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On average, 30 percent of all claims are denied - and half of those are never resubmitted. Is it time to put your billing process through the paces?
Focus on every aspect to boost collections and reduce denials. You'll be glad you did.
Managing the timeliness and efficiency of each stage in the billing process is critical to the success of your practice. Many practices consider only one stage of the cycle - focusing mostly on what happens after claims submission - but if you don't scrutinize all of it, the complexity of the process can overwhelm staffers, slow collections, and increase your denials. Here's how to manage the key stages in your billing cycle effectively.
Although most physicians focus on problems that occur after a claim has been submitted, it's what happens before submission that's often the most problematic.
Many practices (especially surgical offices) have a predictable end-of-the-month influx of charges. Deborah Walker Keegan, a physician revenue cycle consultant, tells me it's not uncommon at many practices for a third of the month's charges to be keyed in the last few days of the month. Although staff usually manages to get all the charges keyed by the month's close, clogging so many at the end leads to costly staff overtime, increased errors, and the neglecting of other important work, such as claims follow-up.
To get your practice's charges in on time, follow these steps:
In addition to timeliness, managing the charge lag offers the ability for a practice to more effectively monitor for lost charges. If physicians don't turn in their charges, the monitoring process for lost ones becomes laborious and often unsuccessful. In fact, managing partner Richard Honaker of Family Medicine Associates of Texas refers to charge tickets as "$100 bills" to emphasize the importance to the physicians in his practice of turning them in.
Once the charges are in your billing system, it's time to submit them to the party responsible for payment. Before you do, however, make sure that the charges are accurate.
Combs personally reviews a detailed worksheet of all services being billed before the charges are posted and converted to claims. Although the review takes time, "this helps us reduce errors and corrections, therefore keeping the cost of submitting claims to a minimum." Larger practices can direct the charge review to follow-up staff, often organized by payer. The Medicare account representative, for example, is responsible for reviewing the charges before they are released, as well as working any follow-up that may result from a problem with the account. Someone else might do the same with Blue Cross. Although this may add a day to your cycle on the front end, getting it right the first time pays off.
Once your practice is sure the charges are keyed correctly, submit the claims to the appropriate payer or the statements to the appropriate patient. Evaluate your system configuration as it relates to these submissions:
Payment and denial posting
As checks and correspondence come into your practice, handle them immediately. Most staffers are trained to post checks by the end of the day but correspondence often gets put aside. Since payers and patients offer the reasons for nonpayment on their correspondence, this information needs to be attended to in a timely manner. Otherwise, follow-up becomes a "shot in the dark" exercise.
Direct correspondence to the appropriate person (e.g., a Medicare denial should be given to the billing staff handling Medicare) within a day's time. If possible, key the reason for the denial (e.g., "patient not eligible on the date of service") into your system so that those working on the account have access to the information and denial trends can be monitored.
At her office, Combs records the reasons for denials during the payment-posting process, and her staff is required to work denied claims within five days of the receipt of the denial. She wisely notes, "Working denied claims within five days ... improves our collection success rate. This is especially true if the denied claim rests in responsibility being transferred to the patient. Remaining current ... allows the patient to receive a bill that is recent, rather than asking them to pay a bill from a visit six months ago."
It's not unusual for an account to sit open for months and months without any staff attention. Either the payer has not responded to the claim you submitted, or the patient has ignored your notices of his financial responsibility. For these open accounts, it's important to have a protocol for timely evaluation. Otherwise the account will continue to age; not only will your payment be delayed, but the likelihood for collection diminishes every day.
Set your practice management system to alert your billing staff of these no-activity accounts every 30 to 60 days. The information may be in the form of a written report, or modern systems can deliver it via electronic work files. Either way, set parameters to deliver the activity by level of importance. Some employees have a difficult time prioritizing their work. Focus your staff on working the highest-dollar accounts first.
Meanwhile, don't inundate them with other work, or the open accounts will get overlooked. Walker Keegan recalls a billing office where everyone was responsible for all tasks - working open accounts, submitting secondary claims, working refunds, analyzing reimbursement, and answering telephone calls. The open accounts never made it to the top of the list, and hadn't been addressed in months.
Indeed, the open account cycle is widely considered to be the most overlooked task in a billing office. Why? Because it requires information to be retrieved. Written or electronic information about payments and denials are sent to your billing office, but a payer who has lost a claim never writes or calls. If the open account cycle is not part of your practice's process, you may be overlooking a very important collections opportunity.
Some sophisticated practices time the open account reports to marry with the payers' adjudication cycles. For example, Medicare pays in an average of 14 days if you submit electronically. Run your open accounts report for Medicare, therefore, about 16 to 18 days from the date of claims submission. Catch opportunities for clarification or resubmission early, and you're more likely to meet filing deadlines, as well as transfer responsibility to the appropriate party in the case of a problem registration.
Alabama Allergy and Asthma Center offers an extra incentive to working open accounts in a timely manner. Combs periodically provides gift certificates for working the entire list of open accounts each week, or a percentage of collections if a collections goal is exceeded.
Millaway uses the open-claims process to enforce the state's full fee law. "If we are not paid within 45 days," she notes, "the insurance company owes us full billed charges." Even before the state made prompt payment a law, Family Medicine Associates of Texas integrated the full-fee-after-45-days rule into the language on all of its contracts.
Managing every stage in the billing cycle provides structure to a complex process. By evaluating and improving every billing cycle, your practice can focus resources on a successful outcome.
Elizabeth Woodcock, MBA, FACMPE, CPC, is a professional speaker and consultant specializing in practice management. The author of Physicians Practice Pearls, Elizabeth has focused on medical group operations and revenue cycle management for more than 13 years. She can be reached via email@example.com.
This article originally appeared in the October 2005 issue of Physicians Practice.