Cover Story

PRACTICE POINTERS

Scoop up every dollar you've earned

Payers have devised dozens of ways to deny or delay reimbursement. Is your practice doing enough to fight back?

By Deborah A. Grandinetti

Last year, a four-physician ob/gyn group in Germantown, TN, brought in an extra $250,000 by getting more aggressive about billing. Among the winning strategies: replacing three billing employees with more-capable people, investigating why claims were denied instead of simply refiling them, and training the front-desk people to capture all information needed for claims at the time of scheduling—including verification that the requested service would be covered.

By year's end, the gross collection rate increased by 3.6 percentage points, says Steve Coplon, a Memphis consultant who worked with the practice on the billing improvements. The staff had also brought down the average age of the practice's accounts receivable from 120 days to 60.

Perhaps your billing operation could benefit from a similar overhaul. The key to getting what's yours from insurers, says Coplon, is to instill a "war room" mentality among your billing staff.

"Assume payers are going to do everything they can to downcode, delay, or deny payments," he says. "You need aggressive, persevering employees who realize they're entering a battle and won't give up—people who aren't satisfied until they get those dollars in."

"It is a contest," says Larry Deblinger, a former collections consultant. "I think managed care organizations make their systems deliberately inefficient. They're banking on the probability that enough doctors will be unable to substantiate their claims. The challenge is for your practice to be so efficient, so persistent, so thorough, that you finally knock them down by sheer force."

How do you make your billing operation that good? Here are recommendations from experts we spoke with.

Staff your billing department with the right people

No matter how small your practice, you need at least one person to concentrate on billing. Sherry Migliore, director of consulting for the eastern region of PMSCO, a subsidiary of the Pennsylvania Medical Society, says a lot of offices "make this everyone's responsibility"—and she's seen the chaos that results.

If you can afford to hire more than one billing staffer, do so. "This is not where you want to cut back on staffing," she says. Consider that the right person can easily bring in three or four times her salary, adds Coplon.

That's also an argument for paying a little more for a superstar. If the people who are doing your billing don't merit that description, Coplon recommends assigning them elsewhere or replacing them. "The typical person in billing has worked in the doctor's office for a long time. But that doesn't mean she has the right skills," he explains.

What should you look for in a billing employee? Here are the key traits:

• Initiative. A billing "warrior" will analyze explanation-of-benefit forms instead of just posting payments, and track causes of denial instead of passively refiling claims.

• Follow-through. This person will determine the appropriate time to check back, and she'll make that phone call herself instead of waiting for the managed care company employee to get back to her.

• Perceptiveness. She has a good grasp of coding and understands the relationship between codes. Not only that, she'll use that knowledge to discern when payers are trying to bundle codes or downcode, inform the practice manager, and work with the manager and the physicians to resolve the situation.

• Desire to stay current. An effective billing employee knows that the rules and regulations regarding reimbursement are constantly evolving, and takes pride in keeping abreast of changes.

• Good organizational and record-keeping skills. She knows that good record-keeping is half the battle. She'll document all conversations with payers, keep meticulous records, and produce them at a moment's notice.

• Persistence. Coplon remembers calling a national insurer every day for six months to ask for the $2,000 owed to a physician friend. Each day, he was told the claim was in queue for payment. He only stopped calling the day the check arrived. "Sometimes that's the kind of persistence needed," Coplon observes. "It took just three minutes a day."

Invest in training and incentives

Help your billing people become even better at what they do by investing in training.

This will help retain them, too, because they'll have the satisfaction of a job well done, says Cincinnati practice management consultant David C. Scroggins of Clayton L. Scroggins Associates in Cincinnati. Certainly, you'll want to send staffers to coding seminars. He also recommends sending them for off-site training with the makers of your billing software. Even though that will cost more than in-house training, they'll get "a more comprehensive grasp of the whole process," says Scroggins.

After nine months, send them back for a refresher course. Send the office manager, too, says Scroggins. If she picks up a nugget that improves collections by just one-half percentage point, it's worth it. In a practice with revenues of $1.2 million a year, that's a $6,000 gain from a $300 training session, he says.

Consider using incentives to boost motivation. Some practices will reward a billing employee with, say, a $1,000 bonus, if she meets certain targets, such as keeping the average age of accounts receivable below 60 days, says practice management consultant Ted Byer of Mintz Rosenfeld in Fairfield, NJ.

Other practices provide billing staff with a small percentage of what they are able to collect on accounts more than 90 days old. If the billing clerk is able to collect an unprecedented amount—say, $500,000 worth of accounts over 120 days old—the practice might provide a second reward, such as a trip to a resort area for the employee and her spouse.

Help your staff excel at follow-up

Overdue bills should receive prompt and aggressive follow-up. Ted Byer recommends starting the follow-up process at 14 days for unusually large claims. If your usual claim runs about $100, but you've got a $500 claim outstanding, that's the one the billing clerk should go after promptly.

If the insurer requests more information, a member of the billing staff should forward it immediately, by certified mail. She should follow up with a telephone call within seven days, and document the conversation for her records.

"The key to avoiding delay is to call the insurers—even if they say they will call you in two weeks," says Larry Deblinger. "Letting them delay the process will snowball. You've got to impose your efficiency on them."

Your billing employees will be much more effective if they establish personal contacts with the provider relations representative at each of the insurers. "It helps to have an ally," says Lansing, MI, practice management consultant Gray Tuttle Jr.

Some practices shift responsibility for any bill the insurer has left unpaid after 30 or 60 days to the patient, unless provider-contract terms prohibit doing so. That tactic is very effective, says Migliore. "Since patients don't want to pay the bill, most will call the insurer and see that it gets resolved," she says. "HMOs respond pretty well to patient phone calls." Migliore says you can set up your computer to shift overdue bills to patients. If you make that your policy, however, you need to inform patients when they join your practice. Spell out your payment policy in writing, and have the patient sign off on it.

An aggressive billing staff will also make full use of the computer's capabilities to keep tabs on all payers. One standard way to do this: Have the billing staff run an "aging report" by payer, says Scroggins. Standard accounts receivable software can do this. "Ask for 30-, 60-, 90-, and 120-day aging for each payer. This will identify who the outliers are," he says. "If you know carrier XYZ usually pays within 45 days, then you can get the computer to pull out XYZ accounts that have gone over 45 days. This way, you can take care of them before the 90- or 120-day mark."

You can use these aging reports to establish parameters for each carrier and prevent claims from growing so ancient that no one remembers them anymore. If you'd like to know how your activity in this area compares with that of other practices, consult a practice management consultant who has access to aging guidelines for your specialty and payer mix.

He recommends keeping on top of these accounts by devising a new plan each month and designating a day, or days, on which to focus on specific payers. "You might decide, for instance, that the second Monday of the month is the day to go after Blue Cross," he says.

Don't wait until the scheduled day, however, to challenge underhanded ploys. Some insurers think they can bundle or downcode with impunity. Billing warriors watch for this. When they notice such problems, they act.

The billing staff in one of Coplon's client ob/gyn groups noticed that when doctors there did both a hysterectomy and adhesion removal at the same time, certain insurers reimbursed for only one of the procedures. The billing department brought this to the practice manager's attention. Staff compiled medical records and operative reports for each claim, and filed a challenge. In most cases, they got additional payment, says Coplon.

A neurology practice, similarly, challenged a pattern of downcoding. Its billing staff noticed that the local branch of a national insurer routinely knocked level 5 visits down to level 3. The specialists gathered documentation, met the plan's medical director, and successfully argued their case.

Add outside muscle to collection efforts

There are times when payers won't budge, despite your billing staff's best efforts. An aggressive billing staff won't stop, however, simply because it has exhausted the grievance procedures available through that plan. If a meeting with the medical director or regional vice president fails to bring satisfaction, warriors will pursue other avenues.

One good bet: asking the state medical society to help. That's what New York physicians did when Oxford Health Plans delayed payments to thousands of physicians. The medical society complained to the state insurance commission, which added more pressure. The result? Oxford advanced money to some physicians and hospitals until it could process their back claims, and got much better about paying on time—at least for a while. That's an effective strategy, say our experts, because it prevents the HMO from retaliating against individual practices.

One pediatric emergency group, owed over $1 million in unprocessed claims by a large managed care organization, grew frustrated enough to take its case to the governor. The physicians had been meeting with plan executives, but making little headway. Some of the accounts went back two years. Coplon says the governor's chief of staff took a personal interest in the matter, and within three months the group had its settlement check.

One more last-ditch resource: the state insurance commissioner. Savvy billers don't use this until all other remedies have failed, because they know it can put the practice on the plan's blacklist. Practices that go this route must be confident that they can document that an insurer has repeatedly delayed payment without reason, and that they've done everything possible to resolve the problem.

Warriors who are pushed to the wall, however, won't hesitate to go this route. They've already invested so much in their collection efforts, they're not about to let things slide now—not when there's still a chance they can win. That's because they're used to winning.

The author is a former Senior Editor of Medical Economics.

What your billing staff needs to get started

A motivated billing department doesn't hesitate to act—and that means sending out all bills within 24 hours, electronically whenever possible. In general, filing electronically reduces errors, minimizes costs, and speeds payment.

It also helps to have the following on hand, for quick reference:

• A matrix that details what each of the payers has agreed to pay for each of the various codes your practice submits. This way, when the staff posts a payment, they'll know whether the payer has allotted the correct amount. Don't assume the payer will live up to the rates negotiated in the contract.

• A copy of your state's prompt-pay law, if such a law exists. Some practices attach copies to claims that are seriously delinquent.

• Contact information for the provider relations person—and higher-ups—at every insurance company your practice contracts with.

• A policy that spells out how to respond when the billing staff contests the explanation of benefits.

• From each payer, a list of deadlines that your office must meet to successfully resubmit a denied claim.

• A policy that details when to turn unpaid bills over to a collection agency, and when to write them off.

• Benchmarks to strive for. For example, Memphis practice management consultant Steve Coplon recommends keeping the average age of accounts receivable below 70 days.

 

Deborah Grandinetti. Practice Pointers: Scoop up every dollar you've earned. Medical Economics 2001;17:112.