Why is it important to have written accounts receivable procedures?

When a practice is small, every patient can be treated on an individualized basis. As the practice gets larger, a doctor must rely on staff to make decisions and to make those decisions in a manner that reflects the doctor’s values. Procedures help insure that decisions are made in a consistent fashion and protect against unintentional violations of the law. They also make the management of the accounts receivable function so much easier.

If you do not have procedures:

- There is always an excuse as to why something was not done properly.

- You cannot measure the effectiveness of your staff.

- You cannot focus on problem situations.

- You spend time working on small problems while larger ones may lurk in the background. - The priorities your staff assigns to their work could result in balances being written off that could have been collected.

- You cannot easily determine where your staff may need more training.

- It is more difficult to determine the financial value of your accounts receivable.

Procedures, of course, should not remain static. They must be refined as insurance companies, laws or regulations and, as the experience and training of your staff change. All procedures should be flexible. Your goal is to strive for work being done in a consistent manner while leaving room for flexibility when the circumstances call for it.

What are the most frequent mistakes made by chiropractors in managing their receivables?

The most frequent mistakes are:

Poorly trained or untrained staff. The hardest job in the office belongs to the person in charge of collecting past due balances. While doctors have tremendous clinical responsibilities, at least they get to work in an atmosphere that is, for the most part, positive. The accounts receivables person, on the other hand, is confronted with the potential for a negative attitude on every call.

Filling this position is difficult because you not only need a person with the right skills but also the right attitude to be successful. Too often, a doctor takes a short cut by giving the job to another staff person and assuming that ‘proximity equals competence’. In other words, ‘if you watch someone else do a particular job long enough; you yourself will be able to do that job’. The result of that type of thinking leads to an improperly trained person and thousands and thousands of dollars of lost receivables that could have been collected if the person had been trained properly.

Training can be accomplished through a wide variety of methods. Past experience, professional classes, self taught programs, and on the job training can be equally productive. However, it is a mistake to assume that a staff person has been trained just because they attended a training program, read a book, or observed another person doing the job. You cannot have confidence that a person has been trained properly until you measure actual performance against the procedures that you have put in place.

Failure to discuss unpaid balances on a regular basis. It is not unusual for the office’s insurance person to have a variety of responsibilities in addition to collecting receivables. On a small staff the A/R person could be responsible for greeting patients, doing the actual billing, and assisting with therapies while also being responsible for collecting payments from insurance companies and cash paying patients. Because of these overlapping responsibilities, the doctor may be reluctant to have regular review sessions because they do not want to be told that ‘I have too much other work to stay on top of collections’.

The way to resolve this dilemma is to ask yourself a simple question. Am I willing to accept the loss of thousands of dollars of income because of my reluctance to have honest discussions with my staff person about her workload? If the answer is “yes” you will not find a magic answer in this book. Insurance companies are aggressive. They will not pay your claims unless you jump through all of their administrative hoops. The type of detailed work takes both time and professional competence.

When doctors have regular meetings to discuss the status of unpaid claims, it forces them to organize the priorities of their staff. In addition, it helps them to understand why they must be personally involved in some aspects of collections work. The chiropractor is the only individual who can produce the documentation and write the narratives explaining the medical necessity of the care. You cannot maximize the performance of this area unless the doctor is involved in regularly reviewing claims to make sure work is being done correctly and on schedule.

Delayed billing. Another question in this chapter details the actual costs of delayed billing. The most important point, however, is that delaying your billing hurts your collections activities in a number of ways. Beyond delaying your payment, it increases the risk that you will never be paid for your services.

Not enforcing collection policies. Any doctor smart enough to know the importance of having collection policies should also be smart enough to understand the consequences of not enforcing them. The biggest offense in this area is instructing staff to do follow a procedure when the doctor routinely ignores it.

What are “No Out of Pocket Expense Arrangements” (NOOPE) and do they violate the law?

Some chiropractors make it a policy not to charge patients for the deductible or co-payment portion of their care. This is a matter of great concern to virtually every insurance company. At first glance, having a no out of pocket expense policy looks very appealing to the doctor and the patient. In exchange for choosing a certain doctor, that doctor waives the payment of any deductible or co-payment. As a result, the patient pays for none of his or her care.

Patients are happy, because they believe they are saving money. The doctor is presumably willing to live with a reduction in income, in exchange for keeping these individuals as patients. In Wisconsin, however, NOOPE arrangements violate two sections of the statutes, Wi Stats. 943.395 and Chir. 6.02 (14). Failure to collect more than $1,000 in co-pays or deductibles is a Class E felony. In addition, the chiropractor is guilty of violating the terms of his or her license and is subject to disciplinary action by the Department of Regulation & Licensing.

For example, it demoralizes a staff when they insist on a patient making a payment and learn that the doctor has overruled their decision. A more effective response when patients approach a doctor for more lenient payments terms is for the doctor to say, “Mrs. Johnson, that is an area I leave entirely to Susan. As soon as we are finished with your treatment, let’s make sure you sit down with her to discuss your concerns. Whatever the two of you work out is fine with me.”

This approach demonstrates confidence in the staff and allows the doctor to focus on the health needs of the patient. There may be an occasion where the doctor needs to make a special arrangement for a patient, but these occurrences should be rare. If a doctor interferes in a staff person’s decision making on a regular basis two things are going to happen. The patients will know that the collection policies are meaningless, and that they do not need to listen to the staff. As a result, the doctor will never get peak performance from the staff because they know they are always just one conversation away from having their decision overruled.

Writing off collectable balances. A doctor works far too hard to have a balance written off without a complete explanation as to why it was necessary. While a doctor is not involved in day to day collections activity, as the owner of the practice they must insure that their money is properly accounted for. Each accounting period, the doctor reviews the reason for any account balance that has been written off.

- Was a true mistake made in billing? If this is the case, no attempt should be made to collect the balance and the billing should be corrected or the amount written off immediately.

- Did the doctor produce the documentation or reports requested by the insurance company? If not, the staff person should not be blamed for the write-off. While a staff person is expected to follow procedures for collecting unpaid balances, they can not be expected to do work that is the responsibility of the doctor.

- Did the staff person follow up with the insurance company according to your established procedures? (It is more difficult to assess blame if there are no procedures.) Too often, the expense of sending accounts to collection agencies or attorneys could have been avoided if the receivables person had done the work expected of them. Even worse, is when unpaid balances are written off without the doctor’s knowledge because the staff person was too lazy or incompetent to do their job correctly.

Why do “No Out of Pocket Expense Arrangements” (NOOPE) arrangements violate insurance contracts?

When doctors accept the insurance policies of patients, they are responsible for being familiar with the terms and conditions of the insurance policy. If patients are not charged according to the terms of the insurance policies, it may be considered insurance fraud. According to the terms of many policies, the insurance company does not become liable for the claim until after patients have paid their portion of the deductibles or co-payments.

The insurance polices are written on what is called an indemnification basis. They are not agreeing to pay charges. They are agreeing to pay the charges for which patients are legally responsible. If the doctor never charged them the deductible, patients were never responsible for the charges. Therefore, there never was a deductible, and the insurance company’s liability has yet to be established.

For example, suppose your patient’s insurance policy requires the patient to pay 20% of the first $2,000 of charges. The insurance company indemnifies (agrees to pay) the patient for all charges for which the patient is legally obligated. If your bill for services came to $1,000, the patient is obligated to pay $200. The doctor might say, “Don’t worry, you keep your $200. I’ll just bill the insurance company for the $800 and we will call the bill paid in full.”

The insurance company may not be willing to pay. The patient was never legally responsible for the first 20% of the charges. The doctor forgave the $200 in charges which the patient was legally obligated to pay. The insurance company could well maintain that since the doctor forgave the first $200, the bill is now $800. The patient would now be responsible for $160; and upon payment, the insurance company would pay the balance of $640. If the doctor would continue to forgive the patient’s portion, the insurance company would continue to maintain that it is only responsible once the patient has actually paid his or her portion of the deductible or co-payment.

The health care industry as a whole also suffers with this type of billing practice. Consumers have no incentive to be discriminating with their choice of providers or health care services. If all of their services are paid for, there is no reason for consumers to show good judgment. The net result is an increase in insurance premiums which actually limits the availability of health care. What seems to be an effective short-term marketing ploy by some doctors will actually have a very negative long-term impact on their practices.

Our doctor spent a lot of time putting our accounts receivables procedures in place. He insists that we follow them but he will not. How can we possibly be successful?

Obviously this is a sensitive problem. The solution comes in helping the doctor understand how the procedure helps you to do your work more productively. Before discussing this problem, make sure you have the doctor’s attention. Do not attempt a discussion while the doctor is busy seeing patients. Save the problem until after the workday is over or, even better, until you have a staff meeting.

Should you get insurance information over the phone when patients are making an appointment for their first visit?

This is not an approach that is recommended. Patients are used to providing insurance information when they arrive for their first visit. Asking detailed questions over the phone would be very time consuming and quite inefficient for your staff. However, it is very important for you to tell the patient to bring along their insurance information so you can more efficiently process their claims.

If a patient has a question about the chiropractic benefits available under their policy, it would be a good idea to verify the benefits for the patients as soon as possible. If the patient would like to have this information when they arrive for their first visit then it would be worthwhile to take their insurance information over the phone so the answer is available when they arrive for care.

Bring up the problem positively by explaining the ways the procedures help the practice. Point out the extra work that is involved when procedures are not followed. Then, ask the doctor if he would like to change the procedure, or if he has any ideas on how to improve the procedure in order to avoid the problems.

Your doctor intuitively understands the importance of accounts receivable procedures or he would not have developed them in the first place. Your professional approach to explaining the deficiencies in the day to day implementation of the procedures will be appreciated. If the doctor insists that the policies apply only to the staff, then you will need his help in developing alternative approaches when his intervention, or lack thereof, causes a problem. This may be frustrating, but you do have to remember who owns the practice.

My doctor does not like to be involved in billing matters, unless it is absolutely necessary. And yet, some of the patients insist on making financial arrangements only with the doctor. Is there a way we can help our doctor avoid this situation?

Should insurance information always be taken on the first visit?

Absolutely. If patients are relying on their insurance to pay their bills, you should confirm the coverage as soon as possible. By making this call immediately (before the patient arrives for their first visit is the best practice) you can find out if their insurance has lapsed, if their plan has limits on chiropractic care, and the amount the patient must pay in co-payments or deductibles.

When patients need to make special financial arrangements, they may be embarrassed to have to admit this to a CA. Thesepatients may prefer to deal directly with the doctor, whom they feel they can confide in more easily. Allowing patients to confide in the doctor is one thing; making financial arrangements is another. To control these situations:

Does a cash patient reduce the administrative cost of processing a claim?

Cash patients offer one advantage to the practice. Because the patients are personally paying for their services and an insurance company is not involved, the financial risk to the practice is greatly reduced because patients are paying promptly for their care. However, the administrative savings are minimal. While an insurance company does not have to be billed, the charges must still be recorded. In addition, state law requires the doctor to maintain clinical documentation on the care given to the patient or risk violating the law and the consequences of a malpractice claim filed by the patient.

Unfortunately, the savings associated with not filing an insurance claim are not as great as one might expect. The reason is that staff is necessary whether patients pay their bills in cash or an insurance company is billed. Because such a small percentage of patients pay cash for their services, the actual savings due to reduced stationery and postage expense is quite minimal.

As part of the billing and collections policies you give to the patient on their initial visit, print the following on the bottom of the page:

We understand that some of our patients experience financial difficulties from time to time. If you need to make special payment arrangements, please see . We will do everything possible to meet your needs.

If a patient does seek to make financial arrangements directly with the doctor, the doctor can respond by saying:

“Jerry, we want to do everything we can to help you. My job is to focus on all of your clinical needs and the person on my staff who handles financial decisions for me is_____. As soon as we are finished, I will make sure she spends a few minutes with you discussing your needs. Whatever she decides is OK with me.”

What techniques can be used to encourage visit by visit payments by cash patients?

No matter how conservative or liberal your payment policies, they will only be successful if the policies are enforced. Enforcing payment policies requires a team effort that relies on each staff person who has patient contact. The primary responsibility rests with the CA who has contact with patients at the conclusion of their visit. She must have access to the patients’ financial history via a report or a computer, so she can accurately inform patients about the status of their accounts.

After treatment, the patient must stop at the scheduling/payment desk. They hand the CA a routing slip for that day’s visit. The value of the services is added to patients’ accounts. The CA then says to patients:

“Mr. Smith, here is a copy of the invoice for today’s services. As you can see the total is $________ and that brings your total account balance to $__________. How much of that would you like to pay today?”

At this point you have given patients the option to pay their entire balance, the amount of today’s services, or the minimum amount described in your payment policies. If you consistently give your patients all three options, you will find that many of them will pay more than the required minimum.

How often should I bill for my services?

An efficiently run office will bill for the doctor’s services as soon as possible. In most cases, that would mean the first business day after those services are rendered. Offices which only bill once, twice, or four times per month are less efficient for the following reasons:

- The cash flow of the practice is negatively impacted. The longer a bill is delayed, the longer it will take the insurance company to process the claim. The accounts receivable balance could be reduced as much as $7,500 for an office with annual revenue of $200,000 if billing were daily instead of on the 15th and 30th of the month.

- Delayed billing has a negative impact on the organization of an office. The most efficient organizations try to avoid peaks in the administrative work cycle. Billing every day allows for uniform workflow instead of a frantic rush one or two days per month.

- Every day of delay increases the possibility that routing slips will be lost resulting in loses for care that was provided but never billed.

- Worker’s compensation carriers are notoriously lazy in responding to claims. Billing delays for WC claims increase the likelihood that the doctor will lose their right to request a default order from DWD.

- Delayed billing can cause the staff to assume that collections are a low priority. That attitude can have a devastating impact on the follow-up procedures that must be in place for an effective collections system. Less aggressive offices end up collecting less money from insurance companies and writing off much higher balances.

The cost of forms and postage are very minor when weighed against all of the disadvantages of billing delays. An insurance company does not process a claim differently based on when, or how, it is billed. The best office practice is to design an administrative system that includes billing on a daily basis. Someone else in the office is responsible for generating the patients’ statements. They never seem to follow a set schedule. How do I convince this CA that the statements should be sent out at the same time each month?

One of the purposes of your staff meetings is help each staff person understand how his or her work is important to others in the office. (Check the index for questions concerning staff meetings). This is an excellent example. The CA who prints the statements may not be aware that the mailing date is of any significance. Once you explain that your ability to collect on accounts is dependent upon the patients receiving their statements at the same time each month, your co-worker now has a reason to adjust her printing schedule accordingly.

It is a mistake to assume that because someone works next to you month after month, they know what you are doing or why you are doing it. They may be so involved with their own work that they never take the time to understand yours. This may be acceptable until what your colleague is doing, or not doing, affects your ability to do your job correctly.

A staff meeting not only allows people to explain the interrelationship of their jobs; it also allows you to solve the conflicts that invariably occur. When you talk through each of your needs and see how they compare to the objectives of the whole office, the solution is usually obvious. If not, you have the doctor to advise you as to which way he or she would like you to proceed.

When I call an insurance company, I am occasionally frustrated by the information I receive from the claims representative. When I ask to speak with a claims supervisor, sometimes I am refused. Is there a way to get around the claims representative, so I can speak to a member of management?

Here are several strategies you can use:

1) Be persistent. Start by getting the name of the representative. This lets the person know that he or she is personally responsible for withholding this information from you. Next, be polite but firm.

“I know how hard you are trying to help me, but I really would like to speak to your supervisor.”

If the representative continues to insist that the supervisor is unavailable (it is possible that they are sick or on vacation that day), ask to speak with the supervisor’s boss.

“What is happening on this claim (fill in the problem) is really important to my doctor and our patient. If the supervisor is not available, would you please connect me with his / her boss.”

2) Get the name of the claims supervisor from the representative, hang up, redial the company and ask for the claims supervisor by name. If you simply could not obtain the name, tell the operator that you have a problem that can only be helped by the claims supervisor and ask to be connected.

3) If the operator refuses to connect you, ask to speak to the head of customer service or provider relations. If the operator asks you the nature of your problem, explain that “you have a policy matter that needs clarification, and it cannot be handled by a claims representative.” Every insurance company is set up differently, so you might be connected to:

- Provider relations
- Customer services
- Medical Director’s office
- Consumer or provider affairs
- Policy information office

The name of the department does not matter. You want someone who understands the policies of the company and has the authority to help you with your unique problem.

Why do some insurance companies send EOBs to the patient and not to the doctor?

We have asked this question of a number of insurance company representatives and have never received an adequate response. When it is suggested to the insurer that doctors and their staffs suspect it is because the insurance company wishes to delay the processing of the claim, they come back with a vague denial and a statement such as ‘It is the patient who is the policyholder, not the doctor.’ Unfortunately, this puts you and your patient in a difficult position.

When a patient receives information from their insurer that their claim is being reviewed or denied, they should automatically forward that information to you. In the real world, however, this happens far less often than it should. Patients routinely ignore information they receive from the insurance company and assume that you are handling everything. This problem is compounded if the patient has been discharged and is no longer in regular contact with your staff.

The first solution is to improve communications between the collections staff and the staff members that primarily interact with patients. This can be accomplished by keeping a list at the front desk with insurance companies and special problems related to them. Here is a partial list of special problems.

1) This insurance company only sends EOB’s to the patient. Make sure to remind the patient on every visit to bring in any information they receive from the insurance company. Reinforce that if we do not receive payment form the insurance company within _____ days, the patient must begin making progress payments on the account.

2) This insurance company uses a UCR formula based on data up to 18 months old. As a result, their reimbursement amount is below what we charge. Remind the patient that the insurance company will probably not pay in full for their services and that they are responsible for unreimbursed amounts.

3) This insurance company delays its claim processing by requesting documentation for nearly every patient visit. Explain this to the patient and remind them that you allow an insurance company_____ days to pay a claim and after that the patient is responsible for making progress payments on their account.

4) This insurance company claims that nearly every service is “medically unnecessary”. Explain to the patient that this does not mean their care is unnecessary, but rather that insurance companies use this as an excuse to delay the processing of their claim. Remind them that you will submit all information requested by the insurance company but that the patient is responsible for making progress payments on their account if a balance is not paid within _____ days.

5) This insurance company routinely denies payment for intersegmental traction, massage, or trigger point therapy. Explain to the patient that the doctor will provide documentation justifying the care, but if an appeal is unsuccessful the patient is responsible for payment. (You might want the doctor to explain this portion of the treatment plan, so the patient has a clear understanding of why this therapy is necessary.)

It is not necessary to print all of the applicable language behind each insurance company’s name. You would only have to list the insurers and print the number(s) that apply to them after their name with the expanded explanations at the top or bottom of the page.

The second solution is to make sure your receivables staff is making their follow-up calls on the schedule you establish. A staff person in regular communication with the insurance company will find out about a problem much faster than waiting for the mail to arrive in order to learn about their problems.

Is it a good idea to send a copy of my doctor’s documentation along with the claim?

While, in general, the answer to this question is no, there are circumstances in which sending documentation along with the claim is a good idea. The difference depends on the quality of your collections staff and an understanding of your administrative costs.

If you were to send a copy of your documentation along with each claim, you would incur the following costs:

- Photocopying
- Stationery or paper
- Postage costs (which for most docum- entation files could easily exceed $1.00 for each mailing)
- Large size mailing envelope.
- Staff salary cost (for the individual making the copies)

In addition to these measurable costs, there is also the intangible cost of delaying other work in order to complete this task. If the individual responsible for collections is also responsible for all of the administrative work related to collections, this time intensive task could be keeping her from making the follow-up calls that are so important to an efficiently run receivables operation.

What do we do when patients routinely tell us they have forgotten their wallet or will pay us ‘next time’ (and next time never comes)?

If you are in the grocery store and forget you wallet, you are not allowed to leave with your groceries until you return to the store with a check. Patients that routinely violate your payment policies are taking advantage of you. There are two approaches you can use to deal with this. The first is to place a reminder call to the patient the day before their appointment.

“Hi. This is Jennifer Smith calling for Springfield Chiropractic. We are looking forward to your visit tomorrow morning at 10:20 and want to remind you that your co-payment of $20.00 is due at that time. Have a great day!

The second approach is to tell a person that has forgotten their checkbook or purse, “We are open until 6:00 p.m. this evening. Could you drop a check off sometime before then?” If you say this with a smile, the patient will understand that they had an obligation to pay at the time of their visit. You have professionally offered them an alternative payment method. After making an extra trip or two they will remember to bring their checkbook with them.

Unless a claim reaches a pre-determined audit point, the claim will be processed automatically without the need for a review of the office records. Sending documentation when it is neither requested nor necessary is clearly not cost effective. Indeed, it may be counter productive. Many insurance companies assume that if documentation is included with a claim it is because they requested it for a “medical necessity” review. By sending documentation before it is requested, you may have exposed yourself to an unnecessary review and its attendant delays.

The only time it makes economic sense to send documentation along with the claim is when you are familiar with the review tactics of an insurance company and you know that the documentation will be required before the claim is paid. In Wisconsin, an insurance company is supposed to pay a claim within 30 days as long as it has all of the information required to make a proper claim decision. When a company deliberately wants to delay payment it merely waits until the 29th day and then requests a copy of the office notes. This subjects you to an additional 30 day delay.

Your staff should make a list of all of the insurance companies who operate in this manner. Even then, because of the administrative and postage costs, it may not make economic sense to send notes with every claim, especially if you are doing your billing on a daily basis. A better course of action might be to send documentation along on a weekly basis. A note on the front of the file can be used as a reminder device as to the schedule for including documentation.

If I have already sent my files and I know they have been received, do I have to send another copy?

This problem has to be a major irritation to a CA. You send your file and verify that it has been received. The claims representative tells you that he or she will get back to you in three weeks. Three weeks later the claims representative tells you he or she no longer has your information and asks you to re-send the entire package. How can this be?

Insurance companies do make mistakes. It is not that the insurance company threw away your documentation, it more likely that it was misfiled. With their overwhelming amount of paperwork, the insurance company feels it is more cost effective for you to send the material a second time than for a claims representative to go and search for it. If you choose not to send the information, the processing of your claim will stop.

A better course of action would be to ask the claims representative for expedited processing of the claim. Since the company is at fault for losing your information, ask what can be done to prevent any further delays. If it happens a second time, you definitely want to get a supervisor involved. The supervisor’s involvement can cut through a lot of red tape and get your claim paid.

What do you do when an insurance company continuously claims they never receive the records you send to them?

One of the great unanswered mysteries of all time is what happens to all of the documentation that is sent but supposedly never received by an insurance company. Does the post office have special warehouses holding “lost” chiropractic clinical documentation? Do insurance company claim managers use this “lost mail” to warm their homes during cold winter nights? Or, are the administrative systems of some insurance companies so poorly run that they really do receive the mail but misplace it within their filing systems?

While human nature wills us to believe that it must be one of the first two answers, it is far more likely that it is incompetence rather than conspiracy that results in so many duplicate mailings being necessary. Even the largest chiropractic office is tiny in comparison to an insurance company. An insurance company is simultaneously processing claims for thousands of doctors and hundreds of thousands of patients. Your documentation must make its way through their mailroom, a possible microfilm logging system, and an internal routing process that must correctly identify the one person out of hundreds or thousands to whom the records must be delivered.

If there is a single mistake and the file is misdirected, the insurance company considers it too expensive to search for the records. Instead, they wait until you follow up for a status report on your claim and then ask you to mail another copy of the records. If you use the same mailing procedure as the first time, you have increased the probability that your records will be lost for a second time. You can save yourself the frustration of all of these experiences by following the following procedure.

- Never send records without specific mailing instructions from the insurer.

- If the EOB requesting records has a specific department name and address, be sure to use it. If you do not, your records are likely to be misdirected.

- Whenever you send documentation, call the insurance company four to five business days after the records are mailed to verify that the records were received. This call also allows you to ask how long it will take to review the records, so you can follow up appropriately.

- If an insurance company claims they did not receive your records, do not send a second set unless you have the specific name of an individual to put on the envelope. Also, verify the address to which the records are to be sent. Inform the person that you will call in three or four days to verify that they have received the information. Most importantly, write down the name of the person and the agreed upon follow-up date.

- As an alternative to a second mailing consider faxing the information to a specific person. Follow up the fax with a confirming phone call.

- It may be to your advantage to have pre-printed “paste-it” notes with the following heading to assist the insurance company mailroom.

“You requested this documentation for the following claim number/s.”

- Remember, an insurance company does not care how long it takes them to process your claim. It is to their advantage to allow the process to go on indefinitely. Unless you follow-up on a regular schedule you can assume there will be no activity on your claim.

How can an insurance company reject a claim when the representative has not yet seen a copy of our records?

Today, the overwhelming majority of claims are still paid on a routine basis. However, each year greater proportions of claims are undergoing special reviews by the insurance company before the claim is paid. When payment for your care is denied, the correspondence from the insurance company will read something like:

“The care does not meet the medical necessity provisions of the insurance contract.”

This does not mean that your doctor has done something wrong. In fact, it has very little to do with the quality of care which was rendered to the patient. This language is used to inform the doctor that additional information is needed before the claim can be paid.

An insurance company has set procedures that must be followed in order to get a claim paid. If you do not follow that procedure, your claim may be refused without anyone telling you why. In the case of a claim being rejected when records have not been reviewed, the policy would require a copy of the patient’s records before a claim is approved for payment. If these copies were not sent along with the claim, the claim would be rejected without an explanation.

To prevent this from happening, you must know the processing procedure for each insurance company. When a patient has coverage from an insurance company for whom you have not previously submitted a claim, call the insurer and get the following information:

- What type of documentation is necessary to file a claim?

- Should a copy of the clinical documentation be sent along with each claims submission, or do you wait to send the documentation until it is requested?

- Can you request a specific person to help you, or must you work with all of the claims representatives?

Following the procedures of an insurance company can save you weeks in getting your claims approved.

What information is an insurance company supposed to provide when it rejects a claim?

Wisconsin statute 632.875 states that if an insurance company restricts or terminates coverage, they must provide to the patient and to the treating chiropractor a written statement that contains all of the following:

(a) A statement that an independent evaluation has been conducted under s. 632.87 (3) (b) 1.

(b) The name of the treating chiropractor.

(c) The name of the patient

(d) A description of the insurer’s internal appeal process that is available to the patient.

(e) A statement indicating that the patient may, no later than 30 days after receiving the statement required under this subsection, request an internal appeal of the insurer’s restriction or termination of coverage.

(f) The address to which the patient should send the request for an appeal.

(g) A reasonable explanation of the factual basis and of the basis in the policy, plan or contract or in applicable law for the insurer’s restriction or termination of coverage.

(h) A list of records and documents reviewed as part of the independent evaluation.

Some of our patients bring in their “explanations of benefits”. What should I say to patients who ask me why the insurance companies are telling them that their care was not “medically necessary?

Patients who receive an EOB stating their care was “not medically necessary” are likely to be concerned. They may begin to think the doctor has done something wrong. Your job is to reassure the patient:

“Mrs. Taylor, let me explain exactly what that means. Medical necessity is a term that insurance companies routinely use when they initially review a claim. It does not mean your care was unnecessary. It is the insurance company’s way of asking our office for additional information about your care.

Every time Dr. Smith examines or treats you, he keeps very extensive notes. When the insurance company uses this phrase, it means that we need to send all of your clinical documentation to them for their review. Once the insurance company reviews all of that information, the claim should to be approved.”

It is OK to let your patients know how frustrated you are when insurance companies use language like “not medically necessary”, instead of the “English” translation that you gave them. Insurance companies use this type of language for all health care providers, not just chiropractors.

How can we encourage our patients to make their co-payments of deductible payments on a visit by visit basis?

Your collection policies can only be successful when they are consistently enforced.

- If you collect co-pays or deductibles before the patient is seen by the doctor, make sure the staff makes the collection attempt. This may be difficult if the staff has a multitude of other responsibilities but the collections work must not be allowed to slide.

- If you collect after the patient has received care, be sure that the patient is required to stop at the scheduling/payment desk after each visit. Use a presumptive tone. “Dan, your portion of today’s care is $20.00. How would you like to pay for that?

Is a statement that the care did not meet the medical necessity provisions of the patient’s insurance coverage considered a “reasonable explanation”?

No. They should include a specific clinical reason as to why the care was not paid for.

Some insurance companies send us EOBs that state the services were not “medically necessary”, but do not any further explanation. What should we do?

The insurance company is hoping that you will write off the account balance. Believe it or not, some offices do just that. By now, however, you know that the words “not medically necessary” have very little meaning. They are merely a phrase that signals you to send more documentation to the insurance company.

You have two choices if you receive correspondence that does not tell you what information the insurance company wants. The first is to call the insurance company and find out directly from them. The second is to send them a complete copy of your file. Of the two alternatives, you are better off sending a copy of your file without delay. The type of company that does not give you any guidance is looking to delay the processing of your claim. A telephone call will only confirm that a complete set of your records is needed before the claim is processed.

What really works to get our doctor to fill out reports for insurance companies?

Insurance company reports are time consuming and difficult to prepare for every doctor. When your doctor left school, he or she was excited about the prospect of treating patients. In the real world, doctors have to spend an extraordinary amount of time doing paperwork to justify their care to insurance companies. Every minute that they spend filling out forms or writing reports is less time available for patient care.

You can be of some help by insuring that claims are filed properly, so insurance companies do not generate unnecessary inquiries. You can also encourage your doctor to take a couple of additional minutes with each patient to complete the documentation at the time of the visit. The extra effort will yield better documentation and less frustration when it comes time to answer the questions of insurance companies. Frequent discussions of accounts receivable, along with the amount of claims which have to be charged as non-collectible, will help keep your doctor focused on the importance of completing the reports required by insurance companies.

We have staff that does not do a very good in keeping accurate files. What can we say to them to help them understand the importance of this work?

There is no responsibility in your office more important than the proper handling of your patient records. Within your patient files is the entire history of your relationship with the patient. Complete and accurate records:

- Allow your doctor to diagnose and treat the current health care problem of the patient.

- Help your doctor to understand how future problems might be related to past conditions.

- Provide you with the information you need to bill patients or their insurance carriers.

- Serve as a resource for your doctor to defend his or her care when it is subject to an independent medical examination.

- Protect your doctor from claims of malpractice.

- Provide statistical information to insurance and managed care companies which they use to determine treatment protocols and payment systems.

- Assist other health providers in understanding the health history of your patient if the patient is referred to them for care.

What if the insurance company will not tell me how long the review of our records will take. How do I follow up?

Persistence, persistence, persistence. An insurance company is are not expecting you to call them twice a week until the review is completed. But, that is exactly what you should do if they will not give you any information regarding the review process. Most major insurance companies are fairly professional when it comes to dealing with providers. Some companies, however, love to play the game.

The longer you are kept waiting, the more interest the insurance company earns on your money. If you are willing to wait four to six months for a claim to settle, the insurance company is happy to accommodate you. On the other hand, if you place a professional follow-up call every three to four business days, the claims representative will get tired of hearing from you. He or she will either give you the information you need or expedite the processing of your claim.

Is there any limit to the number of times my doctor has to write reports explaining his or her care?

No, there is not. Sometimes a case that seems uncomplicated can get extra scrutiny from the insurance company. The result of this scrutiny can be a lot of report writing. Reports are used by insurance companies to help them, or their consultants, understand the documentation in the patient files. Because the educational level and quality of claims representatives and consultants varies widely, some of them need to be lead through the case step by step.

These reports take a lot of your doctor’s time. The best way to respond to them is to provide complete clinical documentation and to supplement that documentation with a narrative when necessary. It is an expensive and frustrating process, but it must be done in order to insure that you receive payment on your claims.

For a self-insured employer, what are my options if I have submitted all of my records to the insurance company and I have used their appeal system, but they still refuse to pay my claim?

When this happens the doctor has three options:

First, the balance can be written off. That ends the paperwork nightmare, but it also ends the ability of the doctor to collect for work that was legitimately provided.

Second, the doctor could balance bill the patient for the unpaid services. In your initial conversation with the patient you told the patient that he or she would be responsible for any unpaid charges by the insurance company. You have every right to collect for those services from the patient. Rather than just issuing a bill to the patient, it would be very wise to include a copy of all of your correspondence with the insurance company, if you have not already done so. This way the patient has a clear understanding of the lengths you went to trying to get the claim paid. The patient may also wish to pursue action against the insurance company through the grievance procedure of his or her policy or through the courts.

Third, the doctor could decide to try to collect from the insurance company through the courts, on behalf of the patient. To do so, the doctor would need to obtain an assignment from the patient. An assignment transfers the rights of the patient to collect from the insurance company to the doctor. When the doctor receives the assignment from the patient, he or she would normally agree not to pursue collection from the patient in exchange for being able to take the insurance company to court.

Is it a good idea to send my records certified mail, so I can prove the insurance company received them?

When you send your records certified mail to a large insurance company, your receipt only confirms that they received the letter. It does not guarantee that the letter will be delivered to the right person. If you are concerned with the possible loss of your documentation, call the claims representative and personally verify that he or she received the information. Better yet, fax your records to a specific person at the insurance company. Not only will you know for sure that the information arrived, it will also give you the chance to find out how long it will take the insurance company to review the information.

What do I do when a fellow staff person refuses to follow one of our office procedures?

Here are the possible problems:

- The individual was not aware of the procedure.

- The person did not understand the procedure.

- He or she did not know why it was important or how it relates to other work in the office.

- The employee just does not care.

The only way to find out which of these is the cause of the problem is to professionally discuss the problem with the staff member. You might begin by asking if he or she knew that there was a procedure for the activity. Whether the answer is yes or no, you then want to explain why the procedure is necessary and how it makes the office more efficient. You might also explain the problems that are caused if the procedure is not followed.

At this point, you are almost certainly going to get a favorable response from the employee. After all, once people understand why something is important, they are usually only too happy to cooperate. Misunderstandings most often occur because people assume the procedure is not really necessary. Once they understand, things usually improve. In the rare case that it does not, you should ask for a private discussion with the doctor or the office manager. He or she can stress the importance of the procedure to that employee.

How should a collections meeting be structured?

The collections meeting should be divided into three sections: cash accounts, insurance accounts, and personal injury accounts. While each section has unique collection activities associated with it, the format for discussing the accounts is the same.

- Bring in a copy of your accounts receivable report, your collection cards, and the account file if there is any special correspondence that needs to be reviewed with the doctor.

- Review each account that is past due.

- Brief the doctor on the reason why the account is past due, the attempts that have been made to collect the account, and the current status of the account.

- If there is a change from your last collections meeting, brief the doctor on the change as well as any payments that have been made on the account.

- If you and the doctor have agreed to take a certain action on the account, the action should be noted on your collection card.

- While you never want to act hastily in taking a patient to small claims court, referring an account for collection or, writing off a past due balance; it is equally important to have a realistic view of the collection potential for the account. That is why it is so important to document each time the patient makes contact with you and what resulted from that contact.

The amount of time that you spend discussing any one account will be small. Your collection cards are absolutely critical, because without them you would not be able to recall the details of your collection activity. If there are problems with a certain account, your doctor may ask for more frequent updates on the activities pertaining to that account.

Your meetings are a perfect time to discuss changes in your collection’s policies as they are needed. When you get to the point that the only accounts being written off are those that are truly unavoidable, you know that you have an excellent system for collecting your accounts receivable.

Can an insurance company require a certain style of documentation?

An insurance company could only require a certain style of documentation if it was part of the insurance contract with the patient. While most contracts do not spell out the type of documentation required, the reality is that insurance companies have their own standards regarding documentation. If a doctor does not use SOAP documentation, he or she will find that they will have to write many more reports justifying their care.

Every insurance contract has language that states that care will not be paid for unless it is medically necessary. This puts the justification for providing that care back on the doctor. Without a patient history, orthopedic and neurological testing, other diagnostic procedures, and a treatment plan, a lot of insurance companies will say the doctor did not prove the care was necessary. Any style of documentation used by your doctor will have to satisfy this need for information or the care will be rejected.

Is there any way to screen potential patients to determine if they are likely to pay their bills?

Every city or county has credit bureaus that will provide you with financial profiles of your patients, as long as they are not new to the area. You can also call their previous health care providers to see if they will give you financial references. Some providers will be cooperative in this area and others will not.

Of course, the best way to avoid having big problems in this area is to stick very closely to your billing and collections policies. If you follow up constantly with patients and their insurance companies, you are likely to be able to solve problems while they are still small instead of watching them grow into a major financial disaster.

Is it acceptable to call patients a couple of days before their payments are due to remind them of the due date?

Yes. The tendency on the part of some CA’s is to let the due date for a payment pass before making the call. Not only is the call not made on the day the payment is due, a few more days are usually allowed to elapse “just in case” the payment is in the mail.

That method is quite understandable for patients who routinely pay their bills on time. For patients who are typically late, however, a more effective means is to place the following call to the patient a couple of days before the payment is due (leaving the message on a telephone answering machine is perfectly acceptable):

“Hello, Mrs. Goodson, this is Robin Pierce at Dr. Smith’s office. This is just a reminder that your $50.00 payment is due on Thursday. If you should have any problems paying your bill by then, please give me a call. Thank you.”

When patients are always late with their payments, they are taking advantage of their relationship with you. Making this call helps remind them, in a nice way, that they have agreed to make a payment by a certain date. It eliminates the possibility of the patient “forgetting” and, it also lets them know that if they have a problem they should let you know as soon as possible.

Can an insurance company require a certain style of documentation?

An insurance company could only require a certain style of documentation if it was part of the insurance contract with the patient. While most contracts do not spell out the type of documentation required, the reality is that insurance companies have their own standards regarding documentation. If a doctor does not use SOAP documentation, he or she will find that they will have to write many more reports justifying their care.

Every insurance contract has language that states that care will not be paid for unless it is medically necessary. This puts the justification for providing that care back on the doctor. Without a patient history, orthopedic and neurological testing, other diagnostic procedures, and a treatment plan, a lot of insurance companies will say the doctor did not prove the care was necessary. Any style of documentation used by your doctor will have to satisfy this need for information or the care will be rejected.

At what point in the visit is it best to speak to patients about past due bills?

As soon as you become aware of a problem, you should discuss it with the patient without delay. If you have a CA whose job focuses solely on billing and collections, the other members of the team need to bring problem patients to her. A suggested approach would be for the CA to greet the patient and, after updating their patient files, say something like:

“Mr. Mears, before you go back to the treatment room, we need to have you go over some administrative matters with . If you will follow me, I will take you to her office.”

Please remember that any financial problems with patients should always be done in a private area of the office.

Should we ever ask patients to bring in a payment rather then waiting for them to mail it?

As long as patients are complying with your payment terms, they should be able to make their payments in whatever manner they wish, in person or by mail. The only time you need to be concerned is when they begin to make their payments late.

If you phone a patient about an overdue payment, it is quite reasonable to ask that patient to drop the payment off. Asking a patient to make a special trip to drop off a payment gives a sense of urgency to the patient. Dropping the payment off at the office is not as convenient as mailing it. The patient will know you are making the request, because he or she has not kept previous promises to pay.

Why is it so important to call patients as soon as their accounts are past due? Isn’t everybody a few days late with his or her bill payments?

Not everybody is a few days late with their bill payments. As a matter of fact, if you look at your patient records, you will see that most patients prefer to pay their bills as they come due. The reason you need to call patients as soon as their accounts become past due is to let them know that you take the payment of their bills very seriously.

As long as your conversations with patients are professional and never rude, there is no need to hesitate when making a call. It is the patient who has promised to pay you on a certain day. If that promise is broken, it becomes your responsibility to remind the patient.

Most patients are very aware of the due date of their bills. If they do not pay their bill on time, for whatever reason, they are looking for additional time to pay. Every day you do not contact these patients gives them the opportunity to use the money for a different purpose instead of paying your bill. The faster you follow up with late paying patients, the less likely you will have problems.

Does an insurance company have to give a copy of the independent medical exam (IME) to the doctor?

No. While a patient always has a right to this information, it is not always available directly to the doctor.

The reason for this is because the insurance policy is a contract between the patient and the insurance company. Information regarding denial of claims may be considered confidential by the insurance company. On a practical level this is a little silly. The doctor provided the care, and if the insurance company does not pay for it, the patient is likely to get a bill for those services.

It would seem that if insurance companies really wanted to help patients, IME reports would be mailed directly to the doctor. Most insurance companies do this. But once again, you have to remember that some insurance companies only want to do what is best for them and not what would be in the best interests of patients.

How can we be sure our patients understand their responsibilities before and after they are discharged from care?

The key to success in collections is communications. Before the patient is discharged:

- Make sure the appropriate staff person goes over the patients balance with him/her on the day that a patient is being discharged from care.

Explain each item on the bill and be sure to ask your patients if they have any questions. You do not want to take the chance that patients will not pay their bill because they do not understand the charges.

When patients do not understand their bills, they will not just withhold payment for the disputed charges. They withhold payment for the entire bill. The time to clear up any misunderstandings is when you still have personal contact with these patients.

- Go over your billing and statement procedures with patients.

Explain to patients when bills are sent, when the doctor expects payment, and how payments are credited to their accounts. This is your very best opportunity to make sure that patients know their payment responsibilities. Tell them exactly when their statements will be sent each month and how long they have to send their payments.

- Ask patients to call you, in advance, if they cannot make a payment for any reason.

By asking patients to call you if there is a problem, you are accomplishing two things. First, you are reinforcing how important it is to make their payment on time. Second, you are letting them know that you will be sensitive to any problems they may have in paying their bills.

This sensitivity is important. There are times when things may happen to patients and they are not able to pay their bills on time. It is better for you, and the patient, if you know what the problems are when they happen. Then you can work out an alternative payment schedule. If patients know you will be sensitive to their special needs, they will be more cooperative if problems should occur.

After the patient is discharged from care:

- Make sure your statements are sent on schedule each month.

If patients do not receive your statements at the same time each month, they will not develop a consistent pattern for paying your bills. If your statements are late, they have a built in excuse for being late with their payments.

- Post all payments to the patient’s account as soon as possible.

Accurate records are your only means for taking action on patients who have not paid their bills. Posting accounts as soon as you receive a payment requires a little extra effort, but it allows you to take action more quickly if accounts become past due.

- Past due accounts should be updated daily.

Once accounts become past due, pay special attention to any payments which are received. This is especially true for seriously past due accounts. If you have started any collection activities with a lawyer or a collection agency, these activities might have to be terminated based on payments made by the patients.

- Patients should be called the first business day after their accounts are past due.

The natural inclination of a staff person is to “give the patient a little extra time”. What you may have forgotten is that the patient has already received at least 30 days to make their payments.

The first phone call to them can be extremely polite:

“This is Janice Cook from Dr. Smith’s office. Mrs. Trent, I have been reviewing your account, and I noticed that your payment for this month has not reached us yet. Is there any problem we need to discuss?”

Your patient may be quite surprised to receive a call so soon after the bill was due. Because you will be exceedingly polite, the patient will quickly understand that the doctor is very serious about collecting the balances which are due.

- Make sure you have a collections card for each patient that you must call.

You should begin your collections card on the first date the account became past due. Every time you make contact with a patient, assign a follow up date for the next contact. After the follow up date is listed, the card should be placed in your 31 day follow up file.

- Record all contact you have with the patient on your collections card.

All phone calls, letters and payments should be recorded. The volume of work in the collections area makes it too difficult to remember all of the things a patient may have said to you. Taking notes on your collections card helps you remember exactly what occurred on each call to the patient.

Since this is your own personal card, feel free to keep references not only to what the patient said, but how he or she said it. Sometimes the mood of a patient can tip you off to a developing problem.

- Set up a 31 day follow up file. This file is nothing more than 31 separate manila files that you use to store collection cards which need follow up with patients.

Each number corresponds to a calendar day, without regard to the month. For example, if it is November 27th, and your patient tells you that you will receive their payment on December 2nd, you would note the patient’s promise to pay on the collection card. The card would then be filed in the number “2” file.

Every day you take out the file which corresponds to the day of the month. If it is March 23, you will work on everything in the “23” file. This system insures that you will never forget to follow up with a patient. Every day you have your follow up work laid out clearly. If you did not finish the work from the day before, you simply move it to the next day’s file.

When you assign a follow up date, you need to check your calendar. You do not want to accidentally assign an account to be followed up on a day the office is not open. When you use this system it does not matter how long, or short, a period of time elapses between contacts with a patient. You can confidently place the patient’s card in the appropriate follow up file and know that it will be there on the day you are supposed to make contact.

To be sure you can find the follow up card if the patient makes a payment ahead of schedule, put a patient location card in a special card file.

- If the patient does not keep their payment promise, they must be contacted on the first business day after the payment is due.

Your calls should be direct but professional. Ask the patient if they have had an unexpected problem. If not, you must politely insist on prompt payment.

At this point in the collection process, some chiropractic assistants are reluctant to make the collections call. Somehow the CA may feel that she is harassing the patient by asking for payment. Nothing could be further from the truth.

The patient agreed to pay the doctor’s bill at the time they received care. When the payment was not made on time, you gave the patient a further opportunity to make payment. The patient gave you a date the payment would be made. The patient then broke their promise for the second time. After a second broken promise, there is no reason at all that you should feel reluctant to make a collections call.

It is the patient who is worried about receiving your call. They know that a promise was made and not kept. The only way a patient is going to respond is if you keep the pressure on them.

- After the first broken promise, shorten the amount of time the patient has to make the required payment.

If patients are not keeping their promises, it is pointless to allow them another month in which to make their payment. It is a much better strategy to have them make small payments more frequently. Shorter amounts of time between payments lets patients know that you are closely watching their accounts.

- If a patient has kept a promise to send a payment which was late, it is a good idea to acknowledge the payment with a phone call.

It lets the patient know that you were watching for the payment and are pleased that they kept their promise. Because of your phone call, the patient is more likely to make subsequent payments on time.

We have some patients who do nothing but complain about our insurance procedures. Is there anything we can do to change their attitudes?

Normally people complain because they do not like to be inconvenienced. Dealing with insurance companies is very inconvenient and your patients want you to make this part of their lives easier. Your mission is to try and explain that insurance companies put up a lot of barriers before they will pay a claim and educate your patients as to how insurance works. Using the material contained in this chapter as well as the book “Managing Insurance Receivables” will be excellent resources in your educational efforts.

What happens to the work in my 31 day follow up file if I am out sick for a few days or on vacation?

Work that is delayed due to illness or vacation is simply moved forward in the 31 day file, to the first day you are back at work. This is also true of work that is not completed on any given day. The uncompleted work is also moved forward to the next business day.

Your 31 day file is what helps keep you focused on your work priorities. By completing the work in the file each day, you know you are following up correctly on your accounts. If you are out of the office for a few days, you will not be able to catch up in one day. But, the 31 day file system lets you know the exact amount of work that needs to be done.

My doctor is constantly asking me for information about the status of a patient’s claim with an insurance company. Almost always, there is nothing new to report as the claim is being handled routinely. How do I get her to stop asking me all of these questions, so I have more time to spend on my work?

You have a doctor who is very interested in your work. This active interest may be caused by a number of factors. The first is that they may be unfamiliar with the procedures for billing and collections because they were not involved in their creation. As a result, they are uncertain as to whether or not the accounts receivable work is being done properly. The second is that they are trying to make sure the payments due from the insurance company arrive in time to meet the financial obligations of the practice or their personal needs.

In either case, you can devise a system to insure your doctor has the information she needs and you have the time to do your work properly. You could handle the first situation by having a weekly meeting on collections. The purpose of the meeting would be to go over the status of all patients who have a balance due. This process is described in another question in this chapter.

By setting up a special time for this meeting, your doctor can save her questions for a time when both of you will be prepared to share information. After several meetings of this type, the doctor will be thoroughly familiar with the procedures used to collect an account. The doctor may then suggest that the meetings be shortened to discuss only those accounts with problems.

A natural exception would be the doctor inquiring about the status of a patient’s account while the patient is in the office. There are some patients who will always be very worried about their account, because they may have very limited financial resources. If the insurance company will not pay the patient’s bills, the patient may not have the money to do so. Therefore, the patient may constantly ask the doctor to check and “make sure that everything is OK.” While it takes time to provide this information, it is a service that is very appreciated by patients.

When your doctor is concerned about the amount of money due from insurance companies, you can assist by preparing a couple different kinds of reports. (See questions dealing with collection reports.) What your doctor is really looking for is a way to keep track of what is happening financially in this part of the practice. If you can timely collection reports, your workday will not be interrupted as frequently.

If there are disputes over some of the services patients received, should we suspend our collection activity until the disputes are resolved?

You will always have some patients who will call or write with questions after receiving their bills. They may not understand some of the procedures that were done or, may think there are items on the bill that should not be there. Naturally, it is best if you can provide a quick explanation that will resolve the question.

Some problems take time to research. This is especially true if an insurance company is involved. It is not a good idea to hold up collection of the entire amount until the dispute is resolved. Ask the patient to pay all of the charges that are not being disputed. When you make this offer, patients feel more comfortable knowing they do not have to pay for something they find questionable. You win as well, because you receive payment for most of the claim instead of having to wait for payment until the dispute is resolved.

How do you know what collections information the doctor would like to see if he or she will not tell you?

The way to find out is to prepare different types of collections reports and then ask:

Is this the kind of information you would like to see, doctor?

Is there additional information that would make the report more meaningful?

Would you like to see the reports more frequently, or less frequently?

Is there anything special you would like me to keep track of?

These are the types of questions which will open up the lines of communication between you and your doctor. Once your doctor understands that you are doing everything possible to keep her informed, her confidence in you will increase and you will gain greater flexibility in doing your job.

Is a doctor required to file an insurance claim for a patient?

Federal law requires doctors to file claims for Medicare patients. Other than Medicare, the filing of an insurance claim is a courtesy offered by doctors. Doctors do not have to perform this service; however, keep in mind that most of the competition will.

Can we balance bill the patient for the amount the insurance company reduced our fee?

Unless you have a contract with an insurance or managed care company that prohibits balance billing, you always have the right to bill the patient for services that are not paid for by the insurance company. When doctors agree to provide care to a patient, they file insurance for the patient as a courtesy. When the insurance company decides not to pay a portion of a legitimate bill, the doctor is under no obligation to waive the charges.

The battle over the payment of charges resembles a contest of wills. The insurance company wants to make you feel as if you are doing something wrong. On the other hand, they do not tell the patient that the data they use to calculate UCR is often up to 18 months old and may have other deficiencies (see UCR question). Unless you or the patient stands up to the insurance company, the insurance company wins. The patient, of course, feels that he or she should have nothing to do with this argument. That is not true. The insurance contract is between the patient and the insurance company. The doctor bills the insurance company as a courtesy, but the ultimate responsibility for the bill is with the patient.

To avoid having to pay the charges themselves, patients can be involved in the process. Patients have the right to ask every question your doctor asks. An insurance company which is unwilling to answer a doctor’s questions, may be more responsive to the patient. It is not easy for patients to undertake this task since they are not used to the terminology used by insurance companies. However, if patients are willing, your combined efforts may be able to get claims paid in full.

Can I refuse to give my patients a copy of their records if they have an unpaid balance?

No. A patient is entitled to a copy of their records any time they request them. Records may not be withheld because a patient has an unpaid balance on their account. If a chiropractor fails to provide records when they are requested, they are in violation of Chir 6.02 (28) which states that unprofessional conduct by a chiropractor includes failing to release patient health care records to a patient in accordance with Wi Stat. 146.83.

Does an insurance company have to honor a lien signed by my patient and/or the patient’s attorney?

Wisconsin law does not require an insurance company to honor any liens signed by patients or their attorneys. When an individual is involved in an auto accident, there could be many individuals or companies that would like to claim a portion of the settlement. The amount of the settlement may not be enough to pay the auto repair shop, health care providers, rehabilitation clinics and attorneys. Therefore, when settlement terms are agreed to, the insurer issues the check to the patient and lets the patient decide whom to pay.

When should an account be written off?

There is a natural reluctance to write off an account as uncollectible. Every collections person wants to believe that there is a chance that the patient will eventually pay the bill. But accurate accounting is important and writing off an account should not be delayed. Once you have:

- billed the patient properly

- made a complete effort to collect the account by phone

- written at least one collection letter and a final demand letter

- started an action in small claims court and received a judgment that cannot be collected, or

- referred the account to a collection agency or an attorney, if warranted, and they have responded to you that they have been unsuccessful

you have done everything that is reasonably possible to collect this account.

Some account write-offs on cash accounts are to be expected, such as when a patient moves without leaving a forwarding address. However, every time you have to write off a cash account, it indicates the potential for a change in your payment policies. At least twice a year, you should sit down with your doctor and review all of the accounts that had to be written off and focus on the reasons why. If you see the same reason repeating itself, you have to question whether your policy in that area ought to be more restrictive.

What percentage of revenue is written off in a well-run office?

This question is best answered by first defining a legitimate write-off. A legitimate write-off is an amount of money that the doctor is legally entitled to but chooses to forgo rather than pursue collection through the legal system.

- The difference between the doctor’s list price and the amount reimbursed by Medicare and Medical Assistance is not a write-off, because the amount should have been billed at the actual reimbursement rate, not list price.

- The difference between the doctor’s list price and the amount reimbursed by a worker’s compensation carrier is not a write-off, because the law does not allow a doctor to balance bill a patient for amounts above the certified data base level. Note: An accounting entry will have to be made, but the entry should be to an adjustment account instead of a write off account.

- The difference between the doctor’s list price and the price schedule of a managed care agreement is not a write-off because the doctor agreed to lower prices for this care. Note: Once again, an accounting entry should be made to managed care adjustment account so the doctor has a clear understanding of the cost of a particular managed care agreement.

- The difference between the doctor’s list price and a lower price paid by patients on “the same day of service” is not a write-off because the patient was never obligated to pay the higher price.

Examples of true write-offs are:

- Amounts billed, but not collected, through negotiations with an attorney to settle a personal injury case.

- Amounts billed, but not collected, to group health carriers.

- Amounts billed, but not collected, to individuals who have no insurance coverage.

Offices that utilize professional accounting systems as described above combined with aggressive and professional collection practices can write off less than 5% of their revenue.

If the insurance company mails us a check that reimburses us for only a portion of a claim, are we giving up our rights to collect the balance of the claim if we cash the check?

In most cases the answer is no. You can always cash the check from an insurance company without giving up your right to collect the balance of the claim, unless there is an endorsement agreement printed on the back of the check. An endorsement agreement would read something like:

By endorsing this check you are agreeing to accept the face value of this check as full payment for the services rendered in connection with this claim. You agree not to bill United Health Insurance Company or its subscriber for any balance due on the account.

If this language is not acceptable to you, you would not be able to cash the check. Even if you did endorse a check with this language, you have not necessarily given up your rights to the balance of the claim. However, before you do so, it would be wise to call your attorney and ask for advice.

If I deposit the check the doctor receives from the insurance company, are we giving up our right to fight the reduction of our charges?

Absolutely not. The insurance company would like you to believe that the case is closed once a check has been issued for your services. Cashing the check does not take away the rights you have to collect the money that is owed to your doctor. You still have all of the following options:

1. You can call or write the insurance company and find out if the amount due was unreasonably reduced. Check the index for help in preparing you for this work.

2. You may balance bill the patient.

3. If the insurance company will not pay your full charges and you choose not to balance bill the patient, you may file an action against the patient in small claims court. To do this you will need to obtain an assignment from the patient.

What does it mean when an insurance company says it is “closing the file” on a case?

Closing the file is another way of saying that the insurance company plans no additional administrative work on this claim. It does not necessarily mean that no further payments will be made on the claim. If you receive correspondence indicating that a file is to be closed, you will need to supply additional information to keep it open.

This usually means sending a report from your doctor telling the insurance company why the care was medically necessary. It is up to you to get this report filed as quickly as possible. When insurance companies uses language like this, claims will absolutely not be paid unless your doctor convinces them to “reopen” the file by providing additional information.

Can a lien against a patient be enforced?

A lien against a patient is fully enforceable; however, be very cautious before you rely on this strategy. Patients, with increasing frequency, cash a settlement check and use the money for personal purposes before paying their bill. When you attempt to take them to court to enforce your lien, the patient declares bankruptcy and you are left with a major write-off.

If you are depending on a lien signed by a patient, it is extremely important that the staff person responsible for receivables follows up repeatedly to stay on top of the case. This means regular calls to the patient, their attorney and the insurance company. It is necessary to call all three sources because one or two of the sources may not give you accurate information, especially if they are planning to cheat you.

When you know that the settlement date is imminent, arrange for a meeting with the patient. The best meeting date is the same day the check is received. The longer a meeting is delayed, the less likely you are to receive your money. The patient must know you are serious about receiving your money. As explained below, collecting partial payments throughout the course of treatment can limit your financial exposure to dishonest patients.

Why are personal injury claims more difficult to collect than group health claims?

Collecting a personal injury claim is rarely a simple process. You are dealing in an area of insurance work which prides itself on its adversarial nature. The involvement of attorneys, in most cases, can complicate the process even more because they have different objectives than doctors regarding the care of patients.

If a doctor decides to become involved in anything other than the healing process of the patient, it can complicate the collection process. The role of the doctor is to treat the patient until that patient has completely recovered from the accident, not until he or she receives permission from an attorney to discontinue care. If the doctor continues to treat a patient beyond the point where he or she would discharge a regular insurance patient, the collections process is almost certain to be adversely affected.

Personal injury cases involve a different standard of care. Because of the lengthy and confrontational nature of these cases, the doctor must usually do a more thorough initial examination and patient history. As care continues, additional documentation is necessary because the doctor may be called to justify every single treatment or test given to the patient years after the care was given.

Attorneys will occasionally ask a doctor to continue treating a patient past the point of normal discharge because they want to increase the financial settlement by the insurance company. You can understand the desire of the attorney to help the patient, but it decreases the credibility and may be fraudulent if the doctor participates.

A personal injury case always has a chance of involving litigation. When your doctor has to go to court to defend his or her care, they will be questioned very thoroughly by attorneys for the insurance company who know every trick in the book. Once they suspect that care was extended for an unusually long period of time, they will begin to question the credibility of all the care which was given.

Is it more expensive to collect accounts with staff people or with the specialists from a collection agency?

It is always more expensive to use an outside agency to collect your accounts. Whether it is a collection agency or an attorney, either one will charge you more to collect an account than the cost of doing it yourself.

Just like your office, these outside sources have to pay staff people to perform the collection activities. They also have to pay for office space, telephones, computers and everything else it takes to run their businesses just as you do. The difference is that they will add a charge to cover the profit they need to keep the business operating. This profit is why the cost of having them collect your claims is so high.

There is nothing wrong with using a collection agency or an attorney. They can be particularly useful when you have untrained or inexperienced staff. However, if you are using them more and more frequently, you should review your own collection procedures. There is a good possibility that with more aggressive follow up you can eliminate the need for some of this outside help.

Even in cases where a settlement is agreed upon before a trial, a doctor may still be questioned about the care, either formally through a deposition or informally through a second-opinion examination of the patient. In either case, the documentation of the doctor is examined and the result of every test correlated to determine if care was really necessary.

If the answer is no, the insurance company will not want to pay for the work of your doctor, regardless of promises made by your patient’s attorney. Even when a chiropractor does not extend treatment of a patient, the attorney will often ask the doctor to accept less than the full amount of the bill.

The staff is in a difficult position when it comes to the collection of a personal injury claim. Since you have no right to influence the doctor regarding the care provided to the patient, you must design office procedures to show your doctor that you are doing everything possible to collect these bills.

What steps can I follow to decrease my problems with collecting personal injury claims?

Following these steps can limit your financial loses from personal injury claims.

1. It is perfectly acceptable to ask the patient to pay the charges on the same day of service and have the patient seek reimbursement from the insurance company. While this is certainly not standard practice, you are under no obligation to finance the patient’s case against the insurance company. The attorney is working on a contingency basis with the fee being determined by the size of the settlement. Your doctor is still free to make his or her own financial arrangements with the patient.

2. In lieu of full payment, many practices request periodic partial payments based on what the patient can afford on a weekly or bi-weekly basis. Instead of monthly payments, payments are generally made twice a month coinciding with day the patient receives their paycheck. Using this approach, more attention is paid to the patient’s obligation to pay the chiropractor.

3. An auto or personal liability carrier is not obligated to honor a lien filed by a chiropractor. They have the right to pay a patient or their attorney directly. When this occurs there is an increased likelihood that the patient will spend the settlement and declare bankruptcy before paying for their chiropractic care. It is rare for an attorney to sign a lien without modifying its terms to protect his/her fee. Your attorney should draft an acceptable lien which the attorney and patient can sign to insure that you are paid when the case is settled. Because of the various laws in each state, it is not possible to provide a “model agreement”. If you are using an agreement obtained from a textbook or a seminar, be sure your attorney reviews the agreement. One bill that is not paid could cost you much more than the fee of the attorney who would review your lien form.

4. Never take any of your documentation for granted. Be sure that you carefully note any remarks made by a patient regarding changes in their condition or how they are feeling. The files for these cases can get quite large, so it is important that they stay well organized.

5. Payments may come from a variety of insurance policies. Third party payors will not pay you until the case settles. This does not mean that you cannot collect from the patients own “med pay” or from the patient directly.

6. There is no change in the follow up procedure used by your collections staff for a personal injury case. You want your billing to follow the same routine as that for any other patient. Instead of contacting the insurance company, your follow up contact may be with the patient’s attorney. An attorney may be handling many cases and you do not want yours to get lost in the shuffle. This will not happen if you are consistent in following up on the account.

7. You are not obligated to accept less than full payment for your services. If you have drafted a lien agreement, you have the right to expect the attorney to live up to that agreement. Attorneys are very good at giving you the impression that they will not pay you at all if you do not accept their offer. Do not be intimidated. You have a right to be paid according to your agreement, and if the agreement is not followed, you have every right to bring a court action against the attorney.

Why do some insurance companies insist on giving information only to the patient?

Insurance is a contract between the patient and the insurance company. Patients have a tendency to believe the billing relationship is exclusively between the doctor and the insurance company. This is not true. The doctor, or a staff member, will fill out most of the forms for the patient. However, there are some forms which patients must fill out themselves because the doctor does not have the required information. In addition, filing insurance for a patient is a convenience offered by the doctor. Patients must be made aware that they are ultimately responsible for payment of their care.

What are the consequences of having patients file their own insurance claims?

Some chiropractors make it a policy to have their patients file their own insurance claims. The theory behind this is that the doctor will save time, and the insurance company will not demand as much documentation from the patient as it would from the doctor. Both parts of this theory are usually incorrect. The insurance company may pay the initial claims of the patient without asking for documentation. However, when the patient reaches the insurance companies threshold for review, it will occur in the same manner for the patient as it would the doctor. If a claim is rejected for medical necessity reasons the doctor has a real problem.

When the staff of the doctor files a claim with an insurance company, the staff has some advantages. CA’s are generally familiar with the procedures used by the doctor and can readily explain them to the insurance company. When patients file their own claims and have to justify the medical necessity of care, they are not likely to be able to provide the information requested by the insurer. Their only recourse is to ask the doctor why the insurance company has rejected the claim.

The doctor may believe that by giving patients a copy of their file, the insurance company will get all of the documentation they need. But, this is not true. Doctors are often faced with writing reports to provide additional explanations of why care was necessary. Of course, the patient does not have the skill to write this type of report.

As a result, if the doctor expects to help the patient with the information, he or she will not only have to prepare the necessary reports, but also explain it to the patient. The explanation portion could be very time consuming, as patients do not have the background of a CA to help them understand why their care was necessary.

If the doctor chooses not to provide this additional information, the result will be an unhappy patient whose claim will not be paid. Given a choice between a chiropractor who will file insurance claims and one who will not, which do you think the patient will choose?

On September 1, 2001 the law changed regarding how long an insurance company has to pay a claim. What are the new requirements?

The chiropractic profession needed this change in the law because group health insurers were using a legal loophole that allowed them to delay payment for chiropractic services until they received the “proof of loss” required under their policy. Some insurance carriers would wait 30 days before requesting clinical documentation. They would then submit the documentation to their chiropractic consultant to determine if they had a “proof of loss”. The law did not previously put a time limit on these reviews and unscrupulous insurance carriers would use the loophole to delay payment of the claim.

Insurance companies (excluding self insured, federal and Indian plans) are now required to pay group health claims within 30 days after receiving a chiropractor’s clinical documentation or, the insurer must provide the doctor with a written statement containing a reasonable explanation as to why the claim is being denied. The timely payments law does not apply to medical claims; only those claims submitted by chiropractors. If the insurance company does not pay on a timely basis, a chiropractor may bill the insurer for simple interest at the rate of 12% per year.

We would like to take advantage of the timely payments law. How can we do so?

A practice could take advantage of the law by following these steps:

1. Do not delay the mailing of a claim. Claims should be mailed as soon as possible after the service has been provided. The most professional health care offices bill for services the day after they are performed. Every day billing is delayed gives the insurance company one additional day to pay your claim.

2. You have the option of sending your clinical documentation along with each claim. If you do so, please remember that it will be necessary to send all of the documentation for the entire claim. If you were to send only the clinical documentation related to a particular date of service, the insurance company would not have enough information to determine the necessity of the care. Because of the cost of copying and mailing documentation, it is likely that an office would only send documentation with each claim if they have had problems with a particular insurance company. When an insurance company requests your clinical documentation you should remember to send all notes form the first date of service for that particular injury.

3. The insurance company has 30 days from the day it receives the claim to either pay for the services or to give a reasonable explanation as to why the claim is being denied as required by Wi. Stat. 632.875. If the explanation provided is merely a variation of ‘the services did not meet the medical necessity provisions of the patient’s insurance policy’, the insurance company has violated the law. A copy of the EOB, along with the name and address of the insurance company, and the name of the claims or provider relations supervisor should be sent to the WCA.

4. If the insurance company responds within the 30 day period and provides a reasonable explanation for refusing to pay for the services, you have a right to use all of the appeal mechanisms within the insurance company.

5. Your appeal has the greatest chance for success if you are able to enclose a short narrative describing in plain english why your care was necessary. Your response is most effective if each paragraph of the response is indexed to the comments in the IME, and/or the appropriate section of your notes. Without providing further information clinical documentation, your appeal is not likely to be successful.

6. As part of the letter, request the file be re-reviewed. Let the insurer know that you will use all of their internal appeal processes and the independent review process, if necessary, to have this claim properly reimbursed.

What can we do about patients who work for self insured companies and complain that they do not have chiropractic benefits under their insurance policy?

Individuals who work for self insured companies do not have a right to chiropractic benefits in their group health policy. Their best hope for having chiropractic services become a covered benefit is to let their employers know how important chiropractic is to their health care. The patients’ communication with their employers will be most effective if they put their suggestions in writing. The letter should be addressed to the individual who has responsibility for the insurance benefits for the company. The personnel office will know the name of that individual.

Can a lien against a patient be enforced?

A lien against a patient is fully enforceable; however, be very cautious before you rely on this strategy. Patients, with increasing frequency, cash a settlement check and use the money for personal purposes before paying your bill. When you attempt to take them to court to enforce your lien, the patient declares bankruptcy and you are left with a major write-off.

If you are depending on a lien signed by a patient, it is extremely important that the staff person responsible for receivables follows up repeatedly to stay on top of the case. This means regular calls to the patient, their attorney and the insurance company. It is necessary to call all three sources because one or two of the sources may not give you accurate information, especially if they are planning to cheat you.

When you know that the settlement date is imminent, arrange for a meeting with the patient. The best meeting date is the same day the check is received. The longer a meeting is delayed, the less likely you are to receive your money. The patient must know you are serious about receiving your money. Collecting partial payments throughout the course of treatment can limit your financial exposure to dishonest patients.

Remember that some insurance companies are more fair than others. What is certain is that insurance companies quickly learn which chiropractors do/don’t fight their decisions. The ones that do not fight are likely to see a continuing pattern of care denials. The ones that do fight, especially those that, if necessary, are willing to go all the way through the appeal steps are likely to see more of their care approved.

We have quite of number of cash patients in our practice. Is it a good idea to tell cash patients when payment is expected on their account?

You and your doctor must decide when you expect cash patients to pay for their services. The best policy is for all services to be paid for at the time of service. Patients are normally allowed to pay for their care with cash, check, or credit card, if available. Patients are told their balance after the CA totals the services they received from the office routing slip.

Your doctor may decide that cash patients may delay paying a portion of their bill. However, it is not in your financial interest to make this decision on a universal basis. If patients have the financial means to pay their entire balance, they should be encouraged to do so. Any time payment is delayed, you increase the chances that a portion of the bill will not be paid.

If you offer delayed payment terms:

- Always give patients the option to pay their entire balance.

- Be definitive about the amount that must be paid on each visit. This can be a flat dollar amount or a percentage of the bill, but patients must know exactly what they are financially obligated to pay. If you allow the patient to decide how much they will pay, you can expect that payments will be smaller and come more slowly.

- If patients are billed for care, state the payment terms clearly on the invoice. The amount that is due should be clearly indicated as well as when payment is expected.

Any time patients are given the option to delay their payment, there is additional financial risk to the doctor. The longer the terms, the greater the risk.

Why should a doctor regularly meet with the receivables staff to discuss outstanding balances?

Your doctor should be briefed on a regular basis about the collection activities of the practice. This way the doctor:

- has an understanding of what is happening on an on-going basis.

- can ensure that billing and collections policies are being followed.

- can get involved in special situations.

- can anticipate when an account may have to be written off and make necessary adjustments in the financial forecasts for the practice.

A regularly scheduled collections meeting is the most professional way of keeping the doctor involved in the process. It sets aside time, on at least a monthly basis, to review the status of each uncollected account. If the doctor knows that there is a prearranged time to review accounts, he or she is more likely to let you do your work on a daily basis.

What traits are usually found in a person who is successful in an accounts receivable job?

A person is more likely to be successful if she/he has the following traits and abilities:

- very organized
- detail oriented
- comfortable working with numbers
- enjoys working on the telephone
- not easily intimidated
- tenacious
- willing to constantly learn new policies and rules.

If a doctor has a CA with a great personality who loves patients and is very good at explaining diagnosis and treatment plans, this individual may not have the personality to deal with insurance companies and the large amounts of paperwork required. Just because a person has skill in one area does not mean she will be good in another. Each job takes a certain type of personality, skills and aptitude. If a person is forced to do a job she is not really suited for, the individual is not likely to be good at it and the practice will suffer.

What is an HMO?

Health Maintenance Organizations began in the middle 1970s as a means to provide complete coverage to an individual or a family in exchange for a prepaid premium. Staff model HMOs pay doctors a salary and these doctors usually work in the health care facility of the HMO. Patients who choose an HMO must choose a doctor who works for that HMO. If a referral is necessary, it is usually made within the HMO organization.Unless it is an emergency, patients are required to receive all their care from the HMO or they are responsible for the cost of the care. While most of the services are covered through the premium, patients may also be expected to make a small co-payment each time they use the services of the HMO.

What is a PPO?

Preferred Provider Organizations are established by the insurance company to give patients a choice of doctors, while containing cost by negotiating discounts from each of the participating providers. Doctors are paid for their services on a fee for service basis while the patients are responsible for a deductible or a co-payment, and sometimes both.

Doctors themselves cannot choose whether or not to belong to the PPO. The decision is completely up to the insurance company. Agreements to serve on the PPO panel of doctors are usually for one year at a time.

What is an IPA?

Independent Practitioner’s Associations function as a closed panel HMO. In a traditional HMO, the HMO provides the buildings and equipment for the use of their doctors. In an IPA, there are no common buildings or equipment. Each doctor maintains his or her own facilities and equipment. As a result, the doctors are spread over the entire geographic community. For the IPA to control its cost, the doctor receives a set fee in advance for every person enrolled in the IPA. In exchange for that fee, the doctor agrees to provide all services necessary for the patients assigned to his or her care.

What are the different types of review that can be done on a chiropractor’s claim?

The most frequent type of reviews includes:

Preauthorization Reviews - The ultimate utilization control is when the patient must have every service pre-approved before receiving the care. Any care, other than emergency care, which is not preauthorized, would not be paid for by the insurance company.

Dollar Value Reviews - Reviews are conducted whenever the amount of care rendered to a patient reaches a predetermined dollar value such as $500 or $1,000.

Global Reviews – Reviews of this type are done by comparing the services and/or prices of one chiropractor against other chiropractors in the same geographic area. “Outliers” or doctors whose treatment parameters fall outside their peers are likely to be subjected to more intensive reviews.

Visit Number Reviews - Reviews are conducted whenever a patient visits the chiropractor more than a predetermined amount of times such as 12 visits. The dollar value of the care in this review is not relevant. The review is based on how often the patient sees the doctor in a calendar year.

Visit/Dollar Combination Reviews - A review of this type is triggered when either the number of visits or the dollar amount of the claim hits a predetermined value. In this way an insurance company guards against a small number of claims with high values and claims with a high number of visits with low dollar values.

Service Specific Reviews - A review of this type is conducted whenever a certain test or procedure is performed by the chiropractor, such as an MRI exam or a second-opinion exam. Because these types of procedures tend to be expensive, the insurance company will conduct a special review to be certain they were necessary.

Multiple Injury Reviews - If a patient has more than a predetermined number of diagnoses for one injury, the insurance company may automatically review the care. They assume that multiple diagnoses indicate a complicated case that could be expensive to resolve.

Multiple Diagnoses/Calendar Year Reviews - A patient who visits the chiropractor for more than a predetermined number of problems during the course of the year might be subject to an automatic review of the necessity of that care. This type of review is often done by those insurance companies who refuse to pay for any supportive or maintenance care.

What is a concurrent review?

In a concurrent review, the review process is conducted simultaneously with the care rendered to the patient. It generally starts with a preauthorization process or with the first bill received by the insurance company.

With a concurrent review, the insurance company is anxious to reach agreement with the chiropractor on the amount of care to be provided to the patient. To ensure cooperation, insurance companies generally tell the doctor, or the staff, that they will approve care only for a certain number of visits. If the patient needs more care than the amount authorized, the doctor knows that the necessity of that care will be extensively reviewed.

Concurrent reviews need to be done on a timely basis, so your office is usually contacted by telephone. The doctor or CA gives the insurance company the diagnostic information along with some indication of the severity of the condition. Based on the information, the insurance representative consults a computer screen which lists the amount of care to approve for each ICD-9 code. The severity of the condition may influence the amount of care which is approved.

A concurrent review is set up so the doctor is not likely to get authorization for all the care which will ultimately be required by the patient. The insurance companies believe they will reduce the amount of money they spend if they only approve small amounts at any one time. Unfortunately, this strategy often drives up the cost of health care. Multiple authorizations increase the amount of time doctors, or their staffs, must spend away from patients, adding to the expense of running a practice.

Even if a doctor cooperates with pre-authorization or concurrent reviews, it does not mean he or she will not be subject to second-opinion examinations or retrospective reviews. In the preauthorization or concurrent review process, care is approved based on statements of the doctor regarding the patient’s condition. An insurance company may also decide to have the patient examined by another doctor or review the documentation of the doctor. This is done to verify that the diagnosis given on the telephone was based on a foundation of orthopedic and/or neurological tests.

What are retrospective reviews?

A retrospective review is conducted after the care to the patient has already been delivered. This type of review is based entirely on the documentation kept by the chiropractor and is often called a “paper review.” In the review process, the insurance company is asking the following questions:

- Did the doctor understand the health care history of the patient prior to this particular injury or illness?

- Were there any factors in the patient’s prior health history to indicate the origins of this particular problem or to help isolate the problem?

- What tests did the doctor conduct to determine the locations, cause and severity of the problem?

- Were the tests sufficiently detailed to provide enough objective data to support the diagnostic conclusion?

- Were x-rays necessary to support the diagnosis?

- Was the treatment plan of the doctor appropriate for the given diagnosis?

- Were re-exams performed on a timely basis to demonstrate the effectiveness of care?

These are just the basic questions which are going to be asked by the insurance company. As the case gets more complicated, the type of questions asked by the insurance company, or their chiropractic consultant, will become more sophisticated. They will begin to analyze the number, type and variety of tests for the specific diagnosis given by the doctor. They will carefully review whether or not the patient was responding to the care of the doctor, and if not, how the treatment plan was adjusted.

The insurance company will expect all of this information to be in the daily notes of the doctor. If it is not present at the time of the review, the care is likely to be rejected as not being “medically necessary.” The term medically necessary rarely means whether or not the care was really needed by the patient. It is used by insurance companies as a basis to deny reimbursement for care that was not documented to their satisfaction.

We have quite a bit of information that we keep in our patient file. Can you please tell me the retention requirements for each type of information?

In general, all clinical information must be retained 7 years from the date the information was created or obtained from another source.

Item Retention Requirements:

Authorization for release of records 7 years
Authorization to treat a minor 7 years
Correspondence with insurance companies None
Correspondence with other doctors 7 years
Correspondence with the patient 7 years
Diagnostic studies 7 years
EOBs None
Examination forms 7 years
HIPAA privacy information 6 years
Hospital records 7 years
Insurance benefit information None
Insurance identification None
Medical records 7 years
Medicare ABN notices 7 years
Patient history 7 years
Routing slips None
Sign in sheets None
SOAP (office) notes of the doctor 7 years
Treatment plans and records 7 years
X-rays 7 years

As a practical matter, items that do not have a specific retention requirement may still be needed for accounting or administrative purposes. When this is the case, common sense is your guide.

What is the correct method for disposing of records?

All patient information should be shredded.