Practice Management Alert

Question: Many of our claims for physical exams get denied. Is it true that physicians can't get paid for preventive medicine exams? Should we just write off all charges for physicals?

Tennessee Subscriber

Answer: Medicare does not pay for preventive medicine exams, but many commercial insurance companies do. Whatever the case, you should not write off charges for noncovered services.

Not only could you lose significant revenue by writing off these charges, but you could also risk incurring the wrath of federal regulators who may fine your practice. Part of the Health Insurance Portability and Accountability Act (HIPAA) prohibits providers from giving Medicare beneficiaries remuneration that might induce them to receive healthcare services from your office. The Office of Inspector General argues that waiving a patient's financial responsibility for medical treatment would run afoul of this provision in HIPAA.

Reimbursement success begins with the appointment scheduler. The scheduler must determine which type of coverage a patient has and, if necessary, inform him that he will need to pay for the physical exam. Tell the patient up front, right as she makes the appointment, what her financial responsibility is and give her an estimate of what she will be charged.

Some practices send a letter to their Medicare patients reminding them that many preventive services, while important to a patient's health, are not covered by Medicare. Thus, the appointment secretary doesn't surprise the patient when she tells him he will need to pay for part of the exam.

Medicare, however, pays for Pap smears and pelvic exams every two years for low-risk women and every year for high-risk women. Thus, when your office sees a female Medicare beneficiary for a physical that includes these services, the patient pays for the physical exam minus the charges for the Pap and pelvic, which you send to Medicare. Because there is a frequency limit on preventive gynecological services, consider giving the patient an advance beneficiary notice (ABN). An ABN tells the patient that there's a chance Medicare won't pay for the Pap and pelvic and that if the claim is denied she will have to pay for those services.

Medicare will pay for a prostate exam once a year for men over 50 as long as it takes place during a physical or if that's the only procedure performed. If the patient presents for any medical condition, then the exam is bundled into the office visit charge and is not paid separately. If you do the exam during a routine physical exam, bill Medicare for the exam and charge the patient for the remainder of the charge for the physical.

Sometimes, however, what was scheduled as a routine physical becomes a diagnosis-driven appointment. Medicare will pay for services that are appropriate to that diagnosis.

When billing insurance companies for physical exams, your office needs to make sure you code for what happened during the bulk of the visit. According to the CPT manual, you can bill for a physical in addition to other services on the same date of service by using modifier -25 (Significant, separately identifiable E/M service by the same physician on the same day of the procedure or other service), but most payers will only pay one of the codes - usually the lesser. Physicians may need to reschedule physicals if they discover significant illnesses that require attention. That keeps the physician on schedule for the day and ensures payment for the scope of service delivered. If a minor problem is addressed during the physical exam that does not warrant performing a separately, identifiable level of E/M service, then code only the physical exam.