You’re a physician, and your passion is learning the latest in medicine and providing optimal patient care. That’s all you want to do when you’re at your practice. However, with the direction healthcare is heading, you will have a hard time staying in private practice without an understanding of the business side.
Though having an experienced, caring, and motivated billing team is critical, it is not enough to guarantee your business’s success. It is more essential now, than ever before, that physicians take an active role in their practice operations and stop relying solely on their office managers, billers, and “other experts” to run their practice effectively. The bottom line is, it’s your practice and no one cares about it as much as you do. So start getting involved.
It doesn’t have to be all bad or boring, either. Learning to read reports and analyzing them on a regular basis can help you understand exactly how you’re getting paid, what’s covered and what’s not, and help educate your patients on their insurance and medical benefits. Patients usually don’t have a thorough knowledge of their insurance plans, and expect the doctor to have all the answers. The more you know, the more you’ll be able to be a great resource to your patients.
So, let’s get started. Here are some reports that every physician should review on a regular basis:
Accounts Receivables – commonly referred to as AR. You will always have money outstanding, unless you are a cash-only practice that collects at the time of visit. You want the first column of 0-30 days to be the biggest. Ideally, 80-90% of your outstanding balance should be in that column. That indicates that there are payments still owed to you from services you provided within the last month. It’s the most current outstanding balance, which can gage your expectations of how much revenue you should be expecting soon.
The next column is 31-60 days and should be anywhere from 5-15% of total AR. That usually consists of your secondary payers and slower-to-pay payers, which may include workman’s comp and accident cases. That should be a small amount of total money outstanding. Anything over 61 days should be immediately worked and addressed by your billers. If AR over 61 days is left unattended, it can quickly grow and the chance of you being compensated can decrease dramatically. Some payers will even deny claims not submitted within their timely filing regulations, which may be 90 days from the date of service.
- Though keeping track of AR is very important, it is equally imperative to understand any and all of your rejections and denials. You always want to be proactive, not reactive. Once two claims are denied for the same reason, it should be considered a trend and investigated. You should try to prevent any denials or rejections, since they can significantly delay your payments and hurt your cash-flow.
- Develop a system for patients’ AR. How many statements are you planning to send out? What will you do with patients who don’t pay? A good rule of thumb is to send two statements to the same patient for the same date of service. If that patient doesn’t pay, either have someone from the office try to call him or her, or send the patient to a collections agency. Be aware of the regulations regarding writing off patient balances. Under most insurance contracts, you are obligated to bill patients for all patients’ responsibility, as per their insurance policies.
- Periodically it is a good idea to review your reimbursements from all your payers. Does it make sense for you to participate with HMO and PPO plans? Should you take capitated plans? Depending on your area, specialty, and contracts, some insurance plans might be a huge hassle, and provide very low reimbursement.
- Invest in periodic coding audits to ensure you are coding correctly, your documentation warrants the levels you are recording, and you are not under or over-coding. You may be leaving a lot of money on the table, so don’t assume that under-coding is better. In addition, insurances can have very strict penalties for over and under-coding. Both are considered fraud, so the more you know and understand coding, the better. Also, do not strictly rely on your EMR software to provide correct coding. Though EMR coding may be used as a guide, studies show it is often incorrect, since it only takes into account your selected fields and not your dictated or written documentation. It is best to have an expert do an assessment several times a year to make sure you are doing everything correctly. Have the auditor provide a feedback and educational session for optimum benefit.
In conclusion, be very selective and pick the very best, not cheapest, billing team to work with you. Having a knowledgeable, dedicated, and proactive billing team is crucial for success. However, it is equally important for physicians to stay on top of their finances and billing. At the end, you are the one in-charge and the only one who can make sure your practice will flourish. Make sure you and your billing team are working in synchronized partnership, meeting in-person on a regular basis, and are constantly analyzing the best practices for your business.
Simply Remember: “The billing team can make or break your practice.”
If you have any questions, please contact us at firstname.lastname@example.org.