MEDICAL BILLING BLOG

Outsourcing medical billing to the correct medical billing company can insure that they have the same incentives as you do.

Almost all medical billing companies are paid a percentage of what they collect. This means they are only paid when you are paid. It also means the more they collect for your practice, the more they are paid. Internal medical billers, on the other hand, are almost always hourly employees. They are paid based on showing up in your office, not based upon how well they perform your medical billing or how much money they collect for your practice. This is not an alignment of incentives.

This issue, however, is often not fully understood or appreciated by many providers.  These providers frequently say: "the staff works directly for me in my office-- they are more loyal and will do a better job and I can see what they are doing".  Experience has shown, however, that this is often not true.   

I recently spoke with a partner at a busy cardiology practice.  While one of the billers was out sick, some paperwork was required and the supervisor went looking for it.  When the supervisor opened the missing biller's desk, a stack of unfiled, old claims was discovered.  It turned out about $40,000 of them were past timely filling deadlines.  They were lost.  I repeat-the practice lost $40,000!  When the biller returned from her leave, she was "sternly" reprimanded.   Let me say it one more time-she was reprimanded.  Not fired, but reprimanded.  Either way, the practice lost $40,000 in just this one instance alone. 

Why wasn't more severe action taken? Because of concerns with upsetting the billing staff and exacerbating a staffing problem that existed. The biller was moved from follow-up to the front desk where she is now being trusted to collect the critical demographic information required to properly bill claims.

This volume of missing charges should not have gone unnoticed. There should have been multiple reports that could have identified such a problem. The practice, unfortunately, did not know how to properly utilize the capabilities of the billing system and so, the required reports were never run. Proper use of a billing system requires much investment in time and training, an investment that hourly employees often do not make. This $40,000 in unbilled charges is likely a proverbial roach of this practice - in other words, for the one you see there are likely hundreds you do not.

If you select the correct billing company you can avoid nightmare situations like this. Here are some of the key elements you should seek when looking for a medical billing company:

• A fully integrated tracking system (charges by locations/provider and payments by source - lock box, office, PO Box) should be in place and you should have full visibility into the system at all times.
• Your medical billing company should reimburse your practice for what you would have been paid by the payers based on your allowable for any claims that go past timely filing for reasons within the medical billing company's control.  What this means is that you never suffer financially if the billing company drops the ball.  Try to have your billers reimburse you if they drop the ball.
• The practice should always (24 hours a day, 7 days a week) have access to the medical billing companies system. This allows the practice to see at any time exactly what is happening with their account.

Physicians are working harder for less as costs rise and reimbursements fall. This is exacerbated by selecting a medical billing approach that does not have the proper alignment of incentives to prevent disasters (such as $40,000 in unbilled charges) from occurring.

It has been said that the definition of insanity is doing things the same way and expecting different results. This certainly applies in the story outlined above. The biller that left $40,000 in charges unbilled will likely continue to cost the practice money. Just because she works for the practice does not mean she represents their best medical billing solution.

Selecting a world-class medical billing service that provides total visibility into their process and has incentives that are fully aligned with those of the practice is the most reliable road to outstanding medical billing and financial excellence.

Copyright 2008 by ClaimCare Medical Billing Services

The path from deciding to outsource medical billing to selecting your medical billing company requires a well planned selection strategy. A cornerstone of this strategy is well thought out and executed reference checks.

There are many critical stops to make in the journey towards your medical billing company selection. Reference checking is one of the most important stops along the road. There are several steps that must be taken to ensure through reference checking.

Although today's write-up is geared towards creating an effective interview guide, this is far from the only ingredient of a successful medical billing services company selection. Other critical ingredients include outlining the minimum requirements of an acceptable reference (e.g., does it need to be in your state, what specialties are acceptable, etc), deciding if you want to speak with a former client, outlining the roles of the people with whom your wish to speak (e.g., lead partner, practice administrator, day-to-day billing contact, etc), creating the interview guide, call the references, and making the final go/no-go decision.

Your interview guide will allow you and not the references to determine what topics are addressed in the reference calls. If you do not drive the calls, you may well end the process still unsure about your final decision. To kick-off the interview guide creation think about the worst things and the best things that could happen as a result of outsourcing medical billing. Keeping your mind on these best and worst cases develop questions that will help you determine where between these two extremes your potential medical billing company operates.

Narrow questions are typically much better than broad questions for reference checks. Broad questions such as "Did you billing improve after you outsourced?" will not give you specific enough data to make an informed decision when your reference checks are completed.

To insure you have the information you need at the end of the interview process use narrow questions such as "What were you days in AR before you outsourced and how did they change 3 months after you outsourced?" This gives you specific and actionable data.

Have you ever taken notes during a call and afterwards had trouble deciphering them? If you have you are not alone. A good way to combat this is to leave about a quarter of a page after each question (and sub question) to make sure you can write the answers on the same page with the questions. You have one final to-do before you start making calls. Review your questions with the following thought in mind "Will I be able to make a go no-go decision after these calls?" If not, what questions are you missing? Once you know that you have all your questions in order start scheduling your reference checks.

It is critical not to allow a good meaning but talkative reference to keep you from getting all of your questions answered. Make sure they know you have a pre-determined list of questions you need to address. Find out how long they have to speak with you and keep an eye on the clock to make sure you get all of the information you need. You should leave the door open for call backs by letting references know you may need to speak with them again.

You may find that one of your references brings up a point you had not considered. If they do, add the relevant question to the end of your interview guide and call back any individuals with whom you have already spoken to get this additional information.

Following the process outlined above will insure that you gather the factual information required to make an informed decision about your medical billing service.

Copyright 2008 by ClaimCare Medical Billing Services

Medical practices lose money every single day (often over 20 percent of their realizable income) because they are not utilizing medical billing specialists, technologies, processes and management that can compete with insurance companies.

As physicians are taking into consideration the use of medical billing services to stop the hemorrhaging of cash from their practices, they are faced with a broad range of options. On the diminutive end of the spectrum are home-based medical billers. On the opposite end of the spectrum are medical billing companies that employ hundreds of medical billers and have thousands of clients.

In thinking through the billing options available, it is essential to understand that medical billing is complicated and requires deep expertise and expansive experience. When a specialty is involved, such as cardiology billing, the requirements for success become even harder to realize. Success requires that the medical billing company have a team that is knowledgeable in the complex rules utilized by insurance companies to judge cardiologists' medical claims.

With cardiologists facing ever increasing costs they must insure that money is not being left on the table because they have a billing company that is not a cardiac billing expert. Cardiologists must also be aware that that many billing companies that claim cardio billing expertise actually outsource their cardiovascular billing work to at home billers. Situations like this are fraught with risk since the remote workers are not working in a controlled and monitored environment.

A key battle ground in the struggle to collect all of the money due a cardiologist is appealing denied claims and answering extremely specific and technical questions about procedures and diagnoses. Success In this arena requires significant experience, the kind that is only gained from serving many cardiologists for many years.

A company that does not encompass a wide range of cardiovascular billing experience will find it difficult to track underpayments since multiple procedure rules and cardiovascular procedures have significantly more complicated contractual adjustments than a typical family doctor or internist's claims. In addition, the billing software and system design of a generalist billing company will often be insufficient for the more complicated requirements of reporting and insurance follow-up required in billing for cardiovascular practices.

The cardiology-driven difficulties of medical billing encompass patient billing also. A cardiologist's patient balance process is more challenging because most of the balances are quite sizeable. Coupling this with the difficulties of explaining to a patient their complicated Explanation Of Benefits and the cardiovascular terminology on their bills drives the need for patient collection specialists that have a strong expertise in cardiac billing.  If patients are not handles with care then cardiologists will see their patient collections fall and their patient complains rise - not a good combination.

To avoid all these billing related pitfalls cardiologists need to utilize specialized cardiovascular billing services. It is not advisable for an internist to perform heart surgery, similarly someone without training in surgical coding and surgical billing is not qualified to offer reliable billing services for cardiologists.

Copyright 2008 by ClaimCare Medical Billing Services

 With the correct set of non-traditional billing tools and programs you can drive down the initial working capital needs of a new or existing medical practice by 90% . These tools are quite unique to ClaimCare and go well beyond a pure medical billing service or an in-house billing department.

All of these tools will have a positive operational impact on how you think about staffing and/or cash flow management/financing in your practice. If these tools are implemented when the practice opens its doors it could dramatically lower working capital requirements and make the practice cash flow positive extraordinarily fast.

1. ClaimCare patient checkout tool (Bring in the bulk of the patient responsibility - about 20% of practice revenue - in the day the doors open and lower staffing requirements at the front desk) - With this tool the practice can substantially increase cash flow quickly by collecting patient balances (not just the co-pay of $20 but the co-insurance which can add up substantially more than a co-pay). This will have a huge cash flow impact, since with this tool the bulk of the patient balances can be collected before the patient leaves the office instead of 60 to 90 days after the visit. In addition, since the tool automates insurance verification it can reduce the work load requirements of the front desk (and allow you to have fewer staff members).
2. Vendor Instant Payment Program - (A free 60 day bridge loan to help minimize working capital needs for the first two months of the practice) This is another program that could help a lot with working capital needs - and best of all it is actually free. With this program all of your vendors are paid within 24 hours of an invoice being approved. As long as the practice repays ClaimCare within 60 days there is no charge for the service. If the practice pays within 30 days they actually get a discount off the bill. This works because ClaimCare negotiates a fast pay discount with the vendors. If we are paid back by the practice within 30 days we share the discount with the practice. If we are paid between 31 and 60 days we keep the discount. As you can see, in the early days of a practice this can give you a 60 day free float on vendor payments. Once you are out of the start-up mode this program will allow you to lower your vendor costs.
3. Equipment servicing contracts - (Lower the cost of maintenance contracts) As the practice buys their equipment they can save a substantial amount on the maintenance contracts through our leasing service program. This program has a great track record and basically self-insures the maintenance agreements. With this approach we are able to save about 20 to 25% off equipment maintenance agreements. This can really add up for a medical practice. This basically applies to any piece of equipment that plugs into the wall.
4. EMR -(Start paperless without the upfront investment in either an EMR or paper medical record storage system) With our EMR offering we can get a practice on an EMR right out of the gate without any upfront cost. This can save you money and improve operations since you will not need to spend the money on typically paper medical record supplies and will, of course, be able to see the benefits from an EMR with the big price tag.

Combining all of this with a world-class billing solution provides a powerful set of tools for starting a medical practice with much less working capital and lower cost.

Copyright 2008 by Carl Mays II

 No matter what technology you deploy or the strength of your process, superior medical billing ultimately relies upon a strong billing staff. There are four key elements to creating a world-class billing team:

1) Deploy a systematic approach to and dedicated resources for obtaining and developing strong employees: As was mentioned above, great medical billing requires great medical billers - no matter what system you have. Finding these individuals typically requires resources dedicated to identifying and screening potential billers for your team. The process should include multiple levels of testing and should reflect the importance of the position. These people will determine if you have cash to pay your bills and yourself.

The leading billing organizations train to develop desired quality.  Junior staff members must pass demanding training programs-junior team members are developed into billers, capable of following the measured and monitored billing process.  In addition, staff is trained throughout the year in latest payer rules, follow-up techniques and compliance guidelines.  A dedicated Compliance Officer is responsible for all additional HIPAA and OIG training.

The best staff is retained; weak staff released.  The billing organization's staff is evaluated every year to assure proper development and progress.  Evaluations are based on tangible, measurable targets and quality indicators. Best performers are properly rewarded and the lowest 10% of performers are asked to leave. This should be done methodically in an effort to continuously improve the quality of billing staff.

2) Specialize the billing team: The top billing organizations' billing team is composed of dedicated specialists in demographic data entry, charge posting, payment posting, insurance follow up, and patient collections.   Each position is designed to excel in its role and is properly supervised and incentivized.

3) Supply your billing team with strong data driven analysis: This rings back to the "You can't manage what you do not measure" message. Your team cannot systematically improve their performance or your billing without in-depth measurements of how billers behave and how the billing process is working.

4) Motivate your billing team: Utilize an OIG approved compensation system for the billing team. Aligning their interest with those of the practice is a huge source of billing improvement.

If you follow these guidelines you can assemble, develop and retain a world-call medical billing team. The results will be well worth the efforts of assembling the team.

Copyright 2008 by ClaimCare Medical Billing Services

Bad debt is on the rise according to a 2008 survey from Transunion. This survey reported that almost 80% of the hospitals responding indicated bad debt growth of between 6 and 20 percent in the past 20 months.

Other key survey findings include:

• Consumer Directed Healthcare Plans are a source of concern for hospital administrators. Almost 80% believe they will be a significant source of additional bad debt by the end of 2010.
• Hospital executives are spending a lot of time worrying about patient collection issues. Improving patient collections was the number one priority for over 40% of executives. Close to 20% have focusing on lowering bad debt as their top goal.

It is there therefore supremely important to collect well from the patients.  Clinics and practices need every tool available (basic and advanced) to streamline what is otherwise a very labor-intensive task:

• Better use of on-line electronic payment tools. The latest tools can make it easy for you to accept practically any form of payment on-line and for patients to pay in a self-serve manner.
• Have more than one credit-card reader if you're processing a lot of patients at the same time. If possible, install a card reader with a built-in check scanner to convert a paper check into an electronic one, debiting the patient's account that much faster.
• Develop and rigorously follow a policy concerning patients that cannot pay co-pays (and other prearranged payments) on the day of service. Will you tell them they need to reschedule? Will you call and collect payments before they arrive? If you see patients that cannot pay on the day of service then make it easy for them to pay you after the fact. Do not wait for the claim to adjudicate to ask for them to send the co-pay. Give them a patient statement showing the co-pay balance due before they leave the office. Include a pre-addressed payment envelope.
• Use a tiered approach to patient collections and match the collection effort not with the patient balance but with the expected payment. Credit Cards use this technique through the use of credit score. They know that a $2,000 balance on a consumer with a credit score with 720 is worth more to them than a $3,000 balance on a consumer with a score of 600. You can use this approach by looking at patients past payment patterns, healthcare credit scores (there are services that provide these) and/or employment status.
• Use a monthly bonus system for employees that collect patient payments in the office. Make the amount meaningful and the metrics clear and easy to track.

The tips and techniques above can help protect you from the growing specter of bad debt.

Copyright 2008. Carl Mays II

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

One of the most important things in billing is to create and follow a very structured plan that can be measured each step of the way. Remember, if it cannot be measured and monitored it cannot be improved!

Clean claim submission can reduce average days in AR to less than 45 days

The leading medical billing services operations utilize scrubbers that ensure your claims are clean before they are submitted to payers. These scrubs accelerate the speed of collections by avoiding denials and delays. They also increase collections by minimizing the volume of "re-work" and allowing billing staff to focus their efforts on pursuing true collections improvement opportunities and not simply resubmitting claims that should have been paid the first time. As a result of these scrubbers, over 90% of claims submitted are paid upon first submission. These "scrubbers" include:

• Basic mechanical scrubber that assures that all claim fields have been properly filled with formatted data (social security number with 9 digits, date of birth etc), the NPI is in a proper field, there is a referring physician if needed, etc.
• Scrubber that checks coding, bundling, and procedure information versus local Medicare and CCI rules. This scrub assures better coding, identifies overlooked procedures or codes.

The truly great medical billing specialists can rely on medical billing specific know-how and business intelligence created over time through work with many medical practices and facilities in the given payer relevant geographic area.

• Dynamic Proprietary Rule scrubber that checks for optimal coding and documentation versus the particular payer or plan's rules. This scrub assures that each claim is optimized for clean submission. When the payer or plan's rules change or when the billing office detects a systemic issue they can update the scrubber to filter and fix problems before claims go out. These specialized scrubbers can make a significant collections difference.

At ClaimCare Medical Billing Services we have found that these actions can decrease the medical practice's collections cycle by up to 40-50 days. This is why you need to insure this critical step is being completed no matter who is doing your Medical Billing.

Copyright 2008 by Carl Mays II

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

If you make the decision to outsource medical billing, then make sure your medical billing company compares your payments to your allowables. It goes without saying, that if you do billing in-house the comparison still should be done. One of the advantages a Medical Billing Service has is that it sees payment information and patterns across many clients for many payers. This allows medical billing services that regularly and systematically compare payments to contractual allowables to spot patterns that a single practice might miss. One that is seen at ClaimCare Medical Billing Services on a regular basis is the systematic underpayment of claims by payers. As we look across multiple clients we will see the exact same CPTs being underpaid by the same amount by the same payer in a given month across all of our clients. The following month we will see the same payer switch to underpaying a different set of CPTs. These under payments are not huge (5 to 10 percent) but they add up quickly to big dollars for a medical practice. The combination of switching the codes being underpaid from month-to-month and keeping the underpayment amount "under the radar" can make this difficult for an individual practice to spot. It is also difficult for a Medical Billing Service to spot if they are not comparing your payments to your contracted rates. At ClaimCare we have found that this single action (comparison of payments to allowables) can increase a medical practice's collections by 5 to 10 percent. This is why you need to insure this critical step is being completed no matter who is doing your Medical Billing.

If you would like to learn more please visit ClaimCare's Contact Us page. 

Copyright 2008 by Carl Mays II