Practice Pointers: Better billing, better collections

May 9, 2003

Whether you're in a solo practice, a small group, or a large one, give employees defined roles, set clear goals, and cultivate teamwork.

 

PRACTICE POINTERS

Better billing, better collections

Jump to:Choose article section... Decide what tasks billing staff will handle What should your head count be? Create specialist roles as the practice grows Build a team that shares work and information Put billing policies and procedures on paper What to expect from two key billing staffers  

Whether you're in a solo practice, a small group, or a large one, give employees defined roles, set clear goals, and cultivate teamwork.

By Robert Lowes
Senior Editor

Working hard doesn't necessarily mean working smart. For proof, look at a dysfunctional billing department in a typical physician practice—possibly your own.

Everyone may be busy entering charges, posting payments, and jawboning with insurance representatives, but an intolerable 50 percent of accounts receivable are more than 90 days old. Over in the corner is a week-old stack of explanation-of-benefit forms that haven't been keyed in, so nobody's noticed the recent surge of rejected claims from the practice's biggest payer. Still, the staff looks like it's hustling.

One reason why a practice's back office might work hard but dumb is rampant multitasking, says Deborah Walker, a Surfside, CA, consultant with the Medical Group Management Association. "Everybody does everything, and nobody is accountable for anything," says Walker.

Of course, in a solo practice, one key staffer may indeed be a billing jack-of-all trades. But as the number of physicians and staffers increases, so does the need to develop specialized back-office roles as well as written policies on how you deal with a denied claim or a deadbeat patient. We interviewed consultants and office managers to find out how successful practices get their billing act together.

Decide what tasks billing staff will handle

Before you overhaul your billing department, remember this maxim—your entire practice is the billing department. You depend on your receptionist, for example, to gather complete, up-to-date demographic and insurance information about patients—the grist for claims. Mistakes at the front end will likely translate into denials, and more work for the billing staff. Likewise, the billing department will operate more smoothly if physicians code correctly.

That said, what tasks and positions belong in the billing department per se? There's no question that submitting claims, posting payments, working old A/R, and answering patient billing questions are back-office functions. Practices differ, though, when it comes to entering charges. Some assign this job to a front-desk cashier (also known as a check-out clerk) while others batch up encounter forms for the back office to process.

Consultants generally favor the first approach. "When front-desk employees enter charges, they tend to be more accurate because they can immediately clear up any questions with the doctor," says Sharon Rentze, a practice management consultant with RBG&Co. in St. Louis. However, for the sake of good patient relations as well as careful charge entry, a busy practice might need more than one cashier, says Rentze.

The seven-doctor Acadiana Family Physicians in Lafayette, LA, gets the job done with two full-time cashiers working side by side. "They have enough time between collecting payments to key in charges," says clinic manager-administrator Paula Quebedeaux.

However you structure charge entry, avoid delegating this task to someone who also posts payments. Consultants say a crooked employee will have an easier time embezzling money if he's in a position to adjust a patient's account on both ends of your cash flow. True, it may be possible to detect this kind of theft with reports from a sophisticated practice management software program. The easier alternative, however, is simply splitting the two functions between different employees.

What should your head count be?

The MGMA publishes an annual survey that provides a helpful rule of thumb on the number of people you need in the billing department. In 2001, multispecialty practices employed about three-quarters of a billing staffer for each full-time physician. The staffing ratio was slightly leaner—seven-tenths of a billing staffer—for internal medicine and family medicine practices. According to the MGMA, the billing staff includes charge-entry, payment posting, and collection clerks, as well as cashiers.

The MGMA numbers jibe with what's commonly found in a solo primary care practice—one employee divides her time between billing and running the office.

For a two-doctor practice, MGMA ratios suggest that you might need a full-time billing employee in addition to an office manager who devotes half her time to tending claims. Three doctors are ready for a second full-time billing employee, with the office manager focusing mostly on overall administration. By the time you're up to 10 doctors, you're likely to need seven or eight people asking for and collecting your money.

Remember, though, that MGMA statistics provide only rough guidelines. Practices that submit most of their claims online and post payments electronically can get by with fewer back-office workers. And obtaining accurate insurance information at the front desk can help trim the head count, too.

Create specialist roles as the practice grows

The more bodies you have, the more you can afford to give them distinct duties. One of the most valuable forms of specialization, consultants say, is assigning staffers to specific insurance carriers. That's possible with just two billing employees—one handles Medicare and your local Blues, for example, while the second is responsible for all other insurers. Each one would post payments and collect A/R in her domain. Consultants favor this strategy because staffers become experts on particular payers and develop personal—and strategic—relationships with provider representatives. "They get to know the names of their children," says Sharon Rentze.

By giving billing employees a stable of payers, you also make it easier to hold them accountable for their performance. "Set benchmarks and then evaluate your people based on how their payer accounts stack up," says Deborah Walker. "You want to collect at least 95 percent of your fee-for-service net charges, which are your gross charges minus contractual adjustments. You'd like to get paid on average within two months. And the percentage of A/R older than 90 days shouldn't exceed 20 percent if you want to rank with better performing groups." Of course, you have to make allowances for circumstances beyond an employee's control—a computer breakdown at a payer, for example.

Not every practice combines the role of payment posting and collection into one position, but this personnel move can pay off. "You'll have an easier time following up on denied claims if you work with EOBs every day," says consultant Michael Wiley in Bay Shore, NY.

Many large practices prefer to make some employees full-time posters, reasoning that they'll get faster at it. But you don't have to give up specialization in the process. Consider assigning a team of posting clerks and collectors to a particular set of payers. Designate one team member a "lead person." Provided that team members talk among themselves, they can play their payer accounts like virtuosos.

Growing groups also need to consider specialized roles for patient accounts. In 2000, a seven-doctor practice in Englewood, CO, called Pediatrics DTC hired a full-time employee to chase down money owed by patients. That hiring decision allowed the two existing collectors to focus exclusively on insurance accounts, says practice manager Mike Ripperton. Even larger practices may need a full-timer to talk to patients in the office about payment issues and field questions over the phone.

Finally, a billing department that reaches six or seven employees usually warrants a full-time manager. For tips on choosing the right person for this job, read "Practice Pointers: How to find a billing boss who fits the bill" in the March 22, 2002, issue of Medical Economics.

Build a team that shares work and information

Despite the virtues of specialization, billing departments can't function without cross-training. "Employees get sick, have babies, and take vacations. People need to cover for each other," says Rentze.

Versatility is a must during unusual working conditions. If the A/R for a particular health plan is too big and too old for the practice's financial health, payment posters may need to pitch in on collection efforts. Likewise, collectors may have to double as posting clerks when a huge Medicare check arrives. Shifting gears doesn't mean jettisoning specialization, notes Wiley. "Each person's job description should spell out her primary role, but also give her secondary roles."

Teamwork extends to sharing information. Employees who work A/R should swap success stories. Liz and Sue may discover that Jackie keeps her A/R under 35 days on average because she makes twice as many phone calls as they do.

You have to explicitly encourage such openness because staffers can easily fall into a proprietary-knowledge syndrome. "A collector may know whom to call at an insurance company and which buttons to push, but she keeps this to herself," says Wiley. "She wants to look better than the other employees for the sake of job security."

One way to get everybody talking is a weekly departmental meeting. "This is an opportunity for posting clerks to report how registration mistakes at the front desk are triggering denials," says Wiley. Also use this time to inform staffers about changes in insurance plans and prepare for regularly scheduled meetings with physicians who want to know how collections are going. "If too many claims are going unpaid past 60 days, the billing department should have an explanation and a game plan to correct the problem," he says.

Put billing policies and procedures on paper

How fast does your staff enter charges once you see a patient? Many office managers might say, "As soon as possible." That vague standard isn't good enough; ASAP can mean two weeks in a slipshod practice. Consultants recommend that no more than 24 hours go by before a charge is entered. That's the kind of concrete goal-setting you'll find in a policies and procedures manual. Every billing department should have one.

"Most dysfunctional practices don't have a manual," says consultant Sharon Rentze. "Instead, the staff depends on word-of-mouth to explain how things get done. A lot of bad habits get passed on to new employees that way." Deborah Walker sees another negative consequence when nothing's in writing—employees improvise. "Each person may have her own way of handling rejected claims," she says.

You don't have to create a manual from scratch. Instead, customize what you'll find in Operating Policies and Procedures Manual for Medical Practices, published by the MGMA. You can buy it online at www.mgma.comfor $126 if you're a member; nonmembers pay $197. While you're at it, consider another MGMA book titled Job Description Manual for Medical Practices, which costs $85 for members and $132.60 for nonmembers.

You also should assemble a binder with at-a-glance information on each insurance carrier you contract with, says Wiley. This binder lists the contact person for each insurer, what it takes to get paid, the process for appealing a denial, and helpful tips compiled by staffers.

Putting everything in writing is essential to planning your work. The next thing to do, as the saying goes, is work your plan. That's working smarter, not harder—one more piece of wisdom for flustered billing departments.

What if working the plan isn't working out? You many want to consider outsourcing your billing. We'll cover that next issue.

 

What to expect from two key billing staffers

Payment posting clerks should:

Post payments the day received.

Work accounts receivable when not posting.

Track denied claims and suggest ways to prevent them.

Spot underpayments.

Collection clerks should:

Contact the insurer if a pending claim isn't paid within 30 days.

Monitor A/R by payer on a monthly basis.

Develop rapport with insurer claims representatives.

Be gracious, but firm with patients owing money.

 

 



Robert Lowes. Practice Pointers: Better billing, better collections.

Medical Economics

May 9, 2003;80:73.