How many of us have been told by our financial planners we need to diversify our portfolios? As a business you need to do the same thing, except looking at who you are billing. Medical practices already have one of the most complex payment systems of any industry (except maybe the US Treasury for tax collection). Payers include government payers (Medicare, Medicaid, TriCare), Commercial payers (Blue Cross Blue Shield, Humana, Aetna, etc.), Self-Pay, and perhaps others. Each payer has different terms in their contracts and different reimbursement amounts for the same procedures. That is the reality of today. I am not venturing into politics, good, bad, indifferent, honestly I’ve seen the best and worst of the current system as a former Medical Billing Manager. Is there room for improvement – ALWAYS!
Large and small practices have room to improve their collection rates. There are opportunities to improve how long a balance stays on the books, improve negotiations, and improve accountability. With the increasing number of High Deductible Health Plans (HDHPs), it is imperative medical practices are aware of the patients’ benefits and out of pocket expenses. When prepared with this core payer information staff at the medical practice will be prepared for financial discussions with the patients. There are many medical practices that do not have the flow of asking for copays in place. Even if there is a co-insurance or deductible in place, the medical practice should have a policy to request the patient pay at the time of service.
Have you read your payer contracts? Have they been updated since ICD-10 and other major changes within the industry? Do your commercial payers pay more than your government payers (They should!)? What are your claim filing timelines for each payer? If there is a dispute, will there be mediation and whose jurisdiction? If the contract refers to a provider handbook, have you reviewed the handbook and agree with all of the terms? Contracts raise more questions than answers. These contracts can be the source of your problem or the solution to your problems. If one party isn’t held to the standards set out in the contract it establish a pattern of unacceptable behavior on either side of the table. Commercial and Government payers do a fairly good job making sure the contract is enforced to benefit them – not you. Medical Practices equally need representation to make sure the contract is enforced properly.
Changes within government payers is often times difficult to interpret. Medicare will follow their “Final Rule” each year after a period of comments. Similarly, changes in state funding of Medicaid can be critical for many practices. Recently the state of Iowa privatized their Medicaid functions toward a risk-based managed care system. Instead of one payer, Iowa Medicaid now has three payers. Procedures in which Iowa Medicaid did not require prior authorization now require it. There were many facets of this change Medical Practices needed to learn how they would be affected. Additionally, contracts needed to be established with each of these payers.
How do your receivables stack up? Do you know which payers are lagging behind or if they are paying the contracted rate? Have you seen a decrease in your cash flow? Data analysis of the payers is critical today. If you outsource medical billing – do you have established expectations and criteria? Do you spell out what happens with claim rejections and claim denials? Do you get a report of claim denials? Is it their process or yours causing the denials? Don’t let your payer mix be a mess. Know the facts about how long your patient or other payer balances have been outstanding, know which payers need attention, and maximize your collections. FinanSynergy knows how to interpret this data. Connect with us for a free consultation.