Outsourcing medical billing to the correct billing company can insure that they have the same incentives as you do.
In most situations (and make sure this is the case for your medical billing service) the billing company only gets paid when the practice gets paid while a practice's in-house staff gets paid irrespective of results. There is also an incentive for the billing company to perform better - the better it performs the more it collects for the practice and in turn the more it earns (and vice versa). This is not true for in-house staff whose wages are typically fixed irrespective of performance and quality of work.
This is a critical distinction that is easily missed because of the misplaced belief that if the billers work for the practice then they care more about its collections. I am not saying they do not care, but I am saying that when your biller has their economic incentives completely aligned with yours (as with a medical billing service) it makes a big difference in how they think about your medical billing and how well they perform their job.
I recently spoke with a partner at a busy cardiology practice. While one of the billers was out sick, some paperwork was required and the supervisor went looking for it. When the supervisor opened the missing biller's desk, a stack of unfiled, old claims was discovered. It turned out about $40,000 of them were past timely filling deadlines. They were lost. I repeat-the practice lost $40,000! When the biller returned from her leave, she was "sternly" reprimanded. Let me say it one more time-she was reprimanded. Not fired, but reprimanded. Either way, the practice lost $40,000 in just this one instance alone.
Why wasn't more severe action taken? Because of concerns with upsetting the billing staff and exacerbating a staffing problem that existed. The biller was moved from follow-up to the front desk where she is now being trusted to collect the critical demographic information required to properly bill claims.
I also asked how it was possible that the billing supervisor missed that $40,000. Did they not reconcile charges and payments and track charges, payments and write-offs? To this the doctor replied that "their system did not provide this level of reporting and no such reports were ever given to him". Since, the practice was using a new release of a major billing software, I know this system has such capabilities - it is just that either (1) no one knows how to use the system-that's bad or (2) they just don't want to bother-that's' worse! Just imagine how much money is probably lost at this practice annually.
Utilizing a medical billing company is not a panacea for such situations, but if you insure the following actions are built into your agreement with the billing service, you should be in good shape:
- A fully integrated tracking system (charges by locations/provider and payments by source - lock box, office, PO Box) should be in place and you should have full visibility into the system at all times.
- The medical billing service should assume full responsibility for timely filing issues and pay the practice the allowed amount for any claims they fail to submit prior to the timely filing deadline. This eliminates the risk a practice has when the billing is done by in-house billers who will never provide such a guarantee.
- 24/7 access to the medical billing system so that full transparency exists between the practice and the medical billing company.
As physicians struggle with stagnant (at best) reimbursements and escalating costs, it is critical that they make the best possible decision in regards to their medical billing. Selecting a solution that structurally minimizes the risk of poor medical billing is critical.
It has been said that the definition of insanity is doing things the same way and expecting different results. This certainly applies in the story outlined above. The biller that left $40,000 in charges unbilled will likely continue to cost the practice money. Just because she works for the practice does not mean she represents their best medical billing solution.
A judicious selection of a medical billing company that meets the criteria outlined above is your most direct and reliable method for avoiding your own medical billing horror stories.
Copyright 2008 by Carl Mays II - 16069
In most situations (and make sure this is the case for your medical billing service) the billing company only gets paid when the practice gets paid while a practice's in-house staff gets paid irrespective of results. There is also an incentive for the billing company to perform better - the better it performs the more it collects for the practice and in turn the more it earns (and vice versa). This is not true for in-house staff whose wages are typically fixed irrespective of performance and quality of work.
This is a critical distinction that is easily missed because of the misplaced belief that if the billers work for the practice then they care more about its collections. I am not saying they do not care, but I am saying that when your biller has their economic incentives completely aligned with yours (as with a medical billing service) it makes a big difference in how they think about your medical billing and how well they perform their job.
I recently spoke with a partner at a busy cardiology practice. While one of the billers was out sick, some paperwork was required and the supervisor went looking for it. When the supervisor opened the missing biller's desk, a stack of unfiled, old claims was discovered. It turned out about $40,000 of them were past timely filling deadlines. They were lost. I repeat-the practice lost $40,000! When the biller returned from her leave, she was "sternly" reprimanded. Let me say it one more time-she was reprimanded. Not fired, but reprimanded. Either way, the practice lost $40,000 in just this one instance alone.
Why wasn't more severe action taken? Because of concerns with upsetting the billing staff and exacerbating a staffing problem that existed. The biller was moved from follow-up to the front desk where she is now being trusted to collect the critical demographic information required to properly bill claims.
I also asked how it was possible that the billing supervisor missed that $40,000. Did they not reconcile charges and payments and track charges, payments and write-offs? To this the doctor replied that "their system did not provide this level of reporting and no such reports were ever given to him". Since, the practice was using a new release of a major billing software, I know this system has such capabilities - it is just that either (1) no one knows how to use the system-that's bad or (2) they just don't want to bother-that's' worse! Just imagine how much money is probably lost at this practice annually.
Utilizing a medical billing company is not a panacea for such situations, but if you insure the following actions are built into your agreement with the billing service, you should be in good shape:
- A fully integrated tracking system (charges by locations/provider and payments by source - lock box, office, PO Box) should be in place and you should have full visibility into the system at all times.
- The medical billing service should assume full responsibility for timely filing issues and pay the practice the allowed amount for any claims they fail to submit prior to the timely filing deadline. This eliminates the risk a practice has when the billing is done by in-house billers who will never provide such a guarantee.
- 24/7 access to the medical billing system so that full transparency exists between the practice and the medical billing company.
As physicians struggle with stagnant (at best) reimbursements and escalating costs, it is critical that they make the best possible decision in regards to their medical billing. Selecting a solution that structurally minimizes the risk of poor medical billing is critical.
It has been said that the definition of insanity is doing things the same way and expecting different results. This certainly applies in the story outlined above. The biller that left $40,000 in charges unbilled will likely continue to cost the practice money. Just because she works for the practice does not mean she represents their best medical billing solution.
A judicious selection of a medical billing company that meets the criteria outlined above is your most direct and reliable method for avoiding your own medical billing horror stories.
Copyright 2008 by Carl Mays II - 16069
About the Author:
Carl Mays II, Founder and Chairman of ClaimCare Medical Billing Services, is a medical billing and process design expert. Carl has been working with medical clients for more than 12 years. Prior to that Carl worked as a mechanical engineer for Boeing. Read more about medical billing companies at the ClaimCare Blog.
