Your Nine-Step Plan to Better Practice Collections, Part I

Betsy Nicoletti, M.S., CPC July 16th, 2012

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All practices want to collect every dollar they can, legally and within their contracts.  Some medical practices believe they are doing just that, and some groups wonder if they could be doing better, and by better, they mean, “Collecting more cash, a higher percentage of what was billed.”

This two-part series identifies nine steps to take to increase practice collections.  Some of these steps focus on patient due collections, some on insurances and some on improving systems and work processes.  But several themes emerge in all of these strategies: invest in technological solutions and constantly assess progress.

1.    Start at the beginning

Do any of you remember fondly the days of the handwritten appointment book, with the patient’s name, phone number and brief description of the reason for the visit “penciled” into the book?  And then not so fondly, sharing the book with other front desk staff or the nurse?  All patient appointments require full registration in today’s world.  Although time consuming, register the patient completely, with full demographic and insurance information when scheduling the appointment.  This allows for electronic demand or batch verification of eligibility and benefits before the patient arrives and will save chasing the patient later.  When the patient presents at the front desk, scan their insurance card into the system with a small scanner made for the purpose.  No more walking to the copier and copying the front and back of the card.  Investing in this technology will pay off.

2.    Take your time when hiring

Start at the beginning, take your time: that’s advice our mothers gave us.  In this instance it means making sure your clinicians are credentialed and enrolled before the first patient is scheduled.  Some groups now say they execute a contract with a clinician and expect the first patient day to be in 90 days.  Medicare and third party payers have strict rules about enrollment.  It is not correct to bill for a new provider under an established provider’s number.  Allowing a clinician to start seeing patients before this process is complete will result in uncollectible revenue.  Medicare has increased penalties for false statements on enrollment applications and strictly limited a group’s ability to bill retroactively for services.

3.    Collect patient due amounts before and during the service

Patient due balances account for 30% of receivables in many physician offices, and the proportion of patient due balances is growing as patients have higher deductible plans. Besides collecting co-pays at the time of service, collect past due patient amounts.  Have a script and a policy that makes it easy for the front desk to ask for patient balances at the time of service.  Many insurance companies allow medical practices to check on-line to see if the patient has met their deductible, before the service is performed.  Surgical practices should use claims estimators before elective surgery. Claims estimators are a function on a payer’s website that allow the practice to enter in the expected procedures to be performed for that individual patient, and then receive an estimate of the patient due amount for that procedure. Although not 100% accurate in all cases, this gives the practice the opportunity to discuss the cost of the procedure, the amount the insurance is expected to pay, the patient due portion and how it will be paid before the service is performed.  Many surgical groups require a deposit before the surgery and an agreement that the balance will be paid during the global period.  Set up recurring payments (discussed below) for the balance.

4.    Collect patient due amounts after the service

Despite a group’s best efforts, there will be patient due balances.  Consider using recurring credit or debit card payments to save the cost of sending a statement.  Gyms, religious institutions, car finance companies all do it: agree on an amount and deduct it from a bank account or charge a credit card.  This can be more effective than budget payments.  Hey, we work in health care.  Are our gyms more sophisticated than we are?

Recently, my twenty-five year old daughter had to pay a bill and she told me, “I don’t have checks for my checking account and they don’t accept on-line payments.”  Most of us have checks for our accounts, but younger patients are using on-line payments with greater frequency.  Make it easy for patients to pay your bill on-line, with debit or credit cards.

5.    Compare your insurance paid amounts with your contract

It sounds like as much fun as having a root canal, but every practice needs to know if its major payers are paying the allowed amount as described in their contracts.  The first step in this process is to find your contracts with your two or three biggest commercial payers.  Take a look at the contract to see how your group’s fees are determined.  Is it by a fee schedule that is sent to you annually?  Is it a percentage of local or national Medicare?  Does it vary by the type of contract?  If so, your job is much more difficult.  Is it a conversion factor times Relative Value Units (RVUs)?  If a percentage of Medicare, are fees based on the current year or a previous year?  Next, print out a frequency distribution of your procedure codes.  For some specialties, 80% of revenue is generated by 20 codes.  If so, look only at those 20 codes.  Some specialties will need to look at 30 or 50 codes.  Start with the most frequently billed codes, and load the payer’s allowed amount into your practice management system.   Then, when payment is received, compare the paid/allowed amount with the expected fee from the payer.  If there is variance, a call to your provider rep is needed.

These are the first five steps in your nine-step program to better (higher) collections.  The final steps will be published on Thursday, July 19, on this blog.  Remember as you take these steps to automate procedures whenever possible and track your progress!

Betsy Nicoletti writes on how to develop a nine-step plan to better practice collectionsBetsy Nicoletti, M.S., CPC, is the founder of Codapedia.com, a wiki for physician reimbursement. She is a nationally known speaker and consultant, and can be reached at www.mpconsulting.org.

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