Where do hidden billing costs typically exist-and how can practice leaders more effectively rein them in? Here are four common blind spots?
In physician practices, there are multiple billing pitfalls that threaten practice revenue. For every 10 physicians who provide care in the United States, nearly seven people provide billing support. Nationally, providers spend $282 billion per year on billing and insurance-
related costs-and half of these costs are considered excessive, a recent study found.
But too often, practice leaders fail to spot these revenue traps. The result: low cash collections, higher-than-necessary billing costs, and threats to patient satisfaction.
Where do hidden billing costs typically exist-and how can practice leaders more effectively rein them in? Here are four common blind spots.
Benefits and eligibility verification
This is the starting point for billing support, and it’s rife with inefficiency. Manual transactions take 10 minutes to perform, on average, and some last as long as 23 minutes. Yet while most providers have adopted electronic eligibility and benefits verification, this billing process remains the single biggest savings opportunity for medical providers to reduce administrative costs, at $3.4 billion.
Making the switch to electronic eligibility and benefits verification is about more than administrative efficiency. It can also reduce denials rework-especially when eligibility checks are run again prior to claim submissions to ensure patients’ coverage is still active. Registration and eligibility errors are the root cause of one-third of denials.
Claim status inquiries
Manual claim status inquiries are the costliest of any administrative billing expense tracked by the Council for Affordable Quality Healthcare (CAQH). Why? Manual inquiries require 14 minutes of staff time, on average, to complete, according to the 2018 CAQH Index. Electronic claim status inquiries, on the other hand, take just five minutes to complete. As a result, the savings opportunity in moving from manual to electronic status inquiries totals $2.6 billion among medical providers.
Given the impact out-of-pocket estimates have on practices’ ability to engage patients in the cost of their care, practice leaders should consider:
For physician practices, cash posting is tedious, highly manual, and relegated to entry-level staff. It takes staff significantly longer to process paper-based check payments than electronic payments, according to an Association for Finance Professionals report. Paper checks also are five times more expensive to receive than e-payments. But the inefficiencies associated with manual payment posting result in more than lost productivity and higher transaction costs. They also threaten practice revenue-especially when errors in posting strangle a practice’s ability to follow up on underpayments. Patient loyalty also is put at risk, such as when errors in manual posting prompt staff to pursue higher balances than necessary.
These are just some of the reasons why automating cash posting makes financial sense for medical practices. It’s an approach that also provides real-time visibility into payments, streamlines remittance advice management, more quickly identifies opportunities to better manage denials, and reduces the costs associated with medical billing. One specialty practice saved 13 hours per day by automating its cash-posting processes, increasing productivity and freeing up staff to focus on more value-added activities.