Shared Rewards

April 1, 2003
Joanne Tetrault

Are you getting the maximum return on your staff's labor?


When you hear the phrase "return on investment," you probably think of potential revenue from a piece of diagnostic equipment or increased productivity that comes from turning a paper-based process electronic. But in a medical practice, often the largest single investment is the staff. Given the hectic pace of most physicians' offices, everyone on staff is busy - but are you getting the maximum return on your staff's labor?

Billing and front-office staff, in particular, are positioned to improve the flow of cash into your practice. What it takes is setting expectations for performance and rewarding staff who meet or exceed performance goals that are tied to the practice's bottom line, like collecting copays and submitting clean claims the first time. Everyone benefits.

Unite front and back

First on the agenda is to break down the barrier between the billing and front-office staff, which can be both physical and psychological. Collections-based performance incentives and rewards must be a group-wide effort, or it simply won't work - it's not just about the billers.

"Incentives for the performance of billing and collection operations need to take a full, end-to-end focus," says Deborah Walker, principal of Boehm/Walker Associates, a practice management consulting firm. "It is important to recognize that front-office and scheduling staff impact both financial viability and patient access in significant ways."

How best to bring billing and front-desk staff together? Improved communication and job sharing are good ways to start.

"The best way, I think, to get the groups together is to provide information relevant to their role in the revenue cycle," says Heather Bossin, principal of Bossin Management Services. The firm provides billing and reimbursement services to large academic medical practices, multispecialty group practices, and integrated health systems.

"The front-end staff need to know during any given month, how many denials are coming in that are registration-type denials. They should know how many denials have come in because something was not authorized, if that is their role," she says. "The back office needs to have a good understanding of the limitations of the front office. It's not always a piece of cake to get all the information that's needed to bill or to be authorized."

"When I started here we had quite a gap [between the front and back offices], not just in communication, but in attitudes toward each other," says Andrea Millaway, director of billing at nine-physician Family Medicine Associates of Texas, in Carrollton. "We've worked very hard to bring the two entities together. ... Our business office helps our front office on evenings and Saturdays because of extended office hours. Our [billing] employees are trained to work up front."

Millaway acknowledges that she'd like to have the cross-training work both ways, but the front office staff generally have less leeway with their time. Nevertheless, there are certain functions that the two departments can share or balance between them that can lead to better collections. One is obtaining complete demographic information from patients, which is key at the front end.

Front-office staff have "a different perception of what their job is. Unless they work back here [in billing], they'll never know how important it is to get the right demographic information," says Mike Dugan of ZA Consulting.

Millaway agrees. "Everybody's responsible for making sure there's the best information in there we can get. We communicate with each other using pop-up memos. If [a patient is] in collection status when they schedule an appointment, [front-office staff] is going to contact us. We try to communicate when something's going on with an account so the front can help us.

"We also send a credit analysis slip at the end of every day for every account balance that's over $100," for patients scheduled the following day, Millaway adds. "We write on this slip, 'Here's the balance, here's what it's for, here's what we expect the patient to do.' And we do collections up-front for deductibles and copays. It's made a big difference. If money's not walking out the door and you're not trying to pull it in later, it's a lot better for everybody."

Setting goals

It's not enough to simply reward staff at year's end with a predetermined bonus for good work. That check for a few hundred dollars in December may help staff with holiday shopping, but it does nothing to truly motivate them. Worse, "everybody expects it," regardless of their performance or productivity, notes Bossin. Staff members need to be given specific goals that relate to the task at hand - and to clearly see the results of their efforts.

"Make sure you set [incentives] up at the beginning of the year and get a quarterly payout, so people get money in their hand ... they know what their efforts are turning into," says Dugan. "It turns a person's job from touching buttons on a computer to bringing in money to the company. It creates more of a purpose for the individual."

Set performance benchmarks that make sense for your particular practice, payers, and staff responsibilities. "You can find regional benchmarks for everything. And you can throw out a number, but until you apply it to your own business, it really is just a number," says Dugan. "Look at the department, look at them among themselves, look at them historically, from week to week, and [compare reps]. Rather than saying, 'You're held at 35 to 45 accounts a day,' I like to move that benchmark to what their capabilities are."

Identifying benchmarks is a little easier on the back end of the billing function, "because you've got collections statistics," says Bossin. "On the back end, the important things to look at are how many claims are worked for third-party follow-up, how many transactions you posted.

"On the front end, related to the revenue cycle, look at how much was collected at the time of service. Another [measurement] is registration errors. In my experience, more than 50 percent of claims are denied because of this. You could also measure how many claims came back with insurance not identified," Bossin adds.

"We do something we call 'the snapshot,'" says Millaway, "and it pulls together things like overhead, provider productivity, total A/R, how many encounter forms we get, and - for data entry especially - how many dollars and charges did one rep enter, how many did the data entry person enter - that's part of their bonus structure."

When setting goals, keep in mind that not all tasks (or payers) are created equal. The person who handles workers' compensation should not be held to the same standard as the person working on Medicare. Differences between specialties within a practice can be significant, too.

"We realize that some carriers take more work than others," says Millaway. "So every six months we go through and look at the percentage and talk about the various carriers."

Results count

Be certain the goals you set are about more than simply working faster. Too many practices base rewards on how fast claims are posted. The result: a lot of quickly submitted, but inaccurate, claims.

"If you say people have to touch 35 to 40 accounts, they'll touch 'em all right, but that's all they'll do. They'll leave their initials in whatever system you have, but they'll just kick out another claim," says Dugan.

Rewarding speed isn't good, Millaway agrees. "We want them to be fast, but we need them to be accurate. How do you catch all the mistakes, all the carrier errors, if somebody's posting it but nobody's checking it? We have our reps post the money, and if something's not paid, they're circling it and appealing it, either right then or within the week."

Bossin admits accuracy is a little harder to measure than productivity, but she has worked with practices that used scorecards to help. She explains, "For every claim, you have a potential of 10 points, and you get points off for [missing certain] things. If you look at these each month, you can tell what percentage they are accurate."

"Once people start getting their measurements back every month, showing 'This is your productivity, this is your accuracy, this is where everybody else is,' you see [scores] move right up," says Bossin.

Millaway's practice shares results among the staff, and she's convinced it is a motivator. "We have graphs of each person's A/R. It's got current, 60, 90, and 120 days in color. So you can see for that month how each person is doing. We post those, for the biggest plans for each rep."

Just rewards

Once motivation and productivity begin reaping rewards for the practice, it's time to share those rewards with staff. Again, have a clear bonus structure in place so staff know what to expect.

At Millaway's practice, the bonus is "a three-part structure. They have to meet the first goal [monthly receipts totaling $700,000]; if they don't meet the goal, they get nothing. If they meet the goal, the 90-day A/R comes into play and the 120-day A/R comes into play. They get $50 for meeting the [receipts] goal, $50 for the 120, and $50 for the 90."

The results are clear, says Millaway: the practice has just 1 percent of A/R over 120 days.

"What it says is there is no more important thing than your time and the way you work. That's what makes the difference to get the money in," Bossin adds. "I don't think money is the be-all and end-all of incentives," says Millaway, "but it works. ... We kind of look at it as a big game, and if we can get [patients] to pay something, we celebrate."

Joanne Tetrault, managing editor for Physicians Practice, can be reached at jtetrault@physicianspractice.com

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