Don't work harder. Just collect what you're owed.
When their pay drops and costs rise, physicians usually try to save the day by cramming more patients into it.
Don't do it.
Instead, focus your attention on collecting what you've earned. The single biggest management issue in most medical practices isn't high overhead or managed-care contracts. It's collections. Physicians are not bringing in what they are owed.
Ironically, trying to improve the financial picture by seeing more patients only makes this problem worse. Seeing more patients overtaxes the physicians and the staff, they tend to make more mistakes, and the collection rate drops further.
There is an old adage in business: "That which gets watched, gets managed." Frankly, most physicians do not do a good job of watching the store. And physician involvement is essential for improvement in collections.
Here is what you need to do to get paid correctly and fully.
Too many practices hire lots of low-level people to do the bulk of the work and a few skilled people to fix their errors. But you're better off with quality people throughout the office who are continually trained to minimize errors.
And I'm not just talking about those folks in the back office crunching claims. Receptionists are the most commonly neglected members of the billing team. Many physicians still think receptionists just hand out clipboards with forms for patients to fill out.
Consequently, they pay the lowest wage required to get a warm body in the chair. In fact, a bad receptionist can easily cost a practice $50,000 per year in uncollected revenue. How?
Receptionists affect collections by:
If you have someone at your front desk who can't handle these tasks, you are cutting into your income. Back-office staff can't fill in the gaps. Imagine, for example, how much better it is to collect from patients on the day of service rather than sending them five collection letters.
If you need high quality front-desk staff to boost collections, you'd better believe you also need great clerical staff, billing staff, and other support staff. Don't try to slide by with the cheapest people you can find. An investment in your staff is one that will pay off.
Give them resources
To completely and accurately accomplish their tasks, staff need resources -- some of which are surprisingly simple. Here's a good starting list:
Written collection policies -- I was visiting a practice with three receptionists who had three different ideas about collecting. When patients showed up without a copayment, one said, "It's OK, we'll bill you." The second said, "Just mail it when you get home." The third was stricter and rescheduled a patient who told her he didn't have his copay.
Ask yourself, in your practice, are receptionists supposed to make appointments for patients who owe three past copayments? Does the practice have a billing fee added to charges when the patient portion of charges is not made at the time of service?
You can set whatever policies you like, but set them. Put them in writing and train staff to use them consistently. Your collections shouldn't depend on the whim of your receptionist.
Include procedures for implementing the policies. For example, if the practice's policy is to see patients who do not have today's copayment, but to add a $10 billing fee, the procedure might be: Have staff explain the policy to patients, give them a self-addressed envelope and emphasize that they must mail the payment within 24 hours to avoid the $10 billing fee.
While you're at it, create a financial policy handout for patients. (See the sample outline in the Tools area of www.PhysiciansPractice.com.)
Written carrier guidelines -- When I'm consulting with practices, I often stand in the reception area and overhear receptionists ask patients about their insurance carrier. Unfortunately, it's usually a very short exchange. The receptionist asks; the patient answers "Cigna" -- or some other large carrier. Without clarifying which plan, the receptionist sets up the patient for Cigna PPO when the patient's benefits may actually be through Cigna POS. The claim to Cigna PPO will be denied.
Give staff the tools they need to understand where to bill and whether a referral or authorization is needed if the practice is going to get paid.
Technology -- Every practice needs a good billing system. Note that this does not mean an expensive billing system. In fact, most $50,000 to $100,000 billing systems are more difficult to use than cheaper programs and lack critical functions, like a good report writer.
Invest in a system that supports practice tasks and get complete training. But don't leave it there. You also need to integrate the system into the practice. For example, receptionists need access to patient account data if they are going to make appointments and collect patient charges. If a patient's account is so far in arrears that the practice has sent it to collections, the software should make that status clear so that patient isn't scheduled for another appointment -- and receptionists should be trained to look for that information.
Training -- A high quality staff is made up of intelligent, motivated, and conscientious people. Such people readily accept and, in fact, want training. Training includes all the knowledge they need to know to do their job, and a basic understanding of how other practice functions operate. All too often, hard-working, conscientious people create problems or inefficiencies in other functions simply because no one ever explained how the entire process works. All they know is their piece of it.
Training also means periodically refreshing knowledge, updating knowledge whenever changes occur, and training needed to implement improvements.
Remember, training must be repeated to reinforce learning. It's time well spent that will pay dividends to the practice in the form of higher collected revenues and improved staff morale.
Track critical indicators
You'll be able to see the benefits of your improved collections efforts by looking at key indicators. You should track:
The final reports help you identify problem areas in your collection process -- and let you tell if they are getting worse or better.
Once you know what your most common collection problems are as revealed by the key indicators you can pinpoint the person, function, procedure, or contract that is the source of the problem. Then, work to correct or eliminate it.
For example, if you are getting lots of denials because HCFA 1500 forms are incomplete or inaccurate, spend some time training receptionists to get the most complete data and get it accurately into the billing system. You might even set up an incentive program, rewarding front- and back-office staff if these denials drop.
If you have to write off lots of claims denied because the patient is not listed as a beneficiary by the payer, review and improve your verification process. Look into online verification, for example.
Involve people in discussions about problems, developing concepts for improvements, and planning changes.
Establish small teams. If there is a problem seeing patients before the required referral has arrived, put the referral clerk, a receptionist, and a billing person on a team to figure out the procedures to ensure that referrals are properly secured and verify that the referral has been issued two days before a patient's appointment.
After tracking denials and fixing the major problems, do not assume that you are finished. New problems will crop up and old ones will return. Take the time to make certain that collections do not decline and keep making improvements. Continually track the critical indicators. Make them part of the routine reports reviewed by physicians and management.
Do what you can to boost collections, and you may be able to get to a happier bottom line without resorting to drive-through office visits.
Paul Angotti, BS, is president of Management Design, LLC, a company that helps physicians to establish and maintain financial and operational control of their practices. He can be reached at firstname.lastname@example.org or via email@example.com.
This article originally appeared in the March 2004 issue of Physicians Practice.