Follow these three steps to revive billing, collections
Having the right people and processes is crucial
By Tom Hardy, FACMPE
S & S Business Services Inc.
Akron, OH
As physicians deal with the many challenges, regulations, and bureaucratic requirements impacting their practices, they may be overlooking the most basic component of a successful business — effectively billing and collecting for the services rendered.
Many practices have obvious indications of ineffective billing and collection such as excessive dollars tied up in accounts receivable or a high incidence of denied claims from third-party payers. Those and other warning signs should trigger action by the physician or staff responsible for the practice billing, but often they do not.
Many physicians have assumed a fatalistic position about reimbursement. They believe that insurance companies dictate the level and timing of payments, and there is little, if anything, they or their staff can do about it. Those doctors rationalize that any problems with the billings and collections are the fault of third-party payers. Usually, the practice staff, frustrated with the bureaucracy they must deal with in practice billing, also adopt this reasoning. No one assumes responsibility for properly billing and collecting in the practice.
Another common issue is a lack of knowledge within the practice to establish an effective billing and collection process. Physicians justifiably complain that they are not adequately trained in business, and in reality, many physicians do not have an interest in the business side of their practice. Most employees are also not knowledgeable about billing and collecting procedures. The coding of procedures, mandated in preparing an invoice, requires specific knowledge for each specialty, with requirements and/or codes themselves often changing each year.
An unrewarding job
Finally, an unfortunate fact is that the staff responsible for billing in a medical practice are often the least recognized or rewarded employees. Interaction with the physician is often focused on the poor results of collection efforts. Equally unrewarding is the need to clarify coding or chart documentation with the physician, who often reacts angrily at the interruption from the medical side of the practice. Patients, who often have kind words for the receptionists or nurses, rarely respond positively to communication with the billing staff. All of this is compounded by the low pay levels, despite the importance of these individuals to the success of the practice.
Corrective actions
There are three fundamental steps to identify and determine corrective actions for practice billing and collection problems.
• The first step involves a complete review of the billing and collection process and audit of a sample of the chart notes, billings, and payment transactions for individual patient encounters. Outlining the billing process will demonstrate the fragmentation that can often create problems.
Important elements of the process are completed by different people who are unaware of the impact that errors in their activities can have on the process as a whole. The receptionist registers new patients, where accuracy in recording demographic and insurance coverage information is essential to properly billing the patient and their insurance. The physician or other clinical personnel complete the coding, where errors in diagnostic or procedural coding can lead to denied insurance claims. The personnel in the billing office who generate the primary bill may not be involved in billing secondary insurance or processing collections, creating a situation where charges for services not paid in the initial insurance reimbursement may be overlooked in the follow-up process.
Diagramming the billing process provides insight into the complexity and the chain of responsibility. As process shortfalls are identified, corrective action can be implemented in the right places.
The audit of the entire billing transaction must include the chart notes, SuperBill, claim form filed, and the explanation of benefits that represent the same patient visit. Only by completing those audits on a sample of patient visits can the billing process be analyzed from start to finish. Shortfalls can be identified through the audit and, referring to the process diagram above, corrective actions can be effectively instituted. Often, it is beneficial to seek outside expertise to complete this important first step, both to ensure objectivity in the analysis and to utilize expertise in this complex effort.
• The second step requires hiring, training, and supporting the right people in positions involving practice billings. When a position vacancy occurs, hire individuals who have demonstrated thoroughness and responsibility in previous jobs, preferably including medical billing experience. Cross-train individuals involved in the billing process so that they understand the relationship of their activities with the rest of the process. For example, having a receptionist process insurance payments for a week will quickly teach them the importance of gathering patient and insurance information correctly. Ensure that the SuperBill includes the most commonly used diagnosis and procedure codes, that they are up-to-date, and that the clinical personnel and physicians are trained in proper coding. An outside expert or training course in coding may be required to complete this step.
Recognize the importance of the billing process and stress it to all practice personnel. Pay good billing people top salaries, and make an effort to acknowledge their contribution to the success of the practice.
• The third step is to develop ongoing monitoring of the billing process, regular audits of billing transactions, and ongoing training for the physicians and staff. Maintaining a strong revenue stream is an ongoing effort, and a one-time consultation or internal review cannot be expected to permanently ensure this dynamic process will function smoothly.
There is no question that the economics of the current health care environment create hardships for medical practices. Reimbursement for services has been decreased, and the costs of complying with billing and collection requirements have increased. However, the basic business principle of maximizing revenues received for services rendered cannot be abandoned. Insurance companies will not correct the billing mistakes made in their favor by a medical practice. It is up to the practice to ensure all steps are being taken to properly bill and collect the revenues to which it is entitled.
[Editor’s note: Tom Hardy is a manager in the medical practice group at S & S Business Services Inc. in Akron, OH. He is a Fellow in the American College of Medical Practice Executives and has spent the past 25 years in group practice management and consulting. He can be contacted at: S & S Business Services, 4040 Embassy Parkway, Suite 100, Akron, OH 44333. Telephone (888) 668-6501.]
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