Tips on structuring a billing arrangement
July 1, 2000 2 minutes read
Tips on structuring a billing arrangement
Look for internal compliance program
One of the ongoing areas of debate between regulators, providers, and the third-party billing industry is the propriety and legality of billing contracts in which fees are based on a percentage of funds collected.
"The OIG’s concerns related to percentage billing agreements center on the potential for inducing upcoding, false claims, and duplicate billing," notes the Healthcare Billing and Management Association, (HBMA) a trade group representing the billing industry.
Billers, however, argue that percentage-based contracts are ultimately more efficient and less costly than "per claim" fee arrangements, which can create incentives to submit multiple claims and to "split bill" — divide legitimate, documented, multiple services performed on the same date into individual "one-code-per-claim" submissions — in order to increase billing fees.
Percentage-based contracts
If you have or are considering a percentage-based billing arraignment, here are some tips from the HBMA on the best ways to construct a contract that will help you avoid possible regulatory problems.
1.Ensure your third-party biller has implemented an internal compliance program.
2. To comply with the Medicare carrier’s manual, all client funds should be deposited into an account under the exclusive control of the provider. Billing companies should not be a signatory on any accounts into which funds are initially deposited. A clear and complete set of records of all transactions should be maintained.
3. Any incentive fees assessed should be related to the collection of actual amounts due, based on the contractual amounts allowed, as defined by federal guidelines or payment contracts. No incentives should be related to average charge, gross charges, coding patterns, or coding profiles.
4. Companies that provide coding services should not offer coding employees incentives based on average charge, gross charges, coding patterns, or coding profiles, or for production output (charts per hour) above a level that could jeopardize accuracy. Companies that offer coding services are encouraged to offer incentives related to accuracy and compliance. Companies and/or their clients also are encouraged to contract for periodic, independent reviews of their coding by qualified review firms.
5. Companies providing follow-up services on unpaid claims should comply with the published requirements of Medicare carriers and Intermediaries, including use of approved forms and inquiry protocols. Claims requiring resubmission should be clearly marked as a resubmission to prevent duplicate payments.
6. Companies are encouraged to report carrier and other payer misconduct related to claim processing to the appropriate federal and/or state authorities.
7. Companies charging a percentage of collected funds should not assess a fee on overpayments. Any fee related to overpayments, if charged, should be based on the cost of processing a refund or for following federal protocols on the processing of overpayments.
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