Utilization Management Toolkit: Templates and Calculation Tools
Audits, Denials & Appeals
APTA Template Letters: Appeals
Utilization Management Toolkit: Member and Provider Strategies to Address UM Issues
The insurance commissioner's job is to protect consumers and ensure their access to appropriate care, It isn't within their scope to address the burden on providers or reduced payment resulting from the use of a UM vendor. Providers should think in terms of how the UM vendor policies are impeding patient access to medically necessary services. Essential to that effort is data collection, which is described below.
Note: Government regulation of health plans is complex. The OIC generally has jurisdiction over only private "insured" health plans in which the buyer is required to pay a premium. Depending on the state or municipality, the OIC may have jurisdiction over some or all aspects of workers' compensation, health maintenance organizations (HMOs), and preferred provider organizations (PPOs). However, state insurance entities never have jurisdiction over Medicare, Medicaid, federal workers compensation, or the military health system TRICARE. It may be difficult to determine if a health plan is subject to state jurisdiction. Providers who are uncertain still may file a complaint, but it may be deemed invalid.
Self- insured employers are covered by ERISA and are not required to follow state law. Issues for these payers must be brought to the attention of the Social Security Administration rather than the OIC.
Utilization Management Toolkit: Chapter Checklist
APTA chapters can use this checklist to see how informed and prepared they are on issues related to UM.
□ Alert members to pending UM vendor contracts.
□ Track reported issues and identify trends.
□ Collect data via UM survey.
□ Educate members on UM and strategies.
□ Educate members on careful assessment of TPA contracts (see APTA’s Managed Care Contracting Toolkit).
□ Alert members to availability and encourage completion of the UM Feedback Form.
□ In concert with APTA, educate members on strategies to avoid denied authorization approvals.
□ Collaborate with payer and UM vendor.
□ Reach out to other provider groups with similar UM issues.
□ Assess legislative options (see this example of what Washington state did to address UM issues).
□ If appropriate, conduct grassroots efforts to facilitate provider and consumer outcry.
□ Build coalitions with other stakeholders.
Utilization Management Toolkit: Tips for Successful Provider and Chapter Collaboration With Payers and UM Vendors
For providers and APTA chapters that are seeking collaboration opportunities with payers and UM vendors, these tips can help make interactions successful.
- Establish positive relationships with payer and UM vendor representatives.
- Seek an audience with payer and UM vendor representatives who have the decision-making authority.
- Consider issues from the payer and UM vendor perspective.
- Seek collaborative solutions or compromises on both sides that may be viewed as a positive outcome for both.
- To facilitate change, collect meaningful data that objectively demonstrates and quantifies the issue, rather than providing anecdotes that may not be actionable.
- Keep the conversation targeted on the main objective.
- Restate any agreed-to changes to be sure there is a mutual understanding.
- Be respectful.
- Use active listening to show you are trying to understand the other points of view.
- Maintain good communication at all times.
- Avoid irritation.
- Remain calm and separate the people from the problem.
- Keep sight of the big picture.
- Look at your objectives and focus on your goals.
- In speaking, use "we," not "you."
Utilization Management Toolkit: APTA Strategies to Address UM Issues
APTA is committed to supporting its members on issues related to UM. Following are some of the association's strategies for resolving issues as well as for providing education and encouraging a positive environment that can avoid issue in the first place.
- Educate members on evaluating contracts (see APTA's Managed Care Contracting Toolkit).
- Educate members on effective communication with payers and UM vendors (see APTA's Managed Care Contracting Toolkit and "Utilization Management Review Essentials" in PT in Motion magazine).
- Educate members on appropriate documentation, outcomes data collection, and billing.
- Educate members on determining the cost of service delivery (see APTA's Managed Care Contracting Toolkit).
- Educate members on fee determination and knowing costs (see Fee Determination and Know Your Costs on APTA.org).
- Educate members on determining and conveying the value of their services (See "Measuring By Value, Not Volume" in PT in Motion magazine).
- Educate payers on the value of physical therapist services (see APTA Policy Center webpage The Value of Physical Therapy).
- Track and trend data collected from APTA-developed UM Feedback Form (see UM feedback form in this toolkit).
- Identify chapters experiencing issues with the same payer and/or UM vendor to identify issues and find solutions.
- Facilitate sharing of APTA and chapter resources and updates among chapters and individual members.
- Develop a UM map indicating vendor activity in each state and across the country.
- Collaborate with chapters, payers, and UM vendors to identify and address issues with mutually satisfactory solutions.
- Help chapters with appropriate messaging to providers on the local level.
- Help members with appropriate messaging to patients.
- Submit comment letters to payers.
- Conduct in-person and virtual meetings with payers and UM vendors.
- Communicate meeting findings to chapters and individual members.
- Collaborate with other health care disciplines and their associations that face similar challenges.
- Explore legislative, regulatory, and legal remedies.
Video: Managed Care Contracting Toolkit
December 19, 2012: As of 2009, there were more than 169 million enrollees in private health insurance plans and over 91 million enrollees in government plans such as Medicare, Medicaid, and military plans. To ensure adequate coverage of their enrollees, managed care plans are constantly reaching out to providers to join their networks. While most physical therapists consider joining a provider network at some point, the decision should be based on sound business strategy.
Joining A Managed CARE Plan: doing The Math
If you’ve never gone through the process of joining a managed care plan, the financial considerations can be daunting. This chapter will help you “do the math” to decide what fee schedules, patient populations, and payment methodologies are best suited to your practice.
Calculate Your Costs
The crucial first step is to define your costs of providing services. Knowing your costs will help determine whether a contract is financially feasible for your practice to manage. For a simple analysis, use the table below to fill in your overall cost of business. Once you have added up your costs, divide the total by either 12 or 52 to get your monthly or weekly overall costs. Knowing how much to charge for your services, or whether a contract offered by a payer is fiscally acceptable, depends on an understanding of your costs.
There are 2 types of costs: direct and indirect.
Direct costs are the expenses for clinical services, such as salaries, equipment, supplies, etc. Indirect costs are often referred to as overhead costs, that is, nonclinical expenses, such as rent or mortgage payments, electricity, heat/
cooling, and janitorial services. Some costs, such as the rent or mortgage, are fixed. This means that your practice will incur the same cost whether you treat 10 patients or 200 patients. Other costs like staff salaries or utilities are semi-fixed. If your staff must work overtime, then salary costs increase.
Variable costs include items like disposable supplies. These costs can increase depending on patient volume. All costs, including fixed costs, need to be reevaluated at least annually. Lease agreements generally have an annual fixed rate increase that has to be accounted for when calculating expenses and forecasting budgets. Lease costs should not exceed about 10% of your overall budget. Labor costs are a key area for a service business like physical therapy and can make or break your practice. The key is combining appropriate wages with adequate productivity. Labor costs should also include owner or key employee benefits and outsourced service costs. It is recommended that labor costs for PTs should equal between 28% and 40% of their gross collections. Higher salaries are usually awarded to more productive staff with fewer cancellations, better patient retention, and higher customer service scores.
Developing FEE schedules
Now that you know your costs of care, you can look at each insurance fee schedule and see how many patients you will need to treat in that time frame to produce a profit. To be realistic, don’t count on more than a 90% collection rate, depending on your market, allowing a margin of error for uncollectible or delayed payments. Also, remember to always maintain about 3 months of operational cash flow, or at least allow 90 days in the billing cycle to receive all of the payments that were billed.
The next step is to estimate the annual gross total income you need to make a profit.
Gross income includes all payments received, before taxes and expenses are deducted, such as insurance reimbursement, self-pay and copay, as well as income from other services like fitness, massage, functional capacity evaluations, etc. Your gross total income must exceed your calculated expenses in order for the business to remain profit-able.
The difference is called net ordinary income(NOI).
Net Ordinary Income (NOI) = Gross Total Income –Total Expenses Divide your NOI by weekly, monthly, or annual hourly net income (before interest, taxes, depreciation, and amortization) to assess your potential income based on the above assumptions and numbers. A reasonable starting target profit margin would be 10%. As growth and efficiencies develop, that can increase. For example, if you add a staff PT, the fixed costs such as rent are now spread among 2 providers instead of 1.
Staggered Deployment of Clinical Auditing Tool ClaimsXten
Beginning this fall, CareFirst will move from our current clinical auditing tool, ClaimCheck, to an enhanced tool, ClaimsXten. ClaimsXten is a comprehensive auditing tool that will allow us to manage the unique requirements of our claims processing platforms. Deployment will be staggered across multiple claims processing platforms over the next year.
What will change?
With these deployments, CareFirst’s claim adjudication will be updated. This update may affect the outcome of some clinical edits, including the four outlined below.
• Add On Without Base Code:
Audits claim lines containing the add on codes when the base code cannot be found for the same member for the same date of service.
•Diagnosis Age Validation:
Identifies claim lines containing diagnosis codes that are inconsistent with the patient’s age.
•Durable Medical Equipment (DME) Own Rule:
Audits claim lines containing a DME item submitted as new or new when rented or used, when the same DME item is member owned.
Audits claim lines that contains a procedure code that has been submitted more than once or twice across dates of service because it has been identified as a procedure that can only
be performed once or twice in a lifetime, reported for the same member.
What does this mean to you?
There will be no change to your process for submitting claims to CareFirst. There will also not be any changes to CareFirst Medical Policy due to this implementation.
Since this change will be deployed across multiple CareFirst platforms at different times, beginning in fall 2017 and continuing through 2018, you may notice different outcomes for similar claims during this time, depending on which claims platform the patient’s policy operates on.
We will continue to keep you updated as this tool is deployed on our platforms. There is no further action needed on your part. If you have any questions, please contact Provider Service at 877-228-7268.
Professional Providers: Clinical auditing tool ClaimsXten™ to be deployed on Facets system on Dec. 1
November 21, 2017 -
On Dec. 1, we will continue the process of moving from our current clinical auditing tool, ClaimCheck™ to an enhanced tool, ClaimsXten, which will allow us to manage unique requirements of our claims processing platforms.
Facets will be the second claims processing platform to have the tool deployed. It was successfully deployed on FEP Bridge in September, and will be deployed on additional platforms over the next year.
What does this mean for you?
Since ClaimsXten is being deployed to our systems over time, you may notice different outcomes for similar claims in the coming year, depending on which claims platform the patient's policy operates on. Please note: There will be no change to your process for submitting claims or to CareFirst Medical Policy as a result of this implementation. This only affects Professional providers at this time.
Questions? Please contact Provider Service at 877-228-7268 Stay Connected: Update your email preferences by visiting carefirst.com/stayconnected.