The Power of Medical Payment Software

November 5, 2014

Payment software could boost revenue and improve efficiencies at your practice. Here's how to get on board.

Prior to implementing a practice management (PM) system that automated its billing operations, the staff at Tri-County Eye Physicians and Surgeons in Southampton, Pa., often waited weeks before learning that a claim had been denied due to mismatched diagnosis and procedure codes. Since going electronic, the practice has not only eliminated that wait but prevented errors from occurring in the first place.

"We know if a claim would get denied before it goes out the door," says Vivien Werner, information systems analyst at Tri-County Eye, a 12-physician practice with a second office in New Britain, Pa. "Our claims are going out cleaner and our payments are coming back faster."

Most practices have been concentrating on getting EHRs up and running in order to qualify for CMS incentive payments for meeting meaningful use objectives. With the Stage 1 reporting deadline now passed, many practices are shifting their priorities.

"Over the past year, our clients were focusing on clinical applications but now we're cycling back to business applications," says Bradley M. Boyd, vice president of Culbert Healthcare Solutions, a healthcare management and information technology consulting firm based in Woburn, Mass. "Now those practices are looking at the benefits of using a billing system to go with their EHR."

Purchasing and implementing a practice management system to automate billing and other business operations can be costly and time-consuming for small to mid-size practices but the investment eventually pays off in increased efficiency and revenue. According to the AMA, the average practice can cut its claim submission costs alone by more than 55 percent by switching to electronic filing, while automating prior authorizations can reduce transactions costs by upwards of 80 percent.

"The practice management system defines how your practice works with itself," says Derek Kosiorek, principal consultant specializing in information technology with the Medical Group Management Association. "It affects every part of your office and defines your work flows."

Kosiorek and other consultants and practice managers offered the following advice on selecting the best system for your practice and taking advantage of the features that can help boost efficiency and revenue.

Choosing a system

If you already have an EHR, find out if your vendor also offers a PM product, experts say. Although interfacing PM and EHR systems can work, it's easier to have everything under one umbrella.

"With interfaces, the systems still talk to each other but there are limitations," says Lynn M. Anderanin, senior director of coding compliance and education at consulting firm Healthcare Information Services in Park Ridge, Ill. "When the products are from the same vendor, you can pull transactions from the EHR into the practice management system automatically but with two products we have to use another interface or middleman to accomplish the same thing."

Premier Dermatology in Joliet, Ill, for example, purchased an EHR system from e-MDs last July and has plans to install the PM portion this summer rather than stay with its current billing system.

"We looked at dermatology-specific systems without a practice management component but we decided that having an integrated system was a key issue for us," says Corky Bellile, senior administrator and chief operating office at Premier, which has six offices and eight physicians. "And we didn't want to toggle back and forth between our existing practice management system and the new EHR."

There is immense benefit to having your billing software as one function among a suite of products that includes your EHR, says Kosiorek, so that charts can pass directly from the exam room into your billing software.

However, interfaces might be a necessity for practices that have difficulty finding an integrated product to meet their needs. Illinois Bone and Joint Institute, for example, a 90-physician orthopedic group with 20 locations in the Chicago area, uses the Vision PM system from Allscripts interfaced with an EHR system from SRS.

"An integrated system is easier to navigate but our challenge was finding one that serves our size, and Allscripts works for us," says Kristie Martinez, administrator at Illinois Bone and Joint's nine-physician Gurnee, Pa., division. "But we have real-time interfacing between Vision and our EHR. The minute an appointment is made in the Vision system, it is uploaded into the patient's EHR."

Finding the right PM system requires researching and vetting different vendors upfront, says Bellile. But that time is well spent if you find a system that accommodates the specific needs of your practice.

"A lot of practices underestimate what needs to be done in terms of selection and setup," she says. "We spent a lot of time talking to other physicians and practice managers and having in-house demonstrations from both of the vendors that we were considering."

Any product you choose should come with extensive support from the vendor during and after implementation, says Asia Blunt, practice management strategist at the American Academy of Family Physicians. She advises asking vendors what's included in their monthly or quarterly maintenance fee, such as system upgrades and service calls; how frequently the system will be updated; and whether they provide cloud-based hosting (most vendors do).

"You may find that some vendors have a higher fee upfront but that it saves money in the long run if upgrades and maintenance are included," says Blunt. "It pays to shop around because there are many different prices and options."

Claims processing

One of the most valuable functions of a PM system is automating the claim submission process. Most systems not only create electronic claims but also use "scrubbers" that work in the background to validate the diagnosis, procedure, and modifier codes against insurers' standard coding edits and rules.

"Scrubbers have edits from all insurers built in," says Anderanin. "It will put claims through the coding edits overnight and you can correct them before the claim goes out, which reduces denials on the other side."

"We've seen a 30 percent revenue increase since implementing our PM system," says Werner at Tri-County Eye, which uses NextGen's Real Time Edits scrubber add-on. With claims going out faster and cleaner, the practice has seen its average collection period for accounts receivable drop from 31 days to 17 days, she says.

All new systems are equipped to handle ICD-10 coding requirements that go into effect Oct. 1, 2015, says Anderanin. However, some practices may have to run ICD-9 coding in tandem because not all types of insurers (i.e., those not covered by HIPAA) are required to make the conversion. In those cases, systems can be programmed to automatically switch to ICD-9 coding for certain payers.

For example, Illinois Bone and Joint often deals with workers' compensation and auto insurers on claims relating to accidents and workplace injuries. The PM system is programmed to automatically apply ICD-9 codes for those payers who will not accept ICD-10, says Martinez.

At Premiere Dermatology, after claims are submitted, the system allows insurers to deposit funds electronically into the practice's account, says Bellile. The payments are immediately processed and adjustments posted to the patient's account.

The software also boosts revenue through appropriate coding, says Bellile. "Physicians can input information about an encounter and the system will give them suggested codes on the spot that they can modify as they see fit."

The ability to use an electronic encounter form is essential to comply with ICD-10, which requires too many diagnosis codes to fit on a standard paper form, says Anderanin. Instead of scanning paper forms and entering charges into the system, coders can process forms electronically using the scrubber to identify exceptions.

Reporting functions

Another key advantage of PM systems is the ability to create reports on almost any aspect of your practice. Many practices use the reporting feature to create daily and weekly tasks for staff that can be distributed and tracked electronically, thus making work flow more efficient.

"We can program the system to go out overnight and look for credits, balances, or overdue accounts," says Werner. "Instead of a staffer hunting and pecking, the system finds problem accounts and creates tasks that you can assign."

Running reports also allows managers to spot trends or problems that might need to be addressed, says Jacquelyn Luster, senior adviser with Impact Advisors in Naperville, Ill., who specializes in helping clients install EHR and PM systems made by Epic. For example, Epic's system displays a dashboard with a snapshot of work queues - such as charge reviews and claim edits - and highlights problem areas.

 "The dashboard can show you the top 10 problem areas within those work queues," she says. "It might say you are missing Medicare secondary payer questionnaires for Medicare patients, for example. Once you start fixing that, the corresponding edit will go away and the claims will get paid."

You can also use reports to identify open encounters by physician and department so you can take steps to close those encounters and get claims processed, says Luster. "Reports let you see what's gone out the door, what's being held, and what you're expecting to get back."

At Union County Cardiology Associates in Union, N.J., office administrator Nelly Gamboa creates reports to monitor spending and revenue from procedures, such as nuclear stress testing and electrocardiograms. The four-physician office uses a PM system from Clinicspectrum.

"We spend a lot of money on the technology, isotopes, and medicine for nuclear stress tests so we have to make sure that we're doing enough of them, and getting paid, to make it worthwhile," she says. "We use reporting to do audits by CPT code and by physician so we know how much revenue each physician and procedure is generating."

Looking at your operations from different angles can help spot potential problems, says Martinez. For example, she runs reports on total charges broken down by insurance company in order to spot any changes in Illinois Bone and Joint's payer mix, such as a rise in Medicaid patients.

She also runs an adjustment report showing why payers made adjustments to certain claims. Managed care adjustments for discounted rates are expected but other adjustments might point to issues that could be addressed and remedied.

"Was it something deemed not medically necessary that we couldn't bill for? Did we fail to get an authorization? The reports help me see how many dollars are being written off and if they are justified," says Martinez.

You can also use reports to gather data needed to participate in incentive programs, such as the Physicians Quality Reporting System, and to market your practice, says Anderanin. For example, you can create a mailing list of everyone in a certain zip code or with a common diagnosis.

"Looking forward, informatics is a necessity for small practices," says Boyd. "A lot of vendors have standard reports, but you need to be able to use those reports to proactively manage patient populations and participate in accountable care organizations."

Front-office functions

A good PM system should smooth the patient check-in process to benefit both practice and patient, experts say. It should also help cut down on denied claims due to failure to verify insurance or get authorizations prior to appointments.

"Systems should have core functionalities like registration, scheduling, insurance verification, and tools for managing self pay as it becomes a greater percentage of the overall reimbursement pie," says Boyd.

At Tri-County Eye, front-desk staffers click an "autoflow" button to bring up pre-programmed screens that guide the check-in process, says Werner. The practice uses a program added onto its PM system that automatically verifies patients' insurance eligibility before their appointments, allowing staff to alert patients in advance about their payment responsibility. Staff can also view patients' coverage details and collect copays at the time of service.

Being able to verify insurance benefits upfront saves staff time on the phone and prevents denials down the road. According to the AMA, a typical practice saves almost $3 per transaction by using electronic eligibility verification, adding up to thousands of dollars a year.

"We've seen a reduction in our eligibility denials because we verify benefits prior to or at the time of service," says Martinez. "And eligibility used to be one of our biggest sources of denials."

Union County Cardiology Associates uses Clinicspectrum's AutoCollect feature, which uses automated secure messaging via texts and patient portals to contact patients about outstanding balances.

"Having messages sent out automatically for daily collections saves us time," says Gamboa. It's one reason that the practice's revenue has jumped by at least 15 percent since the system was implemented, she says.

Some PM systems interact with a kiosk in the front-desk area that allows patients to check in without interacting with staff at the desk, says Kosiorek. Patients can swipe their insurance card to check eligibility and use a credit card to cover copays, similar to the check-in process used by airlines.

Get to know your system

Even though many practices invest significant time and money in selecting, purchasing, and installing a billing system they don't always use it to its full advantage, says Boyd. It's essential that you understand not only what the billing system can do but also how it can help you achieve your business goals.

"Buying a new system alone won't provide all the benefits of automation," says Boyd. "It's also the process of refining and optimizing your work flows and standardizing policies and procedures. Ask yourself what you need to do to meet your goals and make tough decisions to drive change so you're not just implementing good billing but also operational improvements."

It can take months to get up to speed on all the features of a PM system, adds Anderanin, but the effort will pay off in the end.

"It's really important to set up the system correctly and appropriately for your practice or you will pay for it later," she says. "You aren't going to see an increase in revenue if you don't spend time customizing it for your practice."

Once you get your system up and running, it can even serve as a recruiting tool, says Bellile.

"When I talk to potential physician candidates, I can tell them confidently that we're extremely efficient and timely with our collections," says Bellile. "They are very pleased to know we're on top of it because it's important to their income."

In Summary

Practice management systems can smooth work flow and boost revenue by automating your practice's administrative and billing processes. Expect it to help you with:

Verifying eligibility in advance, instantly pulling up benefits summaries, and managing appointments.

Creating reports to assign tasks, look for delinquent accounts, and spot trends in denials.

Filing claims and receiving payments electronically; flagging and fixing coding errors before they go out the door.

Getting suggestions on correct ICD-10 coding at point of service.

Alerting patients in advance about payment responsibilities; texting or e-mailing appointment changes; offering self-service check-in.

Janet Colwell is a Brooklyn, N.Y.-based freelance writer specializing in healthcare. With more than 20 years experience as a journalist, she writes frequently about clinical and practice management issues for several national health industry publications. She can be reached at editor@physicianspractice.com

This article originally appeared in the November/December 2014 issue of Physicians Practice.