Outsourcing vs In-House

How do I decide if I want to keep our billing in-house or to outsource?

outsource ems billingBecause of the recent ICD-10 changes, many EMS services are considering whether they should keep billing in-house or if they should outsource. Typically, internal billing and collection departments do not perform well and tie up a lot of management and resources. Now is the time, with the extra costs required to bill ICD-10 and the risk of revenue loss, to ask yourself what the best route would be for your service.

When considering whether you should outsource your billing or not, here are a few questions to ask to give you a better idea if this is the right choice for your service:

Compliance– Do you have concerns about audits, allegations of fraud, mistakes, or internal whistleblowers? It can be a death knell for EMS services if they are placed on a pre-paid audit.

Education costs– Do you have money in the budget to re-train your billing department on ICD-10 coding? Many services’ billing departments lack the expertise to effectively bill claims, and now everyone will be required to undergo extensive new training.

Software costs– Has your billing software been upgraded to be ICD-10 compliant?

Staffing resources– Do you have turnover of qualified personnel? Could your staff be better utilized doing other tasks?

Management– Is your billing and collection department a difficult area for you to monitor and manage? Do you or your staff have a good understanding of the complexity of insurance billing and the many state and federal regulations?

Reimbursement– Many services do not realize how much money they are losing because of improper coding or lack of follow-up. Most EMS services enjoy a 10-25% increase in their reimbursements, after the cost of the fees to outsource. What would an increase mean to your budget?

Whatever you decide to do with your billing, the key to making a good decision is to understand your internal billing and collection process well enough to intelligently evaluate a potential vendor’s proposed processes and services.

Call Omni EMS Billing Services anytime for anything. Oh and there is no charge for the call…it’s our honor to talk to you!


Clearinghouses: Front-End Payer Rejection Rates Low

The healthcare clearinghouse industry has not seen a substantial increase in call volume or cases related to the recent implementation of ICD-10, but as a group, the Cooperative Exchange anticipates that as activities ramp up over the next few weeks, this may change.

Clearinghouses are finding that their numbers are running about the same as they were prior ICD-10; there has been no significant increase or decrease reported.

In the first few days of October, clearinghouses initially received less than 10-percent volume for ICD-10; however, those numbers steadily increased day by day. As of Oct. 23, a total of 75 percent of total claims volume was sent coded in ICD-10, and this volume has remained consistent. Our members report that 99.8 percent of providers are coding claims in ICD-10.

Since Oct. 1, payer front-end rejection rates are also low. Both clearinghouse and payer rejection rates are within the baseline average since the transition.

Not only has call volume generally remained the same during this ICD-10 transition, but also in some instances, it has decreased. We believe that early testing and education was an important component of readiness for those in the industry that have led us through this transition. Cooperative Exchange members have processed millions and millions of dollars’ worth of claims that have made their way to adjudication with only minor ICD-10 issues.

Early Issues

Some payers have implemented ICD-10 code set-specific rules in their front-end translators and are rejecting entire batches with a batch acknowledgement (999) rather than at the claim acknowledgement level (277CA).

Our members experienced an issue with trading partners with erroneous rejection of codes, for example e-codes specifically. Some providers are sending ICD-10 and ICD-9 codes on the same claim, causing clearinghouse rejections.

Clearinghouses are seeing some claims with ICD codes with incorrect qualifiers as well. This issue is likely due to incorrect settings within the vendor’s software. Our members are also seeing pockets of unforeseen issues with very small payers, but they are reacting quickly to fix them. It seems as if some payers have made changes to their systems after Oct. 1 that are causing unwarranted rejections not related to ICD-10.

Best Practices and Recommendations

  • Qualifiers and codes must match. If you send ICD-10 codes, you must send ICD-10 qualifiers. If you send ICD-9 codes, you must send ICD-9 qualifiers.
  • Payers may have their own requirements that do not follow Centers for Medicare & Medicaid Services (CMS) guidelines for claims that span the compliance date. You need to look at individual payers’ guidance on this topic.
  • ICD-10 LCDs and NCDs became active as of Oct. 1 and will apply to ICD-10 submitted claims.
  • ICD-10 codes must be submitted with the required number of digits.
  • Early identification of an issue is critical to minimize a negative impact to your business as well as your customers and their revenue.
  • Monitoring is essential for inbound/outbound claims, payor rejections and 835 reimbursements.
  • Know your business pre-ICD-10 so comparisons can be made for claims, rejections, and reimbursements. A variance in numbers will lead to early identification.

Recommended ICD-10 Provider Benchmark Metrics

  • Front-end rejection error rates
  • Percentage of 277 CA front-end rejections by status code measured over unit of time(usually two-week intervals)
  • Revenue payment cycle variance metrics
  • Average time (days) from claim submission to payment
  • Denial rate variance metrics (payor/provider benchmark)
  • Dollar amounts submitted on claim, amounts denied
  • Percentage of ASCX12 835 payment denials by type of denial code (CARC/RARC)

Lessons Learned

Clearinghouses are all in agreement that early preparation and educating clients was key to success in the transition to ICD-10. The good news is that there’s nothing but positives to report. In general, claims are moving, payors are accepting, and rejections are very low.

Rejections are in line with our everyday metrics created before ICD-10. We will be watching remits closely in the coming weeks. Promote X12 best practices to appropriately reject claims in a provider-actionable manner via clear claim status messaging (277CA) versus a 999 acknowledgement batch file rejection. The 999 file acknowledgement transaction should only be used to report X12 syntax or TR3 HIPAA errors. Clearinghouses were ready for the transition and have spent an abundance of time and energy on testing to be sure the transition for their clients was as smooth as possible.

About the Author:

Betty Gomez is the Cooperative Exchange ICD-10 liaison and the compliance manager/director of Government Healthcare Solutions for Xerox Healthcare, LLC.

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The Hate Factor: Convention A. 11

I have told you about some of my pet peeves before, and below is another. How many of you reading this article hate Convention A.11 when it comes to PCS guidelines? Come on and admit it: you are silently chuckling about it now!

What is A.11?

As it states:

“Many of the terms used to construct PCS codes are defined within the system. It is the coder’s responsibility to determine what the documentation in the medical record equates to in the PCS definitions. The physician is not expected to use the terms used in PCS code descriptions, nor is the coder required to query the physician when the correlation between the documentation and the defined PCS terms is clear.”

If I were a practicing physician, I would say “yep, all for it; I don’t have to change or add anything to my current documentation.” However, I now live on the other side, where I start to mumble, “here was a perfect opportunity for CMS (the Centers for Medicare & Medicaid Services) to put the onus on the provider for documentation, but inexplicably shied away.”

The example cited by CMS: “When the physician documents ‘partial resection,’ the coder can independently correlate ‘partial resection’ to the root operation Excision without querying the physician for clarification.”

And just when you thought it was over: nope!

The above example given by CMS represents a very small percentage of what coding staffs will be faced with as we forge into ICD10-PCS, and therefore it does not address the myriad of problems that will be surfacing, forcing coders to query for documentation clarification.

Let us look at debridement first.

Debridement fits into two different root operations, depending on the method used: excision and extraction. 

If you look up debridement in the ICD-10 index, you will find:


Excisional (see Excision)

Non-excisional (see Extraction)

The definitions from CMS are as follows:

Excision: Cutting out or off, without replacement, a portion of a body part

Extraction: Pulling or stripping out or off all or a portion of a body part by the use of force

As you can see, not only does the debridement issue not go away with PCS, it can get worse, as coders can code excision or extraction on almost any body part. The following important elements need to be found in the medical record to support assignment of the correct code:


Condition requiring debridement (e.g., ulcer, fracture, etc.)

Site of the debridement (e.g., foot, sacrum, etc.)

Extent and depth of debridement (code to the deepest level or layer of tissue)

Method(s) used to remove tissue (e.g., a definite cutting away of tissue)

Specific type of tissue being removed (e.g., skin, subcutaneous, muscle, bone, or tendon)      

A cutting of tissue outside or beyond the wound margin


Documentation citing “excisional debridement” is not enough to code excisional debridement. The AHA (American Hospital Association) Coding Clinic for ICD-9-CM has provided much guidance on when to code ICD-9 code 86.22, Excisional debridement of wound, infection, or burn. The information from 1988 to 2005 specified that the code applied to the surgical removal or cutting away rather than scrubbing, scraping, brushing, washing, or snipping away bits of tissue with scissors. Therefore, applying the guidance, one would be geared to reporting an excisional debridement when a portion of a body part is cut out or off using a sharp instrument, such as a scalpel, wire, scissors, a bone saw, electrocautery tip, or a sharp curette, provided that the documentation in the medical record also supported the procedure.

The other important thing to remember, which most forget, is that the Coding Clinic provided guidance in cutting tissue outside the wound margin. The first quarter 2004 Coding Clinic further defined excisional debridement to involve cutting outside or beyond the wound margin in removing devitalized tissue. Documentation should clearly indicate that the procedure involves cutting outside or beyond the wound margin. If in doubt, look for a specimen being sent to the lab.

If the physician documentation currently does not support excisional debridement in ICD-9-CM, it won’t support excisional debridement in ICD10-PCS. Sometimes the documentation will cite excisional debridement, but when you read it you find that the provider has performed an incision and drainage. The provider has cut open the cyst/tumor to let out fluid. In these instances, drainage (taking or letting out fluids and/or gases from a body part) would be the reported procedure. If, however, the provider documentation just notes that a wound was “debrided to normal bleeding tissue,” or if it is noted in the documentation that “bleeding was observed,” this may require a provider query for clarification. If the documentation indicates removal of “necrotic tissue,” this will not help in assigning the correct code.

In the past, the AHA has clarified via example that if a single leg ulcer was debrided via excision and included the removal of skin, subcutaneous tissue, fascia, muscle, and even bone, the only code assigned would be the excision of lesion of the specific bone(s). In ICD-10, a guideline has been added: B3.5 (Overlapping body layers ). If the root operations Excision, Repair, or Inspection are performed on overlapping layers of the musculoskeletal system, the body part specifying the deepest layer is coded. Therefore, if an excisional debridement that includes skin and subcutaneous tissue and muscle is performed, when the guideline is applied, the deepest body part would be muscle. This guideline mirrors AHA guidance in coding to the deepest layer.


Excisional debridement of left trochanteric pressure ulcer, stage 4 to bone

0QB70ZZ Excision left upper femur, open approach

ICD-9-CM does not specify the approach, whereas ICD-10-PCS provides approach values for open, percutaneous endoscopic, or percutaneous.


Right foot ulcer involving only the skin

If a non-excisional debridement was done, the code would be: 0HDMXZZ Extraction of Right Foot Skin, External Approach.

And if an excisional debridement was done, the code would be: 0HBMXZZ Excision of Right Foot Skin, External Approach; Excisional debridement of skin, subcutaneous tissue, and muscle of buttocks. 0KBN3ZZ Excision of Right Hip Muscle, Percutaneous Approach.

Or (accounting for laterality): 0KBP3ZZ Excision of Left Hip Muscle, Percutaneous Approach.

Also remember that excisional debridement is not necessarily exclusive to the OR. It can be done at bedside, or in the emergency department. From a coding perspective, as to which one, excisional versus non-excisional, may apply? Think about the inpatient example in which a patient is found to have a decubitus ulcer requiring excisional debridement; this patient is likely to require a longer hospital stay than one who only needs a round of antibiotics and Silvadene with regular dressing changes.

What is the takeaway in all of this? It will be imperative to read that operative report and to actually see that the physician is using a sharp instrument and cutting away and removing something. If, on the other hand, the physician performs a non-excisional debridement, the root operation will be extraction. Report an extraction when the physician pulls or strips off the body part. I am visual, so I think vein stripping procedures when thinking of the root word. 

Never, ever rely solely on the title of the procedure that is being performed; read that entire operative report. Sometimes the title of the procedure will contradict what the physician actually did. Finally, remember that PCS does not do away with worrying about how to code for debridement; in fact it will only get more complicated, so let the query process begin. 

If you have any pet peeves, let us know and we will explore them together.

About the Author

Denise M. Nash, MD, CCS, CIM, serves as vice president of compliance and education for MiraMed Global Services and as such she handles all Compliance and Education needs including migration to ICD-10. She has more than 20 years experience in the healthcare industry. Dr. Nash has worked for CMS in hospital auditing and has expertise in negotiation and implementation of risk contracting for managed care plans. She has also worked with individuals as well as physician groups on utilization and PQRS management to improve financial performance for the risk-based contracts and value based purchasing (VPB) programs. Her past experience also included consulting for the Office of the Inspector General of New Hampshire in its Fraud and Abuse Division.

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ICD-10’s Impact on Critical Access Hospitals

It has only been a month since ICD-10 has officially been implemented, and there is clearly much at risk for rural health entities that deliver healthcare services for more than 72 million people.

I believe that at least half of the more than 1,300 critical access hospitals (CAHs) and 5,000 rural healthcare (RHC) programs have been proactive over the course of 2014, when ICD-10 initially was going to be implemented.

I further believe that Nebraska, where I reside, has been particularly diligent and proactive via a variety of cross-functional trainings and plans. The plans I am referring to entailed coding education, batch testing, ongoing education offerings, a needs assessment plan, a financial risk mitigation plan, leadership physician engagement, and support training for physicians, as well as CEO consistent communication, rounding, managing up, and building team accountability. 

The two critical areas in which ICD-10 is impacting cash flow are:

  1. Lack of accuracy creating denials; and
  2. Lack of ongoing leadership and training support for physicians.

So, recognizing that there isn’t much financial room for margin of error, if I were to put my CAH CEO hat back on, for me success in ICD-10 boils down to strategy and sustainability in six key areas:

  1. Coder productivity – cross-matching between ICD-9 and ICD-10 and the time it takes to accurately provide this reconciliation process is key. Cross-training is also an important element for accuracy/checks and balances and building more robust team support.
  2. Physician documentation, so that queries and denials aren’t encountered. 
  3. IT errors; make sure that electronic medical record (EMR) and billing software are in sync.
  4. Addressing payor issues, revenue cycle, and cash flow – CEOs and CFOs have been addressing all areas necessary operationally to increase cash flow to cover up for an additional 90 days on top of normal expected reserves. Other steps to consider: shore up billing processes and back-office errors, establish a line of credit (LOC), work with vendors for payment arrangements, and create foundations for assistance when and where appropriate based on business designation.
  5. Working with governance structure – connect the board of directors and/or board of trustees in communication and support with on-the-ground staff so that they can better understand the changes that ICD-10 potentially could have on cash flow, cash reserves, physician engagement, training, and potential increases in vendor charges, as well as community communication, including patient feedback impact.
  6. Assessing models to see if ICD-10 is even appropriate for physician, patient, and cost structure needs – some providers are looking at a direct primary care (DPC) model, for which ICD-10 wouldn’t have to be implemented because you aren’t coding from reimbursement. Physicians are beginning to show interest in this in 15 states already. They don’t want to feel encumbered by the codes and demands and just want to practice medicine. 

On a final note, I think there has been excellence in early training support via conferences, webinars, and other online and tool kit resources via six key institutions:

  1. The National Rural Health Association (NRHA)
  2. State rural health associations (the Nebraska Rural Health Association hosts several webinars, holds a mid-year conference for ICD-10 training/preparation, and publishes a monthly newsletter) and RCH constituency groups
  3. State offices of rural health
  4. State hospital associations (CAHs are members)
  5. FLEX and SHIP monies for programmatic activities supporting ICD-10 readiness, as appropriated via Congress.
  6. Critical access hospital networks and ICD-10 task forces that help providers cross-train and problem-solve.

Time will tell about overall positive or negative impact of ICD-10 implementation, but in the meantime there are some especially vulnerable CAH and RHC operations to monitor and support.

Advocates like myself and others at HSC are on board to help address immediate needs and best support other passionate healthcare leaders so that the rural sector doesn’t just survive, but thrive.

About the Author

Janelle Ali-Dinar, PhD has more than 15 years of experience as a chief executive offier, chief operations officer, and vice president and regional executive working within the ranks of multi-billion-dollar health systems, and 10 years of experience in rural healthcare. Appointed to the National Rural Congress via the National Rural Health Association/NRHA in 2013, Dr. Ali-Dinar is a frequent visitor to Capitol Hill. She is a frequent national speaker and panelist addressing a variety of rural health topics.

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ICD-10 Impact on a Hospice: A Case Study

Here are some lessons learned over the last year as we have prepared for an organization-wide approach to implementing ICD-10 across a very large health system in San Diego.

There are three specific areas that should be considered when implementing a new coding process for hospice programs, which went into effect for all claims billed as of Oct. 1, 2015:

        1. Historical perspective
        2. Preparations for ICD-10 and compliance risks
        3. Operational considerations

Historical Perspective

Based on Centers for Medicare & Medicare Services (CMS) claims data, there has been a lack of consistency in the identification and coding of hospice-appropriate diagnoses, ranging from cancer to dementia and everything in between. Over the last 10 or more years, among Medicare beneficiaries there has been a shift on claims/billing to non-cancer diagnoses, specifically towards neurological disorders such as dementia and nonspecific terms such as “debility” and “adult failure to thrive.”  These terms quickly made their way to the top of the most common hospice diagnoses on claims, per CMS.

Additionally, some hospice programs were still behind the times by not having an electronic health record system in place, impeding progress towards compliance and reliability.

That being said, Oct. 1 has come and gone, and all hospice programs are required to comply with federal regulations.

Preparations for ICD-10 and Compliance Risks

Identification of roles, responsibilities, and coding authority of hospice staff has been of the upmost importance, especially in consideration of the issues previously discussed. Several strategies support correct coding, as several touch points exist in determining the correct hospice diagnosis. The initial touch point to coding begins with the intake process, and cases ultimately advance to the hospice admission nurse, eventually requiring the review and input of the hospice medical director for the final say. Increased communication between all hospice team members is required to ensure that the most appropriate ICD-10 code finds its way to the final billed claim.

In addition to the hospice diagnosis, another complicating factor is the requirement to list all diagnoses on the claim, related or not. This new requirement is adding a significant amount of utilization review of the clinical record to ensure accuracy and compliance. Hospice programs may need to consider hiring a trained and certified ICD coder to mitigate compliance vulnerabilities and risk presented by failing to code correctly and accurately.

Operational Considerations

Now that October has passed and hospice programs are close to dropping their first claims with the new ICD-10 requirements, astute administrators will have developed a contingency plan in case claims are rejected and/or denied for incorrect coding. The risk of reducing cash flow is high, the potential for lower productivity is high, and the risk of an unwanted organizational burden looms as hospice administrators learn the nuances of a new coding process. Hopefully, hospice agencies have taken the time to a) understand the new regulations; b) implement a proactive stance by preparing months in advance; c) practice in a test environment; d) train the staff well; and e) submit clean claims to Medicare.

About the Author

Suzi K. Johnson currently serves as the vice president of Sharp Hospice and Palliative Care, a program of Sharp HealthCare, located in San Diego, CA. Her responsibilities include strategic planning, business development, operational oversight, community outreach, and philanthropy.

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