Are You Properly Documenting Surgical Service Claims?

By Michael Carroll on May 9, 2018

Americans spent $3.2 trillion on their healthcare in 2015, an increase of 5.8% from 2014. That’s 17.8% of gross domestic product (GDP). Compare that with $27.2 billion in 1960 and just 5% of GDP. Costs are rising exponentially. Combine that with legislation change and uncertainty, stringent new quality measures required by Medicare and Medicaid as well as updated coding requirements such as ICD-10. It’s no wonder medical practices and organizations are struggling to maintain cash flow and manage uncollected debts.

Surgical procedures make up a huge portion of medical costs for patients, physicians and facilities. Almost 29% of hospital stays involve operating room procedures and 48% of hospital costs involved stays that required operating room (OR) procedures. Researchers concluded from that data, “Mean hospital costs for stays with OR procedures were more than double the mean costs for stays without OR procedures.” It’s easy to see how unpaid surgical procedures play a huge role in an organization’s or a provider’s cash flow.

The good news is that under the Affordable Care Act, the number of uninsured Americans fell from 48 million to 27 million, according to the U.S. Census Bureau. Still, over 200 million claims are denied each year. How much are you spending on the surgical claims process? What percentage of claims have to be corrected? The best way to streamline the process and improve your revenue cycle is to get it right the first time. Are you ensuring this happens by properly documenting surgical service claims? Consider these four tips.

Coding. Coding. Coding.

We put this first because it is the most important. Using old codes or the wrong combination of codes can result in a denied or rejected claim. Even if corrected and resubmitted, you’ve lost valuable staff time researching the error, correcting it and resubmitting it. Coding is not always straight-forward. There may be multiple codes that could apply. However, only one might be approved by the payer. An example noted by Becker’s ASC Review was that of a spinal injection. It could be billed under a pharmaceutical revenue code, surgical revenue code or an ambulatory surgical care code. While all might be appropriate, coding it as ambulatory surgical care or outpatient services is what most payers view as appropriate. Coders must be trained to carefully check operative notes to determine any additional codes or modifiers that are needed. Was there a second procedure, a second incision or an additional physician? Patients are unique and so are their procedures.

Surgical claims codes must also be documented in the correct order to prevent revenue loss. Record the codes from highest reimbursement to lowest, especially when submitting to Medicare. Medicare will reduce the second coded procedure by 50%. If it’s the lesser one to start, you’ll lose less money on the reimbursement. Being familiar with payer preferences, doing your research up front and training staff to use the proper documentation is critical to the integrity of the revenue cycle.

Know Your Payers

Coding is only as good as your knowledge of your payers. Payers have preferences and your coders need to know them. For example, certain carriers prefer certain modifiers. By definition, modifiers mean the physician has altered the standard procedure, but not so much that the code has changed. Carriers may reject a claim if they see a certain pharmaceutical or piece of equipment was used that is not part of the standard procedure, but there was no modifier to explain why. Modifier preferences can differ by carrier or state. Good communication is critical to avoid the pain of the learning curve when patients switch providers or policies change. Encourage coders to personally contact carriers before submitting the claim if they are unsure about the requirements. If a denial does occur, have a process in place that requires accounts receivable to communicate the cause of the denial with the coder.

Document Assistants Used

Physicians will often use their physician assistant (PA) or another doctor for help during a procedure. When a surgery warrants the use of multiple physicians or PAs, be proactive by including documentation explaining why. Was the patient high risk or the condition particularly severe? Did their issue involve multiple specialties? Not being specific may result in a carrier sending your claim to peer review, delaying it or ultimately denying it.

Verify and Get Permission

Part of the documentation process starts before surgery even begins. Be sure your staff verifies patient coverage and gets authorization. Many carriers will ask for further documentation, especially on a high-volume surgery. They are going to want to know if there are any alternatives before approving the procedure. Staff must also verify the details of the plan. Does the patient have a high deductible? Do they have a coinsurance plan? If so, what percentage will the patient be accountable for? What modifiers will be required? Is the patient required to get a referral? Is your location covered by the carrier? Carriers will deny a claim at an unregistered location.

Being proactive doesn’t just apply to your relationship with the payer. Be proactive with the patient too. Well in advance of the surgery, help them understand the details of their insurance coverage and give an estimate of how much they will be responsible for paying out-of-pocket. Help them set up a payment plan. Offer an incentive to pay a percentage up front. Include the patient when you have done all you can, and the authorization or claim is denied. Let them know what’s going on. A three-way call between staff, the patient and the carrier often results in resolution. Don’t forget to document that conversation in case future issues arise.

Note the American Medical Association’s comment about denials. “There is wide variation in how often health insurers pay nothing in response to a physician claim, and in how they explain the reason for the denial. There was no consistency in the application of codes used to explain the denials, making it extremely expensive for physician practices to determine how to respond.”

Responding to denied claims is time consuming and expensive. Documenting the surgery right the first time is the key to a healthy revenue cycle. The tools offered by Agnite Health LLC, an affiliate of Advantage Administration, Inc., are helping our clients streamline their collections process and decrease uncollected debts. Learn more about how we can help your specialty practice by contacting our team. We have over 25 years of experience in the industry to support your practice through medical billing and collections. We can also remove the burden of staying up-to-date on legislation changes, coding requirements and more so you get your billing done right.