August 2008 | Back to Table of Contents

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The Business of Practice

Rachel Havyer, M.D. Specialty: Primary care internal medicine Where working: Mayo Clinic Finished training: in 2007 About my first year in practice: The first year is a time when at first you feel cautious and uncertain. I have benefited greatly by having multiple wise practitioners around me who are willing to share their experience and not be bothered by all my questions. I have been growing in confidence but still find that I appreciate being in a supportive environment. Biggest surprise: How tiring it can be to build a new patient panel. As everyone is new to me, it takes longer to get through an encounter, and that can be emotionally draining. What I didn’t learn during training (but wish I had): It’s always helpful to know more about the regulatory and billing aspects, although this knowledge comes with doing. Also, I would have liked to have had more more experience with longitudinal care during my training as opposed to the more episodic care that traditionally occurs during residency.

Most physicians coming out of residency and fellowship programs have had no reason to think about hiring and managing staff, marketing their services, purchasing equipment or moving into a new clinic space, billing payers, or comprehending financial statements. “But when you go into practice, you realize your livelihood depends on the accuracy of your billing and coding, how well you take care of your office staff, managing your expenses, and being able to look at accounts receivable and understand that information,” says Mayo Clinic’s Kyle Kircher, M.D.

Some residency programs are requiring training in this area. Many family medicine programs now offer sessions on billing and coding, reading financial reports, understanding accounts receivable, managing overhead, marketing, and improving quality and disease management. In addition, the Accreditation Council for Graduate Medical Education lists systems-based practice as one of six competencies all residents must be taught. Yet many new physicians still enter practice with questions. We’ve tried to answer a few.

What basics do I need to know about coding and billing?
The first thing physicians need to understand about coding and billing, according to Jeanne Chapdelaine, director of an Edina-based health care consultancy affiliated with the accounting firm Wipfli, LLP, is this: “They’re the source of all things revenue.” Chapdelaine, who helps health care provider organizations create effective billing processes, says young physicians need to understand that the whole revenue cycle begins with them.

Decoding Coding ICD codes The International Statistical Classification of Diseases (ICD) is a coding system that was originally developed by the World Health Organization for reporting morbidity and mortality data. These codes classify diseases, signs, symptoms, abnormal findings, complaints, social circumstances, and external causes of an injury or disease. The codes have been modified over the years to meet clinical demands for more specificity. The National Center for Health Statistics and the Council on Clinical Classifications created the currently used ICD-9-CM (Clinical Modifications). While ICD-9 had about 7,000 categories, ICD-9-CM has about 12,000. ICD-10, which is being developed as a replacement for ICD-9-CM, has been used throughout the rest of the world for years. Its implementation in the United States is still in the planning stages. CPT codes Current Procedural Terminology (CPT) is a coding system for reporting professional services. It’s maintained by the American Medical Association and revised quarterly (the revisions are published annually). There are codes for every professional service you can offer a patient—from talking with them to ordering tests to doing surgery. The current version is CPT 2008. There are categories of codes for services ranging from providing anesthesia to evaluating and managing a patient.

They also need to understand that they’re ultimately responsible for the information on insurance claims and bills. Because there are myriad codes and rules for applying them, your primary concern as a physician should be accurate documentation in the medical record. For that, you need to be as specific as possible, says Taya Peterson, coding compliance manager for Fairview Health Services. “We don’t expect our physicians to know the coding because it changes so much. They just need to document exactly what they did, so it [reads] like a storybook.”

Peterson says physicians now have a relatively new incentive to pay attention to documentation: pay-for-performance and quality reporting initiatives require them to do so. In the past, they might have thought that hospitals and clinics were emphasizing documentation because they wanted more money, she notes. Now, they know their reputations and salaries, as well as patient care, can be affected by what they do or don’t write in the patient’s chart and how they code. Thus, the more you know about documentation and basic coding rules, the better you’ll be at achieving quality goals and ensuring that the billing process runs smoothly.

How does information in the medical record get turned into a patient bill?
Although the specifics of billing and coding vary from clinic to clinic and hospital to hospital, and although the nuances of coding are infinite, there are some basics that apply to most settings. Generally, things work like this: After you see a patient, you’ll need to document in the medical record the reason for the visit and details about the patient’s medical history, the physical exam, and the factors that went into your decision- making (ancillaries ordered, films reviewed, outside records requested, etc.).

If your clinic has an EMR, you’ll likely be prompted through a series of steps for assigning codes that indicate the type of services provided and the reason for them. If the hospital or clinic doesn’t have an EMR, you’ll likely fill out a paper form called a “charge slip” or “encounter form,” on which you’ll check off the codes for the care you’ve provided and the reasons for it.

Learn More About Coding and Billing The Medicare Learning Network: Medicare sets standards and trends that other private and public health insurers follow. The Centers for Medicare and Medicaid Services (CMS) has a number of publications for health care providers related to billing and coding. The Medicare Physician Guide: A Resource for Residents, Practicing Physicians, and Other Health Care Professionals offers an overview of Medicare and some of the basic steps for participating in and understanding the program such as how to become a Medicare provider or supplier and Medicare reimbursement and payment policies. CMS has an extensive guide on how to code for E/M services. This and other publications can be accessed at: www.cms.hhs.gov/MLNProducts. Minnesota Administrative Uniformity Committee (AUC): This group has worked for more than 15 years to streamline billing activities across Minnesota. The AUC has recently adopted a singular focus, thanks to a 2007 Minnesota state law that calls for standardized, electronic health care billing transactions. That legislation calls for the AUC to work with the Minnesota Department of Health to streamline major components of the billing process. Information about the AUC is available at: www.health.state.mn.us/auc. Minnesota Medical Association: The MMA routinely offers coding seminars for physicians and their staff. Contact Erika Nelson at 612/362-3732 or enelson@mnmed.org for further information. American Medical Association: The AMA offers a number of resources and tools related to CPT coding, including books such as The Principles of CPT Coding, numerous online resources, and in-person training. In November, the AMA will hold a workshop on CPT changes for 2009 in Minnetonka. For more information on the AMA’s resources, go www.ama-assn.org/ama/pub/category/ 3113.html. The National Center for Health Statistics website offers information about updates and revisions to the ICD code sets. The information is available at www.cdc.gov/nchs/icd9.htm.

Basically, you need to report what you did—the service or procedure—using CPT (Current Procedural Terminology) codes. You also need to report why you did each service (that is, what the patient’s diagnosis was if there was one or what signs or symptoms he or she had) using ICD-9 (International Classification of Diseases, Ninth Revision) codes.

In most clinics, the coding the providers choose is sent on to a billing department, which generates a claim that goes to the third-party payer. In some clinics, the physician’s coding will be reviewed by a coding expert. But systems vary. “It depends on the needs of the clinic,” says JoAnne Wolf, RHIT, CPC, coding manager for Twin Cities-based Children’s Physician Network.

Organizations should have a policy that says coders and billers don’t have the authority to change what a physician has marked, according to coding expert Chapdelaine. However, in some clinics, a staff member, rather that the physician, assigns the codes. In others, the EMR automatically generates many of the codes. Physicians have to know enough about basic coding rules to know if those codes are appropriate, Chapdelaine says. Wolf notes that most larger clinics have audit systems in place in which an expert checks the coding on claims. You should try to ensure that the clinic you work for has an effective system of checks and balances in place because it’s your name, not the coder’s, that goes on the claims.

What happens if I make a mistake?
Typically, your clinic’s coding expert will query you if he or she has a question about the codes you’ve assigned. If a third-party payer questions a claim, it will be sent back to the billing or coding department, which will then ask you to clarify the information. The way to avoid having an insurer deny payment is to make sure that what you wrote in the medical record matches the coding. “The extent to which a new physician can get it right before it ever leaves his or her hands, the better the whole operation is going to be,” consultant Jeanne Chapdelaine says.

Coding for evaluation and management (E/M) services is where physicians have the most trouble, say many coding experts. Evaluation and management services are the nonprocedural, cognitive services physicians offer during office or outpatient visits, hospital or inpatient visits, or consultations. They consist largely of taking a patient’s history, examining the patient, and making medical decisions and offering counsel.

There are CPT codes for different levels and categories of E/M services. To select the right one, you’ll first need to choose the category of service (whether it was a visit with a new or established patient, a consultation, initial hospital care, etc.). Then you’ll select the appropriate level of service based on either the amount of time you spent with the patient or the extent of the history you took and exam you performed, and the level of complexity involved in your medical decision-making. For example, if you saw an established patient with a simple problem such as a sore throat that only required a brief history and exam, the E/M code might be 99212. But if you saw an established patient with a new problem and the visit involved a 40-minute discussion, you’d select 99215.

Bone Up on Business In residency, you probably had little, if any, exposure to the business side of medical practice—developing a business plan, marketing, reading financial statements. How can you acquire such skills? Check out offerings from your professional association and local medical society. The American Academy of Family Physicians, for example, offers seminars for new physicians on coding, team building, revenue cycles, and contracting. It also has an anthology of articles relevant to young physicians and residents who need to learn office practice basics on its website (www.aafp.org). The American College of Surgeons offers a three-part computer-based course on practice management for residents and young surgeons (www.facs.org/education/ practicemanagement.html). In Minnesota, the MMA offers seminars on coding, billing, and reimbursement (watch the MMA website mmaonline.net for details). Go back to school. The University of St. Thomas offers two programs specifically for physicians who want more schooling in the business of medicine. The health care-focused MBA is a 27-month program that is approved for up to 189 CME Category 1 credits by the HealthPartners Institute for Medical Education. The mini MBA in health care management gives a high-level overview of some of the same concepts taught in the MBA program—operational management, leadership, marketing, financials, people management, and health care policy and reform. The 14-session program doesn’t lead to a degree, but it has been approved for 37.25 CME Category 1 credits by the American Academy of Family Physicians. The University of Minnesota’s Carlson School of Management offers an MBA with an emphasis on the medical industry as well as executive education courses on topics such as finance for nonfinancial managers, the fundamentals of marketing, and effective communication (www.csom.umn.edu, click on Executive Education). Do work-study. A number of the larger health systems in Minnesota and elsewhere now offer seminars on business-related topics.

Chapdelaine says errors in coding for E/M services also are the most common reason for lost revenue because physicians tend to document a level of service in the medical record that’s higher than what they’ve coded. Revenue also might be lost if the diagnosis is incorrectly coded. For example, if a patient presents with urinary symptoms and the physician orders PSA testing but doesn’t document the symptoms on the charge ticket or in the EMR, the testing would be billed as a screening service. If the patient’s health insurer doesn’t pay for screening services, that claim will be denied.

Why didn't I learn about coding and billing during training?
That they are revenue generators is not something most doctors learn during their training, says John Andrews, M.D., director of the pediatric residency program at the University of Minnesota. “It hasn’t historically been a focus of residency,” he says, explaining that there’s no practical reason for physicians to know about it during their residencies. “The paradox is that residents can’t bill while they’re residents. But when they get out, they realize that medicine is a business.”

By and large, coding and billing have taken a back seat to other issues during training. Increasingly, though, residency programs are bringing in coding experts from their affiliated hospitals and clinics to at least introduce residents to the basic concept that what they write in a patient’s chart needs to relate to the bill for services and explain that they’ll need to know something about codes for different illnesses, types of visits, and procedures. Coding expert Jeanne Chapdelaine has noticed that when trainees do attend such seminars, they often don’t seem to absorb much of the information. “They listen from the perspective of, I’ll learn this when I start practicing,” she says.

Actually, learning about coding and billing on the job makes some sense, given that every clinic and health system has its own documentation and billing system. That means the organization that hires you needs to train you. That training might consist of being assigned to a physician mentor, who will show you how he or she conveys the information needed for billing (not the best option if the mentor’s methods are not accurate) or sitting down with the clinic’s coding and billing staff. Many organizations offer more formal programs. Fairview Health Services, for example, has a PowerPoint presentation for new providers that describes their coding process as well as the organization’s internal policies and procedures related to coding and billing. Chapdelaine says a training program ought to teach you how the clinic or hospital codes services, what its policies and procedures are for coding certain scenarios, how to fill out a charge ticket or complete an electronic medical record, what happens if you make a mistake, and who to turn to if you have a question. If they don’t offer this kind of instruction, you should ask for it.