Bills’ pressure builds

Big changes have affected consultants’ billing and incomes in the last five years. Garry Chapman provides a round-up and looks ahead – with a note of optimism – to 2014

2008 to 2013 was probably the most difficult period consultants have ever encountered.
They had to contend with an ever-changing landscape of the private healthcare market, a huge growth in unemployment numbers shrinking the size of the market considerably and some major changes in the way they could bill the private medical insurers (PMIs).
Depending upon the specialty and the type of practice they had, the changes implemented within the sector in conjunction with the worst recession on record reduced many doctors’ incomes between 5% and 35% with no corresponding decrease in costs.
We have seen very few consultants substantially grow their income during this time. They may well have grown their practice volume of patients, but due to fee reductions imposed upon them, they ended up doing a lot more work for the same amount of income or, in many cases, less.
And where the consultant was unaware of the changing rules and continued to bill incorrectly, the risk of being derecognised by insurers grew substantially.
Below, I outline the major market changes affecting consultants:

This was the single biggest change, as it affected the way consultants could bill all insurance companies. Rule changes starting during 2010 affected the rules regarding the way CCSD codes are used together when billing for operations.
What codes could be billed together was limited and, in many cases, this resulted in only being able to bill for a single code, whereas, in the past, consultants would have been allowed to bill two or even three codes.
An example of this is where they would have been able to bill the codes M4430 (endoscopic removal of foreign body from bladder), M4510 (diagnostic endoscopic examination of bladder) and M7920 (dilation of urethra) together. Now they could only bill for a M4430. For those billing within insurance guidelines – which most consultants do – this obviously reduced the amount of income earnable for doing the same work as before.
There are many examples of these changes and the case above represents approximately a 30% drop in income for doing the same operation. During the rest of this period, more changes were implemented affecting most, if not all, specialties.

New consultants
Another fundamental change was that, in 2008 and 2010, the two biggest PMIs introduced a new recognition system, meaning that any consultant wishing to see their patients had to sign a contract.
They had to agree to a fixed fee schedule as well as a fixed consultation fee, which was typically lower than what was being charged in the market. The new process meant that, irrespective of where their practice was based, they were limited to what they could charge.

Consultations and procedures

Then, in early 2011, an insurer changed the way procedures could be charged at the same time as a follow-up consultation. It limited which CCSD codes could be charged in conjunction with a follow-up visit. For example, a consultant carrying out a D0702 (aural toilet) was only allowed to charge for the consultation or procedure code and not both as previously allowed.
Depending on the specialty, this also had a major impact on income. In some cases, doing the same work before the change compared to afterwards represented a 50% income reduction. The above example is one of many.
In 2010, a major PMI also started writing to consultants asking them to either reduce their consultation fees or substantiate the rationale for their pricing structure. The fee reduction requested varied and could have been anywhere between 10% and 35%.
This process has continued apace with some consultants being threatened with derecognition if they did not comply with the suggested fee reduction. In some cases, the consultant has been derecognised.

Diagnostic tests & pathology
During 2011, there were a number of different changes from multiple insurance companies where they stopped or limited the practice on what exactly could be billed in the area of diagnostic tests, pathology and procedures.
One example of this was unless the practice could prove it owned the machine on which the test was carried out and had a service agreement, then some insurers would not allow it to charge for the procedure. Some insurance companies have stopped all charges for pathology, insisting this must go through the recognised laboratory/hospital.

Open referrals
Since January 2012, a new system for referring some patients was introduced, shifting the emphasis from the GP to the PMI to decide whom the patient should go to see. Other insurers have since followed similar schemes. Unless you are on the special designated lists of the PMIs, it is unlikely you will see patients referred to you who are on these policies.
Procedure codes
In 2012, there was another major push to reduce the fee schedules for CCSD codes. This was particularly brutal for some specialties, as a large proportion of these cuts were for the most common codes used.
On top of this, some of codes were restricted even further as consultants were not allowed to charge for a local anaesthetic. An example of this would have been for the S0633 (Excision of lesion of skin or subcutaneous tissue).
These price reductions varied and were, in some cases, in excess of 50%, which meant consultants ended up doing twice the amount of work for the same income.
Examples of some of the most common codes reductions are as follows: One insurer used to allow £548 for a W8200 (arthroscopic meniscectomy), whereas now the amount has been reduced to £289.
That same PMI would allow £589 for a W8500 (multiple arthroscopic operation on knee) and now that has been cut to £335.

Financial health review
Keeping abreast of so many changes is extremely difficult and if you are unaware of them, you may be losing income but not understand why.
To understand the impact of all the above, the consultant needs to review where they are in terms of their finances. If that has not been done, then the start of 2014 is certainly a sensible time to start the review.

Do your own billing review:

  • Establish if you are billing to the new rules and what the impact has been;
  • Check if your treatments are being coded correctly – not unbundling;
  • See if your codes are being accurately billed per insurer – follow the rules;
  • If your procedures have been affected, establish what the difference is per procedure;
  • Find out which patients owe you money you cannot collect due to incorrect billing;
  • Once you know all that, you need to decide what action to take to gain control of your finances and to stop losing money.

Garry Chapman is managing director at Medical Billing and Collection

What does 2014 hold?
Taking into account all of the changes in the private healthcare sector,it is clear consultants now work in a totally different landscape compared to 2008.
They need to embrace this and decide the best way to move their practice forward.
On a much brighter note, looking at all the economic indicators during the second half of 2013, we can see for the first time since 2008
some sustained improvement in the economy.
And if this rate of growth continues, the economy may well get back to the same level it was before the recession by the end of 2014/early 2015.
The Competition Commission is due to finish its investigation into this sector during 2014, so it will be important to make sure you are
aware of any changes you may have to make to your practice in order to comply with any recommendations.
As unemployment continues to drop, the number of people with PMI will continue to rise.
Self-pay patients are also forecasted to grow. So consultants need to ensure they are in the best possible situation to take advantage of this growth.
That means it becomes even more vital that you know exactly what is happening on the financial side of your practice from both a billing and collection perspective.

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