Orthopedic Surgery Documentation Compliance Tips

July 24, 2023

Written by Debra Rossi, CCS, CCS-P, CPC, CPMA

Joint Replacement Surgery

Prior to approving reimbursement for joint replacement surgery, CMS (and most commercial payers) typically require patients to undergo a period of conservative therapy or non-surgical treatments. The purpose of this requirement is to ensure that surgery is considered only when other treatment options have been exhausted or deemed ineffective.

The specific requirements for conservative therapy may include:

  1. Duration of Conservative Therapy: CMS may specify a minimum duration for conservative therapy, typically ranging from three to six months. During this period, patients are expected to undergo and document their participation in various non-surgical treatments aimed at managing joint pain and functional limitations. The duration requirement may vary depending on the specific joint being treated.
  2. Documentation of Non-Surgical Treatments: Providers are required to document the patient’s participation in conservative therapies, such as physical therapy, occupational therapy, use of assistive devices (e.g., canes, braces), weight loss programs, pharmacological interventions (e.g., nonsteroidal anti-inflammatory drugs), and other appropriate interventions. The medical records should reflect the type, frequency, and duration of these treatments.
  3. Lack of Improvement: Documentation should include that the conservative therapies have failed to provide significant or sustained improvement in the patient’s joint pain, activities of daily living, and overall quality of life. This may involve objective measurements, such as range of motion, functional assessments, pain scales, or patient-reported outcomes.
  4. Physician Assessment and Documentation: The surgeon is responsible for evaluating the patient’s response to conservative therapy and documenting the lack of improvement or inadequate response despite adherence to the recommended treatments. The physician should provide a clear clinical rationale for proceeding to joint replacement surgery.

Please note that the requirements outlined in the CMS NCD are specific to Medicare coverage for joint replacement surgeries. Private insurance plans may have their own coverage policies and criteria. Additionally, these requirements may be subject to updates and revisions, so it’s essential to consult the most current CMS guidelines or to seek guidance from the relevant healthcare authorities for the most up-to-date information.

Assistant At Surgery

When a primary surgeon utilizes an assistant at surgery documentation plays a vital role in ensuring proper communication, accountability, and compliance with regulatory requirements.

Documentation elements that a primary surgeon should provide when utilizing an assistant at surgery include:

  1. Surgical procedure documentation should include a detailed description of the surgical procedure provided including the preoperative diagnosis, specific steps taken, techniques employed, instruments used, and any modifications made during the surgery along with the surgical team, anesthesia details, significant findings, and post-operative diagnosis.
  2. Document the identity and credentials of the assistant at surgery. This includes their name, professional title (e.g., physician assistant, nurse practitioner), and any relevant certifications or qualifications. This documentation helps establish the qualifications and authority of the assistant.
  3. The primary surgeon should clearly outline the roles and responsibilities assigned to the assistant during the surgical procedure. This may include specific tasks, such as tissue handling, suturing, retracting, or other support functions. Documenting these roles helps clearly establish the medical necessity for the assistant and allows for supporting documentation needed for payer clarification when reimbursement is questioned.

It’s important to note the specific documentation requirements may differ based on local regulations, facility policies, and the requirements of insurance providers or regulatory bodies. Surgeons should consult the relevant guidelines and protocols specific to their jurisdiction and healthcare facility to ensure compliance with documentation requirements when utilizing an assistant at surgery.

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Four Key Valuation Considerations When Converting the Imaging Operations of a Hospital Outpatient Department to a Freestanding Center

June 8, 2023

Written by Stephen H. Schulte, CVA, and Madison Higgins

The following article was published by VMG Health’s Imaging & Radiology Affinity Group

In recent years, the healthcare industry has experienced a shift toward freestanding sites of service as more patients opt for lower-cost, convenient, and specialized care. This trend is particularly evident in outpatient imaging services where patients are increasingly opting for the comfort and accessibility of freestanding imaging centers over hospital outpatient departments (HOPDs). As a result, hospitals and health systems are becoming increasingly eager to partner with established operators of freestanding imaging centers. These partnerships often include the acquisition of an ownership interest in an existing freestanding center but may also include the contribution of their HOPD imaging operations to an existing freestanding center or potentially to a new joint venture (JV). When considering the conversion of an imaging HOPD to a freestanding center, there are several important factors to consider from a fair market value (FMV) valuation perspective. These include the proper identification of the volumes to be included in the conversion, the potential impact on patient volumes and reimbursement, changes to the operating expense structure, and the contribution of necessary equipment.

Scan Volume

Correctly identifying the specific volumes that would be a part of this transition is one of the most critical factors to consider when valuing an imaging HOPD that will convert to a freestanding imaging center. Imaging volumes within an HOPD may include volumes related to different service lines such as emergency room visits, outpatient surgical procedures, routine outpatient imaging services, etc. Based on our experience in these situations, the volumes related to routine outpatient imaging services are the most likely to transition. With that said, the volumes related to emergency room visits and outpatient surgical procedures are less likely to transition due to logistics and other clinical factors.

Once the appropriate volumes have been identified, it is important to understand what impact, if any, there would be upon the transition to freestanding operations. The operations of an imaging HOPD may have a large volume of high-acuity scans for patients with more severe health conditions which could be at risk in a freestanding setting. Alternatively, freestanding imaging centers typically provide more convenience for patients since they are generally located closer to residential areas, have their own dedicated parking areas, and patients do not have to navigate the larger hospital environment. This convenience factor can lead to an increase in patient volumes across all modalities but is particularly evident for routine imaging procedures such as X-rays, mammography, and bone density scans. Additionally, as mentioned above, freestanding imaging centers tend to be the low-cost provider compared to an HOPD which may also positively impact volumes. Due to the complexity surrounding these factors, future volume expectations should be discussed in detail with those who are familiar with the current volumes, area demographics, and the competitive landscape in the local marketplace.

Reimbursement/Net Operating Revenue

Another key consideration is the potential shift in reimbursement rates and the impact on the net operating revenue. Reimbursement rates at an HOPD level may not be directly achievable for a freestanding center for a variety of reasons. HOPDs receive Medicare reimbursement rates according to the Outpatient Prospective Payment System (OPPS) set forth by the Centers for Medicare & Medicaid Services (CMS), while freestanding facilities receive Medicare reimbursement rates according to the Medicare Physician Fee Schedule (MPFS).

In general, OPPS rates tend to be higher than MPFS rates for the same service and can result in an expected decrease in Medicare reimbursement that must be accounted for in a valuation. Additionally, commercial payors typically reimburse at rates equal to or higher than Medicare. For valuation purposes, the assumed commercial payor rates should be theoretically achievable by any hypothetical market participant. The reimbursement rate for a given service will depend on many factors, including the location of the provider, local market dynamics, and changes in federal and state healthcare regulations.

Operating Expenses

Imaging HOPDs are typically accounted for as distinct operating units within the internal framework of the hospital. In many instances, the hospital will track certain elements of the cost structure to operate the unit, but detailed operating expenses are not available. The operating expenses accounted for may include costs that are simply allocated to the unit from the overall hospital operations and may not represent the true operating expenses needed to fully run the business. Additionally, the operating expenses that are reported internally may simply represent the direct costs that are easily identified and would not include the full picture. For instance, the internal financial statements for an HOPD typically do not include certain expenses such as facility rent, utilities, janitorial, and administrative functions such as billing and collection services, legal services, etc. In these situations, it is important to remember the intention of the valuation analysis is to simulate the business as if it were operating on a freestanding basis. Accordingly, the valuation will likely include adjustments to the operating expense profile to match the projected net revenues and volumes. In many cases, this will include a full build-up of operating expenses to include all applicable staff salaries and wages, benefits, occupancy costs, supplies, etc. This may be an iterative exercise that could include input from both the appraiser and the hospital to be certain the appropriate operating expenses are fully accounted for and are consistent with both industry and local market dynamics.

Equipment

When valuing an imaging HOPD, it is critical to account for the equipment needed to provide the projected volumes and net revenues. This equipment includes the imaging machines, computers, and software required to perform the imaging procedures. Depending on the structure of the imaging HOPD, certain pieces of equipment may be utilized to service both the outpatient and inpatient volumes of the hospital. In this case, the hospital may choose to retain the equipment and not contribute it as part of the potential transaction since it will continue to provide services at the hospital even after the properly identified outpatient volume is transitioned out of the HOPD. If the hospital chooses to retain the equipment or certain pieces of equipment, it is essential for the valuation to make a deduction to account for the equipment not being contributed. In addition, this dynamic has both operating and transaction implications since the freestanding imaging center will either need to be able to service the projected volumes with existing equipment or it will need to adequately plan for the capital purchase to acquire the additional equipment.

In summary, outpatient imaging joint ventures have been common in recent years with many hospitals and health systems considering the contribution of their HOPD imaging operations. With the continued focus of patients on convenience and their desire to utilize lower-cost options, it is expected that this type of transaction will continue to be a consideration for hospitals and health systems in the future.

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Managing Oncology Practice Revenue in the Face of Rising Healthcare Costs and Regulatory Burden

May 17, 2023

Written by Debra Rossi, CCS, CCS-P, CPC, CPMA and Stephanie England, MBS

The following article was published by VMG Health’s Oncology Affinity Group

As healthcare costs continue to rise and the regulatory burden increases, oncology practices are facing significant challenges in managing their revenue cycle while delivering high-quality cancer care. In this discussion, VMG Health experts explore the typical reimbursement concerns for oncology practices, including managing the revenue cycle, proper Electronic Health Record (EHR) management, and policy concerns related to value-based care trends. We will also examine the unique concerns of clinical oncology and radiation oncology, including documentation integrity and quality improvement initiatives. By understanding these concerns and taking proactive steps to address them, oncology practices can navigate the complex healthcare landscape while providing the best possible care for their patients.

The cost to deliver high-quality cancer care is rising due to inflation, increasing regulatory burden, and increasing overhead costs—not the least of which is the need for additional personnel to meet payers’ administrative demands. An accumulating body of data suggests that patients are deferring treatment because of high out-of-pocket costs. Public and private payers are attempting to decrease these costs by reducing their reimbursements which leaves oncology practices trapped in the middle of looming overhead expenses and creeping payment decreases [1].

Monitoring and understanding reimbursement revenue and keeping track of patient outcomes can open the door to value-based care with a renewed focus on patients. Oncology practices need to take steps to mitigate revenue losses for services that are already being performed while also staying on top of an ever-changing landscape of policy, litigation, and guidelines. The little things add up and cutting corners can lead to problems down the line. Therefore, investing in staff and practice resources now helps limit the risk of audits and paybacks in the future.

Typical Reimbursement Concerns for Practices

Revenue Cycle

Optimizing the revenue cycle for an oncology practice can feel like troubleshooting countless small components to keep a larger, more complex system running smoothly. With significant investments in specialized equipment, treatment protocols, and drugs, as well as the challenge of decreasing reimbursement trends, managing revenue can be daunting. Unfortunately, audits and denials are a common reality that practices must prepare for since the most severe cases can result in significant losses.

To ensure revenue cycle optimization, oncology practices should ask themselves the following questions:

  • Is your staff collecting patient insurance, copays, and financial waivers at the time of service and verifying carrier requirements such as completing any prior authorizations required?
  • How is your revenue integrity system? Are there performance indicators protecting you from costly errors such as auditing claims for under-coded encounters or other missed opportunities for billing, charge capture, and charge lag?
  • Do you have the operational workflows in place to assign responsibility to staff such as following up on any aging A/R? Is there a clear point person with expertise in the requirements for denial resolution within time limitations?
  • Are there practice resources available to help staff maximize revenue, efficiency, and accuracy of claims and charge capture? Are your providers up to date on the latest regulatory changes?
  • Do you have established relationships with your payers and vendors (who often have carrier process insights) to ensure maximum reimbursement rates and the lowest costs for drugs, supplies, and equipment?
  • Are you up to date on changes and extensions for telehealth given the PHE which ended on May 11, 2023, and the Consolidated Appropriations Act (CAA) that was passed? (Note: The CAA extended many telehealth flexibilities authorized during the COVID-19 emergency and act in effect until December 31, 2024.)

The list of concerns may seem inexhaustive, but establishing clear, consistent policies and procedures for all staff members forms a concrete foundation for proper accountability, increased opportunities for education, and more effective feedback. And in the end, you could see better reimbursement by focusing on revenue integrity.

Electronic Health Record (EHR)

Proper management of electronic health records (EHRs) is crucial in today’s healthcare landscape since a high volume of information is recorded and demanded. If your practice happens to still use paper charts, transitioning to an electronic system is essential for optimizing workflow, integrating clinical support tools, and streamlining processes. With that said, it is essential to ensure that EHR templates and documentation are compliantly used to avoid increased audit risk and to avoid decreased chances of winning appeals. Additionally, the more time that is invested in setting up a good foundation increases the opportunities for employee efficiency which can result in increased revenue. Funding is also available for optimizing current healthcare systems using data gathered during encounters. This can lead to care-based contracts that improve both financial and patient outcomes.

Policy Concerns

There has been a movement in recent years to try out value-based care alternative payment models and to move away from fee-for-service schedules. Eventually, the goal is to shift from incentivizing the performance of as many procedures/diagnostics as possible, and instead to incentivizing the promotion of overall wellness through screening, prevention, and care management. Successful programs will not be tied to how many services are provided, but concordant screening and testing for increased prevention.

One of the most current models in use is the Enhancing Oncology Model (EOM), which comes right on the heels of the Oncology Care Model (OCM) and builds upon its principles. Moving toward more care management services and advanced care planning brings unique documentation requirements in-and-of themselves. Is your staff ready for any of these changes? To succeed with this kind of model, you would need more services that may not have been in place before such as:

  • Evidence-based screening tools
  • Electronic patient-reported outcomes
  • 24/7 patient access to a clinician;
  • Patient navigation services
  • Formalization of care plans and others

To achieve the goal of spending more time with patients, providers need to be properly compensated for their efforts. Proper alignment of compensation incentives can encourage providers to change routines and take advantage of discounts and payments available through federal programs. Therefore, designing progressive compensation models is an important step. It is important for practices to stay up to date with these programs and requirements, and to implement them as soon as possible to maximize their benefits. Additionally, payor agreements should be carefully reviewed to ensure that all available opportunities are being taken advantage of. Failing to do so could lead to outdated workflows and potential reimbursement issues in the future. It may not be the most exciting task, but reading the fine print can save practices from costly mistakes down the line. Lastly, it is important to pay attention to how you design compensation models to ensure they are consistent with fair market value.

Clinical Oncology & Radiation Oncology Concerns

Documentation Integrity

Every oncology specialty has unique needs and concerns due to its patient population and the demands inherent to pathology. The complexity level of these cases is particularly high since the median age of cancer diagnoses is 662 and cancer is the second leading cause of death in the U.S.3. Capturing this complexity can later pay dividends in the form of Hierarchical Conditions Categories (HCC) and Merit-based Incentive Payment Systems (MIPS). An example of this would be such as documenting comorbidities properly in the HER. These coding systems use chronic conditions and social determinants of health (SDH) to project costs of patient care and to provide financial incentives when opted in. It would make sense that a lung cancer patient with uncontrolled chronic kidney disease and obesity would require more services than a lung cancer patient who only has hypertension. However, if not documented, it is hard to make that case to payers. As a result, proper coding and documentation are incredibly strategic from a compliance and revenue perspective.

As mentioned previously, trends toward consolidation require rigorous practice evaluation and capacity planning. Evaluations can be great opportunities for auditing current standards along with new providers joining the system which ensures consistency. If there are any hiccups during this process, outsourcing the production coding in the interim can be utilized to keep revenue consistent. Growth is a great thing but without the proper due diligence in all areas, it can become a greater hassle than it is worth, and can eventually lead to a worse outcome than if the consolidation never happened to begin with.

Prior Authorizations

Ensuring maximal coverage for chemotherapy along with other cancer therapies is of the utmost importance with recent surveys reporting prior authorization as a significant concern that can lead to life-altering delays for critically ill patients [4]. What was once a tool for proper resource utilization has become a barrier to care that needs to be taken seriously to increase approvals. Prior authorization requirements tend to increase over time which can become a hurdle for patients due to the increase of experimental treatments used to combat cancer on average and the ever-moving goalposts.

Prior-authorization programs and denial resolution should be a priority investment for any oncology practice. Proper staff workflows and documentation are critical given that most times initiation of the prior authorization is not done by the oncologist but by office staff relying on the medical records available. Some ways to mitigate delays include ensuring the accurate and timely completion of charts, having education regarding guidelines, and the availability of peer-to-peer support. In many cases, practices lack education in this regard. Additionally, with movements toward “gold carding” providers that have a good history of prior authorization approval, there are possibilities for offices with a good track record to bypass the need for prior authorizations entirely in the future.

There are many ways to mitigate loss of reimbursement and ensure you receive the maximum possible even in an ever-changing healthcare landscape. Fortunately, you do not have to navigate this complex terrain alone. Whether it is an issue with coding, documentation, denials, reporting, operational workflows, payer contracts, staff, or Fair Market Value analysis and physician compensation model review, consultation services can be customized to address your current needs. Your work is too important not to receive optimal reimbursement for the services you provide, and if you’re unsure do not hesitate to seek assistance.

Conclusion

In conclusion, ensuring optimal reimbursement revenue and patient outcomes is crucial for the success of oncology practices in a rapidly evolving healthcare landscape. By monitoring and understanding reimbursement policies and patient outcomes, practices can transition toward value-based care and can prioritize the needs of their patients. This will require taking proactive steps to mitigate revenue losses, staying current with policy changes, and investing in staff and practice resources. To aid in this process, our experts at VMG Health encourage you to seek consultation services and resources that can help you navigate the complexities of reimbursement and regulatory compliance. With the right support and guidance, you can optimize your practice’s financial performance and deliver the highest quality of care to your patients.

Sources

  1. Marsland, T., et al. (2010). Reducing Cancer Costs and Improving Quality Through Collaboration with Payers: A Proposal from the Florida Society of Clinical Oncology. Journal of Oncology Practice, 6(5), 265–269.
  2. National Cancer Institute. (March 5, 2021). Age and Cancer Risk.
  3. National Center for Health Statistics. (January 18, 2023). Leading Causes of Death. Centers for Disease Control and Prevention.
  4. ASCO Board of Directors. (October 21, 2022). ASCO Position Statement: Prior Authorization. American Society of Clinical Oncology.
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