Is Your Medical Billing Process Costing You Money?

A medical practice with an excellent billing process, but inaccurate coding will lose money or leave it on the table. But there are ways to avoid that scenario with the right staff and technology.

The need for individuals trained in medical billing and coding, especially certified coders, is greater than ever. And the move toward electronic health records (EHR) and the new ICD-10 code set will increase that demand over the next five years, according to Sunni Patterson, president and chief executive officer of RMK Holdings, Inc., which specializes in revenue management services.

“Having the stuff [that] knows the ins and outs of the billing process, and the coding sets, will go a long way toward helping that practice achieve a better cash flow,” says Patterson, placing additional emphasis on the coding end of the process. “Even if a medical practice has an excellent billing process, if the coding is inaccurate it will cause a claim to be rejected, negatively impacting the practice’s cash flow.”

But there are ways to avoid that scenario.

Recognize the problem

Patterson says that it’s easy for a medical practice to determine if its present billing and coding system is inefficient. The most obvious method is to examine reimbursements. If the practice has a very low or slow reimbursement turnaround time, then there’s a problem right off the bat.

Physicians can measure reimbursement with specific benchmarks, such as their net collection ratio. They can also measure it by analyzing a certain timeframe of their charges and parsing down how many denials they have been receiving versus all of the claims that have been submitted. If they’re seeing a high denial rate, then they know that something has got to be beefed up within the coding or other part of the billing process.

According to Patterson, the top performing medical practices do this routinely. Physicians are monitoring the practice’s cash flow, so the better cash flow they have, the more they can identify opportunities to increase or expand their practice, or meet their other objectives that they have set out.

If physicians don’t have a good handle on the practice’s cash flow or how their reimbursements are coming in or not coming in, it’s very hard to plan for the future.

It all starts with metrics, Patterson says. “And it starts the minute the patient schedules the appointment, that the staff knows the coverage and limitations of the patient’s insurance plan. Because without that information then they are setting themselves up for having that claim denied.”

Potent rules engine

Patterson is a huge advocate for medical practices implementing a potent rules engine, what she describes as part of the claims starting process that comes with many of the better performing platforms. She explains that a good rules engine will not only check for the proper coding, but will automatically identify the claims that are most likely to be denied.

For example, many platforms may include correct coding initiative edits, which are updated on a regular basis as the codes change. Every year the CPT codes may or may not change depending on the medical specialty. If there’s a change, it will automatically be updated in that practice management system.

Those sorts of updates performed on a regular basis are ones that physicians want to look for when evaluating different practice management systems, Patterson says.

Another update that happens frequently is the national coverage determination, which is generated by Medicare. Patterson says it’s yet another way for claims to be scrubbed.

“Let’s say for a particular Medicare claim, this particular CPT code cannot be used in combination with this diagnosis code,” she explains. “[A potent rules engine will] flag the system so it will come back to the biller and it can be corrected before it goes on to the insurer.”

Huge bottom line impact

Patterson says statistics indicate that a majority of health care facilities never collect on as much as 18% of their claims due to a lack of resubmitting claims that were denied on their first pass. In addition, it’s estimated that providers are underpaid by an average of 7% to 11% percent on claims that they do submit, often due to medical coding errors. Those percentages, she adds, are eye-opening.

According to Patterson, a host of practices are leaving money on the table because of a number of reasons, such not having enough staff members to follow up on claims, or not having anyone on the back end to work appeals and denials or the re-submits. Cloud-based medical billing technology, she says, can help.

“It enables staff to operate more efficiently,” Patterson says. “It definitely automates the process for the health care provider, and it creates a seamless interaction. It’s definitely becoming mainstream.”