Six Sigma Blogs

One of the key advantages of billing outsourcing, when it is done correctly, is the clear alignment of incentives between the practice and the billing company.

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.

Most people would prefer all their service providers to have “skin in the game” and only be paid for success versus just for making an attempt. For instance, would you prefer to pay your mechanic only if he properly fixed your car (and only for a previously agreed to price) or would you prefer to pay him an hourly rate and hope he will be as effective and efficient as possible in performing the job?

In a conversation I had recently with a busy cardiologist I heard a story that is not unusual. One of the office’s medical billers called in sick. Some information was needed while she was out so the office manager went looking through her desk. She did not find the information she needed, but she did find over $40,000 worth of claims that had not been billed and had gone beyond the timely filing deadline. That is right, $40,000 worth of claims that could not be billed and for which no money would ever be realized. Upon the billers return she was “sternly reprimanded for this egregious error. Not fired, but reprimanded for costing the practices tens of thousands of dollars. There is no alignment of incentives present in a situation like this.

This reaction is surprisingly common. Typically practices have so much trouble recruiting, training and retaining billing staff they are reticent to let one go. In addition, the billing staff complains about how understaffed they are and how they cannot be held responsible for not being able to complete even basic medical billing tasks. In this office’s case they moved the biller to the front desk and had her in charge of collecting patient demographics. A place where she can do even more harm through poor performance.

This volume of missing charges should not have gone unnoticed. There should have been multiple reports that could have identified such a problem. The practice, unfortunately, did not know how to properly utilize the capabilities of the billing system and so, the required reports were never run. Proper use of a billing system requires much investment in time and training, an investment that hourly employees often do not make. This $40,000 in unbilled charges is likely a proverbial roach of this practice - in other words, for the one you see there are likely hundreds you do not.

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:

- A fully integrated tracking system (charges by locations/provider and payments by source - lock box, office, PO Box) should be in place and you should have full visibility into the system at all times.

- Your medical billing company should reimburse your practice for what you would have been paid by the payers based on your allowable for any claims that go past timely filing for reasons within the medical billing company’s control. What this means is that you never suffer financially if the billing company drops the ball. Try to have your billers reimburse you if they drop the ball.

- You should have access to the billing system so that you can see real time status of your 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.

No - your staff will not work harder for you just because you employ them; and No - the biller who lost you $40,000 will not do any better job collecting money and gathering information from patients. You will probably need to “sternly” reprimand them again.

Selecting a world-class medical billing service that provides total visibility into their process and has incentives that are fully aligned with those of the practice is the most reliable road to outstanding medical billing and financial excellence.

Copyright 2008 by Carl Mays II

As a promoter of home based business opportunities, it can be difficult reaching your goals. One of the biggest reasons why many people struggle is because of lack of effective time management. Here are some great tips to assist you.

1. Write down everything you need to do

In order to manage your time you must identify what you need to do each day. You do not need to jot down the stuff you can delegate, just the stuff you have to do personally. Make sure you have access to it so you can constantly refer to it. Do not worry if you are not able to get everything done, you can always add it to tomorrows list.

The list helps you in that it reminds you what you need to do during the day. Put the most important tasks first and work from there. If you do that and you have a lot of unexpected things that occur, you will at least have handled the most important items you needed to do.

2. Checking email can waste a lot of your time

One of the biggest mistakes you can make when you promote home-based business opportunities is checking email constantly. Constant email checking often results in hours of wasted time a day. You should have a designated time throughout the day that you check email, ideally after you complete some of your more important activities during the day.

One common misconception is that email is not distracting if you do not reply, only check. This is not true because even if you only read, it still takes some of your mindshare away from other activities that are more productive for building your business.

3. Surfing the internet without purpose is a business killer

Because many home-based business opportunities require use of the internet you can be tricked into believing surfing the internet is work. It is only work if you are doing revenue generating activity. Otherwise, surfing the internet is busywork at best and time wasting at worst. One of the best tips you can do is to turn your internet connection off if you don?t need it to work. This will avoid the temptation to check websites you do not need to check.

4. The phone can waste a lot of time during the day

You would be amazed at how much time the phone can take out of your day. Constantly answering the phone not only takes actual time away, but also takes mindshare away as well by diverting you from the task at hand. You should have your voice mail or assistant answer calls for you while working. This way you do not have to worry about taking a call that is not productive to the tasks you are trying to complete at this time. Doing this will help you get more done throughout the day.

Take some time to evaluate how you spend your day. Look at the time you spend on email, on the phone and surfing the internet. Apply some of these suggestions so you can improve your time management ability.

Clean Claim Laws are currently in place in every state. The assistance provided by the laws ranges from states like South Dakota which has no economic penalty to Texas where the payer sometimes is required to pay billed charges

The fundamental concept behind Clean Claim Laws is that insurance companies must respond to a clean claim within a given period (typically 30 days for electronic claims). Systematic utilization of these laws will allow a medical billing service or medical practice to significantly accelerate and increase collections. In order to take advantage of the clean claim law one must have a monitoring system built into your medical billing process that identifies:

1. Which payers are subject to the clean a claim law (not all are),

2. The date your practice initially submits each medical claim;

3. When a request for information was received from the payer (if you receive one then it stops the 30 day clock until you respond),

4. Events that restart the clean claim clock (e.g., your office replies to a payer’s information request), and

5. The date from the payer’s communication about the final disposition of the claim.

The idea of systematically tracking all of this information may be daunting, but with a smart system design it is possible and most definitely a worthwhile undertaking. After submitting a few Clean Claim law violation reports you will see your claims pay faster. I have seen situations where payers have actually called just to assure the practice that claims will be quickly processed.

If you would like to better understand the benefits of implementing a Clean Claim Law tracking system before investing the time and energy into the design and implementation of the system, then run a pilot. Identify a payer that is consistently in violation of the Clean Claim Law. Select 30 to 50 claims from this payer and manually track all of the items outlined above. Once you have some violations, file a report following your state’s guidelines. This process will allow you to better understand what will be required to make such a system a permanent part of your medical billing and see the potential benefit to your practice.

Copyright 2006 by Carl Mays II