New Index Ranks Payor Performance
The Bill Box
Codes for 3D Procedures Are Explained
LEGAL AFFAIRS: Study Asserts that Malpractice System Functions “Reasonably Well”

New Index Ranks Payor Performance

The June 2006 issue of Physicians Practice magazine teamed up with Athenahealth, Watertown, Mass, to provide a ranking of payor performance. Although payors have ranked physicians for years on such criteria as coding patterns and quality of care, physicians have never had a way to assess payors—until now.

Payors can be frustratingly slow, and they are notorious for hassling physicians by sluggishly responding to problems and denying claims. But without credible statistical data available, it is impossible to get more than a vague sense of which payors are, overall, the most efficient and expeditious. Therefore, Physicians Practice analyzed data from Athenahealth on thousands of billing transactions, weighting different data points based on which payor characteristics are most important to practices.

Seven measures were used to assess payors, which were prioritized according to the benefits they provide to the financial well-being of a practice. First, the Financial Performance factor, which accounted for 57.5% of statistical weight, was determined by Days in Accounts Receivable (DAR), First-Pass Pay Rate (FPP), and Patient Liability. Next, the Administrative Performance, which was given 35% weight, was determined by Denial Rate, Phone Call Rate, and Not on File (NOF). And the third factor, Medical Policy Complexity, accounted for the remaining 7.5% and was determined by Unclear Zero Paid (ZP).

The results of the report are occasionally surprising. For example, Medicare achieved a national average score of 92.2%, and some state Medicare carriers came in as high as 94.2%. The highest score achieved nationwide was 94.7% by Humana.

Medicaid, on the other hand, is “fragmented and uninspired,” according to the report. In Illinois, it actually stops paying physicians whenever it runs out of budget—6 months out of the year, according to some accounts.

Table 1. Source: Moore P. PayerView: how do your payers measure up? Phys Pract. June 2006. Available at: www.physicianspractice.com. Accessed June 19, 2006. (Click image for large view)

In other states, Medicaid is marked by equally arcane practices. New York Medicaid will not accept the CMS 1500 standard claim form, insisting on its own standard form—which is available only through direct mailings from the state based on how many forms were used by the practice in the previous month. New York Medicaid ranks as the worst payor in the Northeast, and Illinois Medicaid is fifth from the bottom of the Midwest list. Table 1 compiles the best and worst payors from each region.

The report concludes by noting that better communication between practices and payors is the eventual goal of the analysis. By raising awareness of the communication difficulties between the two groups, the index can—hopefully—drive down costs and inefficiencies on both ends.

Available at www.athenapayerview.com, the index will be updated quarterly, and Physicians Practice will create and publish new rankings each year.

—C. Vasko

The Bill Box

Alaskan Resolution Mirrors Pricing Transparency Efforts of Other States

Pricing transparency has blown north to Alaska, with House Concurrent Resolution (HCR) 31 calling for a statewide system to track the cost, quality, and variety of medical services available.

The bill cites the increasing inaccessibility of affordable health care, the rising number of seniors dependent on Medicare, and the declining population of medical professionals as reasons for the measure. It describes a network through which patients could find the ideal resources to meet their needs, modeled after those already in place in other states, and calls for databases and information hotlines to be established. HCR 31 also adds that the network should be used to create an information system for volunteers and community health contacts in the event of a natural disaster or other statewide emergency.

The resolution had gone to committee by the time the legislature adjourned before a special session on May 18.

Systems similar to the one prescribed in HCR 31 are going live in other states. On June 2, the South Dakota Association of Healthcare Organizations (SDAHO), Sioux Falls, announced that its hospital pricing Web site had posted its first full year of data. The SDAHO’s network is the result of a 2005 bill sponsored by State Senator Tom Dempster (R-Sioux Falls, SD) and provides median prices for the 25 most common inpatient procedures at every hospital in the state.

Hospitals submitted this data via uniform discharge forms, which were in use already, and voluntarily provided information from the 6 months prior to the July 1, 2005, effective date.

In California, the “Hospital Chargemaster Program” posts hospitals’ master lists of charges. Colorado, Kentucky, Oregon, Pennsylvania, and Washington require that hospitals reveal the cost of all inpatient procedures; other states, like South Dakota, mandate only that pricing on frequent services be made public.

Thirty-two states now have statutes in place requiring that some degree of hospital pricing information be made available to the public.

ACR/AMIC Promote Bill to Delay DRA Imaging Cuts

The American College of Radiology (ACR) and the Access to Medical Imaging Coalition (AMIC, aka Big Tent) have thrown support behind generating a bill that would delay the cuts to imaging contained in the Deficit Reduction Act of 2005 (DRA)—providing a grace period of 2 years, during which the ACR hopes to repeal the provisions regarding imaging cuts entirely.

Potential sponsors of the bill include Senator Gordon Smith (R-Ore) and House Representative Joe Pitts (R-Pa). At press time, Joshua Cooper, senior director of government relations for the ACR, said that the bill was scheduled to be introduced in both houses in June.

After bringing the bill to the floor, the ACR hopes to rally support not only among bipartisan cosponsors, but also among physicians, patients, business managers, and vendors. Although the bill—which the ACR hopes will be attached to larger Medicare-related legislation—could be voted on in October, Cooper said that the vote is more likely to take place in December.

According to Pamela Kassing, RCC, senior director of economics and health policy for the ACR, the projected $2.8 billion that the cuts generate already has been spent to help fund the conversion factor freeze, so a delay would require Congress to find additional funding. “If we were able to stop the imaging cuts from being implemented, we would have to find the $2.8 billion in funding somewhere else to replace what we take,” she explained.

Part of the ACR’s lobbying effort includes creating a database to illustrate the potential impact of the cuts. Cooper urged imaging center operators to support the project by submitting their own data into the Impact Tables via the ACR Web site.

Safe Harbors Health Care IT Bill Approved by House Subcommittee

The new bill (HR 4157) to promote the use of health care information technology (IT) gained traction last week when the House Energy and Commerce Subcommittee on Health approved it via voice vote.

Sponsored by Reps Nancy Johnson (R-Conn) and Nathan Deal (R-Ga), the new legislation would:

  • establish safe harbors for health care providers to equip referrers with health care IT;
  • create a committee to make recommendations on national standards for medical data storage; and
  • develop a permanent structure to govern national interoperability standards.

The bill also would codify the Office of the National Coordinator for Health Information Technology within Health and Human Services and clarify that current medical privacy laws are applicable to electronic data.

The subcommittee removed two contentious provisions from the legislation: one would have increased the number of codes from 24,000 to 200,000, and the other would have given federal medical privacy laws dominance over state laws.

—C. Vasko



Codes for 3D Procedures Are Explained

John Marshall, CRA, RCC, RT(R), a radiology consultant with Coding Strategies Inc, Powder Springs, Ga, gave a detailed account of new billable procedures in CT and the restructuring of 2D reformatting and 3D rendering codes during an audio Web conference sponsored by the American Healthcare Radiology Administrators (AHRA), Sudbury, Mass.

Marshall says that billing code 76375 for 2D reformatting and 3D rendering has been restructured because of a 300% increase in the use of the code in the last 3 years and because of technology advancements. The new codes, however, do not replace 76375. One of the new codes is 76376, for 3D rendering performed on a CT scanner without the need to download the data, and is performed by a technologist under the active supervision of a physician. The second new code is 76377, which is the full-blown 3D reconstruction that absolutely requires image postprocessing on an independent workstation. With this code, the radiologist actually adjusts the projections to maximize visualization and then interprets the study.

A common question Marshall says he encounters is, “Is an order required?” He says the answer for hospital-based radiologists is somewhat gray, but that both the American Medical Association (AMA) and the American College of Radiology (ACR) strongly recommend that there be a separate report, and that the hospital-based radiologists clearly state the medical necessity for the 3D rendering. For non–hospital-based imaging centers, Marshall says a separate order from the referring physician is required.

On the 3D CT front, Marshall says that per the AMA/ACR’s Clinical Examples in Radiology, Volume 2,1 it cannot be reported in conjunction with any CT angiography (CTA), MR angiography, nuclear medicine procedure, positron emission tomography scans, CT colonography, cardiac CT, and cardiac CTA.

One of the codes that has been confusing for some, Marshall says, is 77295: therapeutic radiology simulation-aided field setting, 3D. He says that many people are using the 3D reconstruction codes for this procedure, which is incorrect. The correct code for radiation tomography guidance for the placement of radiation therapy fields is 76370. The technical component (TC) may be billed, although it may require a TC modifier. However, because CT slices generally are obtained for use in a 3D planning system, a separate interpretation and report are not performed, and there is no professional service to bill.

One of the biggest changes in cardiac CT and CTA coding is the addition of eight new category III codes. Marshall says that the hospitals are being reimbursed, but he does not know of any physicians being paid for the interpretations—mainly because these codes are all carrier priced on the physician side. The new codes are:

  • 0144T, CT heart without contrast for cardiac scoring, $299;
  • 0145T, CT heart with and without contrast, and 3D structure morphology, $299;
  • 0146T, coronary CTA without calcium scoring, $299;
  • 0147T, coronary CTA with calcium scoring, $299;
  • 0148T, cardiac CTA structure and morphology without calcium scoring, $397;
  • 0149T, cardiac CTA structure and morphology with coronary scoring, $397;
  • 0150T, cardiac CTA structure congenital, $250; and
  • add-on code 0151T, cardiac CTA with and without EF and wall motion, $95.

—M. Saffari

Reference

  1. American Medical Association, American College of Radiology. Clinical examples in radiology: a practical guide to correct coding. Available at: https://catalog.ama-assn.org/MEDIA/ProductCatalog/m990288/CE%20Radiology%20Winter%202006.pdf. Accessed June 13, 2006.

LEGAL AFFAIRS: Study Asserts that Malpractice System Functions “Reasonably Well”

A recent Harvard study published in the New England Journal of Medicine1 strongly suggests that frivolous litigation is not the driving force behind escalating malpractice costs—clumsy and drawn-out legal proceedings are the more likely culprit.

Although the study, which analyzed a random selection of 1,452 closed malpractice cases from five insurers across four regions, found that 40% of all claims were unfounded, the report was quick to note that unfounded claims accounted for only 13% to 16% of the system’s overall costs.

The report also noted that payment for an unfounded claim was much less common than nonpayment of a founded claim, undermining the notion that frivolous claims are the source of rising malpractice costs—and, thus, rising health care costs.

“Claims that lack evidence of error are not uncommon, but most are denied compensation,” the study reports. “The vast majority of expenditures go toward litigation over errors and payment of them. The overhead costs of malpractice litigation are exorbitant.”

Among the study’s most revealing findings:

  • 80% of claims based on physical injury involved injuries that caused “significant or major disability or death.”
  • 56% of claims received compensation.
  • One in six claims resulted in no payment, despite the presence of error.
  • Only 0.4% of claims resulted in payment in the absence of documented injury.
  • The average time between injury and resolution was 5 years.
  • Total litigation costs amounted to 54% of compensation paid to plaintiffs.

Newspaper headlines have highlighted that 40% of all analyzed claims were groundless, and the American Medical Association was quick to draw attention to the figure. AMA Board Member Cecil B. Wilson, MD, is quoted on the association’s Web site as saying, “Today’s study is proof positive that meritless medical liability lawsuits are clogging the courts.”

However, the Harvard report stresses that the truth is in the analysis of the other 60%: “The malpractice system functions reasonably well in its function of separating claims without merit from those with merit and compensating the latter.”

—C. Vasko

Reference

  1. Studdert DM, Mello MM, Gawande AA, et al. Claims, errors, and compensation payments in medical malpractice litigation. N Engl J Med. 2006;354:2024–2033. Available at: http://content.nejm.org/cgi/content/short/354/19/2024. Accessed June 13, 2006.