Medical billing is experiencing unprecedented growth compared to other professions. A variety of misconceptions and unrealistic expectations have accompanied that development.
In this revealing article, physical therapist and electronic medical record (EMR) specialist, Nitin Chhoda, examines the misconceptions associated with a medical insurance billing business.
As the demand for medical insurance billers (MIBs) has grown, so has the number of scams promising individuals enormous incomes with no experience needed.
Despite advertisements to be found in multiple media outlets, there is no such thing as a home-based biller.
No medical provider will allow sensitive information to leave the office for someone to toil over like medical billing homework. While there aren’t home-based billers, there are medical insurance businesses that are operated from the biller’s home.
Despite claims to the contrary, a career in medical billing requires specific skills. MIBs must demonstrate a level of competence to become certified that requires a myriad of specialized knowledge. Would-be billers can’t learn as they go and should seek appropriate educational venues.
MIBs will need a working knowledge of ICD-10 and CPT codes, anatomy, clearinghouses, and both commercial and government-funded insurance programs.
Short Hours, Big Pay
Medical billing isn’t a way to get rich quick. Don’t expect to make $40 an hour or $50,000 in the first year. Those claims are the tools used by scammers. MIBs typically make $11-$20 an hour, depending on their level of experience. Entrepreneurs should be aware that the company may not make a profit in the first year, or even the second.
Launching a new business is time consuming. Operating a business from home provides individuals with the flexibility to set their own hours, but shepherding a new business to success is time consuming. Fledgling business owners should be prepared to put in a lot of long hours. Medical billing is a year-round job.
Certified medical billing people that choose to go into business for themselves are responsible for every facet of their enterprise and they must be self-starters. There will be no supervisor watching a time clock or conferring assignments. Working at home is convenient, but it can also be distracting. MIBs will need to be organized and learn to manage their time wisely.
More than Numbers
MIBs do more than just type numbers in a form on a computer. They verify information, check for appropriate coding and transmit reimbursement claims.
Medical billing staff also monitors claims that have been paid and those that haven’t, along with posting payments to client accounts and providing friendly reminders for patients with balances due.
Billers shouldn’t expect to sit home alone with their computers. They have to interact with others in person and via phone.
Medical insurance billing is one of the fastest growing career opportunities available and unscrupulous individuals have taken advantage of that to sell impossible dreams and expectations. Anyone who wants to launch a medical billing firm should begin with the necessary education and be willing to put in long hours to grow a respected and reputable business.
It’s been six days and the partial government shutdown is in effect. Hundreds of thousands of federal employees are affected, with some possibly receiving backpay.
October 1, 2013 marks the opening of the healthcare exchanges that are going to change the way the middle class purchases health insurance in America, and your patient’s attitude towards the skilled care that you offer.
More about that later in this article.
President Obama said:
“An important part of the Affordable Care Act takes effect tomorrow, no matter what Congress decides today.”
“Tomorrow, tens of millions of Americans will be able to visit HealthCare.gov to shop for affordable health coverage.”
So what’s Obamacare all about?
The Affordable Health Care Act, also known as Obamacare, is an ambitious attempt to establish a one-size-fits-all healthcare system. It’s packed with the right intentions, and it has tremendous potential to do good for the uninsured in America. It also has the potential to overwhelm a medical system that’s already strained to the limit.
The objective is that at least half the nation’s nearly 50 million uninsured people should get some form of insurance coverage through the Affordable Care Act.
This is achieved with the introduction of the new healthcare exchanges (which includes subsidized private healthcare plans), slated to be available online starting today, October 1, 2013. In some states, a version of Medicaid for low-income adults is also going to be an option (more about that shortly).
The Impact for Middle Class America
People who get insurance coverage through their employers will also see changes. Starting Jan. 1, it is going to be the legal responsibility of almost all Americans to carry health insurance or face fines. These fines will become larger as time goes by. Passing up the company medical plan in exchange for a bigger paycheck may no longer be an option. On the other hand, employees who lose their jobs, entrepreneurs starting their own businesses and people in between school and work could have an easier time getting coverage.
Also as of Jan. 1, a pre-existing medical condition will no longer be a barrier to getting health insurance. Yes, this sounds good, but when you take a closer look at the numbers (copays and deductibles) and benefits, there are a lot of things for a patient to consider.
How is Obamacare going to be implemented across the nation? For starters, the provisions of this act suggest the appointment of a panel of individuals who will establish guidelines and make decisions about which treatments are necessary, with an eye on savings that has the potential to lower costs and benefit patients.
Will this work out the way we all want – lower costs and improved quality of care? That remains to be seen.
The Act penalizes those with no insurance, and attempts to increase access to care for millions of Americans.
Deductibles, Co-Pays and Premiums
Some of the likely effects of Obamacare include higher premiums, co-pays and deductibles.
In some instances, co-pays have doubles while the policy offers fewer services. It’s up to the individual patient to shop around, compare benefits and make the right decision, based on available choices. With some plans, imited physician, specialist and pharmacy options are designed solely to cut costs for insurance companies, with a negative impact on patient convenience and quality of care.
The Act mandates all types of “free” preventative services and no one can be denied coverage due to a pre-existing condition. It allows parents to keep children on their policies until they turn 26.
This is excellent for the uninsured in America. It also has a flip side. This has the potential to overwhelm the current healthcare system in the United States.
In a thought provoking article on Obamacare on Foxnews.com, John Goodman from the National Policy Analysis in Dallas said it would take 7.5 hours of each doctor’s day to provide the free services mandated in Obamacare, leaving no time for paying patients. To make things even more challenging, Medicare reimbursements are already below the cost of care and continue to shrink.
Many practitioners are refusing to treat Medicare patients, opting for early retirement, or selling their practices, further reducing patient access to care. This is not what Obamacare intended, but it is the reality that patients (and clinicians) are facing in the Obamacare economy.
Taxes, Penalties and Limitations
The Act imposes a 40 percent tax on healthcare plans beginning in 2018, based on the value of the policy. The tax will be collected through income tax returns. The tax applies to those with a “Cadillac” plan worth $10,200 for individuals and $27,500 for families. Those without insurance face penalties of up to $695 per person for a family of three, or $2,085 per household.
Obamacare virtually guarantees that patients will choose the minimum amount of coverage as a means to avoid penalties and stay covered.
Having said that, the financial impact of a catastrophic medical event cannot be avoided, especially with a restricted healthcare plan. A major increase in bankruptcies is a very real possibility.
Hospital payroll taxes will increase to 2.35 percent, taking an extra bite out of employees’ take home pay. Obamacare restricts the amount people can contribute to a flexible spending account (FSA) to pay for medical expenses at $2,500. New limitations are now placed on the medical products that can be purchased with FSA funds and increases penalties for buying those items to 20 percent.
Employers with 50 or more workers must provide healthcare plans that provide specific services, but there’s no limit on what insurance companies can charge for those policies. Employers are now looking at a potential increase in healthcare costs.
Employers insist they can no longer afford to offer insurance. Delta Airlines estimates that one clause alone will cost the company $8 million dollars a year.
Currently, it’s less expensive for employers to pay the government-enforced penalties than offer insurance. Their employees have no choice but to purchase federally approved policies from state healthcare exchanges, or they risk paying fines as individuals.
The exchanges offer three levels of healthcare plans offered by multiple providers. If you enjoy insurance from your employer, exchange plans can be a double edged sword. They may or may not be more affordable than the healthcare plan you have right now. Even for those who qualify for an exchange plan, there’s no guarantee that they will qualify for a subsidy promised by the government to help pay premiums. Many Medicaid patients will be removed from state rolls and forced to purchase plans from health exchanges.
In states not expanding Medicaid, millions of uninsured people below the federal poverty level will likely be shut out of coverage. That’s the case in Texas and Florida — both of which have large uninsured populations — and in many, but not all, Republican-led states.
It’s because under the law, people below the poverty line — an individual making $11,490, a family of four $23,550 — can only get the new coverage through expanded Medicaid. And the Supreme Court gave states the right to opt out.
The other arm of “Obamacare’s” coverage expansion — subsidized private insurance through the new markets — is mainly geared to uninsured people in the middle class. The administration is hoping to sign up 7 million the first year. Young, healthy adults are prime customers, since they’ll help offset the cost of caring for sicker people sure to sign up once insurers can no longer reject them.
Kevin Maass of Fairfax, Va., has been uninsured for more than a year, since he turned 26 and could no longer stay on his parents’ insurance. He’s got a background in statistics that he hopes to apply to criminology, but he’s been working temporary jobs while looking for permanent employment in law enforcement.
“Not having health insurance has made me a little bit more cautious,” said Maass. “I like to snowboard, but it’s given me second thoughts. Heaven forbid I should break my wrist or my arm.”
Maass thinks he might be able to afford $100 to $200 a month for insurance. Early indications are that he’ll find plenty of options. However, plans with the lowest premiums will have high deductibles and copayments, which means sizable out-of-pocket costs if he gets sick or has an accident.
Nonetheless, Maass says he’s definitely planning to check out the health insurance market. “My parents have been pushing for me to get health insurance,” he said. “I might as well at least get something rather than pay (a fine) to not have anything.”
The Bottom Line for Patients
Nothing is free – there’s always a cost to someone.
With Obamacare, it’s consumers and high income earners who will ultimately pay for healthcare.
A likely outcome is higher costs, less access to practitioners, and increased wait times for appointments and in the office.
The premise of Obamacare always has been to provide affordable healthcare to all while reducing costs, but it’s too early to tell the real impact.
Patients are paying more, practitioners are receiving less and easy access to services is a thing of the past.
It’s unlikely that’s going to change anytime soon.
In fact, with the increased personal responsibility (and financial burden) on most Americans, there is a very real possibility that the future of healthcare will see an unprecedented return to the use of home remedies by patients. Patients will have more important bills to pay (gas, electric and now health insurance) and penalties to avoid.
Does that mean that patients will choose to ‘stay home’ and try and heal themselves on their own, instead of paying a $40 copay and $1000 deductible towards physical therapy? It’s hard to tell, hopefully that won’t be the case.
The real outcome remains to be seen.
Special Announcement – BONUS Presentation at the 2013 Private Practice Retreat
I’m going to be doing a presentation on “Obamacare and how you can prepare your practice to deal with it” in the upcoming Private Practice Retreat from October 11-13 in Las Vegas. Only a handful of tickets remain. If you want to attend, register here for the 2013 Private Practice Retreat in Las Vegas.
A large majority of medical insurance billers (MIB) start their businesses at home and as the company grows, the MIB often discovers they require an assistant.
However, liking someone isn’t enough upon which to base a working relationship and in this insightful article, Nitin Chhoda examines the criteria billers should employ when seeking an MIB assistant.
The key to hiring an MIB assistant is having someone with an eye for detail. The lucky candidate will be functioning as an extension of the biller and in many instances will represent the business to the public.
The MIB assistant will need some basic skills and if they’ve never worked in the field, they’ll need to be trained.
MIBs shouldn’t balk at conducting a background check on potential employees. An MIB doesn’t want to discover that their new MIB assistant has a history of white collar crime, computer theft or embezzlement. It’s better to learn as much as possible about the applicant before making a definitive hiring decision.
Some type of experience in the medical field is an advantage, but not a necessity. Knowledge of computers, data entry or experience with numbers is also helpful. Even if the person has no experience, if they’re trainable and learn quickly, it’s possible to have a competent MIB assistant in just a few weeks.
Electronic medical record (EMR) technology is essential for secure transmittal of reimbursement claims. Few outside the profession will be versed in their use. Many MIBs choose to leave data entry to their MIB assistant and handle the actual submissions themselves. Either way, MIB assistant must be cognizant of HIPAA security standards and thoroughly understand them.
Organization, honesty and integrity are critical skills for an MIB assistant. The individual will be required to communicate with clearinghouses, insurers, patients and clients.
A good command of the language, a pleasant demeanor and a courteous manner are essential, as is the ability to be assertive when needed.
An ideal MIB assistant will have initiative, be able to solve problems on his/her own, and know when to bring difficulties to the attention of the MIB.
Accuracy and the ability to communicate through written means are also essential elements. A winning candidate must be detail-oriented, able to take direction and have a personality that complements the MIB. The MIB assistant will be much more than someone who enters data.
The individual will be an extra pair of hands, but they can also become a friend and the primary backup person should the MIB be unavailable.
Acquiring an MIB assistant is a huge step and one that will have a dramatic impact on the medical billing business. The ideal assistant will ease the MIB’s workload or allow the firm to take on more work. They represent the MIB and the company, making it essential that they have the skills to do it well.
Beginning Jan. 1, 2014, everyone in the U.S. will be required to have some type of medical coverage as part of the Affordable Health Care Act, otherwise known as Obamacare. Coverage can be in the form of Medicare, Medicaid or a typical health insurance policy.
Consumers can purchase coverage through the Health Insurance Marketplace beginning Oct. 1, 2013.
The Marketplace is the backbone of Obamacare, designed to provide four levels of coverage at levels the federal government deems as affordable.
As part of the Act, individuals buying insurance through the Marketplace may be eligible for federal subsidies to help them pay for coverage.
Federal dollars are allotted based on income.
Who Should Enroll?
Open enrollment through the Health Insurance Marketplace runs from Oct. 1, 2013 to March 31, 2014. Patients who don’t qualify for Medicaid, Medicare and CHIP, or who don’t have an employer-based insurance plan, qualify for enrollment.
Individuals who haven’t enrolled in a plan by Jan. 1, 2014 or have received an exemption, will be assessed a fee when they file their income tax return.
Employees who have insurance through the workplace can’t use the Marketplace unless the cost of their insurance exceeds 9.5 percent of their income, or if the plan doesn’t offer the minimum services mandated by Obamacare.
Individuals can choose not to buy insurance and pay the Individual Mandate Tax (IMT) instead.
In 2014, the IMT is $95 per adult and $47.50 per child, or 1 percent of income, whichever is greater. The penalty increases to $325 or 2 percent of the family income in 2015. In 2016, the penalty will be $695 per adult and $347.50 per child or 2.5 percent of the total income.
Fines are based on a cost-of-living formula after 2016.
Preparation And Documentation
To create an account and sign up, consumers will need to provide some basic information including:
Social Security number or document number for legal immigrants;
Employer and income information for each household member;
Policy numbers for any current plan(s) covering household members;
A completed Employer Coverage Tool, available on the site, that lists all job-based plans for which household members are eligible.
Plans And Options
Patients can purchase four types of policies through the Marketplace – Bronze, Silver, Gold and Platinum. The plans pay 60 percent, 70 percent, 80 percent and 90 percent, respectively, of healthcare costs.
Bronze and Silver plan costs are capped at 9.5 percent of income. Gold and Platinum plans are capped at 12 percent of income. High-end plans may be subject to an excise tax of 40 percent of the total cost.
Visitors to the Marketplace can compare policies, deductibles, co-pays and costs. The online calculator allows consumers to find the plan that best fits their needs. They’ll be able to determine if they qualify for a federal subsidy to help them pay for Marketplace insurance and how to apply.
The Marketplace also offers “catastrophic” plans for people age 30 and low-income consumers, but different terms and rules apply and individuals won’t be eligible for subsidies and credits.
Affordable Versus Cheaper
It’s important to remember that affordable doesn’t necessarily mean cheaper. There are no restrictions on how much insurance carriers can charge for coverage and other options may be more cost effective.
Families with incomes less than 15,302 will qualify for Medicaid.
Some may qualify for assistance with out-of-pocket expenses for government programs including Medicaid, Medicare and the Children’s Health Insurance Plan.
Obamacare dictates that each person must have insurance and the Health Insurance Marketplace offers plans to accommodate the law. Patients should evaluate each plan carefully and examine all their available options so they can make an informed decision that’s best for everyone in the family.
The Affordable Health Care Act, known as Obamacare, requires all Americans to have healthcare insurance. Employers that don’t offer insurance and those that refuse to purchase coverage will get hit where it hurts them the most – their wallet.
Obamacare employs fines as an incentive to persuade patients and employers to comply with the legislation.
People will be required to report their insurance coverage, or lack thereof, through their annual income tax returns.
Penalties will be levied on individuals without health coverage, as well as business owners that don’t provide it.
The Individual Mandate Tax
With the Individual Mandate Tax (IMT), in 2014, the fine amounts to $95 per adult and $47.50 per child, or 1 percent of income, whichever is greater. The penalty increases to $325 or 2 percent of the family income in 2015.
By 2016 penalties reach $695 per adult and $347.50 per child or 2.5 percent of the total income. Fines are based on a cost-of-living formula after 2016.
If the filer doesn’t pay the IMT, it’s carried over to the next year and interest continues to accrue on the total. Some will qualify for an exemption from the IMT. The Congressional Budget Office estimates that 30 million Americans will lack coverage in 2016 and 80 percent of that number will qualify for some type of relief.
Those qualifying for an exemption include inmates, people with religion-based objections, and members of Indian tribes.
Also exempt are individuals who can’t find an affordable plan, anyone that isn’t required to file a tax return, and those who are temporarily unemployed.
People living in states that have chosen not to expand Medicaid coverage and anyone paying more than 8 percent of their income for health insurance will avoid the IMT.
The Employer Mandate
Obamacare refers to the Employer Mandate penalty as a “shared responsibility fee.” The fines for businesses not offering insurance will be $2,000 per person, per year.
Companies that contribute 50 percent toward an employee’s insurance premium are eligible for tax credits of up to 35 percent of their contribution, provided the worker makes $50,000 or less per year and is a full-time employee.
The Employer Mandate affects approximately 5.8 million companies throughout the nation.
Business owners with 50 or more employees, or part-time equivalents, are required to offer their workers insurance.
Those that don’t will be assessed a fine. Full-time is defined as 30 or more hours a week.
Businesses don’t have to pay the fine for the first 30 employees.
The provision, set to take effect in 2014, has been delayed until 2015 to work out details on information reporting requirements for businesses.
The mandate stipulates that employer-provided healthcare must be affordable (no more than 9.5 percent of the employee’s wages.)
Employers offering unaffordable insurance, as defined by Obamacare, will be assessed a $3,000 penalty for each employee who receives the federal subsidy to purchase insurance through the Marketplace.
Policies must provide coverage for the employee’s children age 26 and younger. Plans do not have to offer benefits for spouses. The policy must provide “minimum value,” defined as paying at least 60 percent of the cost of covered services, including deductibles, co-pays and premiums.
The IMT is an incentive for individuals to purchase insurance and enforced through fines.
The Employer Mandate utilizes financial penalties as an inducement for businesses to provide insurance or be assessed costly fines that will substantially affect profits. Obamacare places both workers and employers in the same position – get insurance or face the fines.
Launching a medical insurance billing enterprise has the advantage of low start-up costs. Medical insurance billers (MIBs) are aware of the major financial outlays, but there are many smaller costs that are often overlooked in the excitement of entrepreneurship. In the conclusion of this two-part series, Nitin Chhoda inventories the smaller costs of doing business.
MIBs work with computers, digital communications and electronic claim submission, but there are still occasions when paper documents are required.
CMS 1500 forms are the only official claim document accepted by Medicare carriers for reimbursements. They’re available in boxes of varying quantities, ranging in price from $35 for 500 to $150 for 5,000.
Need For Speed
High-speed Internet is essential for MIBs. Those living in highly populated areas can obtain high speed service for as little as $25, but speeds are on the low end of the high-speed scale. Expenditures for the highest speeds can top $150 per month depending upon the provider. Installation fees may also be charged.
MIBs working in rural areas aren’t as fortunate in regard to pricing options. Entrepreneurs living in a country setting may have to rely on satellite service for their Internet connection. Low end speeds can be purchased for as little as $50 per month, while power plans can range from $100-$150 per month.
Customers should also be aware that many plans have usage limits. Additional costs for MIBs may be assessed for those who exceed the ISP’s limits. Some companies simply throttle the available speeds for consumers who exceed their usage.
Talk Isn’t Cheap
A dedicated phone line is essential. MIBs will spend a significant amount of time on the phone and a speakerphone is a wise investment. It allows billers to continue to work even if they’re on hold. It’s not possible to answer the phone 24/7 and MIBs will want to invest in a phone system with the ability to record voice messages.
Depending on the provider, an additional line can cost as little as $10 for MIBs, while other companies will view it as a completely “new” phone service at a cost of up to $50. A speaker phone with answering and message capabilities will range from $50-$100. Expect to pay $150 for a cordless model.
Most phone companies offer voice messaging services for a fee of up to $10 per month for those who want more than a simple phone answering machine.
Lost data or a fried hard drive will quickly put MIBs out of business. Invest in an uninterrupted power supply for potential outages and a surge protector. A power surge can permanently damage a machine, as can low voltage. Power protection costs range from $20-$200.
An additional cost for the protection of costly equipment and valuable data will be a thumb drive or separate drive to back-up files and information.
A thumb drive will range from $10-$70 depending on its storage space, while a 2 terra byte drive can run up to $500. Electronic medical record (EMR) technology provides regular back-up in the cloud.
The cost of conducting business requires MIBs to plan ahead for every contingency. High-speed Internet, reliable communications and data protection are relatively inexpensive, but the cost is an essential part of the medical billing business and critical for a reliable and reputable firm.