How medical practices can put an end to underpayments? Be proactive

 Erika Regulsky Tags: , , , Billing & Collections


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Are physicians being underpaid by insurance companies?

Physicians constantly crib about denied claims. Even as medical practices across the country, try to devise strategies to curb denials, a more silent, assiduous poison is slowly eating up the revenue of physicians. More often than not, it goes unnoticed. Underpaying physicians is a menace that has snowballed into a huge issue.

Programmed to underpay?

The problem begins with poor understanding of payer contracts. When health insurance giant, WellPoint, agreed to pay 700,000 physicians, $198 million dollars, it sent shockwaves across the industry. The doctors claimed that they’d been systematically underpaid over the years.

The physicians alleged that computer systems were programmed to underpay doctors. There are, hundreds of lawsuits and locked horns similar to this, that haven’t made it to the headlines.

Download the resources on 7 practice management templates which need zero technical skills

Is it okay to get paid just 62% of what is rightfully due?

Welcome to the world of contractual agreements. Most insurance companies pay just 86% to 90% of what is in the contract. Even a 10% loss can be a huge hit to medical practices who are already struggling to make ends meet. A practice that collects 30,000 dollars loses 3000 dollars, regularly, for no fault at all.

A lot many medical practices find going through payer contracts a laborious process. But it is better to be safe than sorry.

A few steps to stop underpayments…

  • Educate patients about payment options and responsibilities. Most patients do not realize the fine-print that comes with insurance plans. Physicians should stop letting patient payments to go through the cracks.
  • Analyse payer contracts and agreements every 3 months. Most insurers change regulations often and it is in the best interest of medical practices to stay updated with current plans.
  • Knowing how much you are going to be paid prior to signing an agreement helps. Compile a list of CPT codes based on how often you them and what the top paying codes are. Ask your insurer to list out the fee for each code. This will save your practice from legal wrangles and underpayments.
  • Automate your billing process. Having staff to manually check every payment against the contracted payment rate can be too time consuming and can result in errors. Use a tool that automatically cross-verifies every payment matches the payers’ schedule.
  • Monitor key performance indicators regularly to spot unhealthy payment trends. This will help you clamp down on under paid claims immediately.

How much have you struggled with the payer to get perfect reimbursements? Share your experience..


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I’m a multi-certified revenue cycle management professional and compliance officer with 20+ years of experience. I contribute articles to leading healthcare publications and journals. I am currently working as Senior Transition Manager, in BillingParadise headquartered at Diamond bar, California. BillingParadise offers Medical Billing Services that intersect perfectly with the EMR/Practice management system you use.BillingParadise has offices in New Jersey, New York, Florida, Georgia, Minnesota, and Texas.


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