Last month, the American Academy of Professional Coders (AAPC) announced the 2011 results for its annual salary survey of health care professionals on the business side of medicine. Participants included medical coders, medical billers, auditors, and physician practice managers.
Some of the survey’s findings include:
The average salary for a Certified Professional Coder (CPC) was approximately $46,800.
Approximately 62% of respondents said they work primarily in physician-based coding; 10 percent are hospital coders; and 16 percent said they do both types of coding.
Respondents work in every specialty, with the greatest number in family practice (10.3%) and internal medicine (5.7%). Others include emergency medicine (5.2%), general surgery (4.5%), and obstetrics/gynecology (4.3%)—rounding out the top five specialties.
The average wage in 2011 for a Certified Professional Coder (CPC®) was approximately $46,800 (up $1,400 from last year)
Federal prosecutors alleged that Janzen, Johnston & Rockwell Emergency Medicine Management Services Inc. inflated claims that it had coded on behalf of emergency room physicians in Louisiana and California, and as a result of the fraud allegations, JJ&R agreed to pay the federal government $4.6 million.
From approximately 2000 through 2007, JJ&R used a coding formula that tended to generate claims for a marginally higher level of evaluation and management service than physicians had actually provided. In addition, JJ&R allegedly often failed to comply with Medicare’s coding rules governing claims for teaching physicians, resulting in claims that were not properly payable.
Ms. Algeo acquired the site in 2009 from Elsevier when they could no longer commit to running both sites. Ms. Algeo was excited to move the open source online style guide wiki that she has been working on at MT Reference to MTDesk. Over the next two years, MTChat’s forums were not as popular.
At the same time that MTChat participants were dwindling, Ms. Algeo had made significant improvements to the wiki platform being used at MTDesk, and she used that to create active forums on MTDesk.
She said in the blog post: “After reviewing the site statistics for both sites, I felt bringing the discussion forums back to MT Desk would benefit both sites and make it easier for me to manage the forums while continuing to build the reference wiki at MT Desk.”
As for the future, the forums on MTChat will remain active for some time, however, they all will eventually be migrated to MTDesk, and then MTChat will close permanently.
Rightfully so, Tracy defined the marketing lure of Groupon as “marketing with no upfront fees.” For cash-strapped business owners looking to make more sales, free advertising sounds like a good deal–That is until you break down the numbers:
50% discount to customer
25% fee to deal provider
25% net to business owner
In essence, the business owner only makes 25% AND they have to wait to get their portion, in installments, over time.Tracy outline a simple example, where 1/3 of the business owner’s profits was paid in 5 days, 1/3 in 30 days and the balance within 60 days:
=$25,000 received by business owner (33% or $8,333 immediate advance, with the remaining $16,667 paid out over 60 days.)
Then Tracy used the same scenario as though the business owner were factoring:
-$5000 factoring fee (average 5%)
=$95,000 received by business owner (80% advance or $ 80,000 upfront, with the balance less the fees received once debtor pays in full).
An Opportunity for Acquisition…
Barry was the office manager of a temporary nurse staffing company for many years when he was approached with a great business opportunity. The owners of the business were ready to retire and offered to sell their medical staffing company to him. The owners wanted to see their business continued, so they hoped that Barry would agree to buy the business and take over the ownership duties. If not, they would have to look to sell to an outsider running the risk of losing what made the agency unique. They felt that Barry was the best fit for managing the business. He would ensure the on-going success of their temporary nurse staffing company. The owners were even willing to work out a purchase plan with Barry so that he could make payments over time rather than all at once, but he would still need to make a significant down payment in order to secure ownership of the nurse staffing business.
Collateral Needed for Investment…
This opportunity was extremely exciting for Barry and he felt that it would be a great career move. He knew the ins-and-outs of the nurse staffing industry and was confident that he would continue to operate profitably. In a few years, with aggressive sales to area hospitals and nursing homes, he would be able to increase profits for the nurse staffing business. Barry only had one concern. He had no idea where he was going to get the money he needed for the down payment. Temporary staffing organizations simply don’t have the type of hard assets banks require as collateral. Also, the sellers were willing to take a note financing most of the business, but in return they would not allow any senior debt on the balance sheet. If he absolutely had to, Barry could guarantee the loan personally, but that was his absolute last option. There had to be another alternative for Barry to secure the working capital that he needed.
Cash Available in the Outstanding Receivables…
Looking over the financials, Barry realized that there was a significant amount of accounts receivable outstanding. The owners had not been aggressive in collecting or managing their accounts receivable. The services had already been provided, the employees had been paid, but the invoices were still outstanding. Barry remembered seeing an advertisement in one of his staffing journals for PRN Funding, LLC, a temporary nurse staffing accounts receivable factoring company that turned receivables into cash immediately. Promptly, he called PRN Funding and spoke to an account specialist for his business cash flow solution.
A Successful Nursing Staffing Company…
Just as the owners of the nurse staffing company were preparing to sell him the business, Barry was able to establish a relationship with PRN Funding. PRN Funding bought the outstanding invoices, even the invoices that had been issued months ago, and provided the temporary staffing business with an immediate cash advance. Barry used the funds from the cash advance to make the down payment on the business. PRN Funding was also able to actively and professionally collect on the outstanding accounts receivable, freeing up more time for Barry to concentrate on operating his business and ensuring the continued success of his nurse staffing company.
When a medical coding service is considering selling their receivables to a factoring firm, it’s important to familiarize themselves with some common medical coding factoring terminology. This is a quick reference guide outlining some of the more commonly-used factoring terms to help medical coding business owners navigate seamlessly throughout the entire factoring process.
ACH (Automatic Clearing House) – One method factoring companies use to electronically transfer funds into an Account Creditor’s account. When an ACH is initiated, the funds are made available electronically in the Account Creditor’s account on the next business day.
Account Creditor – You, the client and provider of medical coding services.
Accounts Receivable – The money that is owed to an Account Creditor for the services it has provided to customers on credit. The amount indicated on an issued invoice.
Advance Rate – Money provided immediately to the Account Creditor-expressed as a percentage of the total invoice amount. Frequently, factoring firms advance between 70-90% of the invoices it buys.
Account Debtor – The purchaser of medical coding services who is responsible for paying the invoice, (a.k.a. your customer.)
Cash Flow – The measurement of cash coming into a company via accounts receivables and cash going out of a company via accounts payable and payroll.
Collateral – An asset that is promised or given to a funder to guarantee the discharge of an obligation by the Account Debtor.
Discount Fee – A fee assessed by a factor that purchases accounts receivable. Traditionally, the discount fee is determined by the size of the invoice, the length of time it takes to collect the funds and the creditworthiness of the customer.
Face Amount or Face Value – The total amount of an invoice.
Medical Coding Factor – A company that provides operating capital to businesses through the purchase of their invoices.
Medical Coding Factoring – An alternative financing arrangement, in which a factor purchases the accounts receivables of a company, advances a specific percentage of the invoice immediately and then collects on those invoices.
Medical Coding Invoice – A legal debt instrument which indicates the amount due from a customer to pay for delivered medical coding services.
Non-Recourse – The period of time in which the accounts purchased by the factor remain the factor’s accounts and do not revert to the Account Creditor if unpaid due to an insolvency event. The factor accepts full credit risk for any and all accounts that it purchases during this period.
Notification – The process whereby the factoring company communicates to an Account Debtor that an invoice has been purchased from the Account Creditor and that the Account Debtor is to pay the factoring company directly.
Recourse – The period of time in which accounts purchased by the factor are able to revert to the account creditor if unpaid due to an insolvency event. The client accepts full credit risk for any and all accounts that it sells to the factor during this period.
Reserve – Amount of money that is not immediately provided to the company factoring its accounts receivable when the account is purchased by the factor, expressed as a percentage of the total invoice amount. (Advance Rate + Reserve = 100% of Total Invoice)
Reserve Release – The Reserve, minus the discount fee, is transferred by the factor to the client after payment is received.
UCC (Universal Commercial Code) – The laws dealing with commercial business.
UCC-1 – The financing statement (Form UCC1) filed to perfect a security interest in named collateral.
Keeping this medical coding invoice funding terminology guide close by during conversations with factoring firms will help medical coding business owners better be able to speak and understand the “factoring language.” Using this article as a reference also allows medical coding business owners to save time by focusing on asking the right kinds of questions to locate the best medical coding factoring firm for their company.
In an effort to combat the affects of the crumbling economy, service-oriented businesses have been getting creative with new ways to generate money.
Unfortunately for consumers, that creativity often translates into price hikes, additional fees, reduced services or cut backs on productivity. But does it have to be that way?
Take a look at the airline industry. When fuel prices soared last summer, airline giants started charging extra for what were once common courtesy services in addition to the original ticket price. They started with charging for snacks and drinks and then quickly moved onto charging checked bag fees, assigned seat fees, fuel surcharges, curbside check-in fees, etc.
Once the industry giants established that this additional fee policy was going to be part of the standard flight-booking procedures, it didn’t take long for all of the airlines to jump on the “Hidden Fee Bandwagon.” From a customer’s perspective, it seemed as though the airline industry as a whole started seeing dollar signs instead of thinking about its customers needs. Then along came Southwest Airlines with its clear thinking and its “No Fee Policy.”
In some ways, the accounts receivable factoring industry can appear to be a lot like the airlines industry. Both operate world-wide, both industries should be service-oriented, and both industries are notorious for tacking on extra fees in addition to the basic fee. Much like Southwest Airlines, the factoring industry has a handful of healthcare factoring companies who do not charge extra fees in addition to the base fee. This article will discuss three areas where factoring firms might insert hidden fees.
First and foremost, a business owner needs to understand the basics of how a factor charges for its factoring services. It’s important to note that healthcare factoring firms do not loan money; rather, they purchase a company’s invoices at a discounted rate. This discount rate can be a one-time flat fee, or it can vary depending on how long the factor owns the invoice.
In general, discount rates can be affected by a number of things, including the contractual commitment, the average monthly purchase volumes, the average size of the invoices sold, the number of account debtors (customers) that will be factored and the credit quality of those debtors. Variations in each of these will lead to potentially substantial changes in the fee structure. In many cases, factoring firms will have extra fees in addition to their factoring discount fee. More often than not, these “hidden fees” are disguised as set-up fees, administrative fees and penalty fees.
There are some factoring companies that start charging fees as soon as a potential client applies for healthcare factoring services. Set-up fees range from a minimal application fee of $25 to a hefty origination fee of $500. In some cases, factors will add in individual fees for due diligence procedures (i.e. running credit and background checks) and legal documentation fees (i.e. assembling legal documents and filing liens). When all is said and done, a new factoring prospect could be $1,000 out of pocket before knowing if he/she has been approved for funding.
When business owners are comparing and contrasting factoring companies, it’s important to inquire whether the factor charges specific set-up fees. Sometimes, the factor will say yes, and sometimes it will say no. It’s up to the business owner to decide whether or not the factoring services outweigh the start-up costs before moving forward.
In addition to application, origination and due diligence fees, some factoring firms charge their clients for the time it takes to compile and ship legal documents, billing for postage, long-distance phone calls, photocopying documents and/or time spent on the computer while assisting their clients. There are also fees associated with funding procedures. Most factors will institute set prices for a same-day wire or an overnight transfer of funds.
When a business owner is contemplating the notion of factoring his/her receivables, it’s important to factor any administrative costs into the equation. Without doing so, a business owner could wind up paying a lot more than he/she had initially anticipated.
The last way a factoring firm could potentially squeeze in some additional “hidden fees” is when it assigns fees for various “penalties.” Under this umbrella of penalty fees, a factoring firm could designate fees for misdirected payments, early termination of a contract, aged invoices, expedited funding (within 24 hours or less), not hitting a monthly minimum factoring requirement or going over the maximum allowable factoring amount. In addition, a healthcare factoring firm could also penalize its client by holding onto the funds within the reserve account (cash that is owed back to the client once payments have been received).
When choosing an accounts receivable factoring company, business owners should take the time to read all of the terms and conditions before signing on the dotted line. Entrepreneurs should not be afraid to dig deep into the factoring contract and ask a question when something is unclear. Otherwise, those hidden fees hidden fees will reveal themselves at a point where it’s too late to re-negotiate the terms.
So in conclusion, it does appear that the factoring industry is similar to the airlines industry in that players in both are notorious for charging “extra fees.” The plus side to this realization, however, is that both industries also have some players who stand firm in their “No Extra Fee Policy.” The bottom line-much like when shopping for the best airline deal, it’s extremely important to look at the all-inclusive price, including possibly extra fees, before agreeing to do business with an accounts receivable factoring company.
PRN Funding’s medical coding factoring specialists did not exhibit at the 2011 AAPC, so we didn’t have a chance to review the show. However, there was an interesting review by Bonnie Shrek on the Coder’s Voice Blog. Here’s what Bonnie had to say:
The 2011 AAPC National Conference in Long Beach, California proved to be a great success. The 1700+ conference attendees experienced educational sessions, networking opportunities, and the presentation of vendor products, walking away with a plethora of information to assist in working more efficiently and effectively in their professions. The weather proved to be typical spring California weather. In between and after classes, attendees were able to enjoy the sun and see a glimpse of the Long Beach Grand Prix press day, circling the conference center in fast and sporty race cars.
Beginning on Sunday, April 3, classes such as Legal Trends and Issues, Getting to Know Your Local Chapter and the Conference Welcome – Code Watch by National Advisory Board President Terry Leone, were available to get to know information on legal matters in the workplace and who was involved in the AAPC local chapters. Later that evening, Contexo Media sponsored a Happy Hour at The Auld Dubliner across the street from the conference center for all conference attendees. This was a chance for attendees to mingle with other coders to get to know one another by networking and a chance to get to know Contexo Media employees in a relaxed environment.
On Monday, the keynote presentation by Fred Schafer was inspirational and humorous, allowing the audience to get out of their seats and get their blood going by moving with him. The breakout sessions for that day included such sessions as Straight-Up Radiology Coding, EMR Documentation Challenges and Cardiac Catheterization Coding.
On Tuesday, the day started with a general session from Deborah Grider – President and CEO of the AAPC – on how ICD-10 Will Change Everything. During this session, Ms. Grider spoke of the immense changes to specialties such as orthopedics and obstetrics, some of the changes in specific chapters of ICD-10-CM, and how all of the changes will dramatically affect physician practices and hospitals alike. Sessions included High Risk Pregnancy, Meaningful Use Certification, and the Anatomy Expo, presented by specialty physicians, which proved to be fun and informative, leaning about the anatomy, diseases, and disease processes and some of the related procedures of each specialty. The member appreciation lunch announced the 100,000 member of the AAPC as the Coder of the Year, along with the Networker of the Year.
On Wednesday, the last day of the conference, in addition to the general session presented by David Connolly, JD, the AAPC’s National Advisory Board president Terry Leone passed his responsibility on to Cynthia Stewart – the new AAPC National Advisory Board President – who shared her vision of the future. Sessions included Advanced Surgical Auditing and Maternity Care – Conception to Post Partum, wrapping up what was a hugely successful conference in Long Beach, California.
While the public’s confidence on the economy continues to spiral downward, the demand for health care in this country continues to grow. According to the National Coalition on Health Care, the U.S. spent approximately 17% of its GDP in 2008 on health care costs. That percentage is expected to jump to 20% by 2017.
Doctors’ offices will soon be flooded by 78 million baby boomers as they become eligible for retirement. To handle this sudden influx, physicians will have little time for the day-to-day business operations of their practices and must focus primarily on patient care. As a result, medical billing companies are seeing increased demand for their services.
More and more doctors are outsourcing services such as medical billing and coding to subcontractors, and these companies are reaping the benefits. However, due to the slow pace at which insurance companies approve patient claims, it takes a while for doctors to be paid, and in turn it takes even longer for them to pay their vendors, especially medical billing companies. According to the American Medical Billing Association, it takes an average of 90 days for paper claims to be reimbursed. Granted the advent of an electronic claims system has lowered reimbursement times, it is still problematic for medical billing companies to wait to be paid.
For example, an insured patient goes in to see a doctor. The cost of the visit is $100. Because the patient is covered for this visit, the doctor must make a claim to the insurance company and wait an indefinite amount of time for the claim to be approved. If the claim is not approved, the doctor must send more details of the visit. This increased lag creates a problem for doctors who would rather spend their time with patients than following up on claims. Therefore, doctors turn to experts and subcontract medical billing companies to handle these issues.
Whether they are start-ups trying to gain a market share of this ever-increasing business, or a veteran company trying to beat the slow-payments system of insurance companies and doctors, a viable and flexible option exists for companies called medical billing factoring.
Medical billing factoring is converting the accounts receivable of a business into cash by selling outstanding invoices to a ‘factor’ for a discount. Accounts receivable factoring gives the medical billing business immediate access to cash so that it can manage its operations more efficiently.
Instead of waiting months to be paid by doctors’ offices, medical billing companies can use factoring services to get cash now to pay for their employees and ongoing business expenses. They can also use the money to expand their businesses, such as hiring and training new employees or purchasing new equipment, in a time when the healthcare industry demands these companies more than ever.
Doctors need all the time they can get to provide care for their increased number of patients. While the amount of work has increased and the payments remain slow, outsourcing medical billing duties gives doctors more time with patients. By factoring their receivables, medical billing companies do not have to wait to be paid and can continue expanding their businesses in a market that is favorable towards this niche.
According to the ADVANCE Perspective HIM Blog, the American Academy of Professional Coders, a trade association dedicated to serving the medical coding industry, recently created an ICD-10 resource site in preparation for the government’s mandated ICD-10 changeover in October 2013.
ICD-10 is expected to affect all heathcare professionals, not just the administrative medical coders and medical billing staff.
Among the key features include:
An ICD-10 code conversion tool allowing users to translate an ICD-9 code to ICD-10 instantly;
ICD-10 news and articles from industry experts helping prepare for implementation;
Two interactive floor plan tools that show how ICD-10 affects all aspects of a practice or health plan; and
An online application used to track and graphically measure the ICD-10 implementation progress.
For further information about ICD-10 implementation, please visit the AAPC ICD-10 site.