How To Select a Third Party Billing Entity
Selecting a third-party billing entity (“TPBE”) can be a difficult process for medical group administrators and their organizations. A TPBE usually offers medical billing services, which may include charge-data entry, billing, electronic claims submission, payment posting and collection follow-up.
Upon beginning a search for a TPBE, a medical group must first set its own priorities and determine the services it needs. The following are some important things to consider regarding TPBEs:
1. Size. Large TPBEs typically have the benefits of in-depth compliance programs, multispecialty expertise, many employees, cross-training, and the ability to offer additional services. However, large TPBEs may also include higher TPBE overhead costs, inconvenient locations, and the potential for high employee turnover.
Small TPBEs typically have the benefits of lower prices and less overhead, more personalized service, quicker response time, and potentially more control for the medical group. On the other hand, they may only have limited compliance plans and limited multispecialty expertise, there may be coverage issues due to fewer employees, and they may offer fewer services.
2. Scope of Services. The medical group should decide whether it wants to pay extra for services such as record storage, computer equipment, software upgrades, ad-hoc reports, correspondence backlogs, and in-person representation for appeals with payers.
3. Billing. The group should decide how to be billed: per transaction or per claim? By a flat monthly fee or a percentage of practice revenue collected? It is important to ask vendors for samples of management reports such as accounts receivable, charges billed, collection/revenue, denied claims, credit balance, and contractual and other write-offs. Vendors should also be asked for a list of policies and procedures, a sample contract, and a tour of the facility.
Finally, before entering into a contract, the medical group should refer to the Department of Health and Human Services’ Office of Inspector General’s guidelines for TPBEs (http://oig.hhs.gov/fraud/docs/complianceguidance/thirdparty.pdf) to ensure vendor compliance.
It is a good idea for medical groups to include specific terms and agreed-upon standards in the contract for the following: (1) maximum average number of days in accounts receivable; (2) maximum number of charge lag days; (3) other benchmark numbers important to the group; and (4) consequences if the TPBE does not achieve the stipulated benchmarks. The group will need to provide the TPBE with accurate billing and patient information so that both parties can meet the terms of the contract. Knowledge on both sided will greatly help to build a successful long-term billing arrangement.[1]
BCBS of Louisiana Changes Their Reimbursement for Anesthesia
Blue Cross Blue Shield (BCBS) of Louisiana has recently begun holding meetings with Anesthesiologists across the state to discuss how they (BCBS) plan to change the reimbursement for anesthesia services. BCBS has indicated that they plan to increase the unit rate for anesthesia services. But, the other changes that come along with this proposed rate increase have the potential of putting BCBS at the very bottom of the commercial payers relative to the paid per unit reimbursement.
BCBS Reimbursement goals
- To more accurately reimburse the multiple anesthesia providers that participate during a surgical case.
- To gain similar clinical documentation as Medicare for the BCBS patient population.
- To increase the anesthesia reimbursement to physicians.
The Price for Increased Reimbursement
In exchange for increasing the anesthesia reimbursement rate to anesthesia providers, BCBS is proposing the following clinical documentation and claims filing requirements:
- Anesthesia providers (MDs, CRNAs & AAs) would be required to submit claims using modifiers that indicate which members of the care team participated in the surgical case.
- The guidelines that are currently used by Medicare Intermediaries for the qualification of Medical Direction of CRNAs and AAs by a physician would be employed for BCBS patients.
- A ratio would be implemented for physician to CRNAs or AAs during medical direction. It appears that BCBS would lower reimbursement for non-medically directed cases, similar to Medicare’s rules.
- BCBS would implement a split reimbursement schedule for all claims that have multiple providers participating in the case.
What’s the Impact for a Typical Anesthesia Group
Each anesthesia group should perform an analysis to determine the potential impact that these changes will have on their group practice. Based on what we currently know, the most basic analysis would be a comparison of the revenues from BCBS over the past twelve (12) months against the expected revenue under the proposed changes. I suggest that each practice calculate the split and unit rate that will allow for the group to breakeven under the newly proposed reimbursement. Most of the groups that I have estimated the impact for will break-even under the proposed changes if the split is 75/25 using a $54 unit rate. This is before you factor in a potential wild card.
The Wild Card
The wild card in this newly proposed reimbursement is the requirement to medically direct BCBS cases and use a ratio (4:1) when medically directing CRNAs and AAs. This single change has the potential to negatively affect the way anesthesia group’s staff and carry out their daily cases. The additional documentation and tighter medical direction requirements will not insure improved quality of anesthesia care. However, the changes will drive up the cost of anesthesia services due to the increased staffing required to meet the medical direction qualifications. The sample BCBS impact analysis above has Not taken into consideration a lowered reimbursement for those cases not medically directed by a physician.
What a Win-Win Looks Like
Win-win situations do not occur when one party leaves with all the marbles. A Win-Win for BCBS and anesthesia groups might look something like this:
|
BCBS Wins |
Anesthesia Groups Wins |
| Split reimbursement for each provider (MD & CRNA). | Anesthesia providers receive a 75/25 (MD/CRNA) split. |
| BCBS reimburses all cases using the same split without regard to medical direction. | Anesthesia providers receive a unit rate of $54 or higher. |
| BCBS agrees to make the changes budget neutral for the anesthesia groups for the next 18 months. | Anesthesia providers receive an automatic rate adjustment no later than 18 months following this proposed change. |
If a reasonable Win-Win is not achieved between BCBS and the anesthesia groups, the hospital can expect to receive a request for additional financial support for the anesthesia group.
Summary
Change is coming… those anesthesia group practices that are most knowledgeable about the proposed changes and how they will impact their group, will be in a better position to negotiate a favorable contract with one of the largest commercial payer in the market. For the rest of the US, be prepared for similar reimbursement changes by other BCBS state plans.
