10 Jun 4 Things Practices are NOT Doing that is Crushing Their Financial Success (From an Accountant’s Perspective!)
By: Laura Goodman, CPA, CHBC
1. Not analyzing denied claims and, instead, automatically writing them off.
If a medical practice’s billing staff are not diligently following-up either with insurance companies, clearing houses or staff’s internal workflows, then earned revenue could be left on the table by the practice. If you outsource your billing, and your billing company is simply writing-off denied claims without any back-office due diligence, then they are nothing more than a glorified posting agency. Not following-up on denied claims and appealing where appropriate is essentially lazy and needs to be corrected.
2. Not correctly credentialing a physician with an insurance payer.
I personally know of a case in which a physician lost hundreds of thousands of dollars because a billing company forgot to credential or incorrectly credentialed their physician-client. Can you imagine that? Hundreds of thousands of dollars lost because an employee did not follow through the complete credentialing process. What’s even more shocking is that this is a common problem within private practices. Checking to make sure each physician is properly credentialed with each payer is absolutely crucial to the financial success of a practice’s revenue cycle.
3. Not knowing insurance payers’ fee schedules, not checking if the payment amounts are correct, and not loading fee schedules correctly into the practice management system.
Many physician-owners and practice managers are not aware of the reimbursement prices they have negotiated with an insurance company, nor do the practices have someone double check that the insurance payments are correct. Many practice management software programs don’t provide the ability to load fee schedules into the system. The better (and sometimes more expensive) systems have this functionality, and then also provide alerts when payments don’t match the contracted fees. Insurance companies love to “play games”, and they will pay a physician the lowest amount possible because it often goes unnoticed. This is something every physician should be aware of, and it is something they should be checking into regularly.
4. Not taking the time to assess the mix of insurance payers the practice is contracted with.
A practice needs to know each payer’s contracted reimbursement rates, which payers pay on time, and which payers represent the largest and smallest volume of patients for the practice. A physician-owner may be able to negotiate a better contract with a payer that is high volume or may desire to drop a payer that is slow, low-paying, and low-volume from their insurance mix. Many practices are unaware and accept the status quo from insurance companies, which can lead to significant amounts of billing staff and resources being spent trying to collect from lower-performing payers.