This article is from May 2011 and may contain outdated material.
If you want to safeguard your practice’s fiscal health, it is critical that services are billed correctly and collections maximized—but when did you last evaluate how well you perform those tasks? You can start by reviewing the nine steps of the billing process, and by considering what it takes to build a productive billing team.
Billing as a Nine-Step Process
Medical students generally receive little training about the administrative aspects of practice. As a result, physicians often learn through trial and error what does and does not work for their business. But when it comes to collecting payments, “there is not much margin for error,” said Ron Rosenberg, PA, MPH, president of Practice Management Resource Group, a consulting company that has helped ophthalmology practices nationwide to optimize their billing processes.
What percentage of the allowed amounts for the services you bill should you expect to collect?“You are never going to collect 100 percent of the allowed amounts from patients and insurance carriers, but you had better come close,” said Mr. Rosenberg. “Ninety-five percent of the allowed amount is the minimum acceptable figure. However, you should strive to achieve at least a 98 percent reimbursement rate. For example, if a solo practitioner bills for services that should generate $950,000 per year and leaves just 5 percent on the table, $47,500 is lost. You do not have to be off by many percentage points in your collections to make a significant difference in your bottom line,” he said.
Evaluate each step of your billing process. There are procedures that every practice should follow in order to maintain a billing process with integrity. Equally important, each and every step in the billing process must be operating properly. Errors anywhere along the way will cost you financially.
Steps 1 through 5 should take place before the clinical service is provided.
- Credentialing: Verify that each insurance carrier has accurate information for every physician and location of the practice.
- Patient registration: Obtain accurate demographic and insurance information from the patient and ensure that it is routinely updated so that it remains accurate.
- Patient scheduling: Verify that patient information is correct, whether or not a deductible exists, how much has/has not been met of the deductible, and the amount of the copay.
- Insurance verification: Verify that insurance information is correct and up-to-date two days before a patient’s appointment, and follow-up on any changes or problems.
- Patient check-in: Collect any copays, deductibles or refraction fees when appropriate.
Steps 6 through 9 take place after provision of the clinical service.
- Charge capture: Confirm that every service provided was captured and identified as a charge.
- Claims submission: Remit claims to the clearinghouse for approval.
- Accounts receivable (AR) management: Based on the insurance carrier, determine when you should expect to get paid and how much. Post payments as they are received.
- Follow up: Review unpaid and underpaid claims at regular intervals—e.g., 30, 60, 90, 120 days—and, where necessary, correct any errors and resubmit the claim.
Common Problems to Watch For
Problem—billers chasing after missing information. “Address and resolve problems at the front end of the process so that there is no lag time when a claim reaches the billing staff,” said Brittney Wachter, OCS, CPC, manager at Excel Eye Center, a practice comprising nine ophthalmologists and three optometrists in five locations throughout Utah County, Utah. “If your front desk staff is not trained to obtain the correct patient information—from entering demographics to copying the current insurance card—it must be done by the billing staff before a claim can be processed. The same idea holds true for technicians, who must understand the principles of coding because they work up the patients and scribe for the physicians. If, for example, a patient is having a noncovered service performed through Medicare/Medicaid, the tech should know to obtain an ABN before services are rendered.”
Problem—failure to capture all charges. “Most practice management software systems enable you to create reports to determine whether or not each patient who checked in and out has a charge entered,” said Mr. Rosenberg. “Most systems, however, will not indicate if every service provided was entered as a charge. It is crucial that each billable component of the visit is accurately recorded.”
Problem—slow follow up on unpaid claims. You can also lose money when claims that are denied or underpaid by the insurance carrier are not corrected and reprocessed in a timely manner. “Suppose a claim is denied because a patient’s insurance was not current,” said Mr. Rosenberg. “If the billing office is understaffed or disorganized, the practice may not identify the error for 60 days or more. By the time it is researched, the information is corrected and the claim is submitted, it is denied due to untimely filing.”
Build a Productive Billing Team
Make sure your staff is the right size. Several variables can be used to determine ideal billing staff ratios, ranging from the total number of patient visits to total number of CPT codes billed or the number of open accounts per biller. But established benchmarks tend to offer the most accurate guidelines to follow when determining how many employees you need to process your practice’s billing. Mr. Rosenberg said that “within general ophthalmology, staff costs associated with billing should comprise approximately 5 percent of your income. Other benchmarks recommend one staff person per $1 million of collected income.” (Use the Academy/AAOE’s web-based benchmarking survey to help you evaluate your performance. Go to www.aao.org/benchmarking.)
Make sure you have the right staff. Look for self-motivated problem-solvers with an attention to detail who can troubleshoot issues and converse effectively with patients. “We also look for candidates who have a background in medical terminology and medical office or billing experience,” said Ms. Wachter. “They do not necessarily need ophthalmology-specific experience because we can train them.”
Be prepared to offer training. “We have found that performance is better when we train on site,” said Robert Wheadon, office manager of the 30-physician John A. Moran Eye Center at the University of Utah in Salt Lake City. “While there may be fewer codes than other medical specialties, there are aspects of charge entry that are unique to ophthalmology, particularly the complex coding associated within the oculoplastic, neuro or retina areas of specialization.”
Designate duties. There are a number of ways to delineate duties among your billing staff. “If you consider only the bare essentials of the billing process (charge entry, claim submission, payment posting and follow-up), solo practices have the least flexibility with regard to billing staff size because there is rarely enough work to keep one billing person busy full-time,” explained Mr. Rosenberg. For larger practices, duties may, for example, be divided by insurance carrier/payer, alphabetically by patient last name, amount in collection, functional tasks (i.e., charge entry, payment posting, follow-up) or the experience level of the biller. “Find a system that works best for your practice,” said Traci Fritz, COE, a former chairwoman of the AAOE. “Create a standard list of protocols that outlines your billing procedures, as well as a list of tasks for each employee to follow just as you would for clinical practice patterns.”
Use benchmarks, set goals and reward achievement. “You cannot analyze the productivity of your billing staff if you are not benchmarking,” said Ms. Fritz. Using this data, a practice should determine each biller’s projected productivity level. Some practices offer incentives to those who achieve or surpass these objectives.
Mr. Wheadon meets with each member of his billing staff on a monthly basis to review his or her accomplishments. “I establish unique metrics for each person—for example, total dollars collected, number of accounts managed or total number of AR days. Together, we establish a goal for the following month based on the collection consultant’s anticipated performance. Each achieved goal is rewarded with a nominal gift certificate for a local restaurant or store. Meeting with them individually is also a good way to discuss strategies for success, which is particularly helpful if someone does not meet their goal.”
Ms. Wachter has a novel approach to rewarding her billing staff: “Each week I pose a billing question to my staff and reward the correct answers with a small prize. It encourages them to learn the contractual terms—in great detail—for each of our carriers.”
Limit the opportunity for embezzlement. One person should not be responsible for every accounting task, which can be tricky for a small practice with only a few employees. Separate the duties (e.g., entering charges, opening mail, posting payments, making deposits, etc.), so that one person does not have exclusive control over all the funds. And, if payments are not directly deposited into a bank account, secure checks in a locked box away from employees who post payments.