Better Business Office Performance
It is business critical to ensure a medical business office operates at peak effectiveness — now more than ever.
After reading this article you will understand how to:
- Identify the primary behaviors and oversights that lead to better business office performance
- List technological solutions that improve accuracy and throughput in the business office
- Develop incentives that encourage employees throughout the practice to do their part in billing activities
- Determine strategies for improving the in-office collection of patients’ copayments, deductibles, and outstanding balances
In today’s turbulent reimbursement environment, it is business critical to ensure that your business office operates at peak effectiveness. This team — perhaps just one or two employees in a small practice, or dozens working on your behalf — ensures that your time is reimbursed appropriately.
Instead of just hoping for the best, pay careful attention to the performance of your business office and be alert for the warning signs of problems: swelling receivables, diminishing revenues and, often, a scarcity of accountability for poor performance. Like a snowball gaining size as it rolls downhill, problems can grow quickly once your business office falls behind. To make matters worse, employees’ efforts to control the problems may only make things worse. For example, as workers spend more time trying keep up with newer receivables, aging accounts grow older. When employees shift their focus to resolving the older claims, newer ones are neglected. Here are the eight most-common blind spots that lead to business office woes:
Look at the bigger picture. Yes, the business office is at center stage when it comes to getting bills out and collecting balances, but equally critical tasks that affect billing performance occur throughout the practice. Your receptionists are responsible for confirming insurance coverage, verifying benefits, performing accurate registrations and collecting time-of-service payments. Your nurse or medical assistant is responsible to capture pre-authorizations. You are accountable to document and select the appropriate codes for services you perform. Make sure everyone in the practice understands their role in the revenue cycle.
Embrace technology. The complexity of the billing process can quickly compound inefficiencies, but resist the urge to just throw more employees at the problem. Use automation to work smarter. Automate charge entry by inserting charge edits into your practice management system to reflect each insurer’s payment policies. Deploy claims scrubbers at the clearinghouse level to ensure that only clean charges are transmitted. Instead of calling insurers to confirm each patient’s coverage, batch and electronically submit eligibility verification requests nightly so that each morning begins with a brief-but-focused review of any exceptions.
Manage denials. Insurance companies don’t always pay the first time a claim is submitted so if a service is denied — even if it’s just one line item (i.e., CPT® code) on the claim — conduct a careful assessment. If the denial was warranted — an incorrect modifier was placed, for example — fix the mistake and resubmit the claim immediately. If a service was denied for no good reason — the payer asserts that your service was not medically necessary, for example — submit a letter of appeal outlining your argument in a professional, yet pointed manner. Develop a protocol for following through on each denial to ensure that payment was received.
Optimize staff performance. The tedium of billing can lead employees to develop poor work habits. Sometimes, employees spend so much time organizing their day — printing and highlighting reports, shuffling through folders designated for each payer, completing internal forms — that little actual work gets done. While organizational skills are critical, don’t let professional organizers hijack the workflow. Develop productivity-based measures, like the expectation to “touch” a minimum of 60 invoices each day, and audit each employee’s work by fully reviewing at least 25 of their invoices once annually.
While the business office rarely is responsible for denials, be sure to assess what they do to resolve denials. Do they identify denials accurately and in a timely manner? Do they strive to correct the situation, or just resubmit the same claim? Do employees’ notes truly reflect their actions on a claim? These are only a handful of questions to ask, but your review will support your expectations that employees pay attention to productivity, adhere to your policies and protocols, and accurately document their actions.
Review key performance indicators. Micromanagement isn’t a wise idea, particularly in the business office. You could easily spend all day, every day, on the telephone with insurance companies. Instead of micromanaging, develop an executive dashboard of key performance indicators, such as: days-in-receivables outstanding, percentage of receivables outstanding over 120 days, adjusted collected rate, and cash collected. Put your key indicators in writing; publish them monthly but report the amount of cash collected daily to your business office. Set goals and draw a “red line” — the point at which intervention is required because performance has dipped below an acceptable range – for each indicator you monitor.
Maximize in-office collections. Intuition — as well as research — reveals that patients are less likely to pay after they have received the service and left your office, yet many practices continue rely on post-visit billing for patient collections. Put the focus on collecting at the time of service. Encourage copayment collections, but also set in motion a procedure for employees to determine and request payment each patient’s coinsurance and unmet deductible at the time of their visit. If these amounts are too difficult to estimate with accuracy, determine the opportunity to collect minimum deposits.
For pre-scheduled procedures and surgeries, incorporate collection — either the full amount, a percentage of the expected charge or a minimum deposit — into the scheduling process. For patients who are unable to pay, develop a written charity policy that employees can easily follow. While patients — and employees — may initially resist, these time-of-service protocols will soon become standard office procedure.
Assertively manage key business partners. If you use an outside vendor to handle your business office, regularly assess their performance based on cost, collections — and communication. They should be offering monthly feedback about issues related to your billing, such as which CPT® codes are being denied, how many patients have overdue balances and where there are opportunities to collect registration data more accurately. Your vendor should be transparent, willing to share management reports, details about denials and documentation about work related to particular invoices. If they’re unwilling or unable to share these key data about your billing, it may be time to look for another partner.
Pay attention to underpayments. Underpayments from insurance companies continue to plague physician practices. Your business office should load the practice management system with fee schedules for each plan in which you participate. Then, as payments are posted, they can be easily matched with the expected fee. Any negative variance should spit out on a report to be worked, with an employee assigned to follow up on each transaction. Look for trends — such as all claims for CPT® 99214 being paid a few dollars less than your negotiated fee – and address them collectively with your provider representative. Underpayments are a reality; if you’re not watching for them, rest assured that you are missing an opportunity.
There are certainly high stakes in managing the business office, but achieving better performance is a team effort. Set standards, revise office protocols, coach and encourage employees for success and, most of all, monitor performance regularly to detect underperformance and catch problems early. Billing and collections may seem at times like a competition between your office on one side and the payers and patients on the other, but it is a game that you can win without taking shortcuts or going into overtime.
Offer patients the convenience of using credit cards online to pay outstanding balances, and on the backend use electronic remittance, funds transfer and online payment posting. Make sure that your desktop computers and laptops have sufficient processing speed and memory to handle daily tasks. Buy a second monitor for every employee who works at a computer so they can easily query two or more databases or programs at a time — a necessity now for most positions.
If you attempt to reward billers for how fast they post claims, you may wind up with lots of quickly submitted, but inaccurate, claims. Spread the performance incentives through the practice so that everyone will have a good reason to work together. Reward the front office if it meets a pre-determined percentage of accurate registrations and time-of-service collections. Reward physicians who code correctly and submit charges on time, too.
Understand Your KPIs
Measure key performance indicators in your business office in a way that ensures receivables are reported as the net of credits. Because credits — monies you owe someone else — simply offset receivables, your business office can make itself look better by holding onto monies they shouldn’t. Be aware that mounting credits may be indicators of mistakes — an employee collects a $40 copayment, but fails to “link” it with a $40 balance. Credits are transactions that need to be addressed, and should not be viewed in a positive light. Print your credit balance report each month, with an eye to proactively working all credits over 180 days in age, except for government payers where remediating action should be taken at 60 days.
Make Note of That
Just as more pressure is placed on you to improve your documentation in light of ICD10, it’s important that your business office gets the same message. Indeed, employees’ notes about what occurred with an invoice — and the work related to pursuing payment — is important business intelligence, even in a one-person business office. Set the expectation that all documentation about patients’ accounts must be timely, thorough and appropriately sourced (i.e., employee’s initial, date and time of entry).