Shove Aside 5 Awesome Collections Goof-ups that Threaten Your Medical Practice

Repetitive collections errors jeopardize the revenue and profitability of medical practices. This malaise is further aggravated by delays in submitting insurance claims, incorrect submission of claims, denied claims, ineptitude in following up of denied claims, and lack of experience in revenue cycle management  (RCM) and denial management analysis (DMA). The ramifications are further amplified with decrease in reimbursement and increase in overheads.

Expert Opinion

More than 47% of medical practitioners surveyed during the Medical Group Management (MGMA) 2012 Annual Conference reported annual loss of revenue due to preventable denials in excess of $25,000, with nearly 18% reporting revenue loss of more than $100,000.

According to a survey in 2011 by the American Medical Group Association, physicians suffered continued financial losses in most regions of the U.S. Northern region suffered the worst losses, averaging -$10,669 per physician, compared to -$9,943 per physician the previous year.

Hospitals on an average suffer revenue loss of more than $550,000 per annum due to increased patient discharge times, according to a survey of 577 healthcare professionals, conducted by the Michigan-based Ponemon Institute.

The American Hospital Association (AHA) study report of 2011 has depicted that 1,454 general medical/surgical acute care hospitals, long-term acute care hospitals, inpatient rehabilitation hospitals and inpatient psychiatric hospitals reported an aggregate of $86 million in claims denied.

Missed patient appointments cost $150 billion a year, according to a 2013 report from the Centre for Health Affairs

Increased coding complexity, Recovery Audit Contractor (RAC) Program, and increasing claims from an aging population result in erosion of revenue, according to AHA. Collecting payment for services rendered is essential for the survival of healthcare organizations, and coders are key drivers in that process.

Five cardinal mistakes committed by medical practices in collection of reimbursement are:

• Inability to collect when the service is provided
• Lack of documented payment policy that conveys payment responsibilities of patients
• Inability to follow-up rejected claims
• Failure to stipulate performance and collection yardsticks such as monthly collection goals.
• Non-awareness of tools that streamline collections processes

9 key guidelines to maximise revenue

• Ensure patient balances are collected at the time the services are provided
• Ensure and verify that the staff determines the patient’s portion of payment information, during the benefit verification process and prior to appointments
• Educate the staff on how to find out the patient’s deductible and coinsurance charges
• Maintain a fee-schedule chart listing commonly used codes and each payer’s corresponding contracted rate.
• Ensure the patients are explained their portion of the bills.
• Verify benefits and confirm insurance.
• Re-evaluate, resubmit, and monitor claim denials
• Utilize collections-related technology software tools that makes your task easier
• Implement a patient portal that facilitates online bill payment.

At this juncture when reimbursement is on the decline, with increase in overheads, it is imperative that the practices ensure they collect as much of their hard-earned cash as possible.

Outsourcing medical billing functions eliminates inefficiencies by subcontracting the collections process. It pays to be prudent by having another party handle coding, billing and collection worries, rather than tasking in-house staff with creating and filing claims.