Providers shift their billing tactics

YARMOUTH, Maine - The days of HME providers collecting only the basic documentation needed to submit a claim for reimbursement to Medicare are over, say billing consultants.

An increasing number of HME providers are holding back claims until they've also collected supporting documentation, they say.

"There's been a complete shift in their business model," said Sylvia Toscano, owner of Professional Medical Administrators in Boca Raton, Fla.

In the past, providers collected chart notes and other supporting documentation only if they received requests for additional documentation or ran into problems with their claims.

Collecting supporting documentation upfront has been the standard operating procedure at Northeast Home Medical Equipment for a few years now, says Irene Magee.

"We're a not-for-profit, which makes us a little more conservative," said Magee, vice president and director. "We started with oxygen claims about two years ago and since then we've started doing it for wheelchairs and beds."

More providers are joining Northeast Home Medical Equipment's ranks, especially if they've been audited or they've learned that one of the primary products they offer is under review.

"Those are the providers that won't even dispense a product, if it's not life threatening, until they have all of the documentation," said Sarah Hanna, vice president of ECS Billing & Consulting in Tiffin, Ohio.

But collecting supporting documentation upfront isn't easy (getting it from referral sources can be like pulling teeth) and it isn't foolproof (Medicare's documentation guidelines can be vague), Magee acknowledges.

"You could use an army of billing staff and you're still aiming at a moving target," she said.

Additionally, it can put pressure on a provider's cash flow. Holding back claims until supporting documentation has been collected often results in increases in unbilled AR and DSO.

"Right now, our unbilled AR is hovering at 26%," Magee said. "I'd like it to be 20% or below, and if you asked our CFO, she'd like it to be 10%."

Still, it's the only way to go, says Rick Worstell, CEO of Harrington Management Group, which offers billing services through its Audit Team.

"There's some short-term pain, but once you change your culture, it's not as bad as people think," he said. "Let me put it this way: If you don't have what you need and you end up in an audit or pre-pay situation, you have no cash flow."