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Getting paid properly for physician services is tough. Between constantly changing coding rules and dozens of insurance contracts - each with its own coverage, billing and payment terms - many medical practices find it difficult to keep up. As a result, physicians too often are paid less than their contracted rates.
But there is hope. By applying established revenue cycle management (RCM) best practices, most medical groups can substantially increase revenue. This typically requires investing in physician and staff training, coding and billing resources, and information technology to keep tabs on claims and payers. However, in my 30-year experience managing, consulting and billing for medical groups, these investments usually more than pay for themselves.
 I can point to an emergency medicine group my physician billing service works with as a case-in-point. In one year, we helped them increase revenue per encounter by 17 percent.
When we took over, days in accounts receivable (A/R) were high, claim denials and rejections were common and the practice was writing off tens of thousands of dollars in claims each year. Claims were not appropriately followed up on and front end processes were not effectively preventing the rejections and denials. Even more was lost through failure to collect from self-pay patients. Many services were not properly documented, leading to missed charges for some services and under-coding of other services.
While some of these challenges - particularly the high self-pay loss rate - are more pronounced in emergency medicine, most of the problems this group faced are found in every type of medical practice. The coordinated strategies we employed to overcome them are also universally applicable.
Strategy #1: Improving documentation and coding
Inadequate documentation is one of the leading reasons physicians fail to get paid appropriately for their services. The problem is twofold. First, physicians often do not provide the necessary documentation to support the level of service billed. The advent of electronic health records (EHR) is helping many physicians identify and document services more thoroughly. However, EHR templates alone generally are not enough.
The second problem for many practices stems from a decision not to employ certified coders. As a result, providers may not select the appropriate level of service, or ensure that the documentation supports the code billed. Some providers even deliberately down-code services for fear they will be accused of compliance violations. Failure to correctly apply code modifiers can also cost practices.
These were both issues for the emergency physicians we worked with, and we found that the solution was also twofold. First, physicians and other personnel were trained in proper documentation practices, billing policies and procedures. Developing customized documentation protocols that address issues specific to your practice helps. To get physician cooperation, show them how much incomplete documentation costs them on the bottom line.
In addition to using certified coders to code all claims, we conduct outside audits of their coding to assure compliance and accuracy. We also use our clearinghouse reports to give us the payer feedback necessary to reduce rejections and denials. Small practices may be able to obtain the services of a certified coder through a billing service or other shared arrangement. The coders are also capable of providing other billing procedures which can make the investment in their services cost effective.
Strategy #2: Enhancing contract monitoring and performance management
Another common reason for physician revenue loss is payers reimbursing claims at less than the contract rate. Solving this challenge requires knowing how much you are owed, tracking how much you are paid, and following up with the payer if you are not reimbursed appropriately.
On the human resources side, you can achieve these goals by assigning designated billing staff to each payer. This allows staff to learn the quirks of each payer's system, and to develop relationships with payer personnel to resolve problems. They can also more readily detect and address any changes in payer payment behavior. From a management perspective, this kind of dedicated arrangement also allows you to better assess your staff's performance and accountability.
Training is essential as well. Educate your billers, meet with them regularly and keep them current on billing and coding changes, as well as changes in contracts and payer policies. Include your staff in payer meetings, and encourage them to kick problems up to you or even your medical director when they cannot resolve them alone. It is no secret that a director on the line will often get results.
On the technology side, practice management systems should be robust enough to automate billing and coding rules by payer and contract. Every process that can be automated should be automated.
Look for billing systems that scrub claims before submission for standard errors like mutually exclusive procedures or mismatches between demographics and services. Clearinghouses, such as Navicure that offer payer-specific edits and reports, offer an added layer of protection. These systems sometimes allow your practice to benefit from errors and omissions detected in the claims that are submitted. A full-service clearinghouse also can help you understand denials and transmit them to you as they occur for correction, increasing the timely filing of clean claims and increase your practices's cash flow.
Billing systems also should support management reports, including: overall A/R; A/R by payer contract; denial rates; variances in received versus expected payments; and trends in payments. These reports will help you spot problems early, understand which claims require the greatest focus, and better manage staff productivity. Without robust reporting tools a practice lacks the ability to appropriately manage financial viability; reporting functionality is a wise investment.
Strategy #3: Tackling self-pay issues
Self-pay collections is almost always an area ripe for improvement in the practice setting. Such was the case for our emergency physicians, who received a tremendous revenue boost when we added in-house collectors who contacted all of the practice's self-pay patients within 30 days of service to work out payment plans. Patients with no insurance coverage were offered a discount to settle their balances.
While most non-hospital based practices see fewer walk-in uninsured patients, the trend toward higher co-payments and deductibles is making self-pay a growing issue for all practices. Whenever possible, a patient's expected out-of-pocket liability should be estimated before the service date. When calling to confirm appointments, it is a good idea to tell patients about your collection policy and how much they are likely to owe. This kind of upfront dialog paves the way for patient payment at the time of service.
On the technology side, determining patients' insurance coverage is critical. In this case, the emergency group is hospital-based, so we draw directly on the hospital's patient accounts system to verify coverage or identify patients without insurance. In a clinic setting, this can be done with online eligibility tools in advance of appointments.
Successfully Using Revenue Cycle Strategies
The key to successful revenue cycle management is to stay engaged - with your physicians, your staff, your payers and your patients. Training and consistent education is essential, but so is technology. The more work performed manually, the greater the chance for mistakes that slow or halt revenue streams. I am passionate in my belief that practices need information technology-not only to gain efficiencies, but to gain the knowledge that proves true revenue management effectiveness.
Bette Warn is executive director at ATD Resources, LLC, a physician billing service located in Lakewood, CO.
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