Exploring Partnerships

  Today’s Wound Clinic recently spoke with Mary Hirsch, RN, MHSA, CWS, ACHRN, the Chief Operations Officer at MATRIX Health Services regarding finances and revenue for wound care clinics. Matrix is a growing company focused on developing successful partnerships with acute care hospitals that have determined that comprehensive wound care is a necessary part of their health care delivery systems.

  Today’s Wound Clinic (TWC): How do you know if your wound center is making money?
  Mary Hirsch (MH): Most wound center Program Directors or Managers look at the hospital generated monthly financial reports and check out the bottom line. Revenue less expenses equals the profit right? Well, not really. Most departmental monthly financial statements use charges generated as the revenue value. Unless we truly know what the contractual percent is for our department, subtracting expenses will only tell us what we would make if we collected everything that is billed. I think we have all given up on that fantasy.

  TWC: So how do we determine what we have actually collected?
  MH: One way is to have the finance department do a Profit and Loss Report (P&L). These are done periodically, usually in preparation for strategic planning to identify departments that are doing well and may need expansion and those that are unsuccessful and need to be closed. Don’t wait until you get that call!!!

  A more proactive way is to do a billing and collections review. A well-managed wound center should be doing a billing and collections review at least annually. We frequently do them every 3—6 months for our clients.

  TWC: What do you look at in these “billing and collections reviews?”
  MH: We review an adequate sample of accounts based on payor mix for that review period. We look at the actual bills dropped, the remittance advices (RAs) or explanation of benefits (EOBs) and any financial notes from the working account. We examine the bill dropped for correct ICD-9 and revenue coding, use of modifiers, inappropriate pairing of CPT codes and correct increments of codes. We then compare the bill to the RA. We determine if all procedures are reimbursed and reimbursed appropriately for that payor. We don’t see many denials anymore but we frequently see items that are just not covered. If no one is looking at the collections and reporting back errors, the department staff will continue to make the same errors resulting in reduced reimbursement. The working account notes tell us if there were any problems with bill submission and what corrective action was taken—if the bill was resubmitted and when.

  TWC: What kinds of things have you discovered in these reviews?
  MH: We find some things routinely such as the wrong revenue codes used to bill E&Ms or other procedures, incorrect ICD-9 codes on the bill, lack of modifiers when needed and inappropriate code pairings; all resulting in reduced or non-payment. Sometimes we find things that make a significant difference when corrected. At more than one facility we found that even though the staff was entering charges for 4 increments of HBO, only one increment was being charged on the bill. It doesn’t matter what the charge is, Medicare pays on the CPT code and number of increments. In this case, a loss of 75% of the revenue per treatment billed. Fortunately these facilities were able to rebill many accounts and recoup much of the loss. At several others we have caught charging errors such as charging for 1cm instead of 44 cm of skin substitute. Again, if done frequently enough reviews can catch errors that can be rectified through rebilling.

  In addition to finding billing and coding errors that provide us with an opportunity to improve collections, we use the information gained to project an average reimbursement per visit, collections rate and average revenues per visit or per procedure such as HBOT or skin substitute application. We can also determine the average revenue per visit by commercial payor versus Medicare or Medicaid.

  This information provides you with a better understanding of your business. You can use the average amount collected per visit to compare to the expenses per stat on your financial statements to determine if and how much money you are truly making.

  When doing a “Financial Review” we do a complete Billing and Collections review as well as look at staffing, productivity, patient flow, and supply usage to identify opportunities for cost savings, therefore improving the bottom line.

  TWC: Is there anything else you look at in these reviews?
  MH: We frequently combine the “billing and collections review” with a “Compliance Audit.” We pull the medical records to match the financial accounts reviewed and compare to assure that the documentation supports the procedures billed and that no procedures were billed in error. Many of our clients are using an electronic medical record, which makes this step much easier because it can be done remotely. But easy or difficult, this is a step that should be done. We frequently find that clinicians are confused about what is bundled and not bundled into procedures and that E&M levels billed are not supported in documentation or by a clinic level determination form. Many more times we find that clinicians are not billing for all of the procedures performed, assuming that it is better to err on the side of under billing. Regardless of findings, each review should be followed up with a report to the staff and physicians so that they continue to learn and are part of the improvement process.

  TWC: What advice do you have for clinician’s seeking help in this area?
  MH: Don’t assume that if you fill out the charge sheet correctly, you are getting paid appropriately. Unless you look at the actual collections and compare to what you bill, you cannot be sure you are getting paid appropriately. If you don’t have the time or expertise to perform a complete Financial Review, consulting services are available through my company, MATRIX Health Services. Consulting services have saved many hospitals thousands of dollars in costly billing errors.

For more information on MATRIX Health Services email mhirsch@matrixhealthservices.net or visit www.aboutmatrix.com.