Speed up MCO payment by educating staff

Planning and communication are key

Is billing managed care plans for care a frustrating experience topped off by delayed or denied payments? If the answer is yes, then it’s likely that you blame the managed care organization (MCO) for withholding payment and choking off your cash flow. But there is a good chance that your hospice is a major contributor to the problem.

While MCOs have their own processes that can lead to delays in payment, the main reasons payment is delayed are poor claims, denials, and appeals, says Lisa Spoden, MS, partner in Columbus, OH-based consulting firm Strategic Health Care.

To speed up payment and improve cash flow, a hospice must examine its own processes.

"When we investigated what slowed down payment, we found that it goes both ways, both sides are to blame," Spoden says.

Spoden suggests a couple of fixes that could immediately result in faster payment:

• Submit bills more often than once or twice a month.

• Achieve electronic billing capability.

But changes in the process — the way hospices communicate with MCOs, for example — are where the most significant changes will occur. What many hospices will find is that within the hospice walls, very little is known about managed care. So, before processes can change, staff need to be educated about managed care, followed by an education in the managed care contracts the hospice has with MCOs.

Experts suggest that hospice leaders explain to staff the different types of MCOs and the various relationships with them that can occur. For example, elaborate on the kinds of plans that exist, such as health maintenance organizations (HMOs), preferred provider organizations (PPOs), and Medicare risk, to name a few. Explain the subtle financial relationships that can occur, such as a physician group being the payer for services provided to patients enrolled in an HMO.

Having explained the basics of managed care, the next step is to familiarize staff with the contracts your hospice has with MCOs. If a hospice
is negotiating a contract with an MCO, key staff should be kept abreast of the requirements the contract specifies. A billing department manager, for example, can provide the necessary input to help facilitate error-free claims.

Whoever negotiates contracts with a hospice may not be aware of what the hospice’s billing capabilities are. The negotiator might wind up obligating the billing department to to follow procedures it’s unable to follow.

If a hospice’s billing capabilities don’t meet the requirements of the MCO, the hospice could be left with having to make costly revisions or bill manually, which could lead to errors.

Billing staff must become familiar with each contract’s language. They should also be involved in contract negotiations by questioning the payer about specific claims submission requirements. For example, billing staff should find out whether an HMO requires claims to be submitted on a Uniform Bill 1992 (UB92) or if the HMO has its own form, and what documentation must accompany the claim.

Keep admissions staff informed

After the contract has been signed, the billing representative should meet quarterly with the payer to discuss any system changes, address changes, and personnel changes that could lead to a claims error.

Admissions staff are key personnel who should be included in negotiations. Information from negotiations will provide admissions nurses with information such as whether the hospice is at risk for the cost of care, whether that risk is shared with another provider, and whether the managed care company is assuming financial risk.

In other words, the admissions staff will better understand the relationship between the hospice and its managed care payer and avoid the following scenario, which is a common occurrence that leads to payment delays:

Hospice A has a contract with Physician Group B to provide services to patients they refer to the hospice for end-of-life care. The patients, however, are enrolled in Health Plan C, which has entered into a capitation arrangement with the physician group to provide prepaid care to its enrollees. In this situation, Physician Group B becomes the payer, because they have assumed financial risk for the care of the patient.

Unfamiliar with the physician group contract, the admissions nurse assumes that because the patient is an enrollee of Health Plan C, the MCO is the payer. She calls the MCO case manager for approval of services, and because the services fall under the health plan’s coverage guidelines, they are approved and the patient is admitted. But when the time comes to submit the bill, it is rejected by the health plan because reimbursement staff there know that the physician group is at risk and has already received a per member per month payment for that patient.

In this situation, the claim should have been sent to the physician group. On top of the already delayed payment, the hospice faces further delays from the physician group because proper authorization for services was not obtained from its case manager.

Sending the claim to the wrong payer and other billing errors can be avoided if everyone understands the benefits and requirements of each MCO. To aid in informing staff of requirements of each MCO, experts recommend developing a payer matrix that can be used by all staff members, especially the admissions nurse. This is a chart that lists each contracted MCO at the top of each column and important contract topics in the far left of each row. Topics might include authorization contacts, billing addresses, and reimbursement type. Billing staff should receive a similar document with more detailed information.

The admissions staff should then obtain a copy of the beneficiary’s insurance card. The back of the card will identify the payer and the address to which the claim should be sent. The admissions staff can check the matrix to determine whom to contact for authorization. With both parties properly notified of a patient’s admission along with agreed-upon care, the hospice has a made a solid first step to a clean claim.

Case manager takes over

Once a patient has been admitted for care, the hospice’s case manager begins overseeing patient care and must keep in constant contact with the case manager from the MCO. Case managers are nothing new, but hospices should add a managed care case manager to their interdisciplinary team.

"There should be someone on the interdisciplinary team assigned to act as a liaison between the hospice and the MCO," says Spoden.

It will become the hospice case manager’s responsibility to communicate with the MCO case manager. Keeping the lines of communication open between the internal hospice case manager and the external MCO case manager ensures that both parties are in agreement about care, which will help prevent disputes over unauthorized care when the claim is submitted. Just as important, it allows the hospice to develop working relationships with the MCO.

Just as admissions staff need an education in current contracts, case managers must also have a working knowledge of contracts. The case manager acts as a link between clinical activity and financial requirements of the MCO.

Key points an internal case manager must know about each contract include:

Authorization process. The case manager should be clear on whom to call and when in the event a patient requires care that is outside the agreed-upon care. Changes in care may occur when a physician, after consulting with a therapist, orders therapy services after admission.

Required information. What information or documentation does the HMO or MCO require? Making sure a claim is accompanied by the proper documentation will also prevent delays in payment.

Improve communication

By now it should be obvious that there is a common theme running through the above advice: communication. From the time of admission, admission staff need to communicate to the case manager which payer is responsible for paying for the patient’s care, what level of care the provider was authorized to deliver, and whom to contact for further authorization.

Meetings between internal case managers and external case managers should occur regularly, normally through weekly utilization review meetings in which cases are discussed individually. These meetings also should include other clinicians, such as RNs, therapists, social workers, and chaplains to provide needed background when discussing the change to a patient’s care.

How many case managers does a hospice need? Depending on the level of managed care in one’s market, the number of case managers needed might range from several full-time case managers to none. Hospices should be aware that as managed care becomes a larger part of their business, there will be a greater need for a full-time case manager. The old model of using the director of nursing to track patients will only leave the leader of your nursing staff awash in paperwork in addition to supervisory duties.