The ever-changing healthcare landscape means coders and billers also must continuously update their skills and concepts to stay on top of the changes to make sure they are not leaving money on the table. With the introduction of EMR and advanced practice management software, the general belief is that the standards of billing and collection will be like never before – with every claim being billed out accurately and collected upon in a timely manner. Unfortunately, according to industry sources, independent medical practices are still leaving as much as 30% potential revenue on the table due to the inefficiencies in the billing and collection process. This happens because the rejection and denial rate is still too high and almost 50% of denials never get worked resulting in 5-7% loss of potential revenue. When you have too many denials your revenue can quickly get locked in Accounts Receivable creating a serious impact to your cash flow.

Cosentus is a leading medical billing service provider having optimized the billing and collection processes for numerous practices, enabling them to maximize their revenue and get rid of their cash flow issues. The purpose of this article is how you can implement these basic changes to your existing billing process and see your revenue grow by 25-30%.

Tip 1: Code it Right!

Accurate medical coding is the first step towards optimized Healthcare Revenue Cycle Management. Correct coding initiatives are not only mandatory from a compliance perspective, but it goes a long way in reducing claim rejections and denials while ensuring the best possible reimbursements for the service.

While talking about denials, keep in mind the average cost per claim to resubmit and rework denials is anywhere between $8-10. For the fiscal year 2017, for Medicare FFS programs, reported improper payment rate was 9.51%. The percentage of denials that are preventable – 90%.

*according to MGMA, AAFP, CMS

So, in the best interest of optimized collections, we believe before the claim is sent out of the door, accurate coding is a must.

Incorporate the following in your coding initiatives to collect more and stay away from Denials:

• Use 100% certified medical coders to code your cases, it is the job of a specialist only a specialist should be doing it.
• Stay away from non-specific diagnosis codes. ICD 10 requirements for dx documentation are much more detailed than the previous ICD 9 requirements.
• Incorrect modifier usage is the second most common reason for loss of potential reimbursement and claim denials.
• Modifiers often depend on the requirement of payers. Incorporate payer specific guidelines in your coding to stay clear of denials underpayments.
• Stay away from upcoding – regardless if it is because of lack of clear communication between the physician coder or intentional; never use a higher level of code or expensive procedures as compared to the level of service. This will not only result in delays denials, it is illegal.
• Stay away from under-coding – omitting or exchanging codes for a lower level of code or less expensive code is leaving money on the table.
• Have a reliable charge reconciliation process in place to effectively ensure zero charge leakage.

Do not up-code! Do not under-code! Just code it Right!

Download FREE White Paper: 5 Proactive Strategies To Optimize Medical Coding

Tip 2: Submit Clean Claims

As an independent practice you may wonder how much time and money you spend on resubmitting claims. The higher the number of rejections, the higher the cost. So, one of the very first things to do while thinking of optimizing your billing and collections is to make sure that you are submitting clean claims the first time.

It is interesting that with so much talk about clean claim submission, the industry average of First Pass Acceptance (FPA) of claims is only between 79-85% when the minimum FPA that you should aim for is 97% or more.

If your first pass acceptance rate is not over 97% we recommend you should look at the following areas:

• The #1 reason for rejections is eligibility; be sure to use real time eligibility or batch eligibility.
• Make sure you have the right technology partner; checking eligibility manually is not relevant anymore.
• Right technology also means a comprehensive rules engine, but no matter how comprehensive the rules engine is, you will still have to configure it to best suit your needs as a practice.
• Analyze your rejections in addition to fixing them; you can configure your rules engine better if you have data from this analysis. You can also improve your billing practices for better accuracy.

A clean claim out the door means faster reimbursement and serves as a natural step towards optimizing collections. Using a medical billing service provider like Cosentus, with the right blend of technology expertise, would help you achieve your goals for over 97% FPA rate and subsequently saving approximately $5000 annually per provider for reworking claims. Many clients report 25-30% reduction in days in AR as their FPA rate went up.

Check Out: 6 Top Medical Billing Mistakes That Cause Denials

Tip 3: Work the Correspondence on Priority

Typically, one of the most ignored pieces of the whole Healthcare Revenue Cycle Management is the timely action on the correspondence received from both payer and patient.

Correspondence could have vital information regarding the processing of your claim, such as an additional document needed to further process the claim or a questionnaire regarding a suspected pre-existing condition. When not responded to in a timely manner, it can result in significant delays or denial. These need to be worked on a same day basis so that further information could be shared with the payer timely and the claim could be processed accurately and as per your expectation.

Cosentus Medical Billing recommends the following as part of a sound correspondence management strategy:

• Correspondence should be worked on a 24-hour turn-around time
• ALL correspondence should be logged to the relevant patient ledger
• Log the correspondence as a zero pay use pre-defined action codes to route the case to the best suited employee for further follow up with the payer
• Logging every correspondence to the patient ledger also gives you the ability to report off of it in future
• Some correspondence could be critical, and they need to be flagged accordingly referred to the appropriate authority to handle

A well-organized workflow for the correspondence will not only help you get paid more, but faster as well.

Tip 4: Payer Contract Enforcement

Underpayment by payers is another huge problem for any practice trying to optimize collections. According to industry estimates by MGMA, 7-11% is the general underpayment by the payers to medical practices. Then there is the additional factor of different payers paying differently for the same level of service. Clearly this is a lot of revenue loss to the practice if the payer contracts are not managed enforced effectively.

That being said, tracking each underpayment down is itself a big challenge, and this is where you need robust technology to be able to do so. A partner like Cosentus who knows how to use technology to not only track each of these underpayments, but also how to effectively dispute them with the payers and get you the expected reimbursement, is a positive step toward maximizing your collections.

Cosentus advocates the following as part of an effective payer contract enforcement model:

• You need the right technology to be able to upload all your contracts and negotiated fee schedules.
• Each of these contracts need to be interpreted configured in the practice management software accurately.
• Clearly define if you have any thresholds for under or over-payments, if any.
• While posting paper eobs the software should give you the correct allowable for the claim each CPT on the claim: any claim that has an exception outside of the threshold should be flagged down with specific claim adjustment reason code (CARC) and sent to the dispute queue/ bucket.
• Do not apply any threshold on a large payer trend: $2 on each claim for 500 claims over 3 months is a lot of money. It is absolutely worth it to pick up the phone call a provider rep to get this fixed.
• ERAs are great, they save a lot of time money, but they need to be set up properly. Remember with ERA posting the only control you have is the checks balances you defined at the time of set up. Anything that is a deviation from the threshold should be reported as a warning; find time to work your warning reports.

Payers will always find ways to reduce your reimbursement, whether by denials or underpayments. But if you are ready to take on the challenge by implementing best practices throughout your healthcare revenue cycle, you could increase your net collections by 25-30%.

Check out our blog : 4 Tricks For Negotiating Profitable Urgent Care Contracts

Tip 5: Effective Denial Management

In the ever-changing environment of the healthcare industry, effective denial management is practically the key to maintaining a healthy cash flow. Everyone strives to keep the clean claim ratio at 97% or above, but there will always be some denials. These denials put a lot of pressure on the cash flow by increasing the average number of days in AR, not to mention the extra cost to the collection drive. According to industry sources, 50% of the denials never get reworked this results in 5-7% net loss of potential revenue. Try the above recommendations on correct coding initiatives submitting clean claims to reduce your denial rate. However, at the end of the day there will be some denials, and unless you have the right strategy to effectively manage these denials they have the potential to rob you of your well-deserved reimbursement. The need of the hour is to start shifting from management to prevention. If you can prevent the denial from happening in the first place there is nothing better than that. So, the new effective denial management is preventive denial management. And we believe preventive denial management = sustained cash flow.

Cosentus recommends adding the following as part of your denial management strategy:

• Denial should be always prioritized while doing insurance follow-up should be typically worked within 48 hours of being received.
• Create a well-defined list of CARC (claim adjustment reason code) group them by similarity of further follow up actions. This makes it easier for users to identify and work one type of denials at a time gives you the ability to assign a certain kind of denial to users who would be best suited to work them.
• Some denials would need dispute/appeal with the payer. Define your dispute strategy clearly; what is worthy of dispute Vs what is acceptable. Not every denial needs to be appealed.
• The appeal success rate is highly dependent on the content of the appeal; this is where having standard appeal templates with approved standard verbiage is a must.
• Use preventive denial analysis for the root cause study. The time effort that goes into this exercise will be worth it because it has the potential to reduce your future denial rate.

Denial Management is the job of a specialist, let the experts handle it for you.

Check out our blog: Preventive Denial Management = Sustained Cash Flow

Tip 6: Stick to the Insurance Follow-up Promises

Most people do some insurance follow-up to collect on their accounts receivable, however with varied degrees of success. The real key is to make sure you have a plan in place to close the loop on the claim by working your follow-up promises. It sounds simplistic, and it is, however if this discipline is lacking it results in more efforts and less collections. The accounts receivable keeps growing and soon starts getting out of hand, pushing the practice administrator to approve writing off money that was collectible not so long ago.

Try following these best practices to stay on top of your follow up promises:

• Create a list of well-defined disposition/action codes train your collectors on the standard usage of these codes.
• Link every code to a standard “next follow-up promise date” based upon the nature of the follow up action. Give some flexibility to the collectors to either prepone or postpone the date, but not more than a week.
• Factor in the average time taken by the different payers to process a certain kind of follow-up request while developing the matrix for codes and their standard time frames.
• Clearly identify the responsible parties for each kind of follow up action, so the responsibility accountability to continue to work with the payer till resolution can be well established.
• In addition to tracking the aging of the AR, also track the aging of follow up promises. Define a matrix for acceptable deviation from the standard.

If you have a well laid out plan to work your accounts receivable and the right resources to execute the follow up, your collection can typically go up by 25-30% or more.

Key Takeaway

Sustained Cash Flow is practically the lifeline of any business a medical practice is no different. You have worked too hard to provide the best care to your patients; therefore, you need to be reimbursed accordingly. You need to optimize your medical billing to maximize collections, and you can implement the tips in this article and make these industry best practices a part of your healthcare revenue cycle management. However, it is good idea to partner with Cosentus – a leading medical billing services provider with cutting edge technology domain expertise. While you focus on providing the best care to your patients, we will transform your revenue cycle to maximize your collections. With the improved cash-flow your practice can finally start meeting and beating all the financial goals. We care for you as much as you care for your patients.

Why settle when more awaits!

Cosentus Offers a FREE analysis of your Billing and Coding, to help you determine how well your current billing arrangement is working and how you can increase your practice revenue by 25-30%, by plugging the gaps in the current revenue cycle management. Sign up for this FREE analysis in less than 60 seconds by clicking the link below.