What should you do when your reports indicate a billing problem?
Common reports that indicate the number of days your claims remain in accounts receivable or that reveal your periodic net collections ratio can help you keep an eye on the bottom line. But if those reports indicate trouble, what steps should you take to remedy them? Yelling at your billing staff won't help much.
You need to pinpoint your problems by identifying them at their source. Luckily, billing workflow isn't very complex, allowing you to easily target your investigation. In addition to measuring more standard data, you can also measure performance at specific junctures during the collections process to obtain a more detailed picture of your revenue stream. Having this information will enable you to make workflow changes when necessary.
Some performance metrics you may want to implement include:
Charge entry lag times - How long does it take to enter your charges? Office visits should be entered within 24 hours of the visit, surgeries within three days. If that's not happening, there are only two possible explanations: either staff members aren't getting to it quickly enough or physicians are turning in their charges too late. Establish a written policy that requires a quick turnaround. This should be a top priority.
Documentation - As long as you're evaluating your physicians' roles in billing, pull a few charts to see how long it takes each doctor to complete her documentation. You also can ask specific staff members to gauge this for you over one week. The greater the lag time between patient visits and their documentation, the more billing errors will occur. (Really, how long can physicians remember the details of specific visits?) Doctors should document office visits within three days at the very most, and surgeries within 10 days. But that's usually the exception rather than the rule, as illustrated by the documentation lag time of the physicians with whom my company, athenahealth, works. Clearly, there's room for improvement, and it's not an unattainable goal.
Of course, it's not enough to simply complete patient charting in a timely manner. You need to do it right. Have a biller occasionally review individual physician's charts and give them advice on what they can do to improve. Maybe one doctor routinely forgets to measure the size of lesions before removing them, or doesn't indicate whether a patient's diabetes is under control or not. Oversights like that force billers to guess what happened or to loiter around the office, hoping to catch the physician.
Copay collection - We all know that insurers and employers are passing on more and more healthcare costs to patients in the form of higher copays. You can't brush off collecting these payments at the time of the visit, as it's difficult and more expensive to collect such charges afterward. If your management software doesn't gauge what percentage of your copays you are collecting, ask your front-desk staff to record the copays they collect as well as explanations for the ones they do not collect. Teach them how to politely ask for payments and how to look up how much a patient owes.
Self-pay tracking - Patient deductibles are also rising, and many patients are now paying out of pocket. Run standard collections reports on patient accounts to determine your collection rate for this patient demographic. If the answer is "not great," develop written polices for collections staff to follow when pursuing these accounts. Include details that indicate how often they should send statements and when and how they should send patient claims to collections. For more on patient collections, read "Finding Success With Self-Pay" in our July/August 2006 issue.
Payer tracking - You should also run reports on your private payers as well as payer-specific reports on a regular basis. This should give you a sense of your performance specific to third-party payers and let you know which payers are causing you the most trouble. Also track your appeals. Of all the denied claims you appeal, what percentage gets paid? It's probably more than you think, and knowing these numbers can encourage your staff to file more effective appeals. If your third-party collections are suffering, the most effective remedy is usually to assign specific staff members very clear responsibilities to improve the situation. Who in your office will follow up on claims? Who is writing appeal letters? Establish processes and assign names to ensure everything gets done.
Claim holds - Hopefully, you are using claim-scrubbing software that automatically checks for common errors - such as an ICD-9 and CPT mismatch - and holds such claims for correction prior to submission. If not, get it. Your existing billing software might contain a scrubbing module that you've never turned on; check with your vendor. Once you have the software in place, measure your scrub rate. That is, how many holds occur in your practice and what's causing them? Reduce the corrections you make repeatedly by creating a feedback loop. The people who correct your claims are not the same people who create them. Give your claim creators the information they need to file them correctly the first time.
Remember that reviewing management reports is not a substitute for actually managing. It's not enough to observe problems; you have to fix them. Pick one identified problem each week or each month to tackle. Involve staff and other physicians in finding solutions. Develop plans for improvement and measure your success.
Motivate your staff by allowing them to personally benefit from improvements. For example, give the staff member who collects the highest percentage of copays each month half a day off or a Blockbuster gift certificate. Competition helps, too. Regularly post employee performance by department, physician, or office location (depending on what you are measuring) so your "winners" will be recognized by everyone.
Nearly every office can benefit from a more scientific approach to collections improvement. Taking it one step at a time - a process not unlike making a clinical diagnosis - will go a long way toward helping you determine the best treatment.
Kim Williams is the senior client service manager for athenahealth, a revenue cycle management company for medical practices whose database of billing information is the statistical basis for this series. She can be reached via firstname.lastname@example.org. Check out www.athenahealth.com/diagnostic for more tools to assess the health of your practice.
This article originally appeared in the November/December 2006 issue of Physicians Practice.