(This post has been updated to reflect PPP loan forgiveness changes passed by Congress in June 2020)
On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, an unprecedented $2.2 trillion assistance package intended to deliver financial support to both individuals and businesses impacted by the public health crisis resulting from the COVID-19 pandemic. While the law contains over 800 pages of relief provisions, one of the most important pieces for holistic practices was the $350 billion allocated to the Paycheck Protection Program (PPP).
What are PPP Loans?
In an effort to shore up small businesses, Congress authorized the Small Business Administration (SBA) to give out 100% federally-backed loans to cover payroll and other business expenses. The size of these loans was to be determined by the amount of time the business remained in operation throughout the COVID-19 crisis (which the CARES Act designated as February 15-June 30). Businesses that remained open could receive a maximum loan of 250% of their monthly average payroll costs. The best news, however, was that PPP loans would be forgiven provided businesses used them for their intended purposes and met certain requirements (more on that in a moment).
Although backed by the federal government, businesses had to apply for PPP loans through their regular bank, which caused a number of bottlenecks that prevented money from being distributed quickly. The program also burned through its initial funding within weeks, forcing Congress to pass another bill to provide another $310 billion to borrowers. In total, banks issued around 4.3 million PPP loans totaling $500 billion.
New SBA Guidelines for PPP Loan Forgiveness
On May 15, the SBA and the Department of the Treasury released guidelines on how borrowers could apply to have their PPP loans forgiven. While the CARES Act clearly stipulated that these loans would be forgivable under certain conditions, it left the details of how that process would be handled to the SBA. After the details were made available, however, many business owners raised concerns with Congress, which led to the passage of additional legislation in early June that made further modifications to the loan forgiveness terms.
Borrowers can request forgiveness of their PPP loan by filling out SBA Form 3508, Paycheck Protection Loan Forgiveness Application. Consisting of several sections, the first two parts of the form (PPP Loan Forgiveness Calculation Form and PPP Schedule A) must be submitted to the lender who issued the loan. In most cases, this will be whatever bank your holistic practice has an existing relationship with.
According to SBA’s guidance, there are four business cost areas that are eligible for loan forgiveness so long as they were incurred during the 24-week period (extended by Congress from the original 8-week period) following the disbursement of the PPP loan (the borrower’s “Covered Period”):
- Payroll costs.
- Business mortgage interest payments.
- Business rent or lease payments.
- Business utility payments.
Although the guidelines originally required payroll costs to make up 75% of the forgivable amount, Congress subsequently reduced that amount to 60% and extended the repayment period for unforgiven debt from two years to five.
Payroll Costs
The borrower may deduct payroll costs that were either “paid” or “incurred” during the Covered Period. This distinction allows for some flexibility, as some payroll costs may be incurred before the end of the Covered Period, but not paid until afterward. The total amount of forgivable cash compensation given to each employee during the Covered Period cannot exceed $15,385 (or a $100,000 annual salary prorated over the Covered Period). Non-cash compensation, such as health insurance or retirement contributions, given to employees is not subject to this pro-rated limit.
Business Mortgage Interest Payments
Any interest payments made during the Covered Period on mortgage obligations involving real or personal property incurred before February 15, 2020 are eligible for forgiveness.
Business Rent or Lease Payments
Any rent or lease payments made during the Covered Period on real or personal property directly related to the business due to agreements established prior to February 15, 2020 are eligible for forgiveness.
Business Utility Payments
Any utility payments involving the use of electricity, gas, water, transportation, telephone service, or internet access made during the Covered Period directly related to the business due to service agreements in place before February 15, 2020 are eligible for forgiveness.
Keep in mind that non-payroll costs cannot exceed 25% of the total forgivable amount.
CARES Act Workforce Reduction Guidelines
One of the key goals of the CARES Act was to ensure that full-time employees were not laid off due to the economic downturn caused by the COVID-19 pandemic. In order to qualify for loan forgiveness, employers had to maintain the size of their workforce during the Covered Period. The new SBA guidance measures this with a calculation called full-time equivalency (FTE).
A borrower calculates FTE by dividing the average number of hours paid per week to each employee by 40 and rounds the total to the nearest tenth. Alternatively, they can simply assign a 1.0 for employees who work 40 hours or more each week and 0.5 for employees who work less than 40 hours. If the employer’s average FTE during the Coverage Period is lower than the average FTE during past reference periods, it may not be eligible for forgiveness of all PPP funds. Any employee compensation reductions of 25 percent or greater could also limit loan forgiveness.
The latest SBA guidelines do stipulate a few exceptions to this requirement, however. Any FTE reductions that resulted from an unsuccessful, good faith attempt to rehire an employee are not counted against the employer. Also, any employees who were fired for cause, voluntarily resigned, or voluntarily requested and received a reduction in hours are exempted from the calculation.
There is also a “Safe Harbor” provision that exempts any borrower from losing out on loan forgiveness due to FTE reduction provided they meet the following conditions:
- The borrower reduced FTE levels between February 15 and April 26, 2020, and
- The borrower restored FTE levels to the February 15 level by no later than December 31, 2020.
PPP Loans and Your Holistic Practice
Since PPP funds were distributed through banks, many businesses had difficulty securing loans even when they met the established requirements. This was especially difficult for small businesses like holistic care providers, who often found themselves losing out to much larger companies. For practices that were fortunate enough to obtain a PPP loan, the newly released SBA guidelines offer an easy-to-follow roadmap to getting the loan forgiven so they can get back to treating patients as businesses begin to reopen.
Holistic Billing Services is ready to help these practices resume operations and relieve the pressure of billing and coding so they can tend to their patients in these difficult times. To find out how we can get your acupuncture, massage therapy, or chiropractic practice back up to speed, contact our experienced team today.
Operating a successful acupuncture practice can be a rewarding and worthwhile endeavor that makes a real difference in the lives of patients. Unfortunately, it can also be quite a challenge thanks to confusion over how to bill for services effectively. The ins and outs of medical coding are complex and even a minor error can cause a claim to be denied by insurance providers.
What Are Billable Units?
Like other therapy-based practices, acupuncture practices bill their services according to Current Procedural Terminology (CPT) codes. Each code is considered a billable unit used to track what treatments have been administered. Some of these codes are service-based, representing a specific billing amount for a specific treatment. It doesn’t matter how much time it takes for this treatment to be administered. For billing and coding purposes, a service-based code has the same unit value (in this case, one unit), regardless of whether it takes twenty minutes or two hours to administer treatment (although each code has an average expected treatment time). Only one unit of service-based codes can be billed at any one time.
Many acupuncture codes, however, are time-based or multiple-unit codes. This means that each code is billed according to 15-minute increments. Most insurance providers follow Medicare guidelines when it comes to measuring this time. Often referred to as the “Medicare 8 Minute Rule” or the “Rule of Eights,” Medicare’s standards for outpatient therapy services require practices to deliver direct, one-on-one therapy for at least eight minutes to receive reimbursement for a time-based CPT code.
Medicare calculates billable units by dividing the total minutes of direct therapy time by 15 and then rounding the remaining value up or down according to the Medicare 8 Minute Rule. For instance, if a time-based acupuncture treatment (such as ICD-10 code 97811 for subsequent acupuncture) takes 20 minutes to administer, the practice would only be able to bill for one unit (the remainder of 5 minutes would not qualify for an additional unit). If the treatment took 23 minutes, however, it would be able to bill for two units (the remainder of 8 minutes does qualify for an additional unit).
Why Is Accurately Calculating Billable Units Essential for Your Acupuncture Practice?
Since most acupuncture treatments involve direct, one-on-one therapy, they are classified as time-based codes. That means that an acupuncture practice needs to be very diligent and precise when it comes to calculating billable units. Failing to accurately document the amount of treatment time could result in rejected claims or far lower reimbursements than the practice should receive.
A typical 60-minute acupuncture treatment, for example, consists of four distinct billing units:
- 1 Unit of Initial Acupuncture (Code 97810): This treatment consists of the initial insertion of needles, which obviously requires one-on-one contact with the patient. The initial insertion is expected to take 15 minutes.
- 3 Units of Subsequent Acupuncture (Code 97811): This code covers any follow-up one-on-one, direct treatment by the acupuncturist after the initial treatment.
Where some practices get into trouble is when they fail to bill for multiple units. In the above scenario, the practice could mistakenly submit this claim:
- Initial Acupuncture 97810
- Acupuncture: 15 min 97811
when it should be submitting this claim:
- Initial Acupuncture 97810
- 1 unit
- Acupuncture: 15 min 97811
- 3 units
Failing to calculate billable units correctly can cause acupuncture practices to miss out on collecting revenue for treatments they’ve provided. In this case, the practice would have missed out on two units of code 97811. Spread over multiple patients, it’s easy to see how these oversights could add up quickly and have a devastating impact on a practice’s revenue cycle management.
3 Best Practices for Calculating Billable Units
1. Know Your Acupuncture Codes
One of the best ways to ensure billable units are being calculated accurately is to become very familiar with the most frequently used acupuncture treatment codes. This goes beyond the most basic codes for initial care to include services like evaluation management codes and more specific modalities. Every practice needs to know which codes can be billed multiple times to ensure that it’s being accurately reimbursed for its services.
2. Track Your Time and Treatments Accurately
Simply knowing which codes to use and which ones can be billed as multiple units is important, but that knowledge won’t be of much use if a practice doesn’t keep detailed and accurate records about patient treatments. Acupuncture practitioners need to document how much time they spend delivering direct, one-on-one care throughout the day.
This is especially important when it comes to auditing purposes, as they need to make sure they’re not overestimating how much time they’ve spent administering treatments. Technically, a provider cannot deliver more than four billable units of care in an hour because each unit is broken into 15-minute increments. If a practice seems to be billing more units than its staff can actually deliver, it could be inviting unwelcome scrutiny by external auditors.
3. Partner With an Acupuncture Billing Service
Delivering quality can be difficult when a practice also has to dedicate time to managing billing insurance providers for reimbursements. Since there are only so many hours in the day, most acupuncture physicians want to treat as many patients as possible in that time, which leaves little opportunity to handle the sometimes tedious paperwork of billing and coding. That’s why partnering with an experienced holistic billing service can be extremely beneficial.
Outsourcing the hassle of billing and coding to a trusted partner allows an acupuncture practice to see more patients and deliver better care without having to worry about whether or not they’re calculating the correct number of billable units.
Holistic Billing Services Can Help
Holistic Billing offers a variety of billing services for acupuncture, massage, and other integrated healthcare practices. In addition to our extensive experience with insurance billing, we understand the unique needs of these practices and what sets them apart from other medical practices.
Our certified team of coders, MBAs, CPAs, and IT professionals can help you get your claims reimbursed quickly and set up a reporting dashboard that makes it easier than ever for you to get a comprehensive view of your business. Contact us today to tell us all about your practice’s unique needs.
Operating a healthcare practice of any kind, whether it’s a western-style medical office or a holistic health service, is a challenging and complicated undertaking. As if providing quality care to patients wasn’t difficult enough, there are many other factors practices must take into account if they want to be successful. Learning the ins and outs of health insurance coverage, for instance, is an ongoing process that changes every year as provider policies are updated. Implementing processes and systems for collecting revenue is also essential, especially if many of the practice’s health services aren’t covered by insurance.
Most of these issues fall under the broad responsibilities of healthcare management and healthcare administration. While these terms are quite common, there is a lot of confusion around them because they are often used interchangeably despite the fact that they do have specific meanings.
The Difference Between Healthcare Administration and Healthcare Management
What is Healthcare Management?
As the term “management” might suggest, this area refers primarily to how the business aspects of a healthcare or holistic practice are handled. The primary focus of healthcare management is to develop a business plan that meets the practice’s specific goals and then execute on that plan using a variety of management, negotiation, and leadership techniques. Most healthcare management professionals hold an MBA or have a background in accounting or facilities management. They are typically responsible for budget management, organizational policies, standards of patient care, marketing, compliance, and various aspects of healthcare law.
What is Healthcare Administration?
While healthcare management emphasizes the business side of a practice, healthcare administration is more focused on overseeing and coordinating the staff within a practice or department. The typical healthcare administrator supports the policies and processes that help medical personnel deliver effective care that impacts patients. While they may at times be responsible for meeting regulatory requirements that are associated with healthcare management, healthcare administrators primarily support, direct, and encourage employees to ensure that they are able to provide the best care. Crucially, they are often considered to be healthcare professionals, and it is common for these roles to be filled by physicians, nurses, or other public health specialists.
Healthcare Administration vs Healthcare Management: Who Handles Medical Billing?
There are a lot of similarities between these roles, and the distinctions are made even more confusing by healthcare organizations that use the terms interchangeably. In general, however, the primary difference is that healthcare managers are responsible for the operation of a facility as a whole while healthcare administrators oversee the operations of specific departments and medical staff.
So which of these roles is responsible for medical billing?
Perhaps predictably, it depends on the specific practice.
Larger healthcare practices and medical facilities generally have dedicated medical billers who are responsible for coding medical services and then filing and submitting claims. Some organizations classify this role as a management position while others consider it administrative. In most cases, medical billers are not required to have any medical training, which would suggest that they’re more on the management side. However, since medical billers must work closely with both medical staff and patients, their role fits more naturally within the framework of healthcare administration.
For smaller healthcare practices, the distinction is far less important because the lines between healthcare management and healthcare administration are not clearly drawn. These practices don’t have the revenue or patient volume to justify the existence of additional office personnel. In many cases, both managerial and administrative are handled by only a few (or even just one) people, in addition to many other tasks they’re responsible for. This is especially true of holistic practices, where the clinician may be responsible for every aspect of their practice without any assistance from employees.
The Value of Outsourcing Holistic Billing
For many acupuncture, massage therapy, and chiropractic practices, it can be difficult to provide quality care to patients while also keeping up with all the demands of healthcare management and administration. Medical billing, in particular, can be incredibly time-intensive, not only requiring holistic practitioners to organize, file, and monitor all billing claims, but also to keep up-to-date on the latest changes to coding and to which holistic healthcare services insurance companies will agree to cover.
Partnering with an experienced medical billing provider that specializes in holistic practices can streamline an office’s operations and allow clinicians to dedicate more of their attention to their patients. While there are many medical billing services available, it’s important to find a provider that understands the unique characteristics of holistic practices and can provide the specialized support that helps these practices to be more successful.
At Holistic Billing Services, we recognize that acupuncture, massage therapy, and chiropractic practices call for a much different approach to medical billing than traditional healthcare practices. That’s why we’ve focused specifically on this growing area of medical care and have partnered with over 1,200 practices to help them improve their revenue cycle management and boost their net collections. Our convenient and secure solutions can take the hassle of insurance verifications, claims processing, and denied claims follow-ups off your hands so you can focus on what matters most: delivering quality care to your patients.
To learn more about how our team of experts can help improve your holistic billing, contact us today for a consultation.
Holistic practices face unique circumstances when it comes to medical billing due to the ever-shifting regulatory guidelines that stipulate which holistic health services are covered by insurance, and which services remain strictly out-of-pocket. With patients paying more for their own care and insurers looking for practically any reason to deny claims (and save themselves money), monitoring collections closely is critical for staying on top of a holistic practice’s financial health and insulating it from potential changes in the regulatory landscape.
What is Net Collection Rate?
A holistic practice’s net collection rate is essentially a performance metric that measures how effective the practice is at collecting all legitimate forms of payments for services, which are typically the amount owed after all insurance company adjustments are made. The net collection rate will reveal deficiencies in this process. If a practice is struggling to collect revenue due to bad debt, late filings, coding errors, or claim underpayments, it will have a low net collection rate.
Since net collection rate is directly tied to a practice’s revenue stream, it’s one of the most important performance metrics to monitor. Typically calculated on a quarterly basis, the rate represents a snapshot of financial health and efficiency. A low net collection rate should be treated as an urgent priority because it indicates that the practice has a persistent problem when it comes to gathering revenue, which could indicate an organizational inefficiency or an issue with patient relations and communication.
Calculating and Monitoring Your Holistic Practice’s Net Collection Rate
For many holistic practices, assessing net collections on a quarterly basis may not be frequent enough to identify potential fluctuations or problems before they start to eat into the practice’s revenue. Calculating and monitoring net collection rate on an ongoing basis, whether it’s monthly or every few weeks, can help the practice flag issues quickly and prevent outstanding collections from snowballing to the point where they become unmanageable.
It starts with understanding how to assess a holistic practice’s net collection rate, which involves several important steps:
- Identify the time period that you want to monitor (e.g., 90 or 120 days). Assess data from an earlier period in which the majority of claims would be closed and cleared; ~6 months back is advisable.
- Calculate total payments (from insurance companies and patients) for the designated time period.
- Calculate total charges minus approved write-offs (e.g., due to contractual reasons, bad debt, professional courtesy discounts, etc.) for the designated time period.
- Divide your calculation in step 2 by your calculation in step 3. Then multiply by 100.
- Do this consistently (e.g., every 90 days) for a period of at least one year to get the most accurate average rate.
What Should Your Net Collection Rate Be?
A 96% net collection rate is generally considered ideal across the healthcare industry, regardless of practice type. This applies to holistic practices as well. If the rate is closer to 90% (or lower), the practice is definitely leaving revenue on the table that it should otherwise be collecting.
The whole purpose of monitoring net collection rate is to identify these problems, or, to put it another way, take advantage of opportunities. A low score indicates that some issue is getting in the way of efficient payment collections. There are a few common culprits that bring down net collection rates for a holistic practice:
- Non-Paying Patients: For some reason, the practice has a high proportion of outstanding bills that it cannot collect from patients.
- Claim Denials: One or more insurance companies are consistently denying claims for holistic services.
- Unsubmitted Claims/Unbilled Patients: Claims and bills are not being sent out promptly, which has created a significant lag between point-of-service and revenue collection.
How to Improve Holistic Practice Net Collection Rate
Depending upon the source of the problem, there are a number of solutions that a holistic practice can implement to boost its net collection rate.
1. Require Up-Front Payments
One of the easiest steps to take is to collect 100% of copayments and deductibles from patients at the initial point-of-service. This ensures that no one walks out of the office with an outstanding bill and avoids the resulting hassle of collecting payments afterward, which can be just as inconvenient for the patient as it is for you or your staff. Setting up appointment reminders that inform patients they must pay for holistic services up-front is essential for making this strategy effective. If a patient is unable to cover the cost at that time, the appointment can be rescheduled or other payment options can be discussed.
2. Educate Patients
Many patients who seek holistic medical care may not understand which services their insurance will cover and which services they will be responsible for paying. This can create a great deal of confusion when it comes to billing. To avoid any surprises, either at the point-of-service or in the event of a denied claim, it’s important to educate patients about the unique nature of holistic medical services and how their specific insurance plan regards them. Providing a brochure or reference sheet can be helpful, but patients may have many questions that require more detailed explanations. Having a staff member with the expertise and resources to field these questions can help to reduce confusion about how the claims and payment process works for holistic practices.
3. Provide Payment Options
Expanding payment options requires some investment on the front-end, but it can have a major impact on net collections over time. Mailing out a billing statement and asking patients to write a check was an inefficient collection strategy 30 years ago, and it’s even less efficient today. As consumers, patients are accustomed to being able to pay for services in a variety of ways, whether it’s by credit/debit card, through an online portal, or via a mobile app. For some patients, an installment plan might be the only way they can realistically afford holistic healthcare services that aren’t covered by their insurance provider. By providing a variety of payment options, patients are far more likely to find one that suits their needs and pay their bills promptly.
4. Reassess Your Own Process
When evaluating the reasons for a low net collection rate, it’s easy to assume that the problem stems from patients not paying their bills. In many cases, however, the issue has as much to do with the way a holistic practice handles its billing. Since these offices typically don’t have as much staff support as the average healthcare practice, holistic care providers are sometimes forced to wear many different hats. That can lead to administrative tasks like preparing insurance claims or billing patients being put off in favor of much more urgent tasks.
Unfortunately, time is of the essence when it comes to revenue collections. Taking too much time to submit an insurance claim could lead to a denial, and patients may be less inclined to pay a bill promptly when it takes a long time to arrive in their mailbox. More importantly, filing an insurance claim is a very detail-oriented process, so even the slightest error could result in a claim being denied. Putting a system in place that files claims accurately and promptly (as well as bills patients consistently) is essential for any holistic practice hoping to improve its net collection rate.
Improve Your Net Collection Rate with a Holistic Billing Service
Whatever the causes of a low net collection rate, partnering with a reputable holistic billing service is one of the fastest and easiest ways to turn this key revenue metric around. An experienced billing service can overhaul the way a holistic practice prepares and submits claims to payers to minimize the rate of denials. Turning the billing process over to a third party also frees up time for office staff to focus on providing the best service and care possible. Instead of spending hours on the phones trying to collect outstanding payments, they can focus on expanding the holistic practice’s patient base and improving services to better retain the patients it already has.
Holistic Billing Services has years of experience handling coding and billing issues for holistic health providers, with a special focus on acupuncture, chiropractic, and massage practices. We understand that each practice is unique and requires a customized solution that aligns with its long-term goals. That’s why we work closely with our clients to help them set up the solutions that meet their specific needs and allow them to deliver the best holistic care possible. To find out what we can do for your holistic practice, contact our team today for a consultation.
Today’s generation of consumers is much different than it was 20 years ago (and even 5 years ago). No matter what we’re buying or who we’re engaging with, we want communication to be as quick and seamless as possible—and preferably from our mobile devices.
As a billing company focused on holistic healthcare providers, we’ve introduced our share of acupuncturists to the world of acupuncture insurance billing codes.
One of the most frequently asked questions by new and seasoned practitioners billing insurance for acupuncture. Due to the unique population, reimbursement rates and the preauthorization of patient visits most practitioners find participating in the VA’s Veterans Choice Program (VCP), and Patient-Centered Community Care (PC3) plans administered through TriWest to be highly rewarding.
Around this time every year, Holistic Billing gets swamped with calls from newly minted healthcare providers. On these calls, an all-too-frequent question is “what is necessary for accepting insurance?”. Here’s the quick answer, whether fresh-out-of-school or looking to add insurance to an existing practice, the first thing you need to do to participate with insurers is applying for your NPI.