Increased Managed Care Collections

US Chiropractic Directory

"Preferred Listing Consulting"
 

　From the Desk of Mark Studin DC, FASBE(C), DAAPM, DAAMLP

 

"Increase Managed Care Collections"

This technology and series of protocols have been instituted in chiropractic and medical offices for over 10 years and have taken most offices from 50-60% collections to over 95% collections.

 

A patient comes into your office and you call or go online with his/her carrier to see if he/she is covered and what is included in the coverage. The carrier tells you the patient has the "usual" and "customary" coverage and you care for the patient. 2 months pass and the claim comes in and with the glee of an 8-year-old on Christmas, Chanukah, or any other similar holiday (I am sure I just got someone mad at me for not mentioning his/her holiday), you tear open the envelope to find an explanation of benefits that says, "Amount considered 100%, amount paid $0," or you find a check for $14 that covers the adjustment, therapeutic exercise, electric muscle stimulation and hot packs. The explanation code refers to "usual and customary fee" or "allowed charges." You continue and read the fine print and it says that you cannot bill the patient for the rest and you get incredibly mad at the wrong party. Your anger is at the insurance company, but where the anger should really be directed is at the person in the mirror, you.

The adage says, "If you fail to plan, you plan to fail." You need to plan better and this consultation will help you understand the process so that you can plan much better. The core of the problem with managed care is three-fold:

First: You signed a contract you have never read. Most agreements with carriers have language that only allows a certain amount per procedure and they do not list or make available the fee structure. You, however, are so anxious to have inclusion because you erroneously think that will open the door to unlimited referrals and riches, you rarely, if ever, read the agreements. In fact, 99% of every doctor I have ever queried never read the agreements. Something I personally was guilty of when I practiced and accepted managed care. Some of you have tried to outsmart the system and only accept out of network benefits. There are times when this is a good strategy, but most managed care agreements with the patients have the same restrictions for payments whether they go in or out of network.

Second: Chiropractors are treated a specialists. We have to be careful what we fight for as the primary care providers usually have lower deductibles than specialists. An example is a company in New York; they consider chiropractors "specialists" and have a reasonable fee per visit, $38. However, because chiropractors are specialists, we have a deductible of $45. As others are laughing all the way to the bank, this carrier follows New York law which mandates chiropractic coverage to commercial insurers. They burned the midnight oil to create a loophole and shift 100% of the burden to the patient and the doctor. In-network agreements say the doctor cannot charge the patient and the out of network agreement forces the patient to pay the entire fee. The only benefit of being in the plan in this scenario is that you get advertising in the "book." However, you are exposed to a lot of paperwork and a fight with the patient in explaining why his/her insurance company pays nothing.

Third: Paper, paper and more paper. The paper requirements of the managed care companies has been designed to overwhelm you so that you either do not meet the requirements for any re-imbursement or you spend more than you make rendering a profit margin so slim that it becomes counterproductive to participate.

These are just some of the challenges. Remember, the purpose of managed care companies is to figure out a way to shift the burden from the carriers to the doctors and patients and usually we are willing participants in their scheme to make historical windfall profits.

The solutions: It all starts with iron-clad business system and analysis. You have to run your business no differently than a fortune 500 company. You need to govern the direction of your business based upon the facts and return on investment (ROI). The facts of what you need to do to get paid and the ROI is based upon how much it costs you to process each patient and what is left after you calculate the soft costs (time of your staff) and hard costs (paper, electricity, malpractice, etc.).

Where you start is determining your costs. Take the total cost of running your business, excluding the personal stuff that you claim (I am not an IRS agent) and delete your salary as the costs are going to be determined without your profits. That is calculated as part of the profit margin per patient. The most accurate way to get a 3 month moving average is to take all of the expenses for the last 3 months and divide by 3. That will give you the average cost per month to run your business. Then take the total number of patients over the last 3 months and divide by 3. That will give you the average number of patients per month. Divide the total expenses by the total number of patients and that statistic gives you your CPP or cost per patient. That number is critical as it will guide your business for everything you do. It will allow you to set a fair cash fee and determine what managed care insurances you will accept in your practice.

The next step is to call the managed care companies and ask a few critical questions:

1. Is my patient covered?

2. Are the following CPT codes covered?

3. What is paid per CPT code?

4. What is the co-payment?

5. What are the out of network benefits?

6. What are the paperwork requirements per claim or visit?

Let’s take the easy ones first, #1, 2, 4, and 5 will usually be answered directly, with #2 requiring a little digging on your part. However, the carriers do not want you to know the fees they will pay. They will give you language such as, "We cover reasonable and customary fees," and when you ask whose standard is the "reasonable and customary," they will either not tell you or tell you it is through their panel of specialists. When you press them on the issue, they will tell you that they do not have that information.

You now have a dilemma; how can you run a business without the knowledge of how much you will get paid for your services? Most do, which is why most struggle financially. If your cost per patient is significantly lower than the reimbursement, then you are in great shape. When calculating the ROI, do not forget that you have to pay taxes on the profit when calculating that figure.

For those carriers not listing their fees (most), you have some choices. You can treat blindly and be exposed to treating for either nothing or significantly below your cost per patient (CPP), or you can set up for a battle with your patient because you have not informed them of the up-front and out of pocket expenses.

If the carrier will not release the fees they pay for each CPT, my strong suggestion is that you have your patient write a letter of complaint to the Commissioner of Insurance in your state along with the Attorney General of the state. The carrier is attempting to satisfy the contract with the patient while not having to pay anything. In my "worth very little opinion," that should be constituted as fraud and should to be reported as such.

If you are in-network, read your contract and see if you agreed to treat blindly. If so, you do not have anything to complain about because you accepted getting screwed because you chose not to read the "fine-print." However, if you are in-network and it is not in the contract, you have rights and they need to be exercised. The crux of your argument is not about you, it is about the people of your state being taken advantage of by the predatory carriers intent on misleading the public, which underscores the overwhelming reason why the complaint should come from the patient.

Once you have the factual information about your costs and the level of re-imbursement, you can now make an educated decision of what plans to participate in. Remember, the same company can have 20 different plans, therefore mandating you to qualify every individual patient’s coverage. Often, no 2 are alike.

The next step to getting paid is verification of submission and the quality of your paperwork. However, that is for another consultation.

Now for an unsolicited opinion on how to win financially in chiropractic: I personally fought the battle with managed care companies for years and was too stupid to understand their game. When I finally opened my eyes, I realized I was fighting a losing battle with most companies and saw the only solution was personal injury and workers compensation. In today’s economy, personal injury is the financial class of choice because workers compensation has significant government coverage and the government is running out of money and looking to screw us as managed care has.

If you have come to the same conclusion, go to www.teachchiros.com and click on "Build a Huge PI Practice." Once there, listen to the 13 minute audio that will teach you how to have a thriving PI practice with no advertising, marketing or taking lawyers out to fancy steak dinners because those things are a waste of money anyway.

In many of the consultations, I recommend that you visit other sites to get information. On each of those sites, there is a significant amount of FREE information to help you succeed at a much higher level. You owe it to yourself and to chiropractic to do as well as possible.