Options for HIV Billing

Options for HIV Third-Party Billing Services

Antonio O. Arias, MBA, CHBME Provider Advocate NCG Medical, Inc.

November 30, 2018

Options for Third-Party Billing of HIV Services

Executive Summary

Third-party billing refers to billing Medicare, Medicaid, and private insurance for medical services provided, as opposed to first-party billing which refers to charging patients. There are many challenging components to the medical billing process that may deter organizations from prioritizing billing. However, third-party billing is important when considering alternative and dependable revenue streams. Given the complexity of the medical billing process, some organizations choose to contract with external companies for third-party billing services. This choice is known as medical billing outsourcing. The decision to outsource begins by understanding and analyzing the risks, costs and differences between handling medical billing in- house versus outsourcing.

The process of creating an in-house medical billing department includes:

 Creating a fee schedule which sets the price for the services provided

 Hiring billing staff to manage the billing process

 Credentialing and contracting in order to work with insurance companies, Medicare, and Medicaid

 Finding a clearinghouse to check claims for errors and forward information to insurance payers

 Completing billing activities such as coding, claims submission, and denial management

The process of outsourcing medical billing includes:

 Creating a fee schedule, possibly with the help or review of an outsourcing partner

 Hiring a medical billing outsourcing company which will most likely charge a percentage of monthly revenue as payment

Overall, in-house billing departments offer HIV service providers greater control over the process and patient satisfaction, the ability to limit the sharing of confidential information, freedom from possible hidden costs, the ability to predict fixed billing costs, and a return on investment if a provider has already invested in in-house medical billing. Yet, establishing and

2 maintaining an in-house medical billing operation can be prohibitive for organizations providing HIV services with little experience or resources available to manage the process. The benefits of outsourcing include reduced errors, enhanced consistency, maintaining focus on patient care instead of billing, steadier and more predictable cash flow, ensured billing compliance, liability avoidance, and the benefit of relationships the outsourcing company has already established. Outsourcing partners can also provide helpful performance reports, and all of these factors often actually lead to higher revenue for providers from outsourcing than from in-house billing.

Outsourcing has moved away from being an “all or nothing” affair due to technology that has become available in the last few years allowing organizations to take a hybrid approach to revenue cycle outsourcing. The best outsourced medical billing firms design their offerings with an understanding that medical providers face unique constraints depending on the services they offer.

HIV services providers can also choose to outsource as little or as much as they would like. This leaves them with the flexibility to focus on their strengths while utilizing the services of an outsourcing partner in the aspects of the process where they need the most help. In an environment where many organizations are receiving none of the revenue they could potentially receive from third-party payers for the services they are already providing, outsourcing may offer an option for them to bill those payers without having to go through the process of setting up an in-house medical billing department from scratch. For those that have some capacity for third- party billing already, outsourcing could still help fill in the gaps, so they can bring in more revenue overall.

This white paper was funded by a grant from the Illinois Department of Public Health.

Introduction

Medical billing is a complicated task for many medical practices, but for some Local Health Departments (LHD), Community-Based Organizations (CBO), and other Healthcare Providers (HCP), the complicated nature of medical billing has impeded the formation of any billing capacity. Changing this trend will allow these organizations to address ways to increase their revenue and their stability, so that they can continue improving public health through the services they provide. As these organizations begin the process of developing billing capacity, it is important to consider all available paths to achieving that goal. In-house medical billing departments are a more conventional option, whereby provider staff manages billing operations on site. Yet, LHDs, CBOs, and HCPs can also consider outsourcing, either all or part, of their billing operations. Providers can weigh the advantages and disadvantages of in-house billing, partially outsourced billing, and fully outsourced billing to choose the option that makes the most sense for them.

The focus of this paper is on the operational decision-making involved with addressing whether to outsource the billing function for LHDs and related organizations. In particular, the paper focuses specifically on billing related to the provision of HIV services for these organizations.

HIV Third-Party Billing

Human immunodeficiency virus (HIV) weakens a person’s immune system by destroying important cells that fight disease and infection.1 HIV can be controlled with proper medical care, but no effective cure exists. Some groups of people are disproportionately likely to contract HIV, spurring movement towards greater accessibility of routine HIV screening and HIV prevention services. LHDs, CBOs, and HCPs may provide one or more of the following HIV/AIDS services:2

 Screening/evaluation: Clients may complete a questionnaire on demographic and risk information prior to testing  Testing: Sites may offer serum HIV antigen/antibody testing, Fingerstick HIV antibody/antigen testing, or both.  Diagnosis: Early diagnosis is important for receiving the greatest benefit from drug therapy.  Counseling: Regardless of their diagnosis, clients who are tested for HIV may also receive counseling to reduce their risk of acquiring or transmitting the virus Counseling may also be provided to partners of clients.3  Referral: With diagnosis, providers often offer the client information about medical, mental health, and social support services, as well as partner referral services

1 CDC. 2018. “HIV Basics.” Last modified July 23, 2018. https://www.cdc.gov/hiv/basics/ 2 Mookencherry, Shefali. 2017. “Credentialing, Contracting, Coding and Billing for Public Health HIV Services.” December 15, 2017. https://ipha.com/content/uploads/HIV%20cred-contr-cod- blg%20Webinar%2012-15-17.pdf 3 Wisconsin Department of Health Services. 2018. “HIV Counseling, Testing, and Referral Program.” Last modified September 28, 2018. https://www.dhs.wisconsin.gov/aids-hiv/ctr.htm

 Treatment: There is no cure for HIV, but anti-retroviral therapy can slow the progress and complications of the disease, and prevent secondary infections. Some organizations also provide preventive HIV drugs to reduce the risk of HIV infection. Medical tests for most conditions are primarily conducted in a clinical setting that bills insurance companies for the services they provide on a regular basis. HIV testing and other services are unique in that they can often take place at Local Health Departments (LHD), Community-Based Organizations (CBO), and other Healthcare Providers (HCP) unequipped to bill public or private payers and health plans.4 The range of settings providing HIV testing and other HIV services makes it possible to reach a broader set of people who are at risk, but these services are unsustainable without a dependable funding source. In addition to supporting existing services, there is still progress to be made in terms of expanding routine HIV screening and HIV prevention services to fill service gaps in high incidence geographic areas. These areas experience late diagnoses, unsuppressed viral loads, and higher rates of HIV transmission. Expanding services to address these issues will not be possible without local providers developing the capacity for consistent funding.5

One revenue source that many LHDs, CBOs, and HCPs have yet to take advantage of is third- party billing, including the provision of services related to HIV. Third-party billing refers to billing Medicare, Medicaid, and private insurance for medical services provided, as opposed to first-party billing which refers to charging patients. The National Alliance of State and Territorial AIDS Directors stated in its 2016 HIV Testing and Billing Report that less than half of LHDs who deliver HIV testing services have capabilities for third-party billing. Even less reported that they require health department-supported providers to bill third party payers. The HIV Testing and Billing Report also discovered that different venues have different rates of billing capacity. While community health centers and HIV/ID physicians were billing 72% and 63% respectively, only 53% of LDH clinics and 24% of CBOs are billing.6 This means that many of these organizations are eligible for reimbursements from Medicare, Medicaid, and private insurance companies, but lack the staff, resources, or knowledge to obtain them.

Some HIV service providers may be hesitant about billing for their services because part of their mission is to increase the availability and utilization of important HIV services by providing them to their clients free-of-cost. The Patient Protection and Affordable Care Act (PPACA) requires most new health insurance plans to cover HIV testing without additional cost-sharing, such as copays or deductibles. HIV testing is covered once per year for all beneficiaries ages 15 through 65, and for those under 15 or over 65 if they are considered to be at increased risk.

4 Erdman, Jeffrey M. 2016. “Sustaining Your Organization Through Third-Party Billing.” Illinois HIV/STD Conference. October 2016. https://www.ipha.com/content/uploads/Events/2016%20HIV%20Conf/Sustaining%20Your%20Organizatio n%20through%20Third-Party%20Billing.pdf 5 CSFA. N.d. “3rd Party HIV Billing Development Project.” Accessed October 25, 2018. https://govappsqa.illinois.gov/gata/csfa/Program.aspx?csfa=1614 6 Nakatsukasa-Ono, Wendy. 2014. “Building Sustainability through Billing and Reimbursement.” December 1, 2014. http://depts.washington.edu/hivtcg/presentations/uploads/7/building_sustainability_through_billing_and_re imbursement.pdf

Pregnant women are covered for three tests.7 This means even if service providers bill third-party payers, clients can usually still receive services free-of-cost.8 If a service is not covered by insurance, or a client does not have insurance, sliding-scale fee schedules allow providers to determine what the cost to those clients will be, if anything.

Equipping HIV service providers with third-party billing capabilities is especially important in the context of the financial troubles many of them face. The National Association of County and City Health Officials reported that 48 percent of U.S. public health departments reduced or eliminated services and jobs in recent years, and there has been a reduction in HIV grant dollars from federal partners. LHDs are experiencing shrinking local, state, and federal budgets, and the cost of providing preventive and clinical services such as HIV testing has been growing.

Even with the expansion of insurance coverage, LHDs and health department-supported organizations will need to develop a way to continue providing service for both insured and uninsured patients, which likely means they will need to develop the capacity to bill third-party payers. In fact, one major benefit of billing third-party payers is that the revenue coming in is not dependent on grant or government funding. If service providers are able to recoup their costs by billing their clients’ insurance, their programs will be much more stable and sustainable than relying on other funding sources.

HIV service providers are often, for good reason, mainly focused on increasing public health and making services available to high-risk populations. Even so, a healthy consideration to the business-side of their operations will allow them to continue their mission in the long run. When it comes to the establishment of third-party billing, LHDs, CBOs, and HCPs can take on the complicated process on their own with the creation of an in-house medical billing department, or they can consider outsourcing the process to a company that specializes in medical billing.

What is Medical Billing Outsourcing?

For healthcare providers offering critical services, optimization of the medical billing process is extremely important for continued operations. Medical billing is commonly referred to as revenue cycle management (RCM), which is an accurate designation as there is much more to billing than just sending out a bill, and the process has gotten much more difficult in the past 15 years. Getting a bill to a payer is not enough to guarantee a payment. There are many interdependent, critical tasks necessary for billing, and there are many more obstacles to getting paid in an accurate and timely manner now than there used to be.9

While LHDs, CBOs, and some HCPs may differ from a typical medical practice in that they can receive grant money to fund their services, developing third-party billing capacities should still

7 Florida Department of Health. 2016. “A Provider’s Guide to Reimbursement and Sustainability for HIV Testing in Florida Healthcare Facilities.” December 2016. http://www.floridahealth.gov/diseases-and- conditions/aids/prevention/_documents/Counseling_testing/hiv-testingsustainabilityguide-dec2016- revisions.pdf 8 HIV.gov. 2018. “The Affordable Care Act and HIV/AIDS.” Last modified October 24, 2018. https://www.hiv.gov/federal-response/policies-issues/the-affordable-care-act-and-hiv-aids 9 Roberts, Lucien W. 2012. “Is it Time To Outsource Your Practice Billing?” Physicians Practice. April 18, 2012. http://www.physicianspractice.com/pearls/it-time-outsource-your-practice-billing

6 be a priority in order to have a more stable, dependable revenue stream. There are many challenging components of medical billing that may be deterring organizations from prioritizing it. These include the complex collections process, continual declines in reimbursements, and having to satisfy Health Insurance Portability and Accountability Act (HIPAA) requirements.10

With all of the complicated components of medical billing, some LHDs and health department- supported organizations choose to contract with external companies for their third-party billing services. This process is called medical billing outsourcing. These medical billing companies receive service data from providers, and then conduct billing activities on their behalf. In an environment where many organizations are receiving none of the revenue they could potentially receive from third-party payers for the services they are already providing, outsourcing may offer an option for them to bill those payers without having to go through the process of setting up an in-house medical billing department from scratch. For those that have some capacity for third- party billing already, outsourcing could still help fill in the gaps, so they can bring in more revenue overall.

Medical billing outsourcing has been on the rise, and the market is projected to exceed $16 billion by 2024. In-house billing may be preferred by some providers, but outsourcing is growing in popularity.11 A 2015 study reported that the majority of independent physicians now believe outsourcing is the best choice for billing, and outsourcing is expected to grow between 8 and 9 percent within the next decade.12 The major driving factors of the market include constantly changing healthcare regulations and efforts to decrease in-house processing rates and increase revenue growth. The major factors restraining growth of the outsourcing market are high rates of technology adaptation, making the billing process more accessible, and the reluctance of some providers to make patient records available to a third-party source.

In-House vs Outsourced Process

Figure 1 – In-House Medical Billing Process

10 Invensis. N.d. “Medical Billing Services”. Accessed October 25, 2018. https://www.invensis.net/healthcare-bpo/outsource-medical-billing-services 11 Bay, John. 2018. “Medical Billing Outsourcing Market is Determined to Cross US $16 Billion By 2024.” Herald Keeper. May 21, 2018. http://heraldkeeper.com/market/medical-billing-outsourcing-market- determined-cross-us-16-billion-2024-64641.html 12 Apex EDI. 2018. “How the Medical Billing Outsourcing Market is Going to Expand.” July 14, 2018. https://www.apexedi.com/how-the-medical-billing-outsourcing-market-is-going-to-expand/

Figure 2 – Outsourced Medical Billing Process

In-house and outsourced medical billing processes are similar, but differ because of who is completing the work. Figures 1 and 2 above depict the steps involved in in-house and outsourced medical billing from the perspective of a provider. The three major parties involved in the in- house process are the provider, the clearinghouse, and the payer.

 Provider: An organization that provides medical services. A provider could be a hospital or a private medical practice, but the providers most relevant to the issue of HIV services and the lack of third-party billing are LHDs, CBOs, and some other HCPs.

 Clearinghouse: A company that forwards claims information from healthcare providers to insurance payers. The clearinghouse also performs claims scrubbing, in which they check the claim for errors and confirm its compatibility with the payer software.13

 Payer: The entity paying for the medical services, such as Medicare, Medicaid, or private insurance. When conducted by an in-house billing department, the process begins with employees collecting and verifying patient insurance information, and then generating a superbill for the patient’s visit. The superbill contains codes for the diagnosis and treatments that occurred during the patient’s visit, along with other information, and is used by insurance companies to determine if a claim is legitimate. If the provider has an Electronic Health Records (EHR) system and/or medical billing software, they can enter the information from the superbill into the software and electronically submit claims to a medical billing clearinghouse. If not, they will submit a paper claim. The clearinghouse verifies the claim, scrubs it of errors, and sends it on to the payer. After review, the payer will notify the clearinghouse if the claim is accepted or rejected, which will then notify the payer. When claims are rejected, the provider’s staff will gather the necessary

13 Dummies. N.d. “What is the Function of the Clearinghouse in Medical Billing?” Accessed October 25, 2018. https://www.dummies.com/careers/medical-careers/medical-billing-coding/what-is-the-function-of- the-clearinghouse-in-medical-billing/

8 additional information and resubmit them. The clearinghouse charges the provider for each submission, even if it is a correction. While this is the basic process for billing, before the provider reaches this stage, it has to set up a medical billing department.

There are many components to creating an effective medical billing department. LHDs, CBOs, and HCPs should consider all of the steps involved and, based on a critical consideration of their own capabilities, decide if completing each step in-house is a realistic, and manageable, possibility. Some aspects may seem daunting, in which case providers should strongly consider outsourcing as a means to attain billing capacity. Even if in-house billing is a manageable possibility, it is still important to weigh whether outsourcing could offer benefits in terms of ease, increased revenue, or any other of the provider’s priorities.

There are several investments a health service provider should consider making when developing an in-house billing department. It can be helpful to have at least one staff member specifically dedicated to billing. For some HIV service providers, hiring a medical billing expert could be challenging under their current budget, but if they do not, the burden of billing tasks will fall on other staff members who are already busy with their own operations, and might not have the full training and understanding of billing and coding.14

Once billing staff are established, providers need to create an optimal fee schedule, which sets the price for the services provided and allows the provider to work with private and public insurance to determine reimbursement levels. There are three steps to establishing a fee schedule.15

1. Determining the cost of performing each service, considering supplies, staff payments, and other costs associated with the service. This analysis must also take into account other funding sources that may cover some of the costs, such as tax dollars, grants, and volunteers. In addition, providers of public health services should attempt to settle on a fee that is as low as possible while still covering the cost of the service, and also not too high as to become a barrier for clients.16

2. Determining the standard fee for each service in the region of the provider. The Centers for Medicare and Medicaid Services (CMS) are typically a good benchmark. Providers may find it easiest to use those fees, especially if the majority of their clients have Medicare or Medicaid. If, however, a provider determines that their costs are not covered by the CMS rate, it can be advantageous to still set their own fees because private insurance companies will often reimburse at higher rates.

14 Parkinson, Alexander. 2014. “How to Build the Perfect Public Health Billing Department.” September 24, 2014. https://www.smarthealthclaims.com/blog_post/how_build_perfect_public_health_billing_department 15 Ramkissoon, Nar. 2013. “The First Step to Sustainable Revenue is Setting Your Fee Schedule.” August 13, 2014. https://www.smarthealthclaims.com/blog_post/first_step_sustainable_revenue_setting_your_fee_schedul e 16 Smith, Denise, Athina Kinsley, Christella Leyvas, and Ann Walker. 2011. “California’s Innovative Immunization Billing Project Plan.” Kearn County Public Health Services. December 31, 2011.

3. Setting the fees and creating a list of all provided services and their specific fees. Fee schedules can be very comprehensive, listing every service and corresponding fee, or a more simplified set of guidelines. While providers offering only a small number of services, such as a community-based organization providing only HIV testing and preventive services, setting an individual fee for each service may make the most sense, but for other venues offering many services, such as many LHDs, it may be more efficient to simply follow other set guidelines. For example, in lieu of determining a specific fee for every service, Merced County Health Department stated the following as their fee schedule:

All clinical fees will be set at the published Medicare Fee Schedule. For those services where no Medicare rate is established, fees will be at the greater of Family PACT or Medi-Cal rates. In those cases where there are no published rates in any of these programs, fee will be established at costs plus a fifteen (15) percent administrative fee.

After the fees have been established, many LHDs and supported organizations may want to set up a sliding scale fee schedule, allowing the fees for mandated services to be reduced or waived if a client is unable to pay. While HIV testing should be covered by insurance, for clients without insurance, a sliding scale fee schedule will make it possible to waive fees so those clients can still access important HIV services.

Next, the provider will begin the contracting and credentialing process, working with payers in their area to secure reimbursement rates. This process can be long and complicated, meaning it is important to have an experienced and skilled expert who can negotiate the best rates. Enrollment, the combined process of credentialing and contracting, encompasses the entire process of becoming eligible to receive reimbursement from a third-party payer. For some payers, credentialing can include a contract, a letter of intent, a memorandum of understanding, and final enrollment. Credentialing is required by private insurance, Medicare, and Medicaid. The process of credentialing includes the payer’s review, validation, and eventual approval of demographic, educational, professional licensure, and other pertinent information about the provider. Once credentialed, the payer grants approval and permission for the provider to then contract with them.

Contracting is the process of establishing an agreement between a health plan and a health care provider. A contract will include details about the services that will be provided, payment rates, filing timelines, and any other obligations. Contracts are not guaranteed and the negotiation of a contract can take two to four months, but they are very important, and can have a great impact on revenue. When a provider builds a relationship with a private insurer, and becomes an in- network provider, members become more likely to use that provider for services. The increase in customers, along with the trend of private plans reimbursing at higher rates than Medicaid, is likely to increase revenue, especially for LHDs or CBOs who may currently have few patients with private insurance.17

17 Jefferson County Public Health. “Costs.” Local Health Jurisdiction Immunization Billing Resource Guide. page 11-12.

With contracts established, the provider should focus on developing overall standard operating procedures, encompassing patient intake and claims processes. Patient intake requires the development of procedures for appointment scheduling/check-in, collecting required information for billing, registration forms, encounter forms or superbills, insurance verification, and a formalized check-out process. The claims process will involve claims submission, posting payments, follow-up of claims, and management of denied claims.18 The in-house process will typically include registration with a clearinghouse,19 which will charge a fee per claim, with a minimum charge.20 Before claims can actually be submitted, the provider will need to build capacity for coding.

Medical coding is the process of transforming the descriptions of diseases, injuries, and procedures into numeric or alphanumeric designations, also known as code numbers. Accurately coding data is very important for claims reimbursement. There are several coding nomenclatures used in the healthcare industry, including the Current Procedural Terminology (CPT) codes assigned to every service, and the Healthcare Common Procedural Coding System (HCPCS) codes which are monitored by the Centers for Medicare and Medicaid Services (CMS), and either identical to the CPT codes or specific to medical suppliers other than physicians such as ambulance services and durable medical equipment vendors.

In addition to the codes for services performed, there is also the International Classification of Diseases (ICD) to code diagnoses and classify diseases and a wide variety of signs, symptoms, abnormal findings, complaints, social circumstances, and external causes of injury or disease. The industry is currently using the tenth version, ICD-10, but will start reporting using ICD-11 in January 2022.21 In order to provide supplemental information or adjust the description and details of a procedure or service, CPT Modifiers and HCPCS Modifiers are used.16 Complying with these codes, and keeping up with changes, can be challenging, but for some providers who offer only very few, specific services, the process may be more manageable. For example, if HIV screening is the only medical service provided by an organization, the billing staff will only have to master the relevant codes for that service. Figure 3 below lists some of the relevant ICD-10, HCPCS, and CPT codes, though it is not a comprehensive list.17

18 NACCHO. 2014. “Billing for Clinical Services.” 2014. https://www.naccho.org/programs/community- health/other/billing-for-clinical-services 19 Alpers, Adam. 2010. “In-House vs. Outsourced Billing Operations: Which Is Best?” Physicians Practice. October 19, 2010. http://www.physicianspractice.com/house-vs-outsourced-billing-operations-which-best 20 STDTAC. N. d. “In-House or Outsourced Billing.” Billing Toolkit. Accessed October 25, 2018. http://stdtac.org/wp-content/uploads/2016/05/In-House-Or-Outsource_STDTAC.pdf 21 World Health Organization. 2018 “Classification of Diseases (ICD).” Last modified June 18, 2018. http://www.who.int/classifications/icd/en/

Figure 3 – ICD-10-CM and HCPCS Codes and CPT Coding Modifiers Relevant to HIV Services

ICD-10-CM Diagnosis Codes Z00.00 Encounter for general adult medical examination with abnormal findings Encounter for screening for infections with a predominantly sexual mode of Z11.3 transmission Z11.4 Encounter for screening for human immunodeficiency virus (HIV) Z11.59 Encounter for screening for other viral diseases Z72.89 Other problems related to lifestyle Z71.7 Human immunodeficiency virus (HIV) counseling Z21 Asymptomatic human immunodeficiency virus (HIV) infection status R75 Inconclusive laboratory evidence of human immunodeficiency virus (HIV) B20 Human immunodeficiency virus (HIV) disease Human immunodeficiency virus, type 2(HIV 2) as the cause of diseases B97.35 classified elsewhere Encounter for follow-up examination after completed treatment for Z09 conditions other than malignant neoplasm Z72.51 High risk heterosexual behavior

HCPCS Codes for Billing Medicare Infectious agent antibody detection by enzyme immunoassay (EIA) G0432 technique, HIV-1 and/or HIV-2, screening Infectious agent antibody detection by enzyme-linked immunosorbent G0433 assay (ELISA) technique, HIV-1 and/or HIV-2, screening Infectious agent antibody detection by rapid antibody test, HIV-1 and/or G0435 HIV-2, screening

CPT Coding Modifiers Used when laboratory testing is being performed using a kit or 92 transportable instrument that wholly or in part consists of a single use, disposable analytical chamber Used to indicate a preventive service for which a patient's co-pay, 33 deductibe or co-insurance is waived. Apply modifier 33 for private payers only.

Consider a hypothetical coding scenario for an HIV-service provider. A 66-year-old gay man visits his LHD requesting an HIV test. He indicates sexual risk behaviors, and is covered by Medicare. The staff of the LHD advise him on how to decrease risk for HIV transmission, and order either a conventional HIV test or a rapid HIV test.

 The ICD-10-CM Diagnosis Codes for the patient’s visit are Z11.59 with Z72.89 and Z71.7. The diagnosis codes are important because without the code indicating “problems related to lifestyle”, the test would not be covered by Medicare due to the patient’s age.  The HCPCS code for the test could be G0432, G0433, or G0435 depending on which test is ordered.

For clients with private insurance other than Medicare, provider staff will also need to be familiar with the additional CPT codes for test products, test administration, office service, and counseling.7

It is also important to develop a coding quality assurance system for any in-house medical billing department. Coding errors and omitted information can delay payments to providers. An uncertainty can cause a claim to be moved out of the automated system and denied or sent into manual processing, which is more costly and time consuming. Coding errors vary, but invalid diagnosis codes, invalid member identification numbers, incomplete claims, and inaccurate information such as location of services and misspelling of name, date of birth, address, and insurance policy ID are common.

One of the most common reasons for claim denial is duplication. Providers need to be patient and wait for a response before filing a secondary claim, as returning unearned reimbursement due to duplicate payment may result in a higher administrative cost than the payment total itself. In addition, some healthcare services are bundled into a single package—such as lab profiles with HIV and additional tests—and will not always qualify for separate reimbursements. Timeliness is also very important, as insurers will reject claims not submitted within the permitted timeframe, and it is best to be well ahead of the deadline in case errors need to be addressed. When denial inevitably occurs, it can be worthwhile to identify the error and resubmit because there is still a good chance of receiving payment.22

Public health service providers should also consider filing claims electronically and signing up for Electronic Funds Transfer, which can expedite the payment of claims. While paper claims have not yet completely diminished, providers should be prepared to eventually abandon paper claims. Electronic Health Records (EHR) software makes in-house billing easier, and, paired with integrated practice management systems, could be one factor that keeps billing in-house. When it comes to LHDs, EHR systems are not pervasive. A 2015 study indicated that 42% were using an EHR, meaning 58% were still dealing with paper records.23 Quality billing software increases the ease of billing processes by providing helpful features for:

 Claim processing. Crucial for the immediate reporting of insurance claims and fast receipt of reimbursement.

 Eligibility verification. Determining whether a patient has health insurance should happen before procedures take place, but many customers do not realize they have lost coverage until after the fact, making verification abilities very useful.

 Electronic superbills. Good software will automatically create an electronic superbill with each new appointment, which documents all charges pertaining to the visit from the

22 Brown, Julia. 2015. “Five Ways To Ensure Clean Claims.” Behavioral Healthcare Executive. March 5, 2015. https://www.behavioral.net/article/5-ways-ensure-clean-claims 23 Shah, Gulzar H., and Karmen S. Williams. “Electronic Health Records and Meaningful Use in Local Health Departments: Updates From the 2015 NACCHO Informative Assessment Survey.” Journal of Public Health Management and Practice. September 30, 2016. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5050007/

patient’s initial appointment to checkout. 24 These make it much easier to track and understand open claims.

 Electronic remittances. Allowing direct interfacing with insurance companies to track data effortlessly and accurately by explaining the reimbursement decision of the payer.25

 Payment reminders. Electronic bill collection notices replace the collection letter, allowing for more regular reminders about open bills. If a provider chooses to turn to outsourcing for billing, either fully or partially, they will follow a different process, which is more straightforward for the staff of the provider. When outsourcing, providers still have to establish fee schedules and clinic policies, although some medical billing companies will also help with, or review, fee schedules. After that, the RCM partner can take care of the credentialing and contracting process, and then get started billing. Superbills are simply sent to the medical billing service, and they take care of data entry, coding, and claim submission, as well as interactions with the clearinghouse and insurance companies. The billing service will follow up on rejected claims, pursue delinquent accounts, and send invoices directly to patients, when necessary.

If the provider is using EHR software, the process becomes even easier, as information from the patient’s superbill is stored in the EHR and is electronically transmitted to the billing company, removing the need for the provider to send paper records. It also eliminates an extra round of data entry, leading to greater accuracy. Despite the advantages, there can be issues with integration between the EHR software and the billing service. For integration to work effectively, the type of data being exchanged has to match or be converted to a compatible format. Some billing services even include access to an electronic health records system or practice management software, which can be especially helpful for providers who do not already have EHR software, and by using the software provided by their billing partner, avoid issues of interoperability.26

Outsourcing removes the burden of many billing tasks, but does necessitate the process of selecting and contracting with a medical billing service provider. In the process of selecting a billing partner, providers should consider the costs of the service, but also what exactly the billing partner offers and if that aligns with their specific needs. Costs vary based on the size and focus of the medical provider, but most billing companies charge a percentage of monthly revenue as payment, ranging from 4-12% of net collection,27 with the industry average at 7%.28 LHDs, CBOs, and HCPs should find out what specific services are included in the monthly

24 TIMS. N.d. “Patient Billing… with Workflow”. Accessed October 25, 2018. https://www.cu.net/audiology/features/electronic-superbill 25 EDI Support Services. “Benefits of Electronic Remittance Advice.” Accessed October 25, 2018. http://www.edissweb.com/cgp/registration/era-benefits.html 26 Uzialko, Adam C. 2018. “Choosing a Medical Billing Service: A Buyer’s Guide.” Business News Daily. August 9, 2018. https://www.businessnewsdaily.com/10982-choosing-medical-billing-service.html 27 MedPro Services. N.d. “Pricing.” Accessed October 25, 2018. http://medproservices.net/pricing/ 28 Thorman, Chris. N.d. “Should Your Practice Outsource Medical Billing?” Physician News Digest. Accessed October 25, 2018. https://physiciansnews.com/2010/06/17/should-your-practice-outsource- medical-billing/

14 percentage, and whether clearinghouse fees are included in the percentage or are an additional charge.

Most companies scrub claims for errors before processing them, and many follow up with insurance companies to confirm claims are accepted, but different companies offer differing levels of services. Because of this variation, providers need to consider what services will benefit them the most, as well as if they trust the company to perform those services well. For example, if a CBO that offers HIV testing decides coding is too complicated for their staff to handle in addition to their current responsibilities, and decides to look for a billing company to perform coding for them, they need to find out if the billing service has certified coders on staff and if it is up to date with the most current coding system. It is also important to make sure the billing partner is communicative, responsive, and helpful. Providers may want to make sure that they can access information about their revenue cycle at any time, what they can expect from the service when a mistake is made, and if the service will provide them with copies of any documents it receives from payers.26

Advantages and Disadvantages of Outsourcing Medical Billing

There are both advantages and disadvantages to outsourcing medical billing. Medical billing can be a demanding and challenging task for small medical providers. For practices that already have in-house medical billing systems in place and working efficiently, the cut taken by an outsourcing company may not be worth it. In the case of trying to increase third-party billing for HIV service providers with no current billing capacity, however, this is typically not a factor. Implementing third-party billing can be overwhelming, which is likely why so many providers have yet to do it. For those who are currently missing out on 100% of the reimbursements available to them, offering up a small percentage of the revenue for medical billing capacity could be a worthy exchange. Apart from the simple factor of outsourcing making medical billing possible for some providers who may not otherwise be able to manage it, there are also many other benefits of outsourcing in comparison to in-house medical billing:

1. Reduced Errors. Because professional medical billing companies deal with billing procedures every day, they experience less denied and rejected claims. Even for experienced in-house medical billing departments, avoiding errors is difficult, and for those with no billing experience, like many HIV service providers, errors are likely to be common.

2. Increased Revenue. Even for the LHDs, CBOs, and HCPs that have in-house medical billing, the operation requires expenses of staff salaries and benefits, supplies, furniture, billing software, and computer equipment. Depending on the attributes of the provider and the efficiency of their in-house billing operations, outsourcing can often actually save money, even when accounting for the cut taken by the outsourcing company, because the company is able to take advantage of economies of scale that single providers cannot.

3. More focus on patient care and improved patient satisfaction. This effect is specifically advantageous for smaller groups because with limited staff, the reduced burden from not having to take care of billing can increase productivity, efficiency, and

employee morale.29 For an HIV service provider trying to implement third-party billing, the staff-burden of creating a billing department could distract from patient care and work against the mission of the organization.

4. Improved Cash Flow. When a professional company is taking care of billing, there are no interruptions to the process, resulting in a more steady flow of claims going out and cash coming in. This more predictable cycle can make budgeting easier for providers. In addition, operations and cash flow can be majorly stalled even when just one employee takes a sick day, goes on vacation, or quits; a problem that doesn’t affect larger billing companies.

5. Ensured billing compliance. Medical billing is an ever-changing industry, and the constant changes can be difficult to keep up with for HIV service providers who want to be primarily focused on patient care.30 Medical billing companies, however, prioritize staying up-to-date with industry changes.

6. Liability Avoidance. In-house medical billing departments can be at risk for embezzlement or employee neglect, especially if overseen by someone who does not fully understand the billing process, as the departments of HIV service providers with no current billing capacity could be. Outsourcing companies, however, assume the liability for their own employees, and have a full understanding of the process.

7. Increased transparency. Outsourcing companies should be able to provide organizations with comprehensive performance reports. Receiving a periodic analysis of accounts receivable along with recommendations on how to improve financial performance can be extremely helpful for LHDs, CBOs, and HCPs that may not have previously given much consideration to optimizing business performance.31

8. Enhanced consistency. Not only is it easier for outsourcing companies to maintain consistency and avoid mistakes, they are contractually obligated to perform certain services with a certain degree of success.

9. Established relationships. A biller at a medical provider interacts with all payers and is essentially anonymous to all of them, especially if new to medical billing. A biller at a service, however, deals with payers consistently and may have personal relationships with them, or at least experience dealing with them. This can make the entire process more efficient, and expedite problem resolution.32

29 Hicks, Joy. 2018. “Pros and Cons of Outsourcing Your Medical Billing.” Verywell Health. September, 16, 2018. https://www.verywellhealth.com/advantages-of-outsourcing-medical-billing-2317424 30 Flatworld Solutions N.d. “10 Reasons to Outsource Medical Billing.” Accessed October 25, 2018. https://www.flatworldsolutions.com/healthcare/articles/reasons-to-outsource-medical-billing.php 31 Care Cloud. “In-House vs. Outsourced Medical Billing: Pros and Cons.” Accessed October 25, 2018. https://www.carecloud.com/continuum/in-house-vs-outsourced-medical-billing-pros-and-cons/ 32 Stryker, Carol. 2015. “10 Reasons to Outsource Medical Billing.” Physician Practice. June 24, 2015. http://www.physicianspractice.com/managers-administrators/10-reasons-outsource-medical-billing

Apart from the strengths of outsourcing, there are also some disadvantages for providers to consider, or at least be aware of:

1. Little Control. When outsourcing, providers do not have control over the employees performing their billing activities. Some offices may not want to lose direct supervision over the work that is so vital to their business. This factor is especially impactful for offices that currently have trusted long-term employees conducting medical billing, but is likely less important for small HIV service providers who currently have no billing operations.

2. Risk to patient satisfaction. Though outsourcing can help practices maintain focus on patient care, leading to improved patient satisfaction, patients tend to like being able to pay in the doctor’s office and build relationships. They may be less satisfied when they are only able to discuss important matters over the phone. For HIV services, such as HIV testing which typically requires no payment on the part of the patient, this may be relevant only rarely.

3. HIPAA privacy and security breaches. Though still rare, with more people accessing confidential information, there is a greater risk for a breach.

4. Possible hidden costs. Outsourcing still requires time spent in preparation and coordination, and the cost of legal feels and potentially hiring a liaison. Additionally, providers should read contracts carefully to be sure they know exactly what they will be expected to pay.

5. Return on investment. For providers who have already invested in training medical billers and purchasing billing technology, switching to outsourcing would mean losing the already expended time and money. This is not an issue for those who have not yet invested in revenue cycle management.

6. Variable cost. Most medical billing companies charge a percentage of collections, meaning the more that is brought in, the more that has to be paid out. This can make budgeting difficult, but could also be positive. With in-house billing, costs can only be so low, regardless of how much business occurs, whereas with outsourcing, if the provider does not do much business, they do not have to pay much for billing. This is especially important for some organizations who may provide only a few HIV-related services. Additionally, the percentage system means that the billing service and the provider’s interests are aligned—incentivizing the billing company to have high collections. Business Considerations

Different attributes of organizations will result in different outcomes. The following hypothetical cost analysis demonstrates the factors at play in determining if outsourcing is cost-effective in comparison to in-house billing. The hypothetical LHD in this scenario has ten employees on staff and hires two medical billing specialists for its in-house medical billing department. This LHD offers many service in addition to HIV testing, such as immunization shots, treatments for acute and chronic illnesses, blood pressure screening, pap smears, family planning services,

17 tuberculosis treatment, nutrition services, and child health services.33 They file 60 insurance claims per day (~15,000 per year), with $80 billed per claim on average (~$1,200,000 per year), and have a 60% collections rate.

The billing department costs for in-house are based on the median salary of two medical billing employees ($80,000) and their healthcare costs ($9,000), federal and state taxes ($12,000), and training costs to keep up to date with the latest industry developments ($2,000). It also includes $10,000 to account for the costs of statement paper, office space, office hardware, and other miscellaneous costs. The outsourced billing department costs include four hours of time per week for managing billing tasks at approximately $15/hour adding up to around $3,000 per year in administrative costs due to follow-up required even with the best of medical billing services.

The in-house software and hardware costs reflect an annual cost of approximately $7,000 for practice management software, and $500 for computer hardware costs. It is worth noting that this does not include the upfront cost of a software system, just the annual costs. The $500 outsourced cost is for a computer and printer which the practice would need for interaction with the billing service and printing documents.

The direct claims processing costs for in-house account for the fees the LHD would pay for submitting 15,000 claims per year at approximately $0.18 per claim add up to $2,700 annually. The outsourced cost is, of course, what the provider pays to the outsourcing company, based on the industry average of 7% of total collections.

The percentage of revenue that a provider collects varies widely, but for this hypothetical situation, the provider is collecting 60% of what it bills, which is in the range of an average in- house billing department according to industry experts.28 When switching to outsourcing, providers can typically expect a 5-15% increase in collections. With 10% in the middle of those estimates, the hypothetical collections rate for the provider in this scenario is 70%.

33 Tennessee Department of Health. N.d. “Services Offered by Local Health Departments.” Accessed November 5, 2018. https://www.tn.gov/health/health-program-areas/localdepartments/lrhd/local- services.html

Figure 4 – LHD Cost Analysis

Costs In-House Outsourced Billing department costs $ 113,000.00 $ 3,000.00 Software and hardware costs $ 7,500.00 $ 500.00 Direct claim processing costs $ 2,700.00 $ 58,800.00 Collections costs $ 123,200.00 $ 62,300.00

Collections Claims filed $ 1,200,000.00 $ 1,200,000.00 % of billings collected 60% 70% Collections $ 720,000.00 $ 840,000.00

Collections, net of costs $ 596,800.00 $ 777,700.00

As Figure 4 shows, in this example, outsourcing results in lower billing department costs, lower software and hardware costs, and higher percentage of billings collected. On the other hand, it also results in higher direct claim processing costs. In this scenario, in-house billing is not as cost- effective as outsourcing, even though the provider has to pay their billing partner a portion of their collections. If this example were representative of a real HIV service provider that is currently billing no third-party payers, it would likely make financial sense for that provider to outsource from the start. By doing so, they would not only be able to avoid the process of creating an in-house billing department, they would also be receiving more revenue overall. Though the cost of the in-house department is substantial, with the high volume and value of claims in this scenario, the real factor making outsourcing more cost-effective is the increase in billings collected. If this LHD had reason to believe that they could reach 70% in-house, the advantage of outsourcing would be greatly diminished.

For smaller providers, outsourcing could be even more financially advantageous due to the avoidance of staff and technology investments. Figure 5 shows another cost analysis for a hypothetical CBO. The only medical service this CBO offers is HIV testing. They administer about 20 claims per day (~5,000 per year), $50 billed per claim on average (~$250,000 per year), and have a 60% collections rate. They hire only one medical billing employee, and with the smaller volume and variety of claims, they have half the billing department costs for both in- house and outsourced. The software and hardware costs are fixed despite having fewer billing activities. The direct claims processing costs for in-house are $900 per year at $0.18 per claim and the outsourced cost of 7% of collections adds up to $12,250.

Figure 5 – CBO Cost Analysis

Costs In-House Outsourced Billing department costs $ 56,500.00 $ 1,500.00 Software and hardware costs $ 7,500.00 $ 500.00 Direct claim processing costs $ 900.00 $ 12,250.00 Collections costs $ 64,900.00 $ 14,250.00

Collections Claims filed $ 250,000.00 $ 250,000.00 % of billings collected 60% 70% Collections $ 150,000.00 $ 175,000.00

Collections, net of costs $ 85,100.00 $ 160,750.00

In this case, collections, net of cost, with outsourcing are almost twice as much as those of the in- house department. Even if the in-house and outsourced departments reached the same level of collections, outsourcing still offers a large advantage. Due to the small size of the provider, investing in billing staff and equipment takes a large cut out of collections. An outsourcing company on the other hand, is able to take advantage of economies of scale and therefore charge much less for their service than an in-house department would have to pay to perform it themselves.

These are just examples of the considerations involved, however, and how the distribution of costs can affect a provider’s collections net of cost. Providers should conduct their own cost analyses based on their organization to find out which revenue cycle management strategy is most cost-effective for them, as some may discover in-house to have the financial advantage. It is also important, however, to keep in mind that for a provider who currently lacks any third- party billing capabilities, and therefore has $0 collections net of cost, outsourcing still represents a significant increase in revenue even if cost analysis were to show that in-house billing would represent a larger increase. In addition, the relative ease compared with in-house processes could make outsourcing preferable for some providers, despite the outcome of cost analysis.

Conclusion

With both advantages and disadvantages to outsourcing medical billing, LHDs, CBOs, and HCPs need to also consider their organization’s unique characteristics to determine which option is right for them. Whether a practice should outsource medical billing or keep the process in-house varies based on more than just cost analysis. There are also several provider-specific factors that should be taken into consideration when deciding whether to outsource medical billing:

1. Is the current billing process efficient? Many HIV service-providers have no current medical billing process, making outsourcing an easier way for them to begin billing. For those that do have some in-house billing, however, it is important to consider if that process is efficient, or if it might be improved by partial or total outsourcing.

2. Is there high staff turnover? Turnover in a billing department is very common, and results in very damaging slowdowns.

3. Is the provider large or small? The larger the provider is, the more it benefits from economies of scale itself. Investments in software become more worthwhile, and the larger a billing department becomes, the less staff turnover impedes operations. Most HIV service providers that have not already developed billing capacity are not very large, meaning outsourcing is more likely to be a good option for them. Those on the larger side, however, that may simply not have maximum revenue cycle management, may want to consider fully investing in their billing department, or else hiring an outsourcing company to help them increase capacity.

4. Is the provider tech savvy? In-house billing demands an investment in practice management software and training for staff, and there will be occasional software updates and technical issues. If these will be great obstacles, it may be better to outsource. Considering less than half of LHDs even have electronic health records systems, trying to take on all the new technological requirements of in-house billing might be too much.

5. Is the provider new? New providers have plenty to learn and focus on without adding the complications of revenue cycle management to their list. Outsourcing billing right off the bat can give them relief from the stress of launching a new service. If the provider is not new, and has already invested in technology and staff for billing, switching to outsourcing could mean losing out on that investment. These providers may want to consider remaining in-house or determining some aspects they would like to keep in- house to maximize their investment, while still allowing a billing partner to take over in areas they are lacking.34

6. What are the main priorities of the provider? Many individuals at LHDs, CBOs, and HCPs are passionate about public health and serving their clients, but may not be strong on the business side of operations. Outsourcing can free them from spending time on administrative/clerical work, allowing them to focus on their strengths.

7. Can an outside company add value that cannot be produced in-house? This could be experience, continuity, or results. For example, maybe in-house or outsourcing procedures would cost the same for a practice, but they appreciate the greater consistency of revenue with outsourcing, or they appreciate not having to worry about hiring billing staff, or the reports (analyses) provided by the outsourcing company make the choice worthwhile to them. Outsourcing has moved away from being an “all or nothing” affair due to technology that has become available in the last few years allowing organizations to take a hybrid approach to revenue cycle outsourcing. The best outsourced medical billing firms design their offerings with an understanding that medical providers face unique constraints depending on the services they

34 Gibson, Harold. 2015. “Can Outsourcing Medical Billing Process Maximize Your Revenues?” June 30, 2015. https://www.m-scribe.com/blog/is-your-medical-billing-process-maximizing-revenues

21 offer. RCM partners should be approachable, empathetic, and available to help firms resolve their unique challenges. While some providers may want their billing company to handle every aspect of revenue cycle management, others may just want the company to fill in the gaps or add value to their own billing approach. Aspects of the process performed successfully in-house can remain in-house, while aspects lacking resources, knowledge, or efficiency can be outsourced to the benefit of everyone involved.35

While there are still some medical billing companies with take-it-or-leave-it propositions, there are now also many companies that will allow the provider to decide which functions to outsource and which to keep in house.9 With the revenue that HIV providers stand to gain from billing third-party payers, they should be seriously considering implementing billing operations, weighing the pros and cons of outsourcing as a tool that could make their transition easier. Providers can evaluate the processes for in-house billing compared with outsourced billing and determine the extent to which they would like to partner with an RCM partner in their implementation of third-party billing.

35 Allzone MS. 2018. “The Changing Role of Revenue Cycle Outsourcing.” February 7, 2018. http://allzonems.com/the-changing-role-of-revenue-cycle-outsourcing/