What do adjustment codes do on the payers’ explanations of benefits? These codes tell the payee – the provider why all the money charged was not collected. Perhaps it is a contractual adjustment (difference between what was charged and what the contracted rate with the payer is). Perhaps there is patient liability. There might be adjustment codes telling explaining there was a problem in the process, such as a prior authorization was not obtained, or a test was run on a diagnosis that wasn’t covered. It is important to routinely ask your billing company what the top codes are – and what they are doing – or what YOU should do to eliminate these issues.
The adjustments should be categorized into “Process Related,” “Coding Related,” and “Patient Liability.” From these categories, you should examine whether there is a payer error (not abiding by contracted rates or agreements). If there is payer error – this need to be handled quickly as many times there is a timeline on how long you have to correct a claim.
The more providers, number of payers, and volume play a factor in being able to adequately evaluate your payers’ performance (or the billing company performance). The charge less the adjustment should equal the allowed fee schedule amount. Using the lookup functions in spreadsheets and conditional formatting a quick visual audit can be done. I can use functions to look at the payer calculated allowable amount from the electronic remits and cross reference a fee schedule coloring the cell red if there is any variance from the contractual fee schedule.
Doing a quick check monthly on your most utilized procedure codes is an easy way to make sure you are capturing all the revenue owed to you. FinanSynergy helps its clients with this analysis and can help your practice as well. Please contact Katie Fergus 515.635.5531 or Katie@FinanSynergy.com to assist your practice build a resource to help Audit your Adjustments. Hold your billing staff and your payers accountable – it’s worth it.