Published 2/1/2020
Sarah Wiskerchen, MBA, CPC

Five Coding Tips for Dealing with Third-party Billing Entities

Editor’s note: AAOS partners with KarenZupko & Associates, Inc. (KZA) on the organization’s coding education, and KZA often provides content for AAOS Now. For more information, visit www.aaos.org/membership/coding-and-reimbursement.

Whether due to the complexities of hiring billing staff or a result of hospital employment and practice acquisition, many orthopaedic practices are moving their billing operations to a third-party entity or centralized billing office (CBO). This process is part of what institutions call revenue cycle management.

If you find yourself in this situation, use the following best practices to improve coding accuracy.

1. Keep Current Procedural Terminology (CPT) and International Classification of Diseases, 10th Edition coding as physician-primary tasks.

Even when code selection is designated to an outsourced entity, the responsibility for incorrect coding remains with the physician. The physician is closest to the service and ultimately responsible for correct coding, so physicians should perform original coding themselves. It’s the physician’s name on the claim form.

Coding audits have turned up evidence of both under- and over-coding when third-party billing employees perform the task of primary coding. For example, billed codes that weren’t supported by the physician’s documentation are not uncommon. In other cases, a third-party service has not assigned and billed all the services they could have, resulting in missed revenue opportunities.

Whether they are in the physician’s office or work for a third party, coding professionals provide an important safety net within the coding process by training physicians and helping to apply general or payer-specific coding guidelines. Creating an environment of partnership and collaboration with coding professionals is key.

2. Insist that the third party follows AAOS coding guidelines.

Having Academy data at their fingertips is a crucial component of a CBO or billing service staff’s ability to code correctly. It’s not enough that they rely on Medicare transmittals and non-specialty-specific coding resources.

Coders should consider using Code-X or another version of the AAOS Complete Global Service Data for Orthopaedic Surgery.

Too often, third-party services confuse Medicare National Correct Coding Initiative (NCCI) guidelines with AAOS Global Service Data Policies. For example, the use of image guidance during surgery may not result in an NCCI edit, but it would be considered incorrect coding under AAOS guidelines, because imaging guidance is inclusive to the procedure.

Although a payer may initially reimburse for the imaging service, it’s likely that it would be retracted at some point. On the other hand, when third-party entities use NCCI guidelines more restrictively than contractually required for non-Medicare payers, money is left on the table.

3. Verify that the third-party billing staff includes coding experts, not just billing staff.

Audits often reveal limited attention to or follow-up on denials. This depends on the skill and training of the employees managing the account and whether they are billing or coding staff. Billing staff are trained to efficiently process, close, and follow up on unpaid claims and patient balances. When it comes to the nuances of a claim being denied or getting hung up because of what is actually a coding issue, those individuals can fall short.

The good news is that this is usually a training issue or can be resolved by forging a connection between the coding staff and the accounts receivable (A/R) follow-up staff. First, make sure that the employees have the appropriate tools to formulate effective responses to denials and that they are coached on common denial patterns for orthopaedics. When billing staff make an effort to appeal, the submission often doesn’t have enough supporting explanation. Billing personnel without adequate training in codes and modifiers may accept a payer denial without scrutiny or file an appeal without adequate support.

The bottom line is that if physicians are confident that they have coded claims correctly, staff should never feel required to accept a coding denial. When physicians code correctly and have supporting documentation, third-party staff can be trained how to properly resubmit for accurate payment.

4. Ask for reports that illustrate the third party’s coding knowledge and performance.

Most billing services and CBOs provide basic reports, such as aged A/R by payer and patient; summary of charges, payments, and adjustments; and credit balances. But those don’t get to the level of detail necessary to catch coding problems.

Ask for periodic reports showing charges, payments, and adjustments by claim and by CPT code. Such reports can be eye-opening because they show, by line item, which procedures and services were paid and which weren’t. Such detail can help physicians determine whether a third party or CBO is adequately pursuing appeals and denials. It can identify potential problems, so you can ask questions and take a deeper look. Prioritize review of surgery claims, but spot-check office claims as well, because they can reveal coding or denial patterns that need attention.

Another essential report is the 100 percent adjustment report. Services written off in full—where the adjustment amount equals the charge amount—result in zero dollars collected. A 100 percent adjustment is expected for some orthopaedic services. For example, some spine graft codes are not covered by Medicare, and it is expected that the CPT code billed will be adjusted off. Practices may still bill them to show that the service was performed.

But for other services, that’s not the case. Ask questions about why certain line items received a 100 percent adjustment. Ask to which category the procedure or service was written off. The latter can be telling. Some billing services and in-house teams write off 100 percent adjustments to “contractual” adjustment. This is not correct and will mask how write-offs were handled. Although not typically done maliciously, this can indicate a lack of knowledge or skill—identifying another training opportunity.

5. Require ongoing orthopaedic coding education.

Regularly attending orthopaedic coding education will help billing service employees clarify common scenarios in orthopaedics. For instance, by attending AAOS education courses, coders will learn when modifier 59 may be appropriate and when it is not.

They’ll also learn the correct use of modifier 25. Billing services often misuse this modifier when reporting evaluation and management (E/M) services in conjunction with office procedures. Sometimes it is used too often, and other times it is not used when it should be. Education that highlights different orthopaedic examples of when an E/M service is billable would help. (Learn more about modifier 25 in the February 2017 AAOS Now article titled, “How to Use Modifier 25 Correctly.”)

A third-party billing entity should provide orthopaedic coding training at least annually to the employees who manage your account. Ask for a list of the staff who attended, the name and sponsor of each training course, and the credentials of the instructors. Include all of this information in your compliance plan.

Sarah Wiskerchen, MBA, CPC, is a senior consultant and coding educator for KarenZupko & Associates, Inc.