Basic Practice Management Harald Lausen, DO, MA FCM Clerkship SIU School of Medicine

Objectives The goal of this presentation is to introduce basic concepts of practice management. – Basic Types of Health Insurance – Basic Coding and Billing Terminology – Physician Reimbursement – Physician Liability Insurance – Basic Types of Physician Employment

Health Insurance (Types) Terms of Interest: Managed Care, Capitation, Utilization Review, Deductible, Co-pay, Carve-Out HMO (Health Management Organization) PPO (Preferred Provider Organization) Medicare (A,B,D) Medicaid Government (Military, Employees)

Coding and Billing Terminology ICD (International Classification of Diseases) E&M (Evaluation and Management) CPT (Current Procedural Terminology) HCPCS (Healthcare Common Procedure Coding System)

Example – Visit Coding (E&M) Based on Elements of CC, HPI, PMFSH; Exam Components; Complexity of Management and Decision-Making Treated 401.9, 272.4, , and ; ICD Codes for Benign Hypertension, Mixed Hyperlipidemia, Diabetes Type 2, and Chronic Knee Pain. Assigned -25 Modifier to E&M; Distinct and Separate Service (Procedure) on Same Day. Assigned CPT to Diagnosis ; Injection or Aspiration of Large Joint Assigned HCPCS J3301 to CPT 20610; Code for Kenalog

Physician Reimbursement Reimbursement is typically based on a percentage of the Medicare Fee Schedule Fee for Service (Discount, Cash) Salary (Guaranteed, Productivity) Capitation Global Fee Consider: Payor Mix, Overhead

Example - $100 Office Charge PrivateMedicareMedicaid Allowed Charge$90$60$50 % Covered$72 (80%)$48 (80%)$0-48 (???%) Co-Pay$10$0$2 Balance$8$12 (sec. ins.?)$? Total Collected$90$60$0-48?

Example - $100 Office Charge The allowed amount is what value the insurance company assigned to the E&M code you billed That money cannot be collected from the patient. Cannot inflate charges (for $ losses - taxes) due to usual & customary fees The balance is what the patient owes you --- your office is responsible for collecting that money If billing is denied due to errors, coding issues, pre- authorization, or dates of coverage --- then you must resubmit corrected billing

Physician Liability Insurance Occurrence – Covers liability of acts during term of insurance regardless of when claim is filed Claims Made – Covers liability of acts when claim is filed during term of insurance – Nose Coverage & Tail Coverage Damages – Economic – Non-Economic

Physician Employment (Types) Private or Academic or Government Employee or Self-Employed or Partner Solo Group – Single or Multi-Specialty Locum Tenens Variations

Common Questions Hospital Privileges Patient Termination Pay for Performance Starting Practice / Solo Practice Ethical Issues / HMO & other insurances Income Comparisons Employment Opportunities Legal Issues / Contract Issues