Medical Billing Grade: Does Your Practice Get an A?
Ralph Waldo Emerson said it best: “A good system shortens the road to the goal.” When it comes to ensuring that healthcare providers collect all money due, it’s essential to consider the strength of your entire billing process, including the people and technology(ies) employed to create and follow these processes.
After extensive research, AdvantEdge medical billing experts found that the best predictor of a practice or department’s ability to collect all money due is the “grade” earned by the current operations: the old idiom – people, processes and technology. If your current outcome isn’t an A, the good news is you can take action to improve.
Medical Billing Grade: A – Built to Last
When we study operational and billing processes, we are looking for well-defined and executed processes that help ensure that providers leave little or no money on the table. When we say well-defined, we’re talking about written processes in a user-friendly format. These processes include training, job specifications, timing expectations, workflows, system specifications, exception and escalation procedures, performance reviews and other personnel policies. Written processes and procedures alleviate ambiguity and allow employees and their managers to be aligned on what is required and expected of them – and how their job roles impact their colleagues.
Processes should encompass these functions:
- Patient intake and scheduling (if applicable)
- Referral and pre-authorization processes for specialists (if applicable)
- Clinical and demographic capture, and related integrity testing and improvement
- Coding and claims preparation
- Claims submission
- Claims follow-up and status reporting
- Patient communications – Customer service expectations
- Patient deductible, copay, and self pay processing and collections
- Denial management reporting
- Payment posting
- Contract management (is the practice getting paid according to its payer contracts)
- Ongoing accounts receivable management
- Reporting & analysis – Actionable metrics and leading indicators
- Patient education
It’s also important to have formal measurements in place for cycle times. For example, claims coded within 72 hours of clinical procedure performed, 96 percent of claims to be filed within 24 hours of coding, etc.
Ongoing and open communication is an essential ingredient in the mix because this gives everyone on the team an opportunity to share ideas and suggestions about how to make the process even more efficient. For example: If a staff member observes that some insurance cards are not presented at the time of service, he or she can recommend that scheduling personnel collect insurance information in advance over the phone or online. If everyone on the team is encouraged to offer suggestions about how to best resolve issues, operations will continue to improve. All processes also need to be supported and reinforced by leadership. Note that highly skilled people can keep poorly defined processes afloat for a while, but this isn’t sustainable. There is no substitute for well-defined processes with employees who believe in them and follow them.
Medical Billing Grade B – People Power
A billing operation may have well-defined processes, but with employees not effectively executing them. This can happen if there is no clear understanding of why things are done a certain way, so the importance of following processes is not embraced. Or the problem may be in follow-through. A lack of interaction among functional groups can also be responsible for billing inefficiencies. All of these issues are made worse when there is not enough skilled staff or there is excessive employee turnover. Operations that earn a B Grade are missing 5 to 15 percent of their potential collections.
Medical Billing Grade C – Repairs Needed
If processes are not clearly defined or employees are unaware of how processes should work, then you’re most likely in C territory. Once this has been determined, it’s wise to step back and formulate a new strategy.
Boost Your Grade
If you are not earning an A, then you have strong financial (and potentially compliance) motivation to improve. You essentially have two choices:
- Invest time and money to improve your current operation: processes, people, technology.
- Hire an expert to do your billing; i.e. a professional medical billing company already operating with an A grade.
Option 1 requires a significant investment of practice leadership time, in addition to process, people and technology upgrades. A rule of thumb is that when something is broken, 80 percent is process and tools based, and 20 percent is people. Do you have the analytic skills to figure out what needs to be fixed? If not, a practice assessment by an expert firm is needed as a first step. Many practices significantly underestimate the effort required to get their billing operation “up to par” and keep it there. Recent labor shortages and pay increases make it that much harder.
Option 2, on the other hand, can free up practice leadership time, while achieving top rank results. More and more practices and departments are turning to specialized medical billing companies to handle physician billing, including coding, charge entry, claims filing, payment posting, insurance follow-up, denial management, patient inquiry services, etc. Since these services are both difficult and expensive to maintain internally, it often makes sense to have them done by an expert billing company that can consistently maintain an A grade.
Other factors to consider are:
- Billing companies usually charge a percentage fee which directly links your billing costs with your bottom line financial performance. It also creates a meaningful incentive for those responsible for results to be motivated to achieve them.
- A medical billing company also empowers healthcare providers with more time to focus on what they do best – delivering exceptional healthcare.
Want to learn more about how your practice can improve its medical billing grade? Get in touch with an AdvantEdge expert now, or stay up to date on company and industry trends by visiting our LinkedIn page.