One of the first steps to optimizing the revenue cycle for a Pediatric Practice is to develop and incorporate a consistent Billing Processes, Procedures and Policies Manual for the practice. This manual should be customized to the practice based on how the revenue cycle is managed for the Pediatric Practice. Some items to include in this manual are:
• Payment Plan Agreement
• Examples of letters that will be used for final collections, payment plan, etc.
• List of responsibilities for front desk team members
• Registration forms
• Notices such as privacy policy
For all of our new billing clients we develop or edit the Billing Processes, Procedures and Policies Manual to the needs of the practice. This written document helps to provide clarity to all parties involved related to the Processes, procedures and policies for managing the revenue cycle of the Pediatric Practice. Developing and implementing this manual is an important first step to optimizing the revenue cycle for the Pediatric Practice. If you develop your own manual, recommend you obtain assistance from either a Pediatric Practice consultant or from another Pediatric Practice Administrator to identify if the manual is within the current standards of the industry. We have obtained new clients that were managing the practice based on revenue cycle rules of the late 1990s. In some of these cases, the practices were missing thousands of dollars a month in unrealized revenue due to outdated practices and processes.
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Does Your Pediatric Practice have a clear and consistent Billing Policy Manual?
How Aligned are your consultants to the Goals of Your Pediatric Practice?
A Pediatric practice needs to successfully work with both internal and external stakeholders to be successful. These stakeholders include employees and external vendors/companies and sometimes, consultants. There can be misalignment of the goals of each of these stakeholders with the goals of your Pediatric Practice. There are a number of questions to ask a consultant to insure they represent your best interests.
Some of these questions could include:
-Is the consultant recommending a product or service due to an alliance with their firm or due to quality of the product for your practice? For instance, a company that sells servers will have a bias to recommend server E.H.R. systems due to their revenue being made based on providing advice and maintaining servers. If a consultant speaks at an event sponsored by a Vendor, this might indicate that there is a bias for this vendor. A question to ask: Is the speaking engagement with a particular vendor due to the vendor providing them customers that they can charge their consultant service and do they speak equally at events for all vendors in the same state (not just the ones that send them practices)?
-Having a consultant choose an E.H.R. service, could cause a Pediatric office to obtain an ‘old’ technology product or a product that does not appropriately balance the revenue/cost needs of the practice with the desire for a consultant to provide a service. Some consultants might not have the technical expertise to make the ‘right’ decision for your Pediatric Practice. Recommend asking any “E.H.R. consultant” how long they have managed a practice as well as their experiences with optimizing revenue for a practice (there are many with great experiences and unfortunately some with none to minimal experience). Equal time should be spent discussing the revenue cycle/practice management as well as clinical aspects of the E.H.R.. Consulting advice should look to optimize revenue, minimize burden, cost and start-up time. The practice is ‘on the hook’ for long-term operation of a system/process and the receiving end of decisions made regarding a system.
-Does this consultant make more or less money if the practice identifies a solution that requires minimal work on their part? Why would a consultant that charges by the hour (whether paid for by the practice or the government) seek a system that reduces billable hours? The long-term operational burdens are the responsibilities of the practice not a consultant.
Exceptional consultants with a solid history should be able to balance the needs of their clients with the need to optimize their own billable hours. Great consultants know and understand the revenue cycle and provide hints on how to reduce administrative burdens of Pediatric Practices. With all the conflicting priorities and needs of a Pediatric Practice, it is important for a practice owner to select the ‘best’ consultants/advisors for their particular needs.
Consumer Directed Health Plans (CDHP) in Pediatric Practices
What is a Consumer Directed Health Plan (CDHP)?
A CDHP is a health plan option for which the family usually has a high deductible of $1500, $2500, $3000 or higher. The individual that has this high deductible is ‘trading’ the high deductible for lower Health Insurance Premiums. Additionally, a family might save money in a health care savings account for use when in the deductible phase. The family can roll over money from year to year in the Healthcare Savings Account.
Do all CDHP plans have a high deductible for well visits at a primary care Pediatric Office? No. Many CDHP plans cover well visits which usually includes vaccines. In most cases, the deductible/co-pay is $0.
How common are CDHP plans?
CDHP plans, due to the ability to save the employer and employee cost on the premium are growing in popularity. It is estimated that approximately 50% of small employers offer this option and between 20-30% of Medium to large employers. Many employees prefer to work with the ‘known’ and therefore select the traditional HMO and PPO plan. In Pediatrics, parents usually try to offer a plan that has more coverage due to the need to treat their sick kids. We evaluated some of our Pediatric groups and noticed that CDHPs are significantly below 10% currently.
How might CDHP Plans impact my Pediatric Practice?
Studies show that patients whom are insured using CDHP plans have between a 10% and 20% utilization rate of outpatient care. These studies do not look at the impact of Pediatrics versus specialists and other forms of outpatient care. Parents with this type of insurance are much more knowable of what their policy covers versus parents whom have traditional HMO/PPO coverage. Many will check to see what the plan covers as well as request generic medications versus branded medications.
How might CDHP Plans impact my collections and AR Rate? If a pediatric practice did not have strong patient responsibility follow-up as well as a high penetration of CDHP plans, the practice might see the collection rate reduced as well as an increase in AR days. The Medical Group Management Association as well as other organizations provides benchmarks for collection rates and AR days. The average collection rate is around 95% of the contract amount with 97% used by many groups as a benchmark. Achieving well above 99% consistently should be the minimum benchmark for each Pediatric Practice. Related to AR days, a pediatric group should have AR days less than 30 (less than 30 days of Accounts receivable) with the goal of being at 25.
Although CDHP plans are just starting to penetrate the market place they will continue to be an offering as the country struggles with rising healthcare costs. Monitoring and Management of CDHP plans is one component that will help improve the success of a Pediatric Practice.
