Too often, the focus on the medical practice billing process is whether or not it's efficient. The first question really should be, "Is the process effective?" Taking the time to make these basic observations will help in understanding both effectiveness and efficiency of your billing system.
At the heart of every medical practice is its billing process; the infrastructure that serves as the highway along which many of the business’s most vital transactions occur. All too often, however, that infrastructure resembles a congested interstate that’s littered with gouging potholes. In other words, it has been neglected.
“It happens more often than it should,” says Bill Gilbert, vice president of AdvantEdge Healthcare Solutions, a provider of medical billing and practice-management services in Warren, N.J. “[Physicians] may not see the need to invest in training, or describing their role [in the billing process] to them.”
The Billing Basics
Too often the focus on the medical practice billing process is whether or not it’s efficient. “That’s important,” Gilbert says, “but the first question really should be, is the process effective?” Sometimes taking the time to make basic observations will help in understanding both effectiveness and efficiency of your billing system. First, you need to determine if you have a well-defined process, Gilbert says.
“I don’t just mean in the back office for billing, but throughout the practice,” he says. “As most people know, the billing doesn’t start in the back office. It starts with the first interaction that the office has with the patient, and goes all the way until the last interaction.”
Gilbert explains that if the practice has a well-defined process that starts at the very beginning, with the front desk staff and scheduling staff, and goes all the way to the billing and collection staff, that’s a very good sign.
“Is there a process, meaning, is it written down? Are people trained on it?” he says, “If you ask them, can they explain it? If they can, that’s a very good sign.” Conversely, if there isn’t such a process, or if there is but you ask the front-desk person what their role in the process is and they can’t tell you, that’s a red flag.
As an example, Gilbert points to the person who’s on the phone taking appointment calls, or the person at the front desk checking in patients. Someone may not take the time to explain to them that it’s equally important -- perhaps more important -- that the front desk staff obtain the appropriate insurance information and make a copy of the insurance card. The appointment takers should ensure that they obtain the information over the phone.
Gauging the Effectiveness of the Process
An easy way to determine the effectiveness of your billing process is to ask to see which key metrics are being tracked. Every practice should be tracking, on a daily basis, accounts receivable, revenue/collections per procedure, and the number of high-volume procedures performed in that practice.
Practices also should be regularly tracking their percentage of first-pass clean claims, Gilbert says. Claims that are successfully processed and paid-in-full in their first pass through the claims system are a strong indicator of that the billing process is effective at editing and inputting data accurately.
Tracking the number of claims denied is equally important. Within that, there should be the top five or so reasons why the claims were denied. “[T]ypically that provides a road map for what needs to be fixed,” says Gilbert. “If a physician were to ask what percentage of our claims are being denied and why, [staff should] be able to answer that question directly. If that kind of question cannot be answered just literally off the shelf, then that’s another red flag that the back-end billing process probably has some issues that need further investigation.”
Increased Billing Complexities
Gilbert believes that billing is only going to get more complicated, not less so, in the coming years, and having individuals on site with the specialized knowledge required to do billing accurately and effectively is likely to become an issue.
“We think that over the next period of years, practices are going to look to hire specialists to help in as many areas as they can,” Gilbert says. “We regularly see practices that are missing five, ten, fifteen percent of the money they could be collecting (due to improper billing). For many practices, that’s most of the profit margin. And as reimbursement rates are more likely to go down rather than up, those issues are going to become more important.”