The Case FOR Component Billing in Academic Practices

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The Case FOR Component Billing in Academic
Practices
by Thomas Scheanwald Senior VP APS Medical
Billing Professional Consulting
July 13, 2006
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• This discussion is about maximizing departmental
  revenue

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Questions to Ask Yourself

• Is your overall department revenue growing?
• What is the long term forecast for revenue
  growth?
• What is the eventual impact on the department?

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Sources of Revenue

• Research
• Teaching
• Professorships, lectures, etc.
• Laboratory directorship
• Part A
• Part B
• Component billing

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Revenue Trends

• Laboratory directorship fees
• Are not increasing
• Part A
• Payment for these services continues to be a
  problem
• Improperly defined in contract

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Revenue Trends (cont.)

• Part B
• Continued decline in Medicares physician fee
  schedule
• Component billing
• Source of new revenue

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Current Trends in Component Billing

• Common in South, not so in the North and East
• Over 2/3 of clients now bill
• Some insurances pay, some do not
• Complaints??

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• Component billing is a payment methodology
  designed to compensate for the professional
  services of the clinical pathologist

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Component Billing Checklist

• Review contract
• Collect data for revenue forecast
• Discuss with administration (CFO)
• Information systems capabilities
• Education
• Define bill cycle, policies with billing office

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Review Contract

• Key Points
• Part A is for lab management fee
• Part B on AP
• Language that allows the billing of professional
  component to non-Medicare patients for CP

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Collect Data for Revenue Forecast

• Key Points
• This analysis will provide forecasted charges and
  collections. This will aid in the decision
  making process.
• In addition it will allow
• The identification of billable and unbillable
  charges
• Breakdown of insurance companies and payment
  history

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Discuss with Administration (CFO)

• Key Points
• Is an outside party needed?
• Discuss contract language as it pertains to
  component billing
• Get agreement at this level first
• Be prepared to educate

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Information Systems Capabilities

• Key Points
• Assess the computer system capabilities to send
  lab charges and patient demographics to the
  billing unit

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Educate to Their Concerns

• Administration
• Chief Financial Officer, Vice President
• Lab Director, Outreach Coordinator
• Hospital Billing Office
• Fellow Clinicians and clients
• Insurance companies

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Define Bill Cycle, Policies

• Description of billing process
• Bill non-Medicare patients
• Bill appropriate lab tests
• Follow-up billing to patients for
  copays/deductibles
• Electronic process

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Benefits of Component Billing

• Increases and protects from decreases in revenue
  elsewhere
• Further reinforces the role of the clinical
  pathologist
• Establishes a new revenue stream to the practice
  and the clinical lab

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• Thank You!