Guidelines lower risk of having unpaid bills

Home health agencies will need to pay greater attention to their collection practices and policies in the future if they want to get paid, experts predict.

Hospital Home Health asked several health law professionals what kind of actions home care agencies should take that will reduce the risk of being stuck with unpaid bills. Here is their advice:

1. Know who your payers are.

These days, payers are a virtual alphabet soup of HMOs, PPOs, TPPs, etc. And each type of payer has different methods of handling claims. (See payer definitions, p. 112.) In addition, each individual payer has a multitude of plans, so almost no two home care clients will have the same type of insurance.

"Providers need to be very clear as to what category a particular payer falls into, and if they understand the categories of insurance, it will help them know what to expect," says Renee Krul, RN, BSN, CCM, clinical director with Total Claims Review & Management Inc. in Montclair, NJ. For example, if the client is covered by a network plan and the home care agency is part of that network, then the client might not have any responsibility for paying unpaid claims, she says.

2. Learn the client's specific plan choice.

Coverage may vary depending on what type of plan a member has within a certain company, Krul says. For example, a client might be covered by a self-insured employer plan, which means that there might be a broad range of services that are covered or not covered. "They often tend to write their own plans so we can't really predict what they cover or not," Krul says.

Home care providers should check to see if the patient has multiple insurance coverage, such as a health insurance policy and automobile insurance in the event the patient was injured in a car accident. Another example would be stop loss or reinsurance coverage, which means a second payer would take over coverage when the health care costs exceed a certain price, Krul says.

The reinsurance company may have different requirements for the provider than the first payer, Krul cautions. "It may want the provider to send all the nursing notes whereas the first payer may not have," Krul says. "They tend to monitor things more aggressively."

In cases of third party administrators or third party payers, a prominent insurance company may be handling claims but may not be the authority that is making decisions about what is covered and what is not, Krul says. So a home care agency may have to do a little research to find out the specific details of a client's insurance plan.

3. Recognize that eligibility does not mean authorization.

"Eligibility for insurance means that assuming the plan guidelines for coverage are met, the person is eligible to receive benefits," Krul says. "But it's not a guarantee of benefits."

In certain managed care arrangements, a home care agency might be asked to make a pre-certification call to the payer to establish that the patient is eligible for benefits. Again, if pre-certification is granted, this does not mean the care is authorized, and it may be subject to review.

Obtaining pre-authorization would be a separate step. Whenever possible, home care agencies should ask a payer for a written pre-authorization, suggests Lynn S. Muller, RN, BS, JD, CDMS, CCM, an attorney and partner with Muller & Muller in Bergenfield, NJ. "Insurers tend not to want to sign things, but home care agencies should at least make the attempt," she says.

If a payer refuses to sign a pre-authorization form, then the home care agency should ask for a written commitment for 30 days of services. If that doesn't work, then ask for written authorization for seven days, Muller adds.

4. Find the highest level person to talk to.

When a case is catastrophic or appears to be a long-term or high-cost case, the agency should make every attempt to speak with someone of authority at the insurance company, Krul says.

Don't be mislead by titles because insurers may give a variety of titles to the person who is the first line of contact, including claims manager, claims adjuster, and reviewer, Krul adds. "And this may imply a certain level of authority that may not necessarily be there."

In one case Krul handled, the insurance company called its beginning level telephone screener a "nurse reviewer." "This gave the distinct impression she was a nurse and would have a nurse's knowledge, but she wasn't a nurse," Krul says. "She reviewed nursing claims." Agencies should be persistent in asking for managers and supervisors above the first person who takes the call, especially when the case might become expensive, she notes.

Also, a home care representative should ask if the payer has a case manager and then try to speak to that person first. "If there's a process where the case manager comes out and assesses the case, try to find out when this will happen and encourage this to occur at the earliest opportunity - even before the case begins," Krul says.

Case managers may serve as patient advocates and, therefore, have many of the same goals as the provider. In addition, case managers give providers a liaison to work with, Krul says. "The payers who have case managers show that they have an interest in preventing problems between the providers, payers, and patients," Krul says.

If home care representatives are dealing with third party payers, then they should make sure they have authorization from the company or group represented by the third party payer, Krul advises. "Many people would stop at the first call and assume the patient is covered, but they haven't established that, in fact, it is the case," she adds.

5. Follow up phone conversations in writing.

After having a conversation or negotiation in which a payer representative verifies there is coverage and provides authorization for services, the home care representative should write down the conversation in a letter and fax it to the payer for a signature, Muller and Krul advise. "They should confirm it in writing, saying, `I negotiated with you on this date; we agreed on this fee, and my nurses will start care on this date,'" Muller says. "Then try to get them to sign it and return a copy to you."

This type of meticulous follow-up and documentation will help ensure the payment and give the agency more credibility in lawsuits, Muller says.

6. Ask for copy of plan guidelines.

"When working with plans that are not clearly defined as to home care coverage, ask for a copy of the part of the plan guideline booklet that addresses home care and nursing," Krul says. Patients also may request a copy of their plan if they don't have it, she says.

Then study the plan guidelines to see what they cover and what kind of limits are placed on services, Krul says. For instance, if the plan booklet says the provider will be limited to "reasonable and customary fees," find out what a payer means by that term. "Also, I think the provider should bring the family or patient into this process as much as possible, so they can make informed decisions and choices about their health care," Krul says.

7. Become acquainted with the plan's language and its meaning.

"When you review the benefit guidelines, make sure you understand the plan language," Krul says. While reading the guidelines, ask these questions:

- Does the plan's language require further explanations?

- Is home care mentioned in the plan's guidelines?

- Is the plan current with the type of care that's available?

- Do the guidelines use terms like "if it's medically necessary or appropriate," and if so, what are the criteria for that? Who establishes medical necessity? Is that person medically trained or a person without medical training?

- If you don't agree with what a plan reviewer says, is there a mechanism for appeal?

"These are all questions that will give you clues as to how structured the payer is and how evolved their process is," Krul says.

8. Thoroughly review case before and during care.

These days, home care agencies are spending more time reviewing their admission policies, says Mary Elizabeth Derwin, JD, MS, RN, CNAA, staff attorney with the Visiting Nurse Association Inc. in Oak Park, MI. "Agencies need to make very clear decisions upfront before admitting patients because they can't afford the risk involved in admitting whomever they receive a referral on," Derwin says.

Reviewing cases before admission may be ideal, but it's not always possible, Muller notes. "The problem is if home care agencies had the leisure to screen their cases, a lot of these problems wouldn't happen," Muller says. "But they'll receive a call at 4 p.m. on Friday, saying home care services have to start 40 minutes from now or tomorrow morning, and they're left with their hands tied," she adds. "Then they need to make a business decision as to how many days or how many dollars they're willing to risk without an assurance of payment," Muller says.

Home care providers should review cases that are ongoing, looking for any changes in the patient's condition that might affect coverage, Derwin says. A provider's continuation policy should see if a home care provider can continue to meet the needs of the patient and whether the patient continues to meet certain criteria.

"The patient's need may change to the point were the agency doesn't have the physical resources to provide those services anymore," Derwin says. "The patient may have a need for supplies and equipment that the agency no longer can provide as care progresses."