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

Betsy Nicoletti, M.S., CPC July 19th, 2012

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Follow these nine steps to improve your practice collections

The first five steps to better (higher) collections were in the Getting Paid newsletter that went out on Monday.  The goal is to collect all of the revenue a practice is entitled to collect.  Here are four more steps towards achieving that goal, and a bonus step for primary care practices:

6.    Don’t take denials lying down

Some consultants estimate that as many as 30% of denied claims are never resubmitted or appealed.  The billed amount is simply adjusted away, as “Commercial insurance adjustment.”  Some staff members believe that if the payer denied it the first time, it is almost impossible to get the claim paid.  In some cases, the reason for the denial may have been practice error, such as a coding error or past filing limit and the claim balance is quietly written off.  Medical practices need to work denials quickly and with enthusiasm.  Kareo has published multiple articles on working and monitoring denied claims, and the links to these are below.  Track your denials by payer and reason code each quarter.  Of course, it is critical to fix each claim that is denied and resubmit the claim, but use this tracking report to improve future claims submissions.  Fix problems in registration, or eligibility verification or coding so that future denials are eliminated.

7.    Correct coding errors

The best outcome for a coding error: payment delay.  The worse outcome: no payment at all.  Avoid both outcomes by monitoring and correcting coding errors.  Use a claims scrubber to identify these errors before claims are submitted to the payer.  Fix individual claims, and educate clinicians and staff to prevent future mistakes on claims.   Incorrect use of modifiers and failure to follow bundling rules are two common coding errors that result in claims denials.  Failure to understand medical necessity and coverage policies are a close second.  There are many services that are covered with only a certain frequency and for specific indications.  Check Medicare and private payers’ policies about frequently performed procedures and diagnostic services.  Be sure that staff and clinicians are up-to-date on coding for all services performed.

8.    Use technology, early and often

Manual processes cost more and take longer than automated processes.  Calling an insurance company to verify coverage for each patient, one by one, takes longer than an automated batch query.  Setting up a recurrent payment of six installments takes less time than billing a patient monthly and posting the monthly payment manually.  Practices are rightly concerned with the cost of add-on programs and additional features, but using outdated technology costs revenue in the long run.

9.    Track key indicators

Key revenue and collection indicators include days in receivables, gross and net collection rates, aging of accounts over 90 days, and percentage of claims denied on first submission.  The Medical Group Management Association publishes specialty specific norms in each of these categories.  Some specialty societies collect survey data from their members and make that available.  First, calculate your group’s baseline for these key indicators.  Then, monitor it over time.  Compare your group’s data to norms for your specialty and measure your performance each quarter.  Groups that consistently monitor their performance perform better.  Review this helpful article by Elizabeth Woodcock on using key performance indicators to make sure you’re using them effectively

Bonus step for primary care practices serving adult patients: Provide Medicare Wellness Visits!

It is true: Medicare does not pay for the typical preventive medicine services described by CPT codes 99381-99397.  Medicare does pay for a Welcome to Medicare visit and Annual Wellness Visits (initial and subsequent).  Many practices disdained these visits initially because they did not correspond to the CPT definitions of an annual physical, and indeed, have very sparse physical exam requirements.  Some groups, however, have embraced them because patients expect the service and it gives the clinician an opportunity to talk to the patient about preventive issues and get paid to do it!  Before you turn your back on these visits, review the CMS requirement and take a look at the payment for each.  It is a way of increasing revenue while providing a valuable service. for more information, watch this video on making the most of wellness visits for your practice.

Take these steps to collect at a higher rate for the services your medical practice is already providing.

Betsy Nicoletti, M.S., CPC, is the founder of, a wiki for physician reimbursement. She is a nationally known speaker and consultant, and can be reached at

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