MEDICAL BILLING BLOG

What is the best medical billing fee structure for old AR clean-up?

You may be faced with multiple fee options if you are considering seeking help with your old AR clean-up and denial management. Many medical billing companies will charge a very high percentage of what they collect (over 35%). Others may offer a fixed fee approach. Which is best for your practice?

As is so often the case, the best answer lies between these two options. One of the weaknesses of a high percentage of collections with no fixed fee is that the medical billing company doing the old AR clean-up has no incentive to pursue smaller claims. It will cost well over $20 for each old claim worked by the medical billing company. This means that any claim under $100 will not provide much profit for the company and will likely be ignored. This is an issue because many of the older AR claims are these smaller claims.

The fixed fee option, however, has its own problems. The problem with a pure fixed fee pricing model is that the medical billing company has no real incentive to collect as much money as it can. The company is being paid a flat fee; if it can write off a claim it will cost the company less but, of course, cost the medical practice more in lost revnue. In addition, under a fixed fee model, the medical billing company has an incentive to take a long time to work the old AR - the longer they work, the more they make.

A hybrid model of a moderate fixed fee and a moderate percentage of collections provides the best of both worlds. The fixed fee component makes it economical for the medical billing company to pursue smaller claims. The percentage of collection means the medical billing company will profit from collecting every dollar that it can (and thus does not have an incentive to just write-off claims).

Proper alignment of incentives between the practice and the medical billing company cleaning up your Old AR is critical. A mixed pricing model provides the alignment of incentives that is required for the best overall results for the practice.

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Copyright 2010 by Carl Mays II. Carl is President and CEO of ClaimCare Medical Billing Service, one of the largest medical billing companies in the United States.

Medical billing offices need a helping hand every now and then

Medical billing offices / Managers often find themselves in need of extra "helping hands" for a variety of reasons including:

• The loss of a key employee (either temporarily or permanently);
• A backlog of old AR that has become so large that no one is quite sure how to tackle the problem;
• Growth of the Practice, but the billing staff is the same size.
• Expanding / opening a new office location;
• Problems with current billing system or installing new EMR/system that causes extra work.

In these types of situations it is critical that the medical billing office / Manager and the medical Practice become willing to seek help - even if it's just temporary, short-term help.  Trying to claw out from under these situations without outside help can be overwhelming.   And the strongest billing offices / Managers know there is no shame (in fact there is great wisdom) in asking for a temporary "helping hand" during crunch times.

If you are considering seeking extra / temporary help, what type of help should you pursue?   You want help that meets the following important standards:

1. The extra help can be given quickly, but does not require a long-term commitment on your part. In other words, when you are out from under the immediate crisis, you can stop using the outside resources / medical billing company.
2. The extra help team members are true experts in the medical billing industry and they have access to the most current billing codes and requirements. In other words, don't hire "Aunt Matilda who does medical billing part-time out of her home office now and then for a little extra cash."
3. The "extra hands" help causes minimal interruption or risk to your current cash flow and processes. For example, it is very high risk to use "pinch hitters" to do your up-front data entry work. If they fail, then your cash flow for the Practice will stop. On the other hand, applying "extra hands" on older claims and AR minimizes risk and complications because this work requires less system access, does not jeopardize the new claims that are going out daily, and requires less familiarity with the nuances of the Practice's operations.
4. The help provides EXTRA value beyond the immediate crisis, and gives you the best bang for your buck. True medical billing Experts bring a fresh eye and state-of-the-art knowledge about the billing industry. They can give you honest feedback and keen insights about your Practice that enable you to improve collections, test out new technology to assist your staff, and provide a general level of relief that will allow the Practice to avoid future pitfalls and crises.

The best way to achieve these objectives is to find an outside company who will work the AR that is over 60 days old.  This will:

• Allow the Practice's current billing staff to keep getting current claims out the door fast and clean to ensure the Practice's revenue remains steady and strong;
• Pin-point the source of much lost cash flow and give relief to the Physician's greatest point of aggravation - old AR. No medical billing Manager ever gets in trouble with the physician because all of the AR is under 60 days!! But many a medical billing office / Manager had to face the wrath of a Physician because a large backlog of old AR has started to build up in the 120+ bucket.
• Give the Practice / Office Manager a lot of valuable feedback on the specific issues that led to the old / high AR in the first place. Are certain codes or payers causing issues? Is there a credentialing or system set-up issue? Are there denials that are not being properly pursued? Are there denials being left on the books that will never pay and are simply creating "false AR?" The feedback from the Old AR clean-up can be invaluable in helping the Practice and the medical billing Manager make changes to prevent the old AR from ever becoming a problem again after it is cleaned up.
• Demonstrate new reports and follow-up tools to make it easier for the billing office / Manager to do their job well. Most of the medical billing companies who provide Old AR clean-up services also utilize sophisticated reports and follow-up tools that are valuable to the Practice. Seeing firsthand how these tools work may provide insights into how the Practice could leverage them to prevent future crises.

In summary, knowing when to seek help and being strategic in the type of help you employ can turn a potential disaster in to a triumph that will delight physicians, provide immediate relief for the medical billing office / Manager and set the Practice up for on-going medical billing and collections success.

Follow this link to see an example of an AR clean-up and denial management service that can assist medical billing offices in crisis.

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Copyright 2010 by Carl Mays II. Carl is President and CEO of ClaimCare Medical Billing Service, one of the largest medical billing companies in the United States.

What Payers Don't Want You To Know About Clean Claim Laws

 Each state has passed a Clean Claim Law. The level of benefit these laws provide to medical practices and facilities starts on the low end with states such as South Dakota that provide little more than a slap on the insurance company's wrist to states such as Texas which levy substantial financial penalties on tardy payers.

The basic idea of the law is that a payer has to respond to a clean claim within a set time (usually around 30 days for electronic claims). In order to utilize the clean claim law effectively you must have a tracking system built into your medical billing process that flags:

• To which insurance companies does your state's clean claim law apply (some payers are exempt);
• The date your practice initially submits each medical claim;
• Events that stop the clean claim clock (e.g., an information request from the payer),
• When your practice has taken actions in response to payer requests;
• The date when you received the payer's final adjudication decision.

The idea of systematically tracking all of this information may be daunting, but with a smart system design it is possible and most definitely a worthwhile undertaking. After submitting a few Clean Claim law violation reports you will see your claims pay faster. I have seen situations where payers have actually called just to assure the practice that claims will be quickly processed.

One way to quickly get started using the clean claim law is to run a trial on a payer that you feel consistently takes more than 30 days to ajudicates claims. Find a small number of large claims for this payer that have gone past 30 days and then conduct a trial run with those claims. This will allow you to learn the fundamentals of how to submit and monitor complaints and see the results of your complaints.

Copyright 2006 by ClaimCare Medical Billing Services

Medical Billing Services and Revenue Cycle Denial Management

Revenue Cycle Denial Management has become a universal and often abused term in medical billing. Some use the term to describe a means of addressing claims denied for medical necessity. Others use the term to describe how some information is tracked for a specific payer, set of procedures or a place of service.  Still others try to use it to describe what they do daily in the physician's office.

 

If you were to ask your billing department or a current medical billing company (1) what is their Revenue Cycle Denial Management strategy; (2) what process do they use to methodically measure it and (3) what are the quantifiable results of it, you would most likely get a lot of blank stares.

 

Few billing departments appreciate the value a good Revenue Cycle Denial Management system can bring to a medical practice. A robust Revenue Cycle Denial Management system provides methodical management data for the billing process; the data are then used to (a) increase and (b) accelerate cash flow. The system accomplishes this needed service by tracking, quantifying, and reporting on every claim billed for which any payer denied the service. The reporting should be comprehensive, tracking all denials (not just selected denials). If used properly, the system can reduce first-time claim denials by over 50 percent. In our experience we've come across many practices with no way of monitoring if the payer is denying their claims at excessive or unwarranted rates, or even for what reason. These practices are probably losing 10-20 percent of their total revenue.

What is typically missing from troubled billing operations is the lack of the management-reporting expertise needed to extract the data in a concise and meaningful way coupled with a lack of methodical, measured billing process needed to correct mistakes.

 

ClaimCare Medical Billing Services' comprehensive Revenue Cycle Denial Management system has two main purposes. First, to provide feedback on why and how many claims are not being paid on the first submission to the respective payers. The second is to fix these issues. ClaimCare Medical Billing Services' Revenue Cycle Denial Management software databases have been designed to track, quantify, and report on all denials for all payers. The standard output tracks, by payer, the number of claims denied and the reason for the denials. This is coupled with our Dashboard reporting for a quick visual management. With these unique reports our team can easily identify which payers are inappropriately denying claims; we can also compare these payers to their peers for proper trending and follow-up. The unique output for each practice allows us to refine the payer specific rules and build our own rules to prevent future payer denials. Payers that are chronic violators are pursued to resolve how and when they intend to process and pay outstanding claims. If the issues persist, there may be grounds to charge penalties stipulated by the Clean Claim Law (to the extent it exists in the state). Only by quantifying and analyzing the problem can you discover how to improve on the process. A real Revenue Cycle Denial Management system gives you a way to optimize and accelerate cash flow. ClaimCare Medical Billing Services' system has a proven track record of improving revenues between 5-20 percent.

You can take advantage of ClaimCare's Denial Management success with our Old AR Recovery service.

Copyright 2007 by Carl Mays II

Medical Billing Services: Good ones fight rising healthcare costs

Everyone hears about the fact that much of the cost of healthcare is driven by the expense of processing and adjudicating claims. What is often not mentioned is what is truly at the root of these expenses - payers that are attempting to withhold from physicians the money they are due. I mentioned in an earlier entry how ClaimCare Medical Billing Services constantly sees payers systematically underpaying claims. We also see claims that have been properly submitted and for which we have proof the claim was accepted simply "lost" by payers and the claims have to be resubmitted (sometimes multiple times) in order to secure payment. Now, here is a shocking fact - over 50% of claims that are "lost" or are underpaid are never pursued by physicians (and therefore the payers never have to pay the money they owe to the physician or facility). This means that payers have a powerful economic incentive to play games and make the medical billing process complicated. Here is another shocking fact - it costs the average insurance company about $25 each time a representative has to get on the phone and discuss a lost or underpaid claim with a medical billing specialist. A final key fact is that most payers "grade" each provider. The lower a provider's grade (i.e., a D versus an A) the more likely the payers are to lose or under pay the provider's claims. Why? Because these providers have no track record of catching these problems and pursuing them.

So, how do all of these fact tie into my title about Medical Billing Services fighting the rising cost of healthcare? If each and every underpaid or lost claim is pursued (which is what Medical Billing Services should do because they have the scale to have groups of people that do nothing but follow-up on such claims) then eventually payers will lose all economic incentive to play games and make the billing process complicated and expensive. Imagine if every physician pursued every claim until it was paid in full. The payers would see their cost to adjudicate the claims rise and they would see their payments to providers rise because the lost/under paid claim games would no longer prevent providers from ultimately being paid. This combination would lead to each physician ultimately being paid quickly and without fuss because the insurance companies would lose significant money by playing games ($25 per extra phone call generated by the games) and they would gain nothing since payments would only be delayed, not avoided.

There is lots of talk about the dream system where claim adjudication happens in real time and physicians immediately receive their reimbursements. Such a system will never happen until the economic incentive payers have to maintain a difficult, complicated and veiled system are removed. This, is what medical billing companies can do by doggedly pursuing each claim and insuring that every one of their clients is rated an "A" by all of their payers.

For more information visit ClaimCare Medical Billing Services or go to the Contact Us page. 

Copyright 2008 by Carl Mays II

Texas Medical Billing Tip of the Day - Use the Clean Claim law

Texas has one of the most helpful and powerful clean claim laws in the United States. The penalties for a clean claim violation can go all the way up to the payer being required to pay billed charges; that's right billed charges. The basic idea of the law is that a payer has to respond to a clean claim within 30 days (45 days if it is not submitted electronically). In order to utilize the clean claim law effectively you must have a tracking system built into your medical billing process that flags:

1. Which payers are subject to the clean a claim law (not all are),
2. When a claim was submitted,
3. When a request for information was received from the payer (if you receive one then it stops the 30 day clock until you respond),
4. When your office responded to the information request (this starts the 30 day clock again), and
5. When you received a payment or denial.

The design and implementation of the system and reporting can challenging, but it will pay huge dividends in terms of the penalties from payers and in the way in which you will make payers take notice of your claims next time. At ClaimCare Medical Billing Services we have used our clean claim tracking system extensively and have seen significant rewards for our clients - especially our Texas Medical Billing clients. We have actually received calls from managers at some of our payers that have assured us they would process our claims quickly and asked if we would please stop submitting complaints.

If you would like more information on this please fill out ClaimCare's Contact Us page.

Copyright 2008 by Carl Mays II