In today’s struggling economy, physicians tend to focus more on the business side of their medical practices to ensure the sustainability of their medical practice. To improve a practice’s workflow and revenue for its survival in the long run, physicians have started shifting their focus more towards medical billing and coding. Despite this shift in the healthcare industry, many practices have gone bankrupt because of the increasing claim denial rates. It is estimated that US physicians face a loss of at least $125 billion every year because of poor medical billing. There are two main reasons why physicians face such a huge loss in practice revenue; the increasing number of billing errors made by physicians or staff members in claims and the failure of staying up-to-date with the changing rules and regulations of medical billing.
To get Ready for ICD-10 many practices have started outsourcing their medical billing tasks to billing companies, so that physicians can direct more focus towards their patients and leave the ‘dirty’ work to billing experts. However, simply handing over the billing process is not going to help medical practices reach their highest potential and squeeze maximum revenue out of the submitted claims. There are some billing companies that only assist medical practices by carrying out the implied billing tasks like code reviewing, claim preparation, claim submission and insurance follow-up. These tasks can help reduce claim denial rates of medical practices to some extent, but not assist them in turning the tide against revenue loss.
Some billing companies have taken a different approach to tackle this long term revenue loss problem. These companies offer additional services to medical practices like managing claim processing, payment and revenue generation. These added services are collectively known as Revenue Cycle Management or RCM. RCM service covers tasks like claim tracking, payment collection and also addresses denied claims, which is most likely the main cause behind 60% of missed revenue opportunity for a practice. Following are some other services offered by RCM billing companies, which makes them a better choice as compared to simple medical billing companies:
- Pursuing denied claims
Unlike other billing companies, RCM vendors keep track of both the submitted as well as denied claims. By identifying the error behind the rejection or denial of claims, these vendors can advice physicians to make the required changes before resubmitting the claim. This increases the probability of approval of future claims as well.
- Reporting and analysis
A physician needs to follow up with the billing and revenue generation process of his medical practice. RCM vendors provide timely and detailed revenue reports to the physician, informing him of the number of claims accepted or denied and the shift in the practice’s revenue generated from these claims. Regular reporting and analytics also help physicians and billers to forecast the continued growth and profit of the medical practice for the next couple of years.
- Billing follow-up
If a patient defaults on his bill, who is supposed to follow up? RCM vendors also save physicians from the trouble of tracking all patients who have yet to pay their medical bills.
In a nutshell, RCM companies have redefined the billing process of medical practices and are more suitable to handle medical billing operations as compared to simple billing companies. Moreover, not all RCM vendors charge physicians heavily for offering additional billing services, which is a plus point for small practices. In order to find a fitting RCM company for their practice, physicians must evaluate billing companies on the level of services they provide, their industry experience and use of technology.
The key behind a financially successful medical practice is the effective and efficient use of its Revenue Cycle Management (RCM) model. RCM involves all steps related to claim processing management and revenue generation. Looking at historical trends, revenue cycle management has always been a priority for physicians but the recent regulations imposed by CMS and HIPAA are making RCM unmanageable for many.
Due to this dilemma, many practices have considered outsourcing the entire RCM process to medical billing vendors, who are more equipped to handle the process.
The problem with outsourcing for many
The next question that arises, and one that puzzles many physicians, is that if outsourcing medical billing is the best solution for both small and medium practices, why are many practices (which have outsourced the service) still not generating more revenue?
Well research all points towards the RCM vendor selection process. It turns out that if a wrong vendor has been selected for the job, or a practice fails to maintain a proper relationship with its vendor, the results can be disastrous. Practices aiming to increase their revenue can go bankrupt if physicians fail to follow the appropriate guideline or steps while choosing their Medical Billing vendor.
The ideal medical billing vendor should not only have the relevant experience in Revenue Cycle Management, but should also offer a greater ROI than the cost required to outsource the process. Here are some RCM processes that practices must ensure their vendor is offering,:
Claim processing and submission is not all that is required from medical billing vendors. Billers must keep regular follow-ups on the claims that have been submitted to insurance companies for further processing. Follow up time differs for different insurance companies. Some process claims within 15 days while others take as long as 40 days. Some practices fall in bankruptcy by the time they realize that their vendors have only been submitting claims and keeping no tabs on what became of them afterwards.
- Regular reports to provider
Billing vendors should establish a strong relationship with the practice, and keep the latter updated of submitted claims through regular reporting. The reports must be shared at regular intervals (eg: every 90 or 120 days). These reports must include the percentage of accounts in receivables, as well as a breakdown of payers and providers with accounts in each category. The reports must also include a breakdown of claim denials and rejections, along with their causes.
- HIPAA considerations
The billing vendors must also keep up with the latest HIPAA regulations announced by CMS. They must also provide the practice with Risk Assessment and Measures to remain compliant with HIPAA.
There are many other RCM processes that billing vendors offer including, but not restricted to, performance guarantees, technology interfacing and address inefficiencies and shortfalls in getting fully paid on a timely basis. However, if a practice plans on outsourcing medical billing, it should be aware of billing vendors that try to trap practices by fooling them into signing misleading long term contracts. This way practices would lose a lot of revenue if they decided to end the contract early, even if the cause was poor vendor performance.