The service's efficiency, combined with the practice's EMR and paperless operation, allows West Ashley to run with 2.5 FTEs per physician — one FTE fewer than the Medical Group Management Association's average of 3.5 FTEs per physician. Gastright estimates the practice saves 0.5 FTE per physician — a practice total of 1.5 FTEs — by using Companion Direct. If those employees earn $10 an hour, the practice can save $30,000 annually on salaries alone.

"With a payer such as Blue Cross of South Carolina, we have a four-weekday turnaround time on the claim. There's not only instant recognition if a claim is acceptable, but we also are paid promptly," says Gastright. "Consequently, our accounts receivable beyond 120 days is less than 2 percent. We basically turn claims around in 30 days."

Old-fashioned paper still has a role, however. For Tomko, paper claims fill gaps where electronic claims can't be used — for instance, when secondary claims can't be captured electronically.

Practice manager Martin Bodzin filed electronic claims for several years. Now, he has returned to paper claims for the Dayton, Ohio, practice he manages for solo practitioner Rivka Sanders. Bodzin is no Luddite. He designed an EMR that works with an off-the-shelf database he customized. The system lets Sanders do charting and billing simultaneously. Bodzin manages the claims from his position as general manager — and sole employee — of the small practice.

"I don't believe in going to high-tech just for the sake of technology itself," Bodzin says. "When we looked at the costs with time and effort, we found it was cheaper and just as easy to file with paper."

Appeal it or forget it?

Despite improved efforts up-front, you still must decide how you'll handle the inevitable claims that will bounce back. Start by tracking which claims cause problems. Then, set guidelines for what you will appeal. Woodcock notes that if, for instance, you're billing Medicaid for a low-level office visit, for which the agency will reimburse you $23 to $28, you can lose money if you rebill the claim.

"If you know every denial costs $25, don't appeal anything under $10," Woodcock suggests. "Use a cost-benefit analysis to decide: if it's over $10 but under $100, do you make a second [appeal] effort? Maybe not. But if it's a $5,000 claim, you might appeal it till the cows come home."

When you can't get paid for a claim, or when appealing a denial would mean digging your practice into the red, it might be time to write off the claim. Most practices first turn to a secondary payer: the patient.

"I don't really believe in writing things off. We turn the responsibility over to the patient," says Tomko. "If they don't respond within 60 days, it goes to the collection agency. The market is tough; expenses are high. We have to have receipts in the door." Before you turn over all your old A/R balances, check the rules. For instance, Tomko says, in Maryland, only accounts over $20 can be sent to collections.

Bodzin says his practice notifies new patients that they bear ultimate responsibility for paying for their care; then he bills patients if the practice hasn't received payment within 60 days from date of service.

Gastright, too, says his practice has occasional write-offs, most often when patients don't cover their responsibilities. "Occasionally somebody isn't eligible, and we provide service; that's the luck of the draw," he says.

Whatever you do, have some patience. According to Woodcock, it can take six months to see results from cleaning up your claims process, simply because carriers take 60 to 90 days to pay a claim. But the resulting lack of headaches — and the boost to your business accounts — is worth it.   

Susanna Donato can be reached via editor@physicianspractice.com. 

This article originally appeared in the April 2003 issue of Physicians Practice.