Medicare-and-The-Mystery-of-Collecting-Patient-Responsibility

Collecting From Medicare Patients at Time of Service?

The government has trained practices (the little guys) to be extremely cautious about making a misstep with Medicare patients. That is certainly their intention – to let you know that they have a zero tolerance policy on doing anything that could be construed as taking advantage of Medicare patients or the Medicare program itself.
Sometimes the way the government manages behavior is by being “silent” on what is acceptable.

The question is:
“Can I collect Co-pays, co-insurance and deductibles from Medicare patients prior to services being rendered?”

The answer is yes! They are estimated or calculated patient responsibility payments based on Medicare (or payers) published or contracted reimbursement rates, patient eligibility and benefit information available from Medicare (or Payer). Refer to “CMS Claims Processing Manual, Section 30.3.3.”

30.3.3 – Physician’s Right to Collect From Enrollee on Assigned Claim Submitted to Carriers
(Rev. 1, 10-01-03)
B3-3045.2

A. Before the Claim is Submitted
The provider (including physicians and suppliers) who is accepting assignment should not attempt to collect more than 20 percent of the charge from the enrollee when the deductible has been met:

However, a provider (including physicians and suppliers) may accept assignment after having collected a part of his/her bill. The fact that the enrollee has paid more than any deductible and coinsurance due does not invalidate the assignment.

B. Showing the Amount Collected on the Claims Form
In submitting an assigned claim, the provider (including physicians and suppliers) must show on Form CMS-1500 any amount he/she has collected from the enrollee for these services. This information is essential for correct payment of the benefits due; failure to show the amount paid is likely to result in excessive benefit payment to the provider (including physicians and suppliers) (i.e., if a benefit payment which, when added to the amount already paid by the enrollee, will exceed the Medicare allowed amount).

So, Medicare does allow you to collect the patient’s portion (co-insurance and deductibles) at the time of service. However, practices should have a formal process that assures a uniform and reliable methodology of determining the calculated or estimated patient portion.
Note the Medicare Claims Processing manual says that you can’t collect more than the patient owes – and if you do inadvertently, you must refund it promptly. It EXPLICITLY says that you can collect co-insurance and deductibles at the time of service. It’s acceptable if you have calculated the patient’s responsibility. To do this, you must have a process in place that assures a prompt refund if there are any overpayments.

Do not call these payments a “deposit”. Medicare does not allow you to collect a “deposit”. Then again, these payments are not arbitrary deposit amounts. They are calculated estimates of the patient’s out-of-pocket responsibility, based on published Medicare “allowed amounts” and “patient eligibility information” provided by Medicare.

Having Trouble with Patient Collections?
If your practice is struggling with what to collect at time of service, ask Exchange EDI about Automated Patient Settlement (APS) using an Account on File agreement. An account on file agreement allows your practice to automatically process the exact patient responsibility that is identified on the Medicare EOB. In addition, put the patients mind at ease by letting them know their debit or credit card is stored on a tokenized, secure, encrypted card processor server.

So stop sending statements and start getting paid within fifteen days (15) after the date-of-service. Now you can be in control of when you receive patient payments.

Reduce statement costs. Increase cash flow. Minimize bad debts and save staff time.

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ICD-10 READY-SET-False-Start

ICD -10
READY! SET! GO?
By: B. P. Fulmer; Managing Partner, Exchange EDI

Good News, delay of this cash flow crisis gave us another year to put you financial house in order. Bad News, regardless of this delay, the result will be the same. Payers will not be fully prepared. There will be adjudication rules and edits that will not be properly communicated. It’s not a conspiracy. It is a fact of life due to the complexity of changes that will have to be made in the payer claims processing systems. This means your cash flow will be interrupted.

For practices, making operational and clinical workflow changes, re-allocation of resources (human and capital), cross-walk coding changes, billing and denial management process changes probably won’t be enough. Much, but not all, of the cash flow issue will be out of your control.

THE DOUBLE WHAMMY!!!
1. Because each payer will have its’ own proprietary payment rules for ICD-10 claims, and they will likely differ from ICD-9 rules, the result will be some potentially significant denial, rejection and payment error rates. Learning new payment rules for each payer will take time, and will be a process of “Trial and Error” because payers typically do not publish all these rules.

2. Ninety days after October 1, 2015 implementation deadline date deductibles will reset, compounding an already crippling blow to cash flow. Together the cumulative effect could result in a 50% or more reduction in normal cash flow through the first quarter of 2016 and possibly beyond..

Unfortunately, even if you have done everything right, but your payers struggle to pay claims promptly and correctly, you still have a good chance of becoming a statistic if you don’t have control of you cash flow resources.

At this point the most important action you can take is to start “Pro-actively” managing cash flow! CASH FLOW is KING and it is the only fuel, on which, every business must run.

Ask yourself: “What are my sources of cash and how much do I need?”

Cash Sources:
• Payer payments
• Patient payments
• Aged patient accounts receivable clean-up
• Cash reserves in the bank (As of 10/1/2015)
• Bank operating Lines of credit

How Much Do I Need?
• Four months of working capital
(The most conservative definition of needed working capital is: “How much cash is needed to pay all operating expenses and payrolls for four months. Assume cash receipts from payers beginning November 2015 through April 2016 will be reduced 50%. Do the math!!)

The operative assumption is this ICD-10 Tsunami will adversely affect the flow of payments from your payers. If you remember the effects of the conversion to HIPAA X-12 transaction formats in 2003 and more recently the conversion to 5010 you understand the risk. ICD-10 could be much worse.

What You Do and Don’t Have:
• You have no control whether or not your payers will have their act together.
• You do have more control over setting up credit lines
• You have precious little time to build cash reserves
• You can implement proactive patient responsibility cash flow management practices. Get professional help. Patients really don’t mind paying for services. They pay at the time of service everywhere else, why not you. (Accelerate, Accelerate, Accelerate!!!)

What’s the Solution?
The reality is there is no single solution that fits the requirements of all practices. But here are some actions every practice can take to mitigate the inevitable ICD-10 cash flow risk:
1. Determine how much cash you need to operate your practice for four (4) months.
2. Assume only fifty per cent (50%) of the normal cash flow from your payers for four months.
3. Estimate the cash reserves you expect to have on hand by October 1, 2015. You should have about four months of operating capital
4. Thirty per cent (30%) or more of your cash flow now comes directly from your patients. Implement internal policies to collect co-pay, deductibles and co-insurance at or before the time of service. Strictly enforce these policies. That includes your staff as well. NO EXCEPTIONS!!!
5. Clean-up your patient aged accounts receivable and keep it clean.
6. Begin aging accounts receivable from the date-of-service, not the date of the first statement. When you look at days in A/R, separate payer and patient receivables. Payer A/R should average less than thirty (30) days from the date-of-service. Patient receivables should average less than forty (40) days from the date-of-service. Sounds impossible? It’s not! It is good business.

Three Simple Actions:

• Develop a cash flow management plan.
• Implement it.
• WORK IT. NO EXCEPTIONS!

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Internet Site Privacy Policy

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