Proprietary software

“ Controls should be established to prevent unauthorized and potentially inaccurate computer changes from being incorporated into [the medical billing system]....”

Software developed for a single individual or a small group probably posses the greatest risk of financial harm to the Medicare program. In some cases, the number of people involved in developing and implementing proprietary software is limited to one or two individuals. This reduces the likelihood that someone will see and correct programming that produces erroneous claims. 

The degree of risk associated with proprietary software is directly related to the number of individuals involved and the checks and balances used during development of software. A recent qui tam suit against a billing company revealed that the owners of the company configured their proprietary software to generated erroneous claims.6 They accomplished this by manipulating and using legitimate information about patients and providers already available in their system. The company agreed to pay $1.5 million to resolve allegations that the company defrauded Medicare and other health care programs.  

In another case, emergency room physicians contracted for billing services from a hospital.7 The physicians were unaware that the hospital had purchased and designed billing software that automatically upcoded the services of the physicians. The physicians were paid based on the codes they provided to the hospital billing department. The hospital kept the higher payment generated from upcoding. The hospital and physicians agreed to a civil settlement and paid more than $600,000 to settle the case.

Billing Medicare has become a complex endeavor. The sheer number of diagnostic codes, procedure codes and other coding requirements increase the chance of billing error. Automation helps physicians, and other Medicare providers, manage data. It helps ensure that claims for reimbursement will meet Medicare standards for claims acceptance. The same tools used to ensure accurate billing can also be misused to maximize reimbursement and to submit false claims. 

The HCFA needs to evaluate its electronic claim safeguards and PECOS is a step in the right direction toward ensuring that only agencies authorized by a provider can submit claims. As further work is done in this area, HCFA may want to consider: 

•  Identifying and registering all clearinghouses and third-party billers. The Internal Revenue Service requires preparers of tax returns to identify themselves. Medicare should require claim preparers to do the same. This would provide an audit trail and ensure that claims enter the Medicare system from authorized sources. 
•  Improving safeguards to ensure that electronic claims are accepted only from authorized sites and terminals. Passwords and new technologies, such as caller identification, can be used to ensure that claims are received and processed only from known terminals. 
•  Educating the provider community concerning their liability for erroneous claims submitted to Medicare using their provider number(s). The HCFA currently relies on provider reviews of remittance notices to identify misuse of provider numbers. These notices can be re-routed to a billing company, or another address, and providers may never see them. Providers should be made aware of their responsibility to review remittance notices.  

Informational Software

“...many operations previously performed manually are automated within [informational medical billing] system software.”

Medical billing software has become more sophisticated, and many operations previously performed manually are now being linked to, or included in, billing software packages. Unlike basic software which relies heavily on user knowledge, judgement and entry skills, informational software uses internal data bases and dictionaries to increase productivity and minimize the number of entry errors.3 Medical billing software packages with no, or limited, data base and dictionary capabilities can be linked to other independent software packages specifically designed to meet a particular billing need. For example, software capable of recalling all diagnosis codes (ICD-9 codes) and all procedure codes is available. Related software packages can be linked to billing software or used to create dictionaries containing limited coding information. 

Another characteristic of informational billing software is the ability to recall patient and provider identifying information and in some cases the service items on the last claim submitted for payment. The user can then update the last bill by merely adding line items to the claim or deleting them. Adding line items to a claim is facilitated by the software’s data bases or dictionaries. As the user enters a code or service number, the system’s software automatically recalls the CPT codes, charge information and other pertinent information stored in the software’s data base(s). If the procedure code or diagnosis code is not in the software’s dictionaries, the software can be configured to accept additional codes and information or it can limit choices to those in the system. With a few keyboard entries the user can create a new claim using new information and information already stored within the system.

Like basic medical billing software, informational billing software also provides information to the user about validity tests, completeness tests, logic tests and other program controls established by the software developer. It can be linked to other software packages designed to analyze claim information to see if it will pass Medicare and private sector scrutiny. It can edit services entered on a claim and notify the user of invalid code combinations, missing diagnosis and other errors that might prevent the timely processing of the claim. The user draws upon information provided by the system, and outside the system, to resolve errors identified by the software.

Vulnerabilities inherent in information software are more likely to stem from manipulation of software configuration and data bases and not the software programs themselves. Limited procedure coding options may steer claim decisions to higher valued procedure codes and encourage the use of diagnostic codes not supported in the patient’s medical record. Ultimately it is the software user’s choices and decisions and not the software that affects the accuracy of claims submitted to Medicare. Improperly configured informational software data bases and dictionaries can be misused. Misuse increases the probability of error and exposes physicians and other users to potential payment errors.  

 Interactive Software

Vendor software packages usually contain many options that can be used to generate a claim. These software packages can be vulnerable to misuse and inadvertent error.

Interactive medical billing software represents the state-of-the-art in software billing. Interactive software expedites data entry and offers users several options to facilitate claims processing. Bar coding is one option available that reduces input error. Other options include electronic links to an office laboratory or other medical services that allow the user to obtain billing information directly from the laboratory, other data files and other office areas. Interactive software recalls patient, provider and last claim information. The software recognizes multiple insurance payers and the different coding rules and codes used by them. Interactive systems can be programmed to link procedure codes to ensure the right code is submitted to each of the patient’s insurers. For example, a private insurance carrier may require the use of procedure code 36145 when billing for venipuncture. Medicare requires G0001 for the same service. The software automatically selects the right code for each insurer. 

Interactive systems usually do more than give feedback that something is missing on a claim. They provide information to help the user correct the problem. For example, when the user enters an invalid CPT code, the interactive medical billing software advises that an invalid CPT was entered. The software may produce a list of valid codes in the system and prompts the user to select one of the codes or enter a new code. Some systems also show the expected payment for each code. 

Each software user decides what “prompts” will be in the system. These prompts may also provide feedback as to how coding will affect reimbursement, show other coding options and the expected Medicare reimbursement for each option. The user can accept a system prompt, bypass it or modify it. Interactive systems reduce entry errors. The software uses a form of artificial intelligence to “learn” from past claims activity which services will be paid or denied. Providers can also purchase additional software that analyzes their claim information for compliance with Medicare’s correct coding initiative. Software manufactures and others are also working to identify HCFA’s black box edits.4 As the body of knowledge about these edits increases, software applications will no doubt be not far behind. What distinguishes interactive software from other medical billing software is its ability to provide the user with information and the likely consequences (no pay, more pay, less pay) of their decision. 

Data bases and dictionaries that restrict user choice of diagnostic codes, CPT codes, place of service codes and other claim data can contribute to payment errors.5 The system may be programmed with default diagnostic codes. Whenever medical services or tests are billed, the default diagnostic code can automatically be added to the claim to ensure that the service, procedure or supply billed to Medicare will avoid Medicare safeguards and be paid. The end result produces claims that are flawlessly executed; unfortunately, the medical record may not support the services billed to Medicare. Diagnostic information must be in the patient medical record for the date of service. If it is not, Medicare will recover any money paid in error. 

Data Entry

Each time information changes hands or is acted upon outside an automated system the risk of error increases.

Source documents completed during the office visit are usually given to a designated person within the physician’s office. This person ensures that source documents for each patient seen that day are collected. They may, or may not, review them for completeness. They may add, delete or modify the entries. For example, when a physician performs a procedure not listed on their preprinted source document, they note the service provided in space often provided for this purpose. Someone else may add the procedure code, diagnosis code and fee to the source document. 

Completed source documents can be entered into the physician’s own billing system and forwarded directly to Medicare. They may be entered into the physician’s system and subsequently sent to a clearinghouse which, in turn, submits the claims to Medicare. Finally, source documents may be sent to an outside billing agency that will enter the data and submit it to Medicare either directly or through a clearinghouse. 

The person who actually enters the data (whether an employee of the physician or an outside agency employee) uses the source document as a guide to identify patient, provider, diagnosis, procedure coding and other information needed for claim coding. They may also resolve any missing, incomplete or erroneous information detected either by computer software or document review. 

Employees of the physician, or an outside billing agency, may misinterpret source document information, mis-key information into the system or add, delete or modify information on source documents. For example, the physician notes “I & D,” [incision and drainage] on the source document. Another person (within or outside the physician’s office) will decide which one of the 10 incision and drainage codes will be billed. The wrong choice may effect coverage and payment. Additions to, deletion of and modifications of source document information by data entry persons and other reviewers may not be supported in the patient’s medical chart. Decisions made during the data entry process may reduce a physician’s Medicare payment or create an overpayment. 

MEDICAL BILLING SOFTWARE  

Basic Software

Billing software that requires users to input extensive information increases the risk of claim error.

Basic medical billing software is widely distributed by Medicare fiscal agents and the private sector. Our review of Internet literature on medical billing software indicates that this type of software is inexpensive and in widespread use. Users of non interactive software key most, if not all, claims information onto a claim facsimile. The software manipulates these entries to produce an electronic claim. Typical errors involve entry errors, incorrect or missing patient or provider information, incorrect or incomplete diagnosis codes or invalid Current Procedural Terminology (CPT) codes. 

More sophisticated basic software may recall patient and provider billing information when a patient’s last name, Social Security number (SSN), medical record number or other identifier is entered. The user then enters line-by-line information about the medical services provided onto the partially completed claim. 

Software feedback to the user, if any, is limited to program checks such as validity tests, completeness tests, logic tests and other conditions established by the software developer. Theses program checks may identify missing data required for processing. They may check to ensure that the SSN contains nine digits or that the procedure codes used to describe services are the correct length. If data entry errors exist, the software alerts the user. The user must determine how to resolve the problem(s) and re-enter the correct data. 

A vulnerability exists because each person handling source documents is in a position to misinterpret, mis-key or deliberately alter the original information recorded by the physician. Information needed to prepare a claim that must be manually researched increases the chance of billing error. The number of procedure codes, diagnosis codes and other information needed to produce a claim increases the likelihood that a billing error will occur.  

Finding Good Medical Billing Software - Question need to Ask yourself

A medical billing business requires efficient software to be able to perform tasks related to medical insurance and benefits.  There are several billing software available in the internet today, finding the right one, however, can be challenging.  Below are some questions you can ask yourself to help you come up with a decision on which medical billing software to purchase.  

Is it cost-effective?  Our usual perception is that cheaper means less effective.  This is not always true.  Most expensive types come with a lot of extra features but you do not really need them.  Purchase software that has all the things you need, nothing more.

Is it user-friendly?  This question is asked not for computer illiterate employees.  Most medical billers are tech savvy but the software should be easy enough to use so they could spend the extra effort in dealing with complex software in dealing with other important tasks instead.

Has the software been around for a long time?  If it has, it is more likely to have encountered every bug and issues possible and a fix has already been applied.  New software says that it is bug-free.  It may be bug-free for now but it would surely encounter one in the future.

Is the medical billing software company experienced?  A company that has been around for a long time is more reliable especially if they have a lot of employees.  This ensures that there are experienced people to help you out in times of software trouble.

Is software training programs available?  An online training should be available because it is more convenient and less costly.  Vendors that require you to attend training seminars do not only save money, they do it at the expense of their customers.