Billing and Collections

Minimizing Accounts Receivable Days (AR Days) in a Pediatric Practice

July 20, 2012 in Billing and Collections by support Team  |  1 Comments

All practices have accounts receivables. There is a wide distribution of how efficiently Pediatric practices manage the revenue cycle to minimize the amount of revenue in accounts receivable. A common measure in the industry for benchmarking how well a practice manages the revenue cycle is Accounts Receivable Days or more commonly known as AR Days. What are AR days? Let’s look at an example. If a practice has an average of $100,000 in gross charges a month and currently has $200,000 in accounts receivable (waiting to be paid by insurance companies and patients), the practice has approximately 60 AR Days. All practices should continue to optimize their processes and systems until the practice consistently operates at less than 30 AR days.

There are many inefficiencies that slow down the revenue cycle for practices. For instance, some practices leave a copy of all their charges each week for a biller to ‘pick up’ then send to the insurance company. The biller/billing company then needs to enter these charges in their system, review and send to the clearing house. In some cases, at least two weeks pass prior to the claim being uploaded to the insurance company. I am aware of some hospital systems that wait to the end of the month to send all claims – what a wasteful practice! A strong Pediatric Billing company measures, monitors and benchmarks these processes and looks for ways to improve the AR days for the practice. This usually requires best practice sharing and routine evaluation of pain points in the revenue cycle. This is difficult for an average biller of a practice to do successfully due to their time and focus need to focus on the daily management of claims. Pediatric practices are dependent on the practices systems, processes and back-end billing team to minimize the AR days for the practice.

Using Lean Six Sigma to Optimize the Revenue Cycle in Pediatric Practices

June 1, 2012 in Billing and Collections by support Team  |  Comments Off on Using Lean Six Sigma to Optimize the Revenue Cycle in Pediatric Practices

I enjoyed meeting with clients and potential clients in their Pediatric office. Pediatricians have such a challenging and rewarding career to treat the children of our future. Children should not be treated medically as “small adults” and have special needs and treatments based on a variety of factors including family history, their environment, social economic status, etc. Similar to the special needs of treating children, Pediatric Practices have specific needs to optimize the operation from a revenue cycle perspective. Unfortunately, I have seen too many Pediatric Practices where the practice is operating at a level that reduces the effectiveness of the practice as well as reduces the revenue cycle for the practice. When I walk in these practices I see money flowing out the door without the partners/owners knowing (usually because they do not have time as well as the training to see these gaps as well as the complexity of the revenue cycle). In many of these practices the missing revenue is thousands of dollars a month! There are many tools to help practices optimize there effectiveness including LEAN Six Sigma.

Lean Six Sigma is a quality tool that gained much fame via manufacturing processes (e.g. Toyota – quality focus) before being leveraged in other areas such as business processes and systems. One of the principles of lean six Sigma is continuous improvement in the operation and processes. So how can Lean Six Sigma be leveraged related to Pediatric Practice Management? Some examples include:
• Using LEAN principles to improve the Pediatric Revenue Cycle each month by identifying billing processes on the front end and back end of the revenue cycle that slow down the payment stream to the practice. One objective measure is Accounts Receivable (AR) Days. The AR days are simply the amount of Revenue Outstanding to be collected for the practice divided by the average revenue collected per day. An optimal practice should be below 30 (which means about a month of Accounts Receivable is pending at any one time). We are able to move some practices into the low 20s.
• Holding a Kaizen event to evaluate the front end and back-end of the revenue cycle for your practice. By involving the appropriate individuals to this event, practices can identify ‘pain points’ of the revenue cycle and some potential solutions/ideas on how to improve this pain point.
• Request the physicians and providers in the practice to evaluate and determine the amount of time spent documenting in the EMR system as well as the quality of the clinical documentation. Usually, one physician leader from the practice should be the point for this effort. The time invested should be to identify the most common as well as least common clinical conditions in the office, the time for needed for the visit and charting the visit as well as the consistency of the clinical documentation.

These are a few examples of how a Pediatric Practice can apply LEAN six Sigma principles to improve the practice. For the practice to appropriately apply a recommended improvement, it is critical that the practice leverages a Pediatric Electronic Health Record and Practice Management system that can be customized for the practice (Make sure and speak with your E.M.R./practice management system vendor to discuss if/how the system can be modified/customized based on practice process flow changes). Using LEAN Six Sigma can help improve the operation, the revenue as well as improve patient and provider satisfaction.

How the front Desk Team Optimizes the Front End of Pediatric Revenue Cycle and Billing

May 24, 2012 in Billing and Collections by support Team  |  Comments Off on How the front Desk Team Optimizes the Front End of Pediatric Revenue Cycle and Billing

The revenue cycle for a Pediatric Practice consists of a front and back end. The processes and procedures of claim submission and patient statements are usually established and led by the group that manages the back-end of the revenue cycle. If you outsource your billing for your Pediatric practice, this is the Medical Billing Company that manages the billing of insurance companies and patients. This billing company should have defined processes and systems to manage their billing and collections for clients. They should provide the practice with a billing manual on how they manage the billing for the practice. This manual helps insure there is good communication and compliance with a process. Make sure to select a company that has processes and procedures with focused experienced in Pediatrics. If your practice utilizes a biller in-house, you need a practice administrator to develop processes and procedures then monitor these processes on a routine basis to insure adherence to these systems. Some questions include: what % of claims is sent to the insurance company within 3 days of being seen in the office? What is the rejection rate at the clearing house? What are the trends in re-submissions? How often do you train your billing team? Is the biller aware of the current changes in codes and coding rules? What is your management plan? Although physicians have the intellect to learn these items, does this extra management and learning reduce revenue generating areas like new patients and alliances with other providers? No matter if the billing is managed by a professional billing service or in house, the practice will need to manage the front end of the revenue cycle.

What is the front end of the revenue cycle? The most important aspect of the front-end of the revenue cycle is managed by the front desk team. Prior to a patient checking in, a front desk team member needs to verify the patient’s insurance, collect the co-pay, scan the insurance card and collect any outstanding bills. How well the ‘back end’ casino online of the revenue cycle communicates with the front end is important to optimize the payment due from payments. This level of coordination and communication is dependent on the system being used as well as the people using the system. For instance, a good system will allow the billing team to flag a patient that has a balance so that this information shows up on the schedule when the person checks in. The staff at the front desk needs to be coached and provided feedback on their consistency on collecting any flagged balances. A person in the practice (usually a physician partner) should be reviewing each week to verify that all co-pays are collected, insurance cards scanned in and patient balances collected when the patient shows up.

These are some examples of what the front desk team needs to do. Managing the front end of the revenue cycle is usually very simple and not time consuming. No matter if the practice leverages a professional billing company or decides to utilize their own billers, it is in their best interest to manage the front end of the revenue cycle.

Is Your Pediatric Practice Achieving >99% Collection Rate versus the Contract Amount?

April 27, 2012 in Billing and Collections by support Team  |  Comments Off on Is Your Pediatric Practice Achieving >99% Collection Rate versus the Contract Amount?
2011 Pediatrician Pay versus other Specialities

2011 Pay of Pediatrician versus other Physician Specialities

Many Pediatricians look at their deposits in the practice bank account as well as track the increase/decrease in revenue. The practice has to provide optimal Pediatric care and achieve >99% collection rate to optimize the revenue collection process. Given that Pediatrics are the lowest paid specialty (per the 2011 Medscape Salary Survey – see link at http://www.medscape.com/features/slideshow/compensation/2012/public?src=ptalk&firstbullet), insuring that the practice achieves the revenue due per the contract is a necessity.

Increasing revenue year on year is important but an increase in revenue might not mean increased income/profit for the practice. For instance, if the practice has a 10% increase in visits that is due primarily to higher rates of vaccine visits, and the practice has vaccine leakage (loss of vaccines) as well as sub-optimal coding and billing follow-up, the overall practice profit might decrease. How could this happen and how could I prevent this from happening?

How a lower profit margin could happen? According to the Medical Group Management Association (MGMA) via benchmarking of collection rate, the average practice collects 95% of their contract amount. If a practice has ‘average’ billing systems and processes in place, per the MGMA benchmark of 95%, the practice would not see 5% of their revenue. If the practice had revenue of $1,000,000, they did not collect $50,000 of the contract amount (either the insurance or the patient did not pay). In addition to this, some practices lose entire visits because of the disconnect between the biller and the clinical (common when the practice fills out paper charts and paper billing sheets for a biller to complete). Some other ways that a practice has reduced revenue is improper coding. For example, if a child has a well visit and receives a MMR Vaccine, some billers miss the 90461 CPT code with 2 units. Some billers might send this CPT code but miss that the EOB only paid one of the units and they need to re-file the claim (e.g. 99391, 90707, 90460, 90461 (2 units)).

How could I prevent this from happening?
#1 insure that your Pediatric Practice leverages a medical billing system that is designed, developed and utilized only for Pediatrics.
#2 The Pediatric Medical Billing team needs to be trained and re-trained (at least 1x per quarter) in Pediatrics. The Pediatric E.H.R. should be integrated with this Pediatric Practice Management. The office needs to have audit systems in place to verify that co-pays are collected and match the insurance card as well as a monthly audit of the Pediatric Medical Biller.
#3 There also needs to be redundancies in the Medical Billers to manage the claims while a Pediatric Medical Biller is out sick or on vacation. I have seen both large (>8 providers) and small pediatric practices for which the entire revenue cycle was outdated and disconnected. Unfortunately, I have even seen a large Pediatric Group where the entire team had a significant gap in their knowledge and skills.
This will never be perfect BUT every practice should achieve >99% collection rate and strive for 99.8% (we have a few practices at 99.7%). At least each quarter and preferably once/month the practice should measure and monitor the collection rate.

Five items to Qualify a Pediatric Specific Medical Billing Company

April 21, 2012 in Billing and Collections by support Team  |  Comments Off on Five items to Qualify a Pediatric Specific Medical Billing Company

1. Determine if the company is structured Primarily for Pediatric practice billing. There are a number of
EHR companies that are in Pediatrics that started as software for electronic health records and then
developed a practice management system then offered billing. The order of development of systems and
processes is important for developing holistic systems and processes. Optimizing collection rates to above
99% consistency is important. Unfortunately there are many consultants whom have good knowledge of
meaningful use with absolutely no knowledge of Pediatric practice management. Solid practice
management and financial management are critical to each pediatric practice.

2. Evaluate if Their ENTIRE business is based on optimizing Pediatric offices in both medical billing and
Electronic Health Records.
There are a number of companies that market themselves as a specialty
medical billing company in pediatrics while they are really a general medical billing company with a
marketing campaign focused in pediatrics. Their software processes and usually medical billets have
general medical billing training. This lack of ‘organizational focus’ can mean thousands of dollars in missed
revenue per month for your pediatric practice.

3. Does the pediatric medical billing company reduce burden on the providers and the practice? System
design can decrease burden and increase accessibility. A good pediatric decal billing service will provide a
monthly report that monitors the top benchmarks needed to manage a Pediatric practice. Some of these
benchmarks include collection rate account Receivable days versus national standards such as benchmarks
provided by the Medical Group Management Association. Just as today’s technology allows you to access a
book you purchased on Amazon or a song on iTunes in multiple locations and multiple devices, so should
the software provided by your Pediatric Medical billing service. The is NO NEED for the practice to have to
purchase, maintain, back-up, maintain server firewalls, stay on top of the latest firewall and virus
technology, and update servers. This is an old dated model that provides an extra burden on the Pediatric
practice.

4. Ask about training of their billing staff. Does the billing company train in Pediatrics? The billing and
coding rules in pediatrics change each year. It is difficult for a biller whom is provided general billing
training stay up to date in pediatrics. This lack of pediatric billing training can cost your practice thousands
of dollars.

5. Do they have Standard Operating Procedures (SOPs) designed and developed solely for Pediatric
practice billing?
The revenue cycle contains the co-pay, the insurance responsibility as well as the patient
liability. Although the revenue cycle is similar in medical practice management, there is great variation on
how to optimize the revenue cycle by specialty. For instance, understanding all the rules in vaccine
administration codes is not a benefit to billers for surgeons but is critical in Pediatrics.

Choosing the ‘right’ Pediatric medical company should Increase revenue, decrease administration burden
and reduce stress to the practice.