In this era of declining reimbursement, it is well worth the investment of time and effort to shore up your billing and collections processes. One of the greatest sources of stress in a medical practice – and any type of business, for that matter – is seeing hard-earned revenue delayed or, worse, written off. Excessive delays and write-offs are a clear sign of a faulty billing function.
While it may be formally under the purview of your business office, the responsibility for supporting the billing function extends to every niche and corner of your practice. Remember that billing starts long before an unpaid balance comes to the attention of someone in your business office.
How far and wide do billing-related tasks extend? Consider provider credentialing and enrollment with insurance plans. You might not think of them as part of the billing process, but they are. Delays in obtaining provider credentialing or completing enrollment tasks will obstruct the provider’s ability to collect for his or her services. These tasks must be given top priority, starting at the time of the physician’s recruitment to the practice, and on an ongoing basis thereafter.
Here are additional tasks that will help the billing process operating more efficiently:
Read and monitor contracts. The contract your practice forges with a payer defines the framework for the relationship. It should spell out the parameters of the claims appeals process, the timeframe for recoupments and contract termination details. Start monitoring each payer contract for adherence to payment amounts, due dates, appeals processes and other matters.
Get allowables. Importantly, get the prices, commonly referred to as the allowables, for each procedure code you bill. Knowing general terms, for example, that your reimbursement is 110 percent of Medicare, simply won’t do. Consider that Medicare changes every year; knowing just one side of the equation (the payer’s Medicare multiplier) will not tell you what to expect in payments. Be specific when seeking allowable information from a payer; also ask for details about the payer’s policies for bundling edits and applying multiple procedure discounts.
Understand state laws and regulations. Your state’s insurance laws can help your efforts to recoup timely, accurate payments. All 50 states have prompt payment laws that require health plans to pay clean claims within a designated timeframe. Many states also have enacted supporting legislation, such as complying with your requests for detailed pricing information. To determine the laws applicable in your state, query your insurance commissioner’s website or your state medical society.
Get the money upfront. Optimize time-of-service collections by asking each patient for the coinsurance and unmet deductible, in addition to the copayment. At minimum, collect on balances when patients present. Use opportunities, such as reminder calls for follow-up appointments, to seek payment after the encounter. Help staff collect by offering them effective scripts, such as: “Ms. Jones, I see that you have a balance on your account. Would you like to take care of that now?” Bridging the gaps between the business office and the rest of the practice is critical to take advantage of all opportunities to collect.
Focus on accuracy. Identify insurance coverage and benefits eligibility before you see the patient – and confirm that information directly with the payer. Ideally, the process should be performed automatically for all scheduled patients. When additional services are performed during an office visit, or if the eligibility process can’t be fully automated, query the payer’s website. If coverage can’t be confirmed, contact the patient to determine if other coverage exists; if not, have a discussion with the patient about his or her financial responsibility. In addition to insurance coverage, recognize the importance of accuracy related to all billing processes. The responsibility extends from the front office (getting correct demographic information) to the clinical staff and physicians (capturing accurate charges for services provided).
Monitor denials. The denial of a claim by an insurance payer may come in many different forms, but it’s important to identify, record and take action on the denial. If denials are stacked in a staff member’s drawer, you lose the ability to divvy up work and spot trends. When denials are not tracked systematically, opportunities are lost. Jump on denials as soon as you see them. Follow an action plan to get them overturned and paid: submit medical records to prove that the service wasn’t billed as a duplicate; review documentation to determine if another, covered diagnosis was recorded, but not originally coded; or contact the patient if coverage lapsed with the payer on record.
Tighten the collections cycle. Transmitting dozens of statements for every service isn’t the key to getting paid – and it’s likely to be the source of a large bill from the U.S. Postal Service. Send statements as soon as they are due, avoiding a purely alpha-based billing cycle. Set up a cycle to submit up to four statements, followed by a collections letter that outlines your expectations and offers your phone number for the patient to call to make payment arrangements. In these final letters, give patients a timeframe, such as 15 days, and a description of what happens if their payment is not received or an alternate plan is not worked out. If a patient doesn’t respond, follow through.
After instilling your practice and staff with the spirit of improving billing performance, measure success by tracking key performance indicators. On your dashboard of indicators include the collection rate, days in receivables outstanding and aged trial balance. Watch for positive movement – an increase in payments, a decrease in receivables, and a younger trial balance.
Making efforts to improve the business office means more than just getting better processes – the true payoff is a better bottom line.
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