When envisioning a successful medical practice, you may think about quality of care and practitioners' levels of expertise. Billing is not an aspect of the business that usually comes to mind. However, for medical practices, there are few parts of the operations more crucial than billing.
"Without revenue, a medical practice cannot earn a profit and stay operational," said Andria Jacobs, a registered nurse and certified professional in healthcare quality who is the chief operating officer of PCG Software. "A medical practice, while focused on the well-being and care of patients, is a business and must be profitable. Billing, collections and accounts receivable management are the lifeblood of a successful practice."
A healthy revenue cycle is imperative to sustain the costly work of providing healthcare, but it's not always easy to make sure your practice is paid for the services it has rendered. It can be particularly challenging because healthcare providers are often reimbursed by third-party payers after the patient has already come and gone, and there is a lag between rendering services and receiving payment.
Moreover, insurance claims might be rejected or denied for various reasons. Human error plays a major role in many of these denials; up to 42% of claims are coded incorrectly, and 19% lack appropriate documentation.
"Every claim denial will cost the practice between $25 to $45 to rebill and collect," Jacobs said. "Many practices just write off the underpaid or denied dollars, costing the practice revenue losses on an institutionalized basis."
So, what are the best ways your practice can minimize losses and ensure timely and complete payments for the work you've already done? Business News Daily sought out some expert advice on how you can minimize errors and streamline your billing procedures.
1. Understand the billing process.
You may feel overwhelmed and even a little intimidated by billing and collections. However, it's important to start by understanding the process, even if someone else will ultimately be responsible for the day-to-day management of it. By taking ownership of this part of your business, you can ensure timely claims submission and avoid fraudulent activities.
The billing process begins with verifying insurance eligibility and collecting the patient portion (copayments, coinsurance and deductibles) at the time of service, said Nancy Rowe, owner and operator of Practice Provider Corp. Physicians provide coders with procedure and diagnosis codes for each patient visit.
"Coders verify the proper code selection and add appropriate modifiers to further describe treatment," said Rowe. "Spending time with physicians to learn how they practice and then educate them on the nuances of coding helps to streamline and optimize billing."
Coded claims are then entered into practice management software, uploaded to a clearinghouse and submitted to individual insurance carriers. The insurers either accept the claim for payment or reject it. Payments are received from the carriers, and any balances are transferred to either a secondary carrier or the patient. All rejected, unpaid or partially paid claims should be promptly handled.
"The overall goal of the claims submission process and accounts receivable management is to realize the shortest collection period possible," Jacobs said. "Minimizing the outstanding days until payment ... promotes a clear revenue stream."
2. Look at the big picture.
Once you understand how billing works, it's time to examine the broader issues that can impact your billing process and identify the approach that works best for your practice.
"Many practices often only look at overall payments or number of claims denied, but they don't go deeper to do an assessment of how efficient and effective their billing process is," said Erica Woodward Strick, director of RCM operations at Modernizing Medicine. "Doing a thorough analysis of billing key performance indicators (KPIs), benchmarking to industry standards and creating a revenue management strategy are essential to the long-term success of a medical practice."
Looking at the big picture also includes staying current on industry and regulatory trends and understanding how they can impact the health of your medical practice's revenue cycle, according to Strick.
3. Invest in staff training.
Once you create a standardized and measurable billing process, you need properly and thoroughly trained staff members to implement it. It's never wise to skimp on this step or assume that only the staffer who submits the claims needs training.
"A healthy revenue cycle begins with a well-trained front desk staff who have the tools available to check patient eligibility and benefits, and the ability to collect patient balances at the time of service," said Rowe.
It's also helpful to create a flowchart of the exact steps to billing and collections, according to Craig Ferreira, chairman and CEO of Survival Strategies.
"Clearly delineate the actions that are taken at each step of the flowchart," Ferreira said. "Put enough of the right staff in place to do each job, and train, train, train them."
4. Pay attention to details when submitting claims.
Claims that are not filed correctly will not be paid, so take the time to ensure that all codes are correct and all requirements have been met.
"While HIPAA and the ACA regulations have codified the adoption of national standards for electronic healthcare transactions, code sets and unique health identifiers, there still remains millions of rules and edits that are to be considered when billing each claim line," said Jacobs.
"It goes without saying that complete information is essential," said Cindy Ehnes, executive vice president of COPE Health Solutions. "Sending a claim to the right payer is critical, although in a delegated payer environment, it may be difficult to know which payer, risk-bearing medical group or health plan is responsible for payment. That can result in delay as claims ping-pong back and forth."
It's also key to engage in regular claims scrubbing, which involves identifying and performing corrections for errors in billing codes, according to Stephen Dart, vice president of engineering at AdvancedMD.
"The process generates cleaner claims, a reduction in denials and improved payer communication," Dart said. "By getting it right from the outset and enabling multiple types of edits to the claim before it is submitted providers, [a practice] will be more efficient and find greater success with reimbursement."
5. Include the patient in the process.
Creating the best possible patient experience can have a positive impact on your billing and collections process. Medical practices that establish sound relationships and create open lines of communication with patients have a better chance of collecting accurate insurer information and of patients understanding their financial responsibilities.
"Many patients and their families never review their Evidence of Coverage and do not understand the financial implications of the copays and insurance terms like 'deductible' or 'total out-of-pocket expenses,'" said Jacobs.
As a result, the onus is often on the medical practice's staff to clearly explain fees and personal financial obligations. Since patients are shouldering more of the financial burden of their healthcare, it's more important than ever to verify their insurance benefits and provide cost information before rendering any services.
"Having this information upfront creates transparency and trust between the medical practice staff and patient, which can help avoid costly billing errors later," said Strick.
It's also important to have a good rapport with patients when dealing with insurance company rejections and following up on denials.
"Sometimes the best advocate is the member or policyholder of the insurance policy," said Sunni Patterson, president of RMK Holdings Inc. "Three-way calls usually result in a positive outcome and are highly effective."
6. Use technology to its full potential.
Technology can play a central role in streamlining the billing process. At its most basic, technology can give patients multiple ways to pay through seamless digital transactions. Newer technology, such as advanced medical software, can connect the various departments of a medical practice and create a more continuous flow of information between doctors, staff and administrators.
"Some medical software systems can also help automate steps in the billing process, such as suggesting medical codes and checking medical claims against common insurance payer rules for reimbursement," explained Strick.
"By automating as many steps as possible within the practice's integrated clinical and administrative workflows, the provider will save staff hours and avoid unwanted surprises in the form of denials, ineligibility or larger-than-expected patient responsibility," said Dart.
Dart pointed out that this includes using electronic medical records, automating demographic and health plan verification checks, using claims scrubbing technology, and incorporating patient self-service applications, such as portal functionality, e-statements, digital communication access points and integrated credit card payments.
7. Know your carriers well, and your contracts even better.
By maintaining consistent and open channels of communication with patients' insurance carriers, you are laying the groundwork for straightforward resolution of problems when they do arise.
"Having a health plan contact that is responsible for resolving practice issues is very helpful, and a caring and collegial relationship is worth developing," said Jacobs.
Jacobs also recommends that a practice's management team regularly review the charges, payments and collections of its top 10 carriers.
"These are the contracts that generate the most revenue, and any problems have a greater influence on overall revenue," Jacobs said.
By staying on top of the latest healthcare laws, federal and state regulations, and insurer contracts, you also position yourself to advocate for your practice and your patients when faced with denials.
"Take off those rose-colored glasses and realize what you are dealing with," Ferreira said. "Know your contracts and hold your payers to them. When talking with insurance companies, get a reference number for the phone call. Don't be afraid to go up the chain of command."
8. Consider employing a reliable billing company.
If you find yourself lagging behind in billing or failing to keep up with current regulations, you may want to consider outsourcing all or part of your billing to third-party specialists.
"I recommend using a billing company with size and clout that is willing to be a 'squeaky wheel' that gets the grease – and the cash," Ehnes said. "Find a company that is a real advocate for those who actually heal patients."
Medical billing companies are up to date on billing regulations and can be an ideal resource for smaller practices to ensure proper claims submission. They also free up your staff to focus on work more central to your core mission.
"By offloading some of the tedious tasks, like following up with insurance payers on outstanding claims or printing and mailing patient statements, to a company that specializes in medical billing management, practices can save staff time and resources," Strick said.
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