One large radiology practice found that their second largest Medicaid HMO was paying them at Medicaid rates instead of their contracted rates…for a couple of years. Total lost revenue was $150,000.
Another physician practice found that medical necessity denials were simply being written off without any further review or communication back to the physicians or business manager…for the past year. Total lost revenue was $ 55,000.
If you are not paying attention to your billing and revenue cycle process, these kinds of scenarios can be happening right under your nose. Don’t fool yourself into thinking that this type of revenue loss can’t be happening to you and to your practice.
As the healthcare reimbursement side has grown more and more complicated, so has the ability to get paid correctly for the work that you do. Between pre-authorization denials, bundling, multiple procedure reductions, new electronic billing protocols and physician credentialing hoops to jump through, the ability to get paid correctly is more like a minefield of obstacles rather than an easy road.
So, those of you that are putting your head in the sand and hoping for an easier reimbursement road ahead need to wake up. With more government involvement in healthcare, it seems that the obstacles to getting paid will only increase in the coming years.
From our experience, the best approach is to get in touch and stay in touch with your revenue cycle process. This involves getting familiar with the workflow of the billing side from start to finish.
Understand the flow from when the service is rendered to how it is transferred to the billing side to how it reaches the payer to how the payments or denials are posted to how delinquent accounts are worked.
Some key areas to focus on include:
• Charge Capture- Are all services rendered being captured for billing purposes? Are there any holes in the process which are allowing services to slip through the cracks and not get billed? Even if you have an electronic interface process, these interfaces are not fool-proof. Data streams go down for periods of time and if safeguards are not built in, you can get burned and lose billable services.
• Accuracy of Coding- How accurate is your medical coding? When was the last time that you audited your coders and your coding process? Are the coders or is your coding software up-to-date and working effectively? If you have medical coders, are they certified and do they keep up their continuing education credits so they are staying current with coding and regulatory changes?
• Denial Tracking- Do you know what your most common denials are? How are these denials being worked? Watch out if you see a large amount of “duplicate” denials as this could mean that your billing staff or billing company is frequently “re-billing” claims that were initially denied instead of working them. Keep track of your denial percentage monthly and also track your denial percentage by your major payers so you know what is going on.
• Payment Posting and Payment Compliance- Make sure that you understand how the payment posting process works. Electronic remittance files make posting easier and more efficient but some billing systems have a difficult time doing reimbursement compliance on electronic remittance files. This means that if you “auto post” your Blue Shield payments, for example, some billing systems are not able to match up your “contracted rates” with the rates from the electronic remittance to insure that you are being paid your correct reimbursement rates. It is critical that you routinely audit payment rates from the third party payers. Payers are notorious for not linking all physicians to your contracted rates or not linking each of your locations to your contracted rates. If a payer pays you incorrectly just 5 to 10% of the time, the dollars can add up.
• Write-off Process- Here we are defining “write-offs” as dollars that are adjusted off for non-contractual reasons. This would include adjustments for no pre-authorization or referral, lack of medical necessity, bundling or inclusive denials etc. You should regularly take a look at adjustments and write-offs by category and also by payer. If your billing system allows, you can filter by payer by adjustment reason and by CPT code so you can really drill down into what your billing office or billing company is adjusting off. From our experience, there can be a lot of “lost dollars” or opportunities for additional revenue sitting in the adjustment pile.
Sometimes, groups focus too much on their net collection percentage which can be artificially inflated if your billing office or billing vendor is adjusting off or writing off open AR balances instead of trying to work them and get payment. Keep a close eye on the adjustments and write-offs as there are frequently opportunities for improvement and potential for increased revenue if these denial issues can be solved.
The areas above are just a sampling of pieces of the revenue cycle that need regular auditing and review.
Doctors and medical practices are certainly seeing declining reimbursements but if you also have holes in your revenue cycle, it is possible that your practice’s revenue hit is worse than it truly is.
Take it one step at a time but get more familiar with the revenue cycle so that you can get paid for the work that you do. You deserve it.
Matthew J. Brennan, CPC, RCC is the President and co-founder of Precision Healthcare Management, LLC (www.consultphm.com). PHM is a comprehensive practice management firm that specializes in practice management, revenue cycle process improvement, billing and coding auditing and financial management. Mr. Brennan can be reached at firstname.lastname@example.org.