Outsourcing medical billing to the correct billing company can insure that they have the same incentives as you do.
Almost all medical billing companies are paid a percentage of what they collect. This means they are only paid when you are paid. It also means the more they collect for your practice, the more they are paid. Internal medical billers, on the other hand, are almost always hourly employees. They are paid based on showing up in your office, not based upon how well they perform your medical billing or how much money they collect for your practice. This is not an alignment of incentives.
This issue, however, is often not fully understood or appreciated by many providers. These providers frequently say: "the staff works directly for me in my office-- they are more loyal and will do a better job and I can see what they are doing". Experience has shown, however, that this is often not true.
I recently spoke with a partner at a busy cardiology practice. While one of the billers was out sick, some paperwork was required and the supervisor went looking for it. When the supervisor opened the missing biller's desk, a stack of unfiled, old claims was discovered. It turned out about $40,000 of them were past timely filling deadlines. They were lost. I repeat-the practice lost $40,000! When the biller returned from her leave, she was "sternly" reprimanded. Let me say it one more time-she was reprimanded. Not fired, but reprimanded. Either way, the practice lost $40,000 in just this one instance alone.
When I asked the doctor why a more severe action was not taken, he explained to me that "we already have staffing problems and did not want to alienate the billing staff any further." The guilty biller was apparently moved to the front-desk role and is now responsible for gathering demographic information and money.
There should be safety nets in place to catch $40,000 in missing claims. So how could this have gone unnoticed until a desk excavation? The office did not track and reconcile charges, payments or write-offs. The doctors had been told that the practice's system could not report at this level. The system, however, indeed had the capability to do this, but the billing staff did not know how to properly use it. Without the the fully aligned incentives of a medical billing company, the investment is often not made to full utilize the capabilities of a practice's medical billing system. $40,000 in missing charges is likely only the tip of the ice berg for this medical practice.
Utilizing a medical billing company is not a panacea for such situations, but if you insure the following actions are built into your agreement with the billing service, you should be in good shape:
- Complete visibility and tracking of charge and payment batches should be in place. This will prevent anything from "falling through the cracks".
- Any claims that are denied for timely filing should be the responsibility of the billing company. In other words, they should make the practice whole if they fail to file your claims. This is not a demand you can make of in-house billers (it is not even legal to make it).
- The practice should always (24 hours a day, 7 days a week) have access to the medical billing companies system. This allows the practice to see at any time exactly what is happening with their account.
We often hear from the physicians how hard and long they work for ever decreasing reimbursements. All this is true. However, too often we also see practices (through various reasons) hurt themselves financially - over and over again.
It has been said that the definition of insanity is doing things the same way and expecting different results. This certainly applies in the story outlined above. The biller that left $40,000 in charges unbilled will likely continue to cost the practice money. Just because she works for the practice does not mean she represents their best medical billing solution.
A high performing medical billing company with complete transparency and full alignment of incentives is the surest path to medical billing excellence and strong financial performance for your practice.
Copyright 2008 by Carl Mays II - 16928
Almost all medical billing companies are paid a percentage of what they collect. This means they are only paid when you are paid. It also means the more they collect for your practice, the more they are paid. Internal medical billers, on the other hand, are almost always hourly employees. They are paid based on showing up in your office, not based upon how well they perform your medical billing or how much money they collect for your practice. This is not an alignment of incentives.
This issue, however, is often not fully understood or appreciated by many providers. These providers frequently say: "the staff works directly for me in my office-- they are more loyal and will do a better job and I can see what they are doing". Experience has shown, however, that this is often not true.
I recently spoke with a partner at a busy cardiology practice. While one of the billers was out sick, some paperwork was required and the supervisor went looking for it. When the supervisor opened the missing biller's desk, a stack of unfiled, old claims was discovered. It turned out about $40,000 of them were past timely filling deadlines. They were lost. I repeat-the practice lost $40,000! When the biller returned from her leave, she was "sternly" reprimanded. Let me say it one more time-she was reprimanded. Not fired, but reprimanded. Either way, the practice lost $40,000 in just this one instance alone.
When I asked the doctor why a more severe action was not taken, he explained to me that "we already have staffing problems and did not want to alienate the billing staff any further." The guilty biller was apparently moved to the front-desk role and is now responsible for gathering demographic information and money.
There should be safety nets in place to catch $40,000 in missing claims. So how could this have gone unnoticed until a desk excavation? The office did not track and reconcile charges, payments or write-offs. The doctors had been told that the practice's system could not report at this level. The system, however, indeed had the capability to do this, but the billing staff did not know how to properly use it. Without the the fully aligned incentives of a medical billing company, the investment is often not made to full utilize the capabilities of a practice's medical billing system. $40,000 in missing charges is likely only the tip of the ice berg for this medical practice.
Utilizing a medical billing company is not a panacea for such situations, but if you insure the following actions are built into your agreement with the billing service, you should be in good shape:
- Complete visibility and tracking of charge and payment batches should be in place. This will prevent anything from "falling through the cracks".
- Any claims that are denied for timely filing should be the responsibility of the billing company. In other words, they should make the practice whole if they fail to file your claims. This is not a demand you can make of in-house billers (it is not even legal to make it).
- The practice should always (24 hours a day, 7 days a week) have access to the medical billing companies system. This allows the practice to see at any time exactly what is happening with their account.
We often hear from the physicians how hard and long they work for ever decreasing reimbursements. All this is true. However, too often we also see practices (through various reasons) hurt themselves financially - over and over again.
It has been said that the definition of insanity is doing things the same way and expecting different results. This certainly applies in the story outlined above. The biller that left $40,000 in charges unbilled will likely continue to cost the practice money. Just because she works for the practice does not mean she represents their best medical billing solution.
A high performing medical billing company with complete transparency and full alignment of incentives is the surest path to medical billing excellence and strong financial performance for your practice.
Copyright 2008 by Carl Mays II - 16928
About the Author:
Carl Mays II, Founder and CEO of ClaimCare Medical Billing Services, is an expert in the field of medical billing and medical practice management. Carl has been working in the medical field since 1995. Prior to that Carl worked as a mechanical engineer for Boeing. Read more about medical billing companies at the ClaimCare Blog.
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