Wound Care & Hyperbaric Insights: Revenue Cycle Tips for New Wound Care Clinics

Newly opened wound care clinics only have one opportunity to streamline revenue cycle processes at the time of launch. What do those with experience suggest for today’s facilities?

Today’s Wound Clinic (TWC) has published numerous articles on revenue cycle tips for opening and operating new wound care/hyperbaric oxygen therapy (HBOT) businesses. As part of this special edition focusing on reimbursement, TWC invited wound care stakeholders to share their personal tips with readers. This article offers feedback that we received from your peers.

“Reimbursement Tips I Wish I Knew Before I Opened My PBD”

Lorna Conahan, PT, CWS, wound care manager at Lawrence + Memorial Hospital, new London, CT, and Westerly (RI) Hospital, reported that she went from managing an outpatient rehabilitation department to opening a hospital outpatient wound care provider-based department (PBD). She felt lucky that she already had contacts throughout her organization and said her No. 1 recommendation is to get to know everyone in the facility who is part of the revenue cycle. “You can’t be an expert on everything, but you need to know the experts,” Conahan said. The following is a list of tips shared by Conahan:

1. Learn everyone’s roles (eg, who is responsible for insurance benefit verification and billing).

2. Know the difference between facility and professional charges, and how these charges “drop” to the claims. Don’t assume it’s the same process for both.

3. Meet with the coders regularly, and meet with the billers to learn how and when bills are processed. (Are bills dropped daily, weekly, monthly?)

4. Take the same training as the front-desk staff. Learn how to enter insurance information, how to conduct insurance benefit verifications, and when to ask if prior authorization is required.

5. Meet with the compliance team often to ask what is and is not acceptable behavior. For example, do not get yourself in trouble by asking sales representatives about reimbursement. Free products may sound great, but accepting them could cause a compliance issue!

6. Meet with case management and learn how that staff can assist with patient care.

7. Learn who establishes the charge description master (CDM), as well as what is on it and how it is updated.

8. Understand the required documentation to support all work performed, codes reported, and claim charges. Learn if charges are manually processed or if the documentation uses an algorithm to establish charges. In either case, establish a regular process to spot-check all charges that appear on claims.

9. Know when and how to use coding modifiers.

10. Teach all clinicians basic documentation, coding, and charging. Make this an agenda item at monthly meetings.

11. Meet with the entire revenue cycle team. Learn how to retrieve monthly revenue reports.

12. Know the payer mix and the Medicare Administrative Contractor that a) processes claims and b) writes the local coverage determinations (LCDs) and articles that pertain to the services and procedures performed, as well as the products used in your department.

13. Know the skilled nursing facility and home health agency consolidated billing regulations; meet with directors from each organization to agree on how they will pay for any of these services they seek.

14. Know the National Correct Coding Initiative edits.

15. Don’t be afraid to ask questions and establish regular meetings with all “experts” in the facility to keep current on changes of all types. Remember, the rules may change as soon as you learn them!

“Don’t Assume Everything Is Working Perfectly”

Kim Gondos, MSN, RN, CWOCN, CFCN, CHT-Admin, corporate manager of wound care at Prime Healthcare, Ontario, CA, reminds readers that things do not always go as planned. Consider this list of tips:

1. Before deciding to open a clinic (with or without HBOT), analyze market demographics and competitors, and create a proforma to determine feasibility of the program’s success.

2. Identify the wage index in your facility and how it will affect reimbursement for all services, procedures, and products (particularly those that are expensive).

3. Review the terms of the facility’s payer contracts to determine if the facility is receiving appropriate payment.

4. Understand the CDM process, including who creates it, reviews it, and revises it (and how quickly they are made).

5. Review the LCDs (if they exist) quarterly. Know that changes to LCDs outside of wound care and HBOT can also affect the clinic. For example, patients living with diabetes have daily blood glucose tests before and after HBOT. Novitas Solutions Inc. revised its LCD pertaining to blood glucose point-of-care testing and only covers the test once per month, unless the diagnosis and documentation meet LCD requirements.

6. Verify that the patient’s diagnosis is one that supports the payer’s medical-necessity requirements. If using a software program for this verification, ensure it is accurate and updated with all payer coverage changes.

7. Advanced beneficiary notices (ABNs) are required for Medicare patients (as appropriate) and should be maintained in the patient’s medical record. If your department undergoes an audit by a Recovery Audit Contractor, signed ABNs will be requested.

8. Reconcile the department’s charges daily. Assign someone to perform the reconciliation and allot enough time for that person to do so thoroughly.

9. Audit documentation of physicians, other qualified healthcare professional (QHPs), and clinic staff. Electronic health record (EHR) systems are not always totally accurate. For example, did the physician document “selective debridement,” but the EHR coded “surgical debridement”?

10. Explore with your compliance department whether consignment programs are an acceptable way to receive expensive products, such as cellular and/or tissue-based products (CTPs) for skin wounds.

11. Do not assume the department will always receive separate payment for CTPs with pass-through status.

12. Learn about the revenue cycle. Just because the wound clinic charged for something does not mean it will receive full payment. In addition, payments may take months to process, depending on the payer.

Often-Missed Revenue Cycle Basics

Dawn Falls, BS, RN, CWCN, wound care coordinator at Advocate Condell Medical Center, Libertyville, IL, shares these processes that should be in place on the first day of PBD operation:

1. Insurance benefit verification. Front-desk staff members with knowledge and experience with insurance benefit verification should be dedicated to this process for all patients from day All information should be collected on an intake form. Wound clinic personnel should not assume that private payers or anyone else covers the same services, procedures, and products as Medicare. Coverage and payment depend on the patient’s plan and the hospital’s contract with that plan. When speaking with payers, verify if the procedures commonly performed in the clinic are covered. Also, ask if there are deductibles and copayments attached to each service, procedure, and/or product. Always ask the payer about plan coverages, deductibles, and copayment requirements. This proactive effort decreases patient dissatisfaction. Once a service, procedure, and/or product coverage is verified, ask if prior authorization is required and (if so) the process for submitting the information and for receiving payer response.

2. Direct versus general supervision. Many outpatient wound care PBDs that operate independently of a management company (and whose wound care physicians and QHPs are not employed by the hospital) struggle to assure that direct supervision is available. If the physician/QHP is unavailable for any reason, remember that “I did not want to reschedule the patients’ appointments” is not a valid excuse to ignore direct supervision. For example, when podiatrists are scheduled to work in the PBD, they must only see wounds they are qualified to treat. Coordinating physician/QHP direct supervision and patient schedules is like building a puzzle.

3. Documentation. Having the right EHR to document is crucial. Hospital EHRs that are enough for inpatient documentation are generally insufficient for outpatient documentation. Because the inpatient and outpatient payment systems are different, the documentation requirements to capture and keep revenue in the PBD are different. It is imperative that the documentation capabilities in the EHR help “paint the picture” about the patient’s condition and the work performed. The EHR must also stand up to payers when medical records are requested, when claims are denied, and/or when undergoing audits.

4. Per-encounter versus monthly claims submission. Insist that PBD claims are submitted per encounter rather than monthly, so that quarterly information and monthly information are not causes for confusion. Contact the shared-revenue personnel to timely address any claims-submission concerns.

Prevent Claim Denials With Appropriate Documentation

Moira Sykstus, MHA, RRT, CHT, director of corporate accounts at Intellicure Inc., The Woodlands, TX, shares information about working collaboratively with the revenue cycle team, payers, and (possibly) outsourced billing experts:  

1. Cross-train centralized scheduling, PBD, and physician offices. Many hospitals use centralized scheduling, whose staff members are responsible for the initial patient interactions and insurance verification. Unfortunately, many PBDs incur claims denials because staff did not understand the needs of the PBD (and vice versa). This leads to incorrect insurance information, incorrect patient demographics, lack of wound care-specific insurance benefit verifications, lack of information about prior authorization, etc. — all of which can lead to claims denials. To improve this process, the PBD and centralized staff should be cross-trained. As a kind gesture and to ensure professional billing is also addressed, the PBD can invite physicians’ billers to the training.

2. Work with revenue cycle management staff to obtain reasons for denied claims. Revenue cycle management staff often fail to document the reason(s) for a claim denial and fail to inform the PBD about the denial, why the claim was denied, and how the denial could have been prevented. Instead, they simply post a payment of $0.00 on the patient’s account. In that case, the PBD manager will not know about the denied claim until the explanation of benefits or remittance advice is reviewed. Communicating both the denial and the reason for denial provides all involved parties the opportunity to gain information, which is key to identifying and rectifying revenue cycle problems. The entire revenue cycle team must conduct a root-cause analysis of denied claims because these denials can be due to payer and/or provider
errors. According to Change Healthcare, a healthcare technology company that offers software, analytics, network solutions, and technology-enabled services, the national claim-denial average due to front-end error is 23.9%. Some errors are due to incorrect coding, overlooked contract changes, and/or regulatory changes that were not timely implemented. Although PBD directors are often overlooked when revenue cycle training and meetings are held, including these individuals can prevent the loss of a lot of money from denied and underpaid claims (not to mention significant overhead costs of correcting and reprocessing claims). In addition to denied claims, the revenue cycle team and the PBD should identify underpayment errors made by payers. Underpayment may be due to contract-loading errors, a “bug” introduced during a software upgrade, or perhaps even due to “it was Monday.” Knowing the allowed payment rates and tracking underpayments provides the revenue cycle team and the PBD an opportunity to work with the payers before there is a backlog of revenue that will be difficult to recoup after 90 days. To assess the financial
status of the PBD, the revenue cycle management director and the PBD director should meet regularly to discuss such topics as denied claims, payer underpayments, trend analysis, action plans, and reassessment timelines.

3. Befriend your patients’ payers. It is very important to create, harness, and nurture relationships with the major payers of the patients. Payers are not the enemy — at the end of the day they hold the money. If you treat payers poorly, they will be reluctant to assist in resolving issues. Solid payer relationships can be created and cultivated with time, attention, and willingness to view situations from the payers’ perspective. A strong payer relationship will allow for a more streamlined process when trying to obtain prior authorizations, for example. The PBD may even be able to assist the payer contacts at times when they need to do such tasks as resolve overpayments and expedite refunds. Consider these two real-life examples of issues that may be solved by befriending payers:

• Medicare replacement plans are becoming more strict with prior authorizations, especially for Medicare/Medicaid dual-eligible patients. They will not authorize more than one or two wound care visits for patients at one time. In addition, they are requiring PBDs to submit packets for prior authorization of HBOT and requiring PBD medical directors to speak with payer medical directors. The PBD and physicians had no advance notice of these new policies. During insurance benefit verification, providers should ask if the service, procedure, and/or product requires prior authorization (and the process that should be followed). In case issues occur, always obtain the employee name and telephone extension.

• Some payers are denying claims for professional evaluation and management (E&M) services in Place of Service 22 because “frequency of E&M visits is not medically necessary or warranted.”  When the revenue cycle team reviewed the denials, it identified that the physicians’ billers only reported the primary/active ICD-10-CM diagnosis code for the ulcer. Even though the PBD claims listed the patients’ underlying conditions, the physicians’ claims only listed one diagnosis code. Unfortunately, the underlying condition codes on the PBD claims were not any of the hierarchical condition category risk-adjustment-model codes set forth by the Centers for Medicare & Medicaid Services, even though there were similar, seemingly appropriate ICD-10 codes on the model reference guides. The providers appealed these denied claims, stating the fragile nature of the patients’ conditions, providing the comorbid conditions and how they were addressed, and providing the treatment plans. Thus far, the denials for the PBD and the physicians were overturned and paid. The revenue cycle team also educated the physicians and their billers to “paint the picture” of each patient’s condition with codes for both the primary and comorbid conditions, and to consider using ICD-10 codes (when appropriate) listed in the model reference guides.

4. Know what your payer contracts cover and their payment rates. Many wound care PBD directors do not know what the hospital’s payer contracts say about coverage and payment rates for services, procedures, and products provided to patients. For example, the contract may only pay a small flat fee for a wound care PBD visit regardless of what is done for the patient, or high-cost items such as CTPs may not be identified as an exclusion and may not be covered at all. Wound care PBD directors should discuss these problematic payer contracts with the hospital’s contracting person or department. Managing the financial aspect of the wound care department or practice can be overwhelming, even for a revenue cycle leader (much less to the PBD director or physician practice manager). The ability to provide direction to the team on the items essential for payment in addition to the items essential for good patient care is a never-ending challenge for the ever-shrinking resource of time, where the patient always seems to get slighted. Ideally, documentation of good patient care and payment for that care would automatically parallel, but that is not always the reality.

5. Don’t be afraid to outsource wound care/HBOT billing to experts. Engaging with billing experts as trusted partners does not mean the PBD and/or physician is a failure. In fact, the failure would be not recognizing when assistance is needed. Yes, it is true that wound care claims average less than $250 in reimbursement per visit. However, it is important to note that the volume can be more than 400 claims (which require attention from all areas of the revenue cycle) per month (eg, $100,000 per month). A large accounts-receivable balance in a wound care/HBOT department or within a physician practice can be incredibly challenging to manage and may be better handled by outsourced billing experts. 

Kathleen D. Schaum oversees her own consulting business and is a founding member of the TWC editorial advisory board. She can be reached for consultation and questions at kathleendschaum@bellsouth.net