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Is Your Billing Software Ready for the New Payment Plan?
That's a question on the minds of many administrators. Here's a look into the upgrades that your bottom line depends on.
David Bernard
Publish Date: November 17, 2007   |  Tags:   Financial Management

As surgery centers that bill electronically anxiously await for upgrades that will make their billing programs compatible with Medicare payment changes, software vendors prepare as best they can and ask their customers for patience. Medicare is expected to issue its final 2008 ASC payment rates this month, giving vendors precious little time to upgrade their products by the time the new payment system takes effect Jan. 1. Not quite the Y2K scare, but potentially a logistical nightmare if scores of centers can't code and bill correctly a few weeks from now.

"ASCs are frustrated. They want to be ready to go today, and that's not available" says Melody Mena, administrative director of the Surgery Center at Mount Zion in Morrow, Ga. "You cannot blame the software company. The timing of it is where all the pressures come from." Should the upgraded software not run as smoothly as expected, "you've got thousands of customers all calling support at the same time," says Ms. Mena.

Here's how some of the leading surgical billing software vendors have prepared their products for the new payment system.

Tom Hui, CEO and president of Lafayette, Calif.-based software manufacturer HST, which produces the billing application HST Pathways, says his product is ready for January's changes. "We've had the luxury of watching the CMS ruling evolve over time. We needed to know how it was being structured," which, he says, gave the company a basis to build on. "If you can accommodate that, whatever the final ruling on fees is, you're ready to go."

Mr. Hui says his company will issue a white paper to its customers upon CMS's November finalization offering its best assessment of the billing situation in the month before it takes effect. The paper, he says, will articulate the challenges providers face, list the actions they need to take before Dec. 31 in order to prepare for the changes and suggest best practices as Jan. 1 approaches.

The billing changes that Medicare is enacting are primarily changes in rates as opposed to changes in the actual process of billing, says Craig Veach, senior vice president of operations for Amkai in Waterbury, Conn., makers of Amkai Office billing software. "Entering the charges remains exactly the same," he says, noting that not having to retrain your staff is one benefit in the transition.

But there's a catch, he adds. The transition means that providers will be dealing with two separate contracts for Medicare claims, one of which expires on Dec. 31 and one that commences the next day. The payment rate that's applied will depend on the contract the charges will be billed under, says Mr. Veach, but date of service will play a role in the appeals process. If a claim is rejected, he says, a provider must file their appeal in the format under which the original claim was submitted, even if that appeal is submitted after Jan. 1's changes take effect.

"Our system will select the proper contract," says Mr. Veach of this potentially thorny process. "The program will retrieve the date of actual service. That was a key thing we wanted to do as we designed our system because that's going to happen a lot."

Especially, he says, because private insurers are expected to eventually follow Medicare's changes. "We wanted a system that can handle multiple contracts with varying expiration dates for the same insurance carrier."

Learning from the storm
In June of this year, Birmingham, Ala.-based software company SourceMedical contacted its customers with an apology for and explanation of the "perfect storm" of production complications, late-breaking regulatory changes, and incompatible hardware and services among its clients that led to rejected Medicare claims and delayed payments nationwide. The situation was additionally complicated, it said, by a longer-than-normal backlog of customer calls seeking technical assistance for its AdvantX, SurgiSource and Vision billing applications.

The lessons the company learned from these incidents reinforced its customer support efforts, says Lindsay McQueeney, director of product management for SourceMedical's surgery division.

"We've tried to step up the frequency of communications with our customers," she says. "We want to ... empower customers to understand and take charge of the situation. We don't want this to be the biggest change they have to deal with," given the multitude of other issues on the table.

In terms of preparing the software itself, she says, "we've been consistently working directly with CMS to get a pulse on where they are in the process. That is a moving target ??? [but] we have direct contact with them once a week." That's informed the upgrades to the software products, and their Code Manager modules, that have been issued to date and that await the final deliverables once Medicare's rule is finalized.

From a surgery standpoint
"We're all changing in the way we do things," says Ms. Mena. The move from the familiar nine ASC groupers to the Outpatient Prospective Payment System's more than 1,000 APC codes is just the beginning. Besides the new classifications the federal government has imposed, there's the issue of successfully upgrading your business office's most critical tools so you'll be able to drop a bill in January.

Software is just one link in the chain through which facilities get paid. "This is more of a change than people realize," says Ms. Mena. The other key players and potential weak links include your facility, which must be conversant enough with the new codes to collect all the charges it's entitled to; billing services or claims clearinghouses, which must understand and comply with the new rules and formats in handling their clients' charges; private payors, which aren't yet converting from ASC groupers to APC codes, leading to possible confusion over where newly available charges fall on their fee schedules; and Medicare itself, the prime mover behind the seismic change.

The takeaway
At the Surgery Center at Mount Zion, as at surgical facilities nationwide, it remains to be seen how well the billing process adapts to Medicare's new rules. Ms. Mena notes the importance of using software designed specifically for surgery center billing.

"Primarily, the ASCs who experience problems will be working off of programs designed for the office practice setting, not the surgery center setting," she says. They differ significantly in structure and operation, with practice billing software set up only to collect fees for professional services, supplies and drugs, while surgical billing software collects for facility fees.

Besides verifying that their software is loaded with, accepts and is regularly updated with the new APC numbers, administrators should see to it that their staff is familiar with the codes as well. Fearing that a high number of claims may be incorrectly paid, Ms. Mena urges business offices to audit their returns carefully. She also suggests ensuring a cash reserve. "One thing that many centers are doing is building up sufficient cash on hand to make sure they can cover their expenses for 45 or 60 days in the event of first-quarter delays." Some are even devising a measured plan for postponing the center's Dec. 30 distributions, just in case the cash is needed.

These suggestions aren't necessarily pessimism, but rather what-if scenario planning, she says. Your own facility's business office may be as current as possible, but other links in the chain may cause problems, and it never hurts to have contingency plans in place. "I hope I'm pleasantly surprised," says Ms. Mena.