Blog, Chirosecure Live Event September 4, 2023

Chiropractic Third Party Billing Evolution and Increasing Risk

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Hello everyone. This is Michael Miscoe with Miscoe Health Law presenting this week’s edition of ChiroSecure’s Growth Without Risk Program. This week we’re gonna talk about what I’ve seen is what I’ll call an evolution. I. Of chiropractic billing and the, how the risks have changed over the years.

And I’m gonna start with my first chiropractic billing job, which was in the late seventies, I believe it was in 1978. Preparing. Back then hifa claim forms for Medicare in my father’s chiropractic office. And back then it was just a simple process. You send a bill, you got a check, and it was interesting.

I remember that every patient had a diagnosis of vertebro spondylolisthesis, which was . Problematic only because it’s very difficult to type, especially over and over. And this was of course before computers or even memory typewriters. So I remember asking my father what the heck it was and why everybody had it.

And he said that’s just what you need to get paid. And and that is the way chiropractic billing. Started, and that’s all billing. In fact, back then in the late seventies, in the early eighties we got introduced to commercial insurances with the blues where they started accepting chiropractic claims for reimbursement.

And if any of you were around, you remember what used to be called the Mercedes eighties, where they went from. A single code to describe an office visit. Back then it was an a 2000 code. And then they got into procedural billing in with changes in C P T where there were individual codes for each individual service.

And that led to enormous amounts of billing and reimbursement. Back then there was no such thing as post-payment audits. Nobody knew about it. Payers did not publish their policies, and that began to change as we got into the nineties. So in the nineties, if you think about what changed in the nineties, that led to the onset of post-payment analysis audits, things of that nature was.

What I’ll call big data but computer systems became more advanced. It became possible for payers to evaluate. Claims data, looking for trends that were abnormal outliers and things of that nature. But even back then, it used to take ’em about 18 months to two years to get a good handle on who was an outlier.

I. Because again, the computer processing power wasn’t that great. Writing the logic was very difficult and it took an enormous effort to do that kind of work. So we started to see post-payment audits in the nineties about the time I got into consulting. But back then it was very easy to never meet.

A doctor that had ever been audited, in which case as a compliance consultant back in those days raising issues of potential risk based upon what I was seeing in payer policies, which to that point were still not available online. Online, if you’ll remember in the mid to late nineties was modems.

And so it was Difficult to find these policies. Usually I obtained them through the assistance of a healthcare attorney I worked with at. And we would get them through discovery from payers. And I had a collection of these things and in reviewing them, I saw a number of areas where what chiropractors traditionally did in terms of documentation and billing didn’t necessarily match what insurance companies expectations were.

And did a lot of education in those lines back then. Now we fast forward, from the late nineties through the two thousands. Audits of course, became more common. If you haven’t been audited, you likely know somebody that has or you need to get out more. But audits are a fairly common thing.

Medicare audits prompted by O I g investigations where they do what are called cert audits. Comprehensive error rate testing where there. Objective is to evaluate whether the Medicare contractors are doing their job relative to identifying claims that shouldn’t be paid and or recouping those funds.

And they had determined at one point that. Chiropractic claims suffered from about a 93% error rate. There were a lot of Medicare audits that went on that has waned I think predominantly because many docs are getting out of the Medicare billing business and learning how to do Medicare patients for cash.

And so the. Chiropractic footprint in Medicare doesn’t justify the effort anymore. For those of you that are still billing Medicare just be cautious. If you become an outlier, it’s very possible you could be subject to a Uick audit. Those are unified. Program Integrity contractors they’re always on the hunt for overpayments.

Supplemental medical review contractor audits SRCs. We went through a round of those in the Florida area several years ago where they audited a large number of providers in Florida. And interestingly enough, that led to a lot of them making the switch to.

All of these things that have gone on. The one bad thing about being around this business long enough is that you see things come in cycles. And I can remember when there was no billing opportunities for chiropractors and that was in the seventies and everything was cash. There just wasn’t an opportunity for any third party billing.

And then it became where practices were entirely dependent on third party billing and forgot how to do cash. And now, We’re seeing that reversal back to a cash model because it’s more profitable. You’re never chasing after money because everything you do is paid for before you do it. And all of the overhead expense that comes with chasing after insurance payers claims processing fees and clearing house fees, and either third party billers or in-house billing staff.

To prepare claims, submit claims, chase after claims deal with denials, appeals, all of that goes away. Things like HIPAA compliance potentially go away. If you’re entirely cash and you. Don’t do three things that make you a covered entity specifically. You don’t do electronic benefit ver verification, you don’t submit electronic claims and you don’t accept electronic remits meaning EOBs.

Those are the three things that make you a covered entity under hipaa. And while I’m not saying that you. Can just go nuts and not worry about protecting the privacy of patient health information. It still becomes a concern, but HIPAA technically doesn’t apply to you at that point, and then you’re just subject to your state licensure and or state, Confidentiality laws relative to patient information, and it’s just one more layer of compliance expense that you don’t have to worry about.

I suspect most of you, that’s not a real expense anyway because you may have policies and procedures, they may or may not have been updated with changes in your. Electronic systems, those need to be constantly reviewed and evaluated, training, so forth. And I know that to be the case because every new client I get, I’m the one drafting and sending the business associate agreement that allows them to send p h i to me before that’s in place, docs are sending audit results with patient information in them and whatnot, and they technically shouldn’t be doing that.

Until those agreements are in place. While that may not be a cost that you actually experience, it’s a cost that you should and that potentially goes away. Now, the one interesting thing is that there’s one in, in many states, not in all states, but in some states where you have first party benefits for auto injuries.

And you have decent workers’ compensation benefits. That’s the one area where I think there are still opportunities to do a reasonable case value. Don’t be greedy. Remember, pigs get fat, hogs get slaughtered. But you can get in, do your thing in a PIP case. Don’t get crazy with your coding.

Try to get out within six to eight weeks and you’re never gonna be a blip on anybody’s radar screen. Don’t be too predictable in the type of care that you provide. In terms of you’re not always billing the same codes consistently all the time that gets noticed. But if you do reasonable care, you can get in and make, a decent amount of money, $2,500, $3,000 case in a PIP or work comp claim, and it’s not gonna create any problem for you. The problem and the reason why so many docs are transitioning to cash for the regular commercial insurance is because there’s just no money in it. Deductibles are real high. Co-payments are real high and more importantly.

Payers are diminishing the number of visits that they think are appropriate for management of conditions. If you get too robust in your plans of care, you’re certainly gonna get audited and you’ll be likely given some or most of that money back. That’s what makes dealing with an in with insurance so difficult because while it is possible to comply with all the rules, it requires a lot of effort, a lot of documentation.

And unfortunately I have yet to find an E M R system that is capable of producing the kind of documentation that insurance companies are looking for. I could show you what it looks like but. It’s very difficult and time consuming to prepare in which case when you consider the value of what you’re getting from the insurance company, considering the cost share obligations of the patients, which you can’t waive that’s generally illegal except in limited circumstances such as a documented objective, financial hardship.

The insurance business isn’t what it used to be, and docs are finally Usually in response to an audit and they never wanna go through that again. When they start to realize the risk and that, the money that they thought they made, they really didn’t make, in which case, when they evaluate profitability long term, in terms of what it costs to do that care, bill that care, collect that care, deal with the post-payment case, pay money back.

You’re working for a pittance at that point. And then if you did, you know you were Uber compliant and following all the rules, you’re spending more time doing records than you are treating patients. Your time is better spent and more profitably spent with treating patients In this evolution, I don’t necessarily think that the reversion to cash model of care is necessarily bad.

I think it frees a lot of practices. Most of the docs that have worked with it, have done this conversion are ecstatic. Wish they’d have done it years ago. And I’m not saying it’s necessarily right for you, but you need, do, need to evaluate. What you’re doing, and I’ll tell you a quick story about a recent client that is in a pickle is staring at a large six-figure refund demand, let’s say a mid six-figure refund demand.

And I. The reason is they were making great money off of insurance. And the problem is that the way they were doing it, there were too many services per visit. A lot of the services that they were doing weren’t necessarily justified based upon what they were actually doing number of documentation problems.

They had a relatively high volume, which means they were generating a lot of cash and they were riding a horse. It was just not sustainable. And finally the payer did an audit and euphemistically that horse, bucked them off. And the hard part is explaining to the doc that’s a horse that you’re never gonna get to ride again.

You’re never gonna see that kind of money again because that kind of money wasn’t real. Especially given that you have to give it all back. So all the effort and expense that it took to generate those big gross dollars your net on that, even had it not been for the audit, seemed like it was okay.

But then when you think long term and you look at your risk because of all the policies you weren’t paying attention to the documentation issues and coding issues that you weren’t paying attention to, and you come to realize that it was fake money. And that’s unfortunately a story that happens too often in the insurance.

So if you’re making great money on insurance, And you think, why in the heck would I ever go cash? Consider that the great money that you’re making might be problematic. You should probably look into it, do an internal audit have somebody evaluate it and see whether you’re on solid footing, and you can actually defend the payments that you received.

Because if you can’t, you need to start thinking about either fixing that and or incorporating some cash so you’re not so dependent on insurance, because when those issues come up Things have to change and they need to change rather suddenly. And sudden change in a practice is usually not very fun.

And it does create a short term upset in your income. So think about those things, but think about how chiropractic has evolved through billing. To where we’re now going back to where we started. And for docs that have played the insurance game, got stung and then got out of it most of them wish they never had to deal with insurance ever.

And they truly like the idea of not having to look over their shoulder anymore, wondering when an insurance company’s gonna come and try to beat him up. Just some thoughts to ponder. Nothing too heavy for today’s presentation, but just an observation that I thought was worthy of sharing. So I hope you found that useful and we’ll look to talk to you next time. .