Guest post by Michelle Tohill, director of revenue cycle management, Bonafide Management Systems.
Keeping your practice fiscally healthy while you keep patients physically healthy can be tricky. Medical practices work hard, offices get busy, people need attention and everyone on staff does their best to provide the immediate goal of helping people feel well. But we also know that the only way you can continue to help your patients feel well is if you maintain a healthy business that sustains your overhead, staff costs and profit.
Your ability to collect maximum reimbursement can make or break your ability to provide excellent healthcare to your patients. Without steady, high levels of reimbursement your practice will likely suffer from low cash flow and minimal profitability. It can also impact your staffing choices, ranging from running with too few employees to underpaying critical staff members, resulting in poor care. The stress level in a practice that is under-reimbursed can damage your practice from the inside out.
One way to keep a practice in the black is to minimize claims denials — that’s not as easy as it sounds. A recent American Medical Association study sought to calculate just how much reworked claims can cost a practice and found that medical offices waste as much as $14,600 each year on correcting denied claims via appeals, trouble-shooting and countless phone inquiries.
But you already know all about this — your billing staff or outsourced billers probably tell you all the time how many obstacles stand in the way of successfully submitting claims.
Here are some tips to help you avoid leaving $14,600 on the table each year:
Constant Updates: Insurance policies change often, but it’s vital for your staff to stay up to date on any changes that could impact coverage. Insurance companies can and do have their own policies in regards to certain procedures and diagnostic codes, so your billing staff or practice management system should make sure you are on top of the changes. One way for your billers to stay updated is to subscribe to insurance company correspondence and newsletters that will notify subscribers of changes. In addition, a good practice management system will help with the constant updates. For example, many software systems will automatically update changes, either periodically or even daily so that practices are never lacking in the knowledge they need to gain adequate reimbursement.
Investigate: No denied claim should be left at “denied.” As tedious as it might be, each denied claim must be investigated to pinpoint exactly what the source of denial might be. The most common reason for a claims denial is improper coding, in which the code referenced is incomplete, invalid or does not correspond to the treatment described by the physician. As mentioned above, much of these issues can be pre-empted by subscribing to constant updates, and it is the first check your billing staff should do when a claim is denied. Small mistakes in coding can lead to thousands of dollars under-reimbursed. Other reasons for claims denials include timing problems, pre-authorization/authorization mistakes and authorization period/session conflicts. Many times the issue lies with the patient, who might have lacked the appropriate physician referral, failed to pay COBRA on time, or lost insurance coverage. In short, there are many, many reasons why a claim is denied. Your practice management system can streamline your investigation process so that your team can easily investigate and reissue each and every denied claim. You’d be surprised at how many millions of dollars are left on the table each year when medical billers fail to follow up on denied claims.
Check and Recheck: As tedious and time-consuming as it may sound, proof each claim for the slightest error and then recheck for anything you might have missed the first time around. Taking this step before the claim is even submitted can save not only time post-denial, but money for your practice. Make sure your billers have adequate time to do this or if you use practice management system, make sure it will automatically flag any errors.
Billing Insight: Most importantly, leadership should have visibility into the billing process. You should be able to see billing status and reports a constant basis so that you can evaluate the health of your business. Good technology and communication are key to achieving this most important step of all.
By following these four steps, you should be able to reduce or completely eliminate claims denials in your business, thereby getting maximum reimbursement for the work you do.