In an era where reimbursement is shifting towards quality care and patient outcomes, it is necessary for medical practice executives to take a fresh look at their business processes to ensure potential collections are not leaking throughout the revenue cycle.
Most physicians want to see patients, practice medicine, perform care that they were trained to provide and go home. The Administrator or practice executive is typically quite busy addressing staffing concerns, patient complaints, reviewing contracts, and responding to physician inquiries. It takes a great deal of dedicated focus, time, and energy to manage those critical tasks associated with converting patient visits into reimbursement.
It is our experience that many physician practices have really good teams behind the scenes that ensure patient insurance and benefits are accurate, charges are entered timely, and patients are treated in a professional and courteous manner when they have questions about their bills. It is also our experience that most physician practices have team members that are trained or skilled in only a small portion of the back-office responsibilities that are necessary to ensure high patient satisfaction and a profitable outcomes. Far too often, we observe that a practice has only one certified professional coder who is experienced in assigning the appropriate medical codes for their unique patient mix and related services. We hear of employees dreading taking time off from work because they know their wok will go undone in their absence. We see the trend lines associated with staff turnover related to charge entry, cash posting, and A/R follow-up on denials. These little things may seem trivial, but they add up financially over time and they can take a toll on employee morale and productivity.
While there is no single cure for ensuring all revenue is collected all of the time, there are five key areas that we routinely advise our clients to consider in hopes of improving financial performance and mitigating risk within the business office.
Conduct a medical coding and chart documentation review
Almost any practice can greatly benefit from conducting a routine medical coding assessment of its claims. Whether the end result is confirming the appropriateness of your practice’s coding habits or identifying missed revenue or compliance concerns, a coding audit can be one of the most useful tools a practice does to improve performance and ensure consistency between providers.
Analyze patient balance amounts that are being transferred to bad debt
Perhaps no single point of data more clearly demonstrates your practices’ success at collecting patient balances than reviewing what went uncollected and subsequently transferred to your bad debt collection agency. Dean Dorton recommends taking a deeper look at the details of what was transferred to collections for a recent twelve month period. In reviewing this data, look for trends associated with “frequent flyer” patients who rarely make payments or for those “common balance after insurance” amounts, such as $25, $50, and $100 that indicate a potential co-payment or patient financial responsibility amount that went uncollected. Identifying these patients can help the practice better collect them on the front-end.
Identify underpayments
Also known as partial payments or partial denials, an underpayment can be difficult to identify without the use of a contract management system. Too many practices rely on their cash posting team members to identify underpayments and resolve them as appropriate. While that may be an effective approach for some practices, it leaves way too much risk in the hands of a select few employees. A comprehensive approach to underpayment identification and resolution should include resources from information technology, patient accounting, and finance. Top performing practices will reconcile expected reimbursement to actual on a continuous basis to ensure the appropriate payment is being received.
Cross-train business office staff
Most practices cannot afford to have one coder, one Medicare biller, or one person that knows how to post electronic payments. It simply is too significant of a business risk to rely on a small number of employees to complete tasks with great financial consequence. With this type of staffing model and little to no cross-training of staff, backlogs are inevitable. This leads to sluggish cash collections, poor morale, and dependency on a select few. It is critical that business offices cross-train its team members on how to complete multiple tasks and/or contract with service providers to ensure critical tasks are completed when team members are absent.
Be proactive in follow-up efforts
An efficient and high performing business office makes proactive account follow-up a daily routine. Charges must be entered and reconciled daily, payments must be deposited and applied to accounts daily, and unpaid open account balances must be proactively worked on a daily basis. Utilizing work queues or even an aged trial balance, practices’ must identify high value accounts that need follow-up in order to get paid. Working accounts in descending dollar order can have the most significant impact on a practice. Typically, 80% of a practice’s outstanding A/R is comprised of only 20% of the encounter volume. These accounts must get worked as part of the team’s daily responsibilities to ensure strong cash collections.
With the changes we’ve seen in the market due to hospital-physician integration and payer reimbursement, it is critical that practices’ continue to focus on those areas that ensure strong compliance, high patient satisfaction, and positive financial outcomes. Focusing on these five areas are just a small part of ensuring a practice is as effective and efficient it can be in converting patient visits to revenue.