that lists each contracted MCO at the top of each column and important contract topics in the far left of each row. Topics might include authorization contacts, billing addresses, and reimbursement type. Billing staff should receive a similar document with more detailed information.
Admission staff should next obtain a copy of the beneficiary’s insurance card. The back of patient insurance cards identifies the payer and also indicates the correct claim filing address. The admissions staff should check the payer matrix to determine whom to contact for authorization. With appropriate parties properly notified of a patient’s admission and the agreed upon care, the hospice has made solid first steps to a clean claim.
Case manager takes over
Following a patient’s admission, the hospice case manager begins coordinating patient care. In addition, the hospice case manager should establish and maintain constant contact with the case manager from the MCO.
Case managers are not new to hospice, but those dedicated to managed care contracts are a recent innovation. "I don’t think you can effectively treat and manage a managed care patient without a managed care case manager, Schrom says.
Keeping the lines of communication open between the internal hospice case manager and the external MCO case manager ensures both parties are in agreement about care, which prevents disputes over unauthorized care when the claim is submitted.
Just as important, it allows the hospice to develop working relationships with the MCO. "It gives hospices well-established contacts with the MCO, a person who can intercede on their behalf," Schrom says. "Having someone who can intercede for you is a huge asset."
Just as admission staff needs an education in current contracts, case managers must also have a working knowledge of the hospice’s MCO contracts. The case manager acts as a link between clinical activity and the financial requirements of the MCO.
Key points an internal case manager must know about each contract include:
• Authorization process. The case manager should be clear on who to call and when in the event a patient requires care outside the agreed-upon care. For example, changes in care may occur when a physician, after consulting with a therapist, orders therapy services after admission.
• Required information. Making sure a claim is accompanied by the proper documentation also prevent delays in payment.
In addition, for internal case managers to perform their job properly, the admission staff needs to communicate the following information to the case manager:
• Which payer is responsible for the patient’s care?
• What level of care the provider was authorized to deliver?
• Who to contact for further authorization?
Meetings between internal case managers and external case managers should occur regularly. This normally occurs during weekly case review meetings or telephone conference calls to discuss individual cases. These meetings also should include other members of the care team, such as RNs, therapists, social workers, and chaplains. Team members can provide useful insight when discussing a patient’s current status and any changes to a patient’s care.
The number of case managers a hospice needs depends largely on the number of managed care contracts it takes on. As managed care becomes a larger part of their business, hospices will have a greater need for a full-time managed care case manager. The traditional hospice model of using the director of nursing to track patients will leave the head of your nursing staff awash in paperwork in addition to supervisory duties.
Handing off to billing staff
Communication doesn’t end with the case manager. When a hospice prepares to submit a claim, the case manager must communicate the care provided and dates of service that must be billed to the MCO.
The billing staff should remind the case manager of the proper documentation needed to submit a clean claim. This exchange could take place during a pre-bill audit, an action that home health agencies and skilled nursing facilities do with their managed care contracts.
"The pre-bill audit is an interesting idea that could work, but I don’t know of any hospices that do it," says Lisa Spoden, MS, partner in Columbus, OH-based consulting firm Strategic Health Care. Spoden is also the chairwoman of the NHO’s managed care task force. "But hospice staff might be too busy for that."
However it is done, billing staff must know what documents must be attached to the claim and communicate to the case manager so the proper documents are provided when the claim is prepared.
Spoden suggests the payer matrix also include a checklist of required documentation and codes for each MCO with which the hospice contracts.
Once the bill is submitted, the billing department must aggressively follow up on unpaid claims. Allowing claims to sit in accounts receivable without question allows payments to be delayed further. "You have to take an activist approach," Fields says.
Hospices need to develop an intervention plan for claims payment. A claim should be followed at least 90 days after submission, notes Fields. If problems with a claim occur, billing personnel are charged with correcting the error and working with the MCO to ensure prompt payment, he adds.
Fields says billing staff must find out who within the MCO can make claims decisions so they can go directly to a decision maker. "They have to know who to talk to," he says. "They have to learn to work the account and communicate with the managed care company."
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