Bifurcated Billing

Dec. 27, 2011
Russ Rudish Faculty practice billing often makes up a big chunk of hospital revenue, so a high denial rate can impact the bottom line in a big way.
Russ Rudish

Faculty practice billing often makes up a big chunk of hospital revenue, so a high denial rate can impact the bottom line in a big way. Today, many hospital-affiliated and -owned practices still struggle with outdated billing systems and the onerous task of installation and maintenance across multiple practice sites. Lately, however, many say software as service architecture is making it easier to accurately bill out of these physician groups, all with minimal outlay from the IT budget.

“Back in the day, the revenue gotten on the physician side was much lower than it is today,” says Russ Rudish, health care providers sector leader, Deloitte LLP (New York). “People didn't pay a lot of attention to it.” Today, however, more doctors are going back on the hospital payroll because they can't make it on their own. “Even the specialists are worried about financial stability,” he says. Add to that patient demands for billing transparency, changes in referral patterns, and improvements in the IT space, and the faculty practice bill is heading for a paradigm shift.

But which way will it go?

“When we help health systems make selections these days,” Rudish says, “the move is to get away from mom and pop billing.” He says best practice is for the doctors or groups to not do their own billing, but for that billing to be done comprehensively as part of the hospital's bill.

Comprehensive billing is also being demanded on the patient side. “I want to know how much I'm going to owe, not just the hospital, but the hospital and Dr. Jones,” says Rudish. “And that's a seamless front end.”

Today, in some cases the hospital bills on behalf of the physician group and in some cases the doctors do it themselves. “Twenty years ago, billing was very decentralized and all over the place,” Rudish says. "Some docs did it well and some did it poorly. They complained about it but nobody ever did anything about it.”

In the past, some hospitals set up well-run management services organizations or retooled their billing departments to meet physician needs, particularly if the hospital had an ownership stake in the practice. Many faculty or physician practices have a separate organization, often outsourced, that does billing for physician professional services (as opposed to hospital facility-care billing).

Getting the hospital information into the physician billing system is not always easy. “When I talk to other CIOs, people are using any method of getting that data into the billing system,” says Praveen Toteja, CIO of Washington, D.C.-based Medical Faculty Associates, (MFA) Inc., of George Washington University. “Some are primitive ways, basically bringing reports and entering them by hand. Fortunately, we never went through that.”

MFA is comprised of 300 providers taking care of 65 percent of the hospital's patients, and Toteja says billing and interfaces are written and maintained out of the hospital, which uses Malvern, Pa.-based Siemens Invision. “I maintain the interfaces,” he says.

Toteja, who uses U.K.-based GE's IDX for billing and has written most of his own code, says he believes most systems do not support the professional billing. “People like us in IT figure out Band-Aid solutions to get the billing up and running and then what's happening behind the scenes is forgotten,” he says. “If I leave here, you can imagine all that history of how to do things would leave with me.”

Most agree that physicians have an inherent distrust of hospital billing. Why? A typical hospital bill will average $20,000 per case, while the professional component of that may be $600. Physicians often feel the hospital's larger bill will have priority. “The hospital is more worried about its $200 million dollar charging than $200,000 for the provider,” Toteja says. “But the provider lives by that $200,000.”
Edward Sullivan

The issue becomes how to get a comprehensive bill. Some say interfacing physician-friendly practice management software like Watertown, Mass.-based athenahealth is a solution. But according to Rudish, “athenahealth is not an enterprise system. If athenahealth is part of the answer, it has to integrate with a hospital's clinical system. The question is how hard is it going to be to do it, how hard is it going to be to sustain it, and that is a risk that some people are willing to take on and some people are not.”

One individual willing to take on that risk is Edward Sullivan, director of physician services at 230-bed Winchester Hospital, in Winchester, Mass., a suburb of Boston. Sullivan says the practice mostly deals with community physicians. “We do the ED physician billing, the urgent care location billing and some OB/GYN billing,” he says.

The hospital uses Westwood, Mass.-based Meditech, and Sullivan says the physician billing services group, which uses athenahealth's PM system, interfaces with Meditech. “We get a download every night of all the patients that were seen in those two environments, and the demographics of those patients that were seen that day.” The practice uses Westborough, Mass.-based eClinicalworks on the clinical side in addition to athenahealth practice billing. “The claim doesn't go out the door without athena scrubbing the heck out of it,” Sullivan says.

He says the ED practice group is a split bill, with the ED billing the professional fee and the hospital submitting the charge for the ED. “We try to be self accountable,” says Sullivan. “Athena is an ASP model and so we need a T1, and we wanted to make sure our connection was reliable. Speed, reliability and functionality were key.”

For Sullivan, the interface is a major help, because data doesn't have to be re-keyed. But due to the inherent differences in the physician and hospital world, there are still difficulties no matter how the practice gets the data.

For Toteja, a sticking point is diagnosis. “We need more information for professional billing,” he says. Take, for example, the initial diagnosis code: A patient can walk in saying, ‘I have a stomachache,’ and that's the final diagnosis put on that visit, rather than just an initial symptom. But by the time the patient leaves, he's discovered to have had ulcers. “For professional billing, you have to have the right diagnosis code, the right procedure and the right modifiers,” Toteja says.

Sullivan is more than happy with the interface because he captures his own data, rather than relying on the hospital, and is happy with his numbers. “The payer information that's captured by the hospital's billing department isn't always the most accurate,” he says.

Sullivan utilizes athenahealth's real time eligibility to sweep the patient schedule in advance and determine insurance accuracy. “The hospital would love to have that,” he says, “but they don't. Sometimes, after we get the download at night, we go on our system and find out that the patient is not eligible.”

The interface is written not to override the athenahealth patient information; Sullivan says athenahealth corrects his payer information right away, “whereas the hospital will send out the bill to the wrong payer and it will bounce around and they might have to pull it back to self pay,” he says.

Will the future see practice-friendly ASP models like athenahealth taking off in different areas of the hospital? Sullivan, who's a big fan, says he doesn't think so. “No, because Meditech is Meditech and they're two different animals,” he says. “The hospital is going to go after the big money. You don't need a hospital billing system for physicians, you need a physician-based billing system.”

Toteja has his own view of the future. “In my perfect world, you'd put the charge in the hospital system and it says, ‘There has to be a provider over here now, what did the provider do?’ And then feed one charge to their billing system and feed the other to the professional billing system.”

That may happen sooner rather than later. Salt Lake City-based Intermountain Healthcare is working with GE in partnership on an inpatient/outpatient billing system that may change the space. The project, now in its third year, is part of Intermountain's EMR development partnership with GE Healthcare.

According to Rudish, it's all about running a seamless organization where data can flow wherever it must. “The big companies are going where the market is and saying, ‘I will build that bridge.’ If I'm a CIO and talking about the future, I need this holistic clinical enterprise and I need this holistic financial enterprise.”

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