Practice Management Alert

Consider having a healthcare attorney assist with the process.

To receive payment for the some of the technical components of the services your physician provides in the office for patients in nursing facilities, you may need to have a set contract with the facility.

In last month's issue of Medical Office Billing & Collections Alert you learned what consolidated billing is and why understanding proper nursing facility billing is important to your practice. But determining if a patient your doctor treats falls under a Part A or Part B stay is often only half the battle.

Collecting payment from the nursing facility for the technical component services your physician performs -- such as medications, lab work, x-rays (the technical portion, not the interpretation), the technical portion of EKGs, billable supplies, DME dispensed from office, etc.-- can be your next challenge. Setting up a contract with every nursing facility you work with can help you avoid consolidated billing and collection headaches down the road -- here's how.

Make the Contract Specific and Detailed

You'll want to make the contract specific and identify the services, using CPT and HCPCS codes, your physicians can provide to the facility's patients as well as the negotiated fees for those procedures and services.

"The contract should clearly indicate the nature of the relationship, compensation for the services to be rendered, the length of the contractual obligation, as well as confidentiality and other compliance requirements," advises Sarah L. Goodman, MBA, CHCAF, CPCH, CCP, FCS, president/CEO of SLG Inc. Consulting in Raleigh, N.C.

The contract should also list your billing information and include a disclaimer stating that you expect payment for services rendered regardless of the nursing facility's reimbursement status with the Medicare carrier. Provide an executed copy of the contract to the facility, and keep one for your records.

Tip: "I would add a time frame in which the facility would pay the doctors -- for example, within 15 days or perhaps 30 days since there may be bookkeeping constraints of receiving the payment from Medicare," says Barbara J. Cobuzzi, MBA, CPC, CENTC, CPC-H, CPC-P, CPC-I, CHCC, president of CRN Healthcare Solutions, a coding and reimbursement consulting firm in Tinton Falls, N.J., and senior coder and auditor for The Coding Network.

"Review the contract on an annual basis to ensure the codes and prices are current," says Joan Gilhooly PCS, CPC, CHCC, a coding expert and president of Medical Business Resources in Lebanon, Ohio.

Resource: Take a look at the basic sample contract on page 59 to help you get started. You can also visit www.cms.gov/snfpps/08_bestpractices.asp for sample contracts direct from CMS.

Don't Price Gouge Just Because You Can

You should consider charging the nursing facility only for the reimbursement you could expect according to the Medicare Physician Fee Schedule, experts recommend. Just because you're not held to a set fee schedule doesn't mean you should set prices higher than you'd charge for other patients, Gilhooly says.

While you are not bound by Medicare's set fees for the services you bill directly to the nursing facility, you'll likely find yourself struggling to get additional dollars from the facility over and above the fee schedule amount. The effort won't be worth the time and effort, particularly if you deal with numerous nursing facilities -- plus you risk having the facility decide to stop using your practice.

"There needs to be respect for the nursing facility on the part of the provider's office when working with the nursing facility," Gilhooly says. "The facility only gets a set amount from Medicare and it needs to stretch to cover the patient's medical needs."

If you mark up your fees, you're setting the facility up for difficulty paying because it receives a flat rate and is working within tight margins.

"The physician is asking something of the facility and have to go about it gently and understand that although they are getting something for services they provided, up until now, they have not been paid and without the facility's cooperation, they will continue to not get paid," Cobuzzi agrees.

Beware: You also shouldn't "mark up" your fees or tack on fees to account for driving time or gas costs related to nursing facility visits, even if you think you deserve pay for this.

"Your best case is to get the Medicare allowed amount, and you may not even be able to do that," Gilhooly cautions.

Good practice: Try using a contract and talking first to resolve any persistent payment problems with a nursing facility. As a last resort, however, you can report your problems to the local or regional overseer of nursing homes and request an investigation into their billing operations.

Get Professional Legal Advice

Protect yourself: Have an attorney review any agreement or contract you plan to use before you obtain the signatures to ensure the contract is in fact legal and binding. Make sure that attorney is competent in Stark law compliance, Gilhooly stresses. "This shouldn't be a 'do-it-yourself' contract," she adds. While you can start with a sample contract, you should consult an attorney before presenting it to the nursing facility.

Here's why: "Healthcare contracts, in general, have become increasingly complex," Goodman says. "A qualified legal professional can assist the physician in sorting through contract provisions that define income (e.g., pay for performance), termination and non-compete clauses, and other business-related issues."

Pointer: What if your practice doesn't deal often or ever with nursing facility patients? You should still have a contract just in case. You never know when one of your patients will be admitted for a art A stay, and unless the facility has a doctor on staff for temporary transfer of care, your provider will be obligated to go and care for the patient.