Can’t Someone Else Do This Billing?
by Kathy Dodson, AOPA Government Affairs Department

Have you ever dreamed of outsourcing your insurance work to an outside biller? The idea of someone else following up on missing payments and worrying about all those insurance rules and regulations is tempting.

As enticing as this prospect sounds, before jumping into a billing service arrangement, you should be aware of the Office of the Inspector General’s (OIG) concerns. 

Each year the OIG announces its upcoming projects. This year, it’s planning to examine the relationship between medical billing companies and their clients. It is concerned that such arrangements could drive up the cost of health care through increased billings. Here are some of the areas that cause the OIG the most concern. 

Percentage-based payments
When a facility pays a billing service a percentage of what it collects, in some ways this arrangement makes sense—more collections probably means more work was done by the biller. But it is also fraught with potential problems. 

From the OIG’s viewpoint, such an arrangement gives the billing service a strong incentive to increase collections and hence its paycheck. To make such a situation even worse in the OIG’s eyes, the billing service could influence, or even pick, your codes. So any time the OIG sees a payment as a percentage of collections, it suspects your business may be filing false claims or violating anti-kickback statutes. 

Their suspicions don’t mean you can’t use a billing service. When you enter into such an arrangement, structure it so that the service is paid a flat fee, instead of a percentage. 

Direct bank withdrawals
Arrangements that allow the billing service to directly withdraw their fee from your bank account also draw the OIG’s attention. These heighten the risk of fraud, since the billing service may withdraw more than its contract stipulates. Your safest bet is to make a separate payment to the billing service and not give them the authority to withdraw their payment directly. 

Management services
Some billing services also offer to manage your other office activities. While having a one-stop shop may be appealing, to the OIG it creates a possible conflict of interest. 

For example, what if a billing service offered to review your productivity? If the review suggested that you provide more services, that would mean more claims (and more money) for the billing service. Avoid this risk by paying the billing service a flat fee for each separate service it performs. 

Claims audits
Likewise, be wary of hiring your billing service to carry out a claims audit on your practice—especially on claims that it submitted. The OIG would look at such an arrangement to see if the audit found many claims unbilled. If it did, it would suspect that the billing service was trying to manipulate the audit to generate more claims and therefore a larger payment for itself. 

Communication
You can avoid many of these situations by communicating with your billing service on a regular basis. Clarify what you expect from the service in terms of your compliance plan. Also, make sure that the biller is up-to-date on all insurance rules and regulations. Document when you do this so it is clear that you are making good faith efforts to comply with all insurers’ requirements. 

Contracting
Before you enter into any contact with a billing service, have the contract reviewed by your attorney to ensure that you are protected and are not unknowingly subjecting yourself to an inappropriate arrangement.

Here are some things you may want to consider when entering into a contract: 

Make sure that the billing service is legally able to bill Medicare. You don’t want the service to be using someone who has been excluded from Medicare to bill your claims. Search the OIG’s list of excluded companies, at www.oig.hhs.gov/fraud/exclusions.html, for the company and its owners. Ensure that the service checks this list as well. 

Make sure that the billing service retains all of the records on your claims, including what you sent to it and anything that is received from the payer. 

Ask for the qualifications of the actual billing staff. Make sure they are familiar with O&P and find out what type of training they have had. 

Require that the service allow you to access and audit your claims data. This way, you can ensure that what you submit to it is being correctly translated into a claim and that the billing service is complying with all payer rules.

Have the contract spell out the claims development and submission process. The contract should clearly identify what the billing service is responsible for. 

Include a mutual indemnification clause so that any errors made by the billing service will be its liability, while your errors will be your responsibility. 

Billing service arrangement will be an ongoing concern for federal law enforcement agencies, so be cautious. Before you enter into such an agreement, take the OIG’s concerns into account and have the agreement reviewed by an attorney. The time and money you spend now will bring you peace of mind in the future.

Kathy Dodson is the senior director of government affairs for the American Orthotic & Prosthetic Association (AOPA). Questions? Call (571) 431-0810 or visit www.aopanet.org/op_experts/index.php.