Hospice is comfort care provided for patients with an advanced stage of illness. Hospice helps terminally ill people to live their remaining days with the least amount of pain and discomfort possible through medications, therapies, and other treatments administered by hospice nurses and physicians.
According to the National Hospice and Palliative Care Organization (NHPCO), approximately one million hospices provide services for about two million Americans each year. In 2008 alone, hospices generated revenues of $11.9 billion – mostly from government-funded reimbursement systems such as Medicare or Medicaid. However, since most hospices are private organizations and hospices provide services on a not-for-profit basis, hospice revenues are insufficient to meet hospice needs. For this reason, hospices rely heavily on patient billing and coding for support.
Hospice Billing Challenges
One of the biggest challenges facing hospice providers is that Medicare reimbursement for hospice care (also known as hospice benefit) is significantly lower than what hospices spend on service delivery to patients. In fact, according to industry experts, hospice reimbursements received from Medicare or Medicaid do not even cover hospices’ costs for office overhead expenses such as salaries, management fees, and marketing efforts.
Healthcare reform has made it mandatory for all U.S.-based healthcare organizations – including hospices – to have an inpatient hospital discharge as hospice inpatient care to be eligible for hospice reimbursement from Medicare or Medicaid. Without this discharge document, hospices would have incurred significant financial losses, and many hospices that are near bankruptcy because of underutilization of their services might want to consider outsourcing their hospice billing processes to a third-party hospice billing company.
What Hospice Billing Services Can Third-Party Billing Companies Offer?
Third-party hospice billing companies can offer many value propositions to hospices that outsource the management of their hospice billing operations. Here are some examples:
1) Processing current claims
The most important thing any healthcare organization must do is submit all claim forms accurately on time to maximize their reimbursement receipts. However, hospice managers are so burdened with all the other demands in managing hospice operations that they do not have a lot of time to deal with billing. Thus, hospice operators who outsource their hospice billing management can spend more time focusing on hospice patient care instead of spending valuable time processing past-due and unpaid claims.
2) Entering records into physician coding system
All hospices must code patient services using ICD-9 codes so that physicians’ services can be reimbursed appropriately by Medicare or Medicaid. Since most hospices are not equipped with enough people to properly process coding, hospices often forget to submit billing records resulting in thousands of dollars worth of lost reimbursements.
3) Providing hospice eligibility determination services
Each hospice must have a hospice eligibility coordinator responsible for verifying hospice patients’ eligibility status on behalf of the hospice center and submitting this information to Medicare or Medicaid. Since most hospices are understaffed, they sometimes encounter problems determining hospice patient’s eligibility statuses, resulting in delayed claim submissions or non-submission of necessary documents altogether.
4) Managing hospice reimbursements
Hospices that outsource hospice billing solutions to professional hospice billing companies can be exposed to more efficient and accurate reimbursement. Many hospice care providers do not have the expertise or experience that hospice payment collection agencies have regarding working with Medicare, Medicaid, and other third-party payers.
5) Performing hospice eligibility verification
Hospices that outsource hospice billing management realize increased processing speed because they rely on hospice payment collection agencies to perform hospice eligibility verification on their behalf. Since many full-service hospices do not have underpaid hospicians or hospice nurses, they must rely on other hospices’ resources, including staff, computers, and software programs, to verify hospices’ eligibility statuses. As such, it takes a longer time for them to say whether a particular individual is eligible for hospice services or not.
6) Processing hospice claims
Hospices that outsource hospice billing management discover more hospice payment collection agencies with hospice payment processing specialists on staff who are more efficient than their hospices’ hospicians and nurses in terms of processing hospice claims. Since most hospices do not have the necessary resources to invest in hospice billing software, they may often experience decreased efficiency when preparing hospice claims for submission.
7) Transmitting hospice claim data
Hospices must send information about every patient encounter with Medicare or Medicaid (i.e., dates on which patients received care, services provided, and lengths of stay ) within 15 days after the end of a month during which such encounters occurred. Since many hospices do not have hospice billing support specialists, hospices could take longer to transmit hospice claims because they rely on hospicers’ resources, including computers, software programs, and hospice payment specialists.
8) Processing hospice cost reports
Hospices often suffer from loss of reimbursements resulting from late submission or non-submission of hospice cost reports. Since most hospices do not have specialized hospice payment collection agencies on staff to perform this task, hospices usually use their hospicians, nurses, and other staff members to complete these bills, creating delays.
9) Disputing claims
Hospices with a full-service model often provide medical management, including decisions regarding when life-sustaining treatments should be stopped. However, since hospices do not generally have hospice payment experts on their hospices’ staff, hospices must rely on hospices for information that can be used to dispute medical claims, including hospice eligibility. Patients and families may also contact hospices with complaints about hospice charges. Hospices with specialized hospice payment specialists on staff are more likely to respond to such customer inquiries within 30 days of receiving the initial complaint because they have developed a reputation for being hospice chargeback recovery pros.
10) Meeting hospice cost containment goals
Hospice billing companies specializing in hospice payment collections have also developed a reputation as hospice chargeback recovery pros because they offer hospices the ability to meet their hospice cost containment goals. These hospices may recover funds for services like home health or prescription drugs that patients should never have received during hospice care. As such, hospitals that depend upon specialized hospice payment collections companies for data analysis are more likely to save money on unnecessary claims than hospitals with hospices that only perform billing and coding tasks.
Hospice Billing Companies Can Help Hospices
Finding solutions that can meet the above criteria is key. Of course, there are other needs that hospices have when it comes to billing for hospice services. Hospices are in a unique position to make sure their billing for hospice services is done correctly while also meeting other needs that hospices may need. It’s important to work with an expert who can help you find solutions that meet the criteria discussed above and more.