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Billing errors are costing consultants’private practices a fortune and when you consider the complexities involved, it is no wonder, says Garry Chapman

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Billing errors are costing consultants’ private practices a fortune and when you consider the complexities involved, it is no wonder, says Garry Chapman

We have been billing for consultants for 22 years and I still visit practices where it is not being done as well as it could be. While this is disappointing, it is not surprising considering the changes that have occurred over the past few years and that continue to happen on a monthly basis. Most practices I see are extremely busy, with both the consultant and the secretary being stretched on a daily basis with the workload they have to deal with. Consultants are typically running both an NHS practice as well as a private practice, which means that they have very little spare time, especially if they are trying to juggle family commitments on top of this. Secretaries will be organising the clinics and theatres, dealing with the patients, the letters, the phone calls and the emails on a daily basis. On top of this, they are raising the invoices, reconciling the payments and chasing the shortfalls. They have very little
spare time, if any. The question of who is making sure that the billing is being done correctly is therefore a difficult one to answer. But if the practice does not want to lose money on a continual basis – or worse, fall foul of the insurance company regulations and risk being derecognised by them – then they need to make plans to address this critical area. The main components involved in this area are highlighted below. It is vital for the practice to understand how complex and important this issue is in order to determine what steps to take.

CCSD
CCSD stands for Clinical Coding and Schedule Development group and it was formed by five major private medical insurers in 1997. Bupa, AXA PPP, Aviva, Simply Health and Pru Health were the insurers involved at the beginning and, to this day, they still have representation on the board. The original scope involved two projects. The first was the development of revised medical codes and associated narratives and the second was the development of setting a scale of relative values for the codes, depending upon the complexity. However, after an Office of Fair Trading investigation, it suggested that the second development project should not progress and that decision is one of the main reasons why today the difference in value per CCSD can be up to 100%, depending on the specialty and the insurance firm. After long correspondence and discussion with consultants across 22 specialties, the CCSD schedule was launched in 2006. It has progressed since then and now comprises of more than 2,000 codes.
In September 2013, it also launched a schedule for diagnostic codes. An important point to note is that the CCSD schedule is updated on a monthly basis and can include any of the following:

• Rules on which codes can be billed together and those which cannot – commonly referred to as ‘unbundling’;
• The narrative against a specific code;
• Replacement codes;
• Discontinued codes;
• New codes.

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Any of the above could have an impact on the way that the practice does its billing. Unless the schedule is checked each month for updates to establish if they affect the practice, then you could be billing with errors.

Insurers’ variations

The CCSD schedule is used as the sole platform for coding for private healthcare and the private medical insurers use it as a basis to create their own fee schedule.
This is complicated by the fact that the insurers do not have to use the CCSD schedule rules, as it is not mandatory.
This means that each insurer can choose to adopt the CCSD schedule in whole or part, resulting in the fact that some insurers do not recognise specific codes and some insurers have their own rules on which code combinations are acceptable for billing purposes.

I have listed some of the main exceptions below:

• A particular insurer will allow an AC100 (local anaesthetic) to be billed with a selected list of minor codes, but it does not publish a list;
• A particular insurer will only allow certain codes to be billed in conjunction with a follow-up consultation;
• A particular insurer will not allow a follow-up consultation to be billed within ten days of an operation;
• A particular insurer will restrict the amount of inpatient care that can be billed by including a set amount within the specific code used in surgery.

Due to the above, there are many varied and complex rules that exist regarding the use of the
codes and, on top of this, you need to understand the pricing structure relative to each insurer.
Here are some of the main variables that currently exist:

• Some insurers have a fee for each CCSD code;
• Some insurers place each CCSD code into different categories for pricing purposes;
• Some insurers do not publish a schedule – they will pay what they consider to be market rate.

Formulas for multiple codes

Once you have understood all of the above, then the final piece of the jigsaw is to understand the formula that can be applied for each insurer, dependent upon the number of codes used.

See some examples below:

Example 1

Some insurers will state that if you bill three codes together, then you multiply the highest value code by 40% and then add that figure to the price of the highest value code.
Some insurers will state that when two codes are used, you multiply the price of the highest value code by 25% and then add that figure to the highest value code.

Example 2
Some insurers will state that if you bill three codes together, you take the highest value code and add to that 50% of the second highest value code; then add 25% of the lowest value code to the figure that you have already calculated.
Some insurers will state that when two codes are used, you add 50% of the second highest value code to the price of the highest value code .

Example 3
Some insurers will state that when three codes are used, you can only charge for two codes, as they do not recognise the use of three codes.
Some insurers will state that when two codes are used, you add 50% of the second highest value code to the price of the highest value code.

Summary

We are not surprised when we visit practices where the billing is not being done correctly, as it is a full-time job to keep abreast of all of the rules as well as all the changes that take place on a monthly basis.
On top of this, the practice has to keep abreast of any price changes that occur. These can be up as well as down; so, again, it is vital to ensure that all of these areas are monitored closely.
The most common errors we see are pricing-related. This is where the wrong price is chosen due to either wrong use of codes or where the wrong formula is used or where the wrong price is used for a specific code for a specific insurer.
The worst part about this is that, in many cases, it has been going on for years, so the loss of revenue over that period can be dramatic.

What should you do?
❶ Understand the complexities of the CCSD schedule for your specialty, including what coding combinations can be used;
❷ Make sure that you code correctly by understanding the narrative for each code and checking each month to make sure that it has not been discontinued or replaced by a new code;
❸ Ensure that you know the formula used by each insurer for pricing multiple codes;
❹ Be aware of the different rules each insurer will have over and above the CCSD schedule.
Maintaining all of the above is an almost impossible task for one person to cope with. In our experience, as the practice continues to grow, the consultant and the secretary are so busy dealing with the medical side of the practice that billing is frequently neglected.
If you are struggling doing all of the above, then you need to consider outsourcing your medical billing and collection, as this specialist knowledge will typically form part of the service.

Garry Chapman is managing director at Medical Billing and Collection

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