Practice Management Alert

8 ways you can categorize adjustments to reveal billing-office secrets

Lumping all your adjustments into one number doesn't reveal anything about why you wrote off that money - but track adjustments by category and the answers will quickly appear.

Most practice management software will allow you to create different adjustment codes to separately label and track adjustments by category, says Marvel Hammer, RN, CPC, CHCO, president of MJH Consulting in Denver. Then you can run a report to see how your monthly adjustments break down. You can also go further by running an adjustments report by payer, for example, to help analyze payment trends.

How you label and analyze your adjustment codes will depend on what aspect of the billing process you want to analyze, Hammer says. "I like to look at anywhere from four to 10" different adjustment categories at a time, she says. For example, you might decide to create adjustment codes for the following types of adjustments:
  Discount for PPO contract

  Multiple-surgery discount

  Service within global period

  Charge entered past filing deadline

  Noncredentialed provider. You'll also want to include a code for "above usual and customary" because this is most frequently the reason for adjustments.

Customize for specialty interests: You want to "create codes only for the adjustments you find most prevalent in your practice," Hammer says. So an internal medicine practice probably wouldn't create an adjustment code pertaining to global periods or surgical procedures, but would be more interested in E/M issues, such as denials for preventive care and a problem visit on the same date, she adds. 8 Ways to Make Adjustment Codes Pay Up Using adjustment codes creatively can allow you to assess an employee's efficiency, calculate the cost of certain billing blunders and much more. Hammer offers these eight examples of how adjustment codes may become a handy billing office tool:

1. Keep track of how much you're spending - and writing off - on DME supplies that a certain payer always bundles with the procedure code.


2. Identify when and why billers are adjusting off 100 percent of a charge. This reveals a biller who doesn't want to bother with appeals and writes off charges instead.


3. Calculate how much denials for no preauthorization are costing you monthly, and use this to show the responsible staff how their inefficiency affects the practice's bottom line.


4. Track adjustments for missed filing deadlines by biller to see if some employees have too much on their plate or just aren't staying on top of things.


5. Run a report of adjustments for missed appeal deadlines to show billers why appeals need to go out the door faster.


6. Total adjustments for a certain PPO discount and bring that information to the negotiating table. For example, [...]