The Good, the Bad, and the Ugly THIRD-PARTY BILLING COMPANY PAYMENT MODELS or more than sixty years, third-party billing companies have supported physicians, specialty groups, and F other clinicians who provide billable medical services. First arriving on the scene in the 1950s, changes to the billing company industry have tracked those of the health care providers they support.1 As health insurance coverage became more prevalent, the need for specialized billing support grew. With the passage of Medicare and Medicaid in 1965, the number of patients covered by insurance greatly expanded, thereby establishing yet another set of coverage and billing rules for health care providers to follow. Today, billing companies provide billing guidance and navigate claims through an ever-increasingly complex system of rules governed by private insurance payors and governmental health plans. in addition to billing services, many third-party billing companies also provide coding, credentialing, and administrative support. Third-party billing companies vary in size from small operations where a biller works out of his or her home to publicly-traded companies with revenues of $400 million a year.2 notably, this is one of the few remaining industries where a sole operator can conceivably open a new billing service, operate, and thrive. in recent years, a number of major changes to the health care statutory and regulatory requirements have taken place. coupled with the government’s renewed health care fraud enforcement efforts, these changes have significantly impacted both providers and third-party billing companies. The purpose of this article is to examine a number of the payment challenges now facing third-party billing companies. The Role of Third-Party Billing Companies has Long Interested OIG The unique role played by third-party billing companies has not gone unnoticed by the government. notably, the department of Health and Human Services, office of inspector general (oig) issued its suggested “Compliance Program Guidance for Third-Party Medical Billing Companies” early in the agency’s push for healthcare compliance. only guidance for clinical laboratories, hospitals, and home health agencies was published prior to addressing third-party biller concerns.3 As oig noted almost 15 years ago, when discussing a number of areas of special concern: “. . . The oig has a longstanding concern that percentage billing arrangements may increase the risk of upcoding and similar abusive billing practices. See, e.g., oig Ad. op. 98– 1 (1998) and oig Ad. op. 98–4 (1998).4 Unfortunately, neither of the advisory opinions referenced by oig dealt with a straightforward percentage billing scenario. nevertheless, the government has consistently expressed its concern regarding percentage-based billing arrangements. While most third-party billing companies are aware of this concern, their contracts with physicians and other health care providers have continued to base their compensation on a percentage of collections (or in some instances, the amount of gross billings filed on behalf of a provider). Finally, it is important to keep in mind that oig has included “Billing Service companies” in its annual work plan three times in recent years. This further highlights the fact that oig has consistently chosen to dedicate audit and investigative resources to review business relationships between billing companies and the health care providers they serve. By Robert Liles, Esq. 16 HBMA Billing • noveMBer.deceMBer.2013
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