Technology: Sorting Out Your Billing

October 1, 2007

You deserve every penny you’ve earned. But if your practice is like most, you probably aren’t getting that. There are technologies out there that can help - but which one is right for you?


Billing is arguably the most complicated facet of running a practice. The process starts the moment a patient signs in at your office, and it doesn’t end until an insurer pays the bill (hopefully). And everyone in your practice is involved, meaning there are numerous places where things can go wrong. A front-desk staffer could fail to verify insurance. A doctor could log an improper code. A billing clerk could submit an incomplete claim. And so on.

If anyone stumbles during the process, your accounts receivable can morph into a monster capable of destroying your practice. You can hide under the blankets and hope the monster will go away, but it won’t.

Fortunately, there are tools available to help you vanquish the beast and take control of your A/R. By doing so, you’ll end up with more money in the bank, a happier staff, and better patient care. Let’s take a look at what’s out there.

A little help from a friend

Brenda Cottrell, billing manager for Southeast New Mexico Oncology & Hematology, remembers how bad the practice’s billing problems once were: More than $6 million in A/R and scads of rejected claims, with a distressing number of them facing timely denial. “We were doing all our own billing electronically ourselves. It just became overwhelming,” says Cottrell. “We would get denials, and we didn’t have time to work on them.”

That was two years ago. Today, the practice’s A/R is down by about 40 percent. Most payments post within 45 days. The denials have been reworked and resubmitted. What’s more, the staff feels much more relaxed. They have time to spend on issues beyond billing, such as securing copay assistance for patients and applying for compassionate drugs, (prescription drugs supplied to low-income or uninsured adults who need them for chronic care).

How did the practice achieve this? By outsourcing its billing needs to a billing services company.

Cottrell cites peace of mind as a major benefit of using Catalisse, the billing company it chose. By outsourcing, the practice’s billing staff can now concentrate on less routine matters. Before, they’d all but given up on having time to work their denials, many of which had timed out - a permanent loss of income. “We’ve almost completely eliminated that,” she says.

How does a billing service fit into a practice’s inner workings? “We copy EOBs received and Catalisse posts them. Then they enter our charges. They do the coding, making sure all charges are entered correctly,” says Cottrell. “We work the noncontracted insurances and Medicaid; they do everything else. We send them our denials.”

Denials are way down in number now, because Catalisse thoroughly scrubs the practice’s claims so they’re more likely to go through the first time. And payments fill the coffers much faster than before. “It used to be 65 to 80 days to get a payment; now it’s about 45,” Cottrell says.

A billing service can also help pinpoint data gaps or procedural anomalies that might otherwise go unnoticed. Southeast New Mexico’s staff sometimes forgot to capture required authorization numbers for claims forms, thereby fattening the denials stack. Catalisse created a report to flag patients needing such authorization numbers.

A good billing service will treat communication as a top priority. Cottrell says she communicates with her Catalisse contact every morning to discuss any relevant issues. Staying in touch keeps the arrangement well oiled.

If a problem does arise at the practice, a billing service has your back. On one occasion, the practice was having a problem with formatting the form for electronic billing. “I worked on the forms, and they did the hardcopies so we wouldn’t fall behind. It’s a team effort.”

But a close, efficient relationship doesn’t suddenly appear on Day One. It takes times to acclimatize the company to the way your practice conducts business. Cottrell says that the two were in near-constant communication for the first six months.

You’ll probably have to change at least some of your own ways too. You’ll need to blaze new procedure trails and expect the workload to increase temporarily, much as when you clean out your garage - worse, and then much, much better. Persevere, and in the end, you’ll have a reliable ally for your practice’s claims submission.

Is the price right?

Outsourcing your billing certainly doesn’t come for free. Just like a CoinStar machine in the grocery store takes a cut from the loose change you dump in for automatic tallying, a billing service takes a percentage of your claims revenue - sometimes as much as 8 percent. Obviously, the more you earn the bigger the cut.

But Southeast New Mexico’s decision makers think it’s money well spent. “I don’t see it as an added expense. What they’re doing is worth it because we would’ve had to hire a lot more people and train them,” says Cottrell. This is a valid point. Compute what you would be making if all your claims are processed at maximum efficiency, and calculate 8 percent of that. Then ask yourself how this figure compares to the expense of keeping your billing in-house. These expenses can include:

Staffing - Good help doesn’t come cheap, and there’s no guarantee you’ll see a good return on your investment after you go through the time and expense to hire people. Billing manager Jonathan Fowler of Chapel Hill, N.C.-based Village Pediatrics says, “I’ve talked with providers who say they’d fired a biller and when they cleaned out the biller’s desk they found a box of unsubmitted encounters.” Yikes.

Technology - Eric Vitug, senior billing office manager for Sentara, a multispecialty practice in Southeastern Virginia, says that being properly outfitted technologically to handle billing is key. Will you need to purchase software? Who will provide ongoing technical support? “Having rock-solid IT support is critical to in-house billing,” says Vitug. “If someone doesn’t have that, or billing experience with electronic claims, then I can see why someone might [use a service].”

D-I-Y electronic billing

With billing software, you can go one of two ways: Have it installed on your office computers or access it on the Web from any computer. Vendors are increasingly touting Web-based solutions as their primary products. Tommie Lewis, vice president of marketing for Emdeon, says, “We provide the solution that works best for the provider’s work flow. Web-based seems to be the best way. The users are always on the latest rendition, so there are no version control or licensing problems. If we upgrade the software, they have it immediately, and they can work remotely.”

Vitug says that Sentara has been using PayerPath, a Web-based billing application, for nearly seven years - back when such technology was in its infancy. “We wanted to be online. We knew there was going to be lots going on with the Internet.”

PayerPath itself was a baby back then. In many ways, Sentara and PayerPath developed the billing application together, based on Sentara’s numerous needs. A 400-physician, 60-site, multispecialty behemoth, Sentara’s 119-employee billing department processes 6,000 to 8,000 claims a day, with last year’s total topping 1.5 million. Nevertheless, outstanding funds-in-A/R average only 27 days - a 67 percent improvement from a decade ago, before the practice teamed with PayerPath. Any claim still in A/R after 60 days gets shunted back to the central office for one-to-one treatment and follow-up.

Vitug prides himself on the performance of his in-house billing department, but he readily admits that PayerPath outshines his team in one area: “They’re the experts on what the payers want electronically. We pay for their knowledge and their edits so we can bump our claims up against them. If we didn’t have that and just sent the file out, we don’t know as much. Then we’d have to create our own unit here to watch out for all the rules and regulations - and they change every single day.”

That’s for sure. Take Medicare’s June announcement that providers should start including their NPI numbers on a small number of claims to test for acceptance. Did you know this? Make sure the vendor you choose has a firm grasp of such issues.

But possibly the most compelling reason for adopting in-house billing technology is the instant gratification factor, thoroughly trumping the long learning curve of a third-party service. Craig Bridge, chief operating officer for Navicure, which offers a Web-based billing product, says, “Within 30 days, [practices] are pretty much up and running. Within 90 days, the financial benefit starts.”

Benefits across the board

Regardless of which solution you choose, resolve to face and fix your billing problems. Family physician Yatin Shah of Illinois-based Primary Care Joliet says he’s glad his practice finally did just that in April 2006. Primary Care Joliet was already using a billing system, but the system was insufficient, leaving the practice awash in denials. Busy check-in staff collected copays but rarely verified insurance, opting instead to cash in on a practice incentive plan tied to copay collection. Coding mistakes committed by the back office further gummed up the reimbursement gears. But now, with the CareSeries Plus Web-based billing application and a fully integrated EMR, the check-in staff verifies insurance and collects copays regularly and the providers code with panache. The automated claims are super-double-checked before submission using a claims scrubber. Everybody’s happy.

Regardless of which approach you take, you can expect the following benefits with billing technology:

Lower A/R, both in age and amount - Expect most of your claims to come back within 30 days. “Blue Cross is our best payer - typically seven days,” says Fowler. “That makes my books look awesome.”

Trickle-down cleanup - Your billing solution or service can “learn,” so to speak. “If the ZIP doesn’t match the state, PayerPath will flag it as invalid. Then we can go back to our practice management system and fix it,” says Vitug. With increasingly more robust edits on the front end, you’ll get more and more squeaky-clean claims ready for submission, or “low-hanging fruit,” as Lewis describes it. You won’t be able to completely eliminate denials, but you’ll be able to fix them sooner and faster. Shah says, “If my docs pick a code which is not at the highest level, the code scrubber runs behind the scenes, picks it up, and drops it into a ‘bucket.’ We have one or two people assigned to clean up these claims. With the old system, this would put us behind 60 to 90 days. Now, it’s in the bucket immediately.”

Better patient care - Improved claims processing will directly affect your patients, eliminating the insurance eligibility game that your front-office staff currently has to play. They’ll know instantly whether the insurance info on the card is valid. Moreover, Web-based software will check patients’ copays. “We don’t have paperwork, and we don’t have to worry about handing it all to a clerk at the end of the day,” Shah says. “You have a clean bill submitted electronically while the patient is still in the parking lot.”

Compliance watchdog - Practices need all the help they can get to stay abreast of changes to healthcare regulations - handy in a business where the rules shift more often than a viral flu strain.

Happier staff - Expect a more relaxed atmosphere. Now there’s time to do what you need to do, so who wouldn’t be happier? “We now try to concentrate on fee schedule changes, compliance, and helping indigent patients,” says Cottrell. When’s the last time you took a look at your payer contracts? Your budget? Job descriptions? Mission statement (you have one, right)? With the pressure off, thanks to a good billing solution, you can direct your focus to these important but often neglected issues.

Fowler found he was able to realign some duties that pleased his staff. The receptionists now do the precerts - and with the billing application it’s a breeze. “And I tell the nurses they don’t have to know any coding, but they do have to mark the right vaccine.” A clearly laid out work flow also eases tension, says Shah, and increases staff morale; everyone knows what to do and when to do it. “If you have a system that forces you to do the next step before moving on to the next patient, you’ll get it done.”

Final considerations

Are you comfortable with the idea of entrusting an important part of your business to someone else? “Control is a major issue,” says Lewis. “If it’s my business and my practice, I’d think long and hard before relinquishing control.”

Fowler concurs, and also suggests that perhaps less is more, noting that “healthcare has created so many ‘little children,’ or ‘in-betweens,’ providing services.” Will adding this layer benefit you? Southeast New Mexico says yes. Village Pediatrics says no. Fowler (of Village Pediatrics) is the only biller for the two-provider, one-nurse practice. He single-handedly processes 500 claims a month. But with the practice growing as fast as the kids they treat (they opened just 18 months ago with zero patients), they may need to revisit their billing protocols soon.

Remember, the most important aspect of a billing solution is whether you actually make use of its capabilities once you have it. “What groups need to think about is how can they grow and [still] have the same amount of staff,” Navicure’s Craig Bridge says. “Employees want higher wages and insurance companies are lowering reimbursement rates. So you have to find a tech solution. If you’re not willing to use it, you won’t get the benefits.”

Shirley Grace, senior writer for Physicians Practice, holds an MA in nonfiction writing from The Johns Hopkins University. Her articles have appeared in numerous publications, including The Washington Post and Notre Dame Business magazine. She can be reached at sgrace@physicianspractice.com.

This article originally appeared in the October 2007 issue of Physicians Practice.