Pediatric Office Revenue Cycle Management/Medical Billing – Today vs. Yesterday

October 12, 2011 in Billing and Collections by support Team  |  1 Comments

I am amazed at the number of Pediatric offices for which the partners use modern technology in their
home life and have a dated revenue cycle for their office.  Their home activities are expenses while the
office revenue cycle provides the revenue stream for their practice and their income.   Because the insurance companies routinely update systems and processes, the average Pediatric office is at a disadvantage to managing the revenue cycle.  Interesting that I have observed a practice owner drive to the nearest cell phone dealer and within an hour walk out with a new phone and abandon the old phone.  This same practice owner is unable to make a change that will increase their compensation.    Many pediatricians have systems in their office that were either designed prior to the 21st and still being sold today or are using a system that the practice purchased before the start of the 21st century.

I have met ‘Sally the biller’ whom has done the billing for years but is years behind on optimal coding
techniques for the office.  Also, we have picked up work from ‘Sally the biller’ for which thousands of
dollars have been missed in charges not resubmitted or reprocessed correctly.  It is expensive and time
consuming for a practice owner to continuously train and challenge their billing team.  Consultants have a solution – hire them to manage the billing team.   This could increase their billable hours – might be better approach to utilize the consultant a few times a year to audit account and measure versus national benchmark (if they are a high skilled consultant, they are probably busy and flexible on the arrangement).  Hiring a practice manager to manage the billing team as well as other functions might or might not be a good idea based on the size of the practice.  These challenges are especially difficult for a 1-3 physician Pediatric group where the extra headcount might only add cost and complexity to the practice and actually reduce the profit margins.

Some of the items to manage for back office revenue cycle management include: insure qualified Pediatric billers are continuously managing the revenue cycle, monthly deep dive into the account to calculate benchmark performances and evaluate aged claims, auditing, training, change of codes, change of claim file standards, change of scrubbers and claim edits, evaluate distribution of sick coding.   The larger practices also require other factors like the evaluation by provider.  Most pediatric practices become more profitable by focusing on increasing patients and revenue versus spending significant amount of time on these management issues.

Why are major corporations outsourcing?  Because the activity is being outsourced is not the core activity
of their business.  Xerox has run an advertisement campaign that they announce Marriott, a hotel, and
Ducati, an Italian motorcycle manufacturer, outsource their back office operations to Xerox so these
companies can focus on serving their customers.  Shouldn’t a pediatric office focus on their patients and
not back office management?  Optimizing profit margin and reducing administrative burden is always on the ‘grid’ for executives in companies.  Business owners of Pediatric Practices either become too busy to think strategically about this approach or might not have the proper advisers.  The links below show these videos:

Xerox – Ducati

Xerox – Marriott

Xerox – Virgin Airlines

It is confusing for a practice owner to know how to identify a company that performs consistently in
Pediatric back office operations/medical billing.  There are many companies not meeting their growth
objectives of their EHR software and/or consulting practice so they might add in Medical
billing as a service.

When evaluating a company/business to manage your revenue cycle some questions to ask include: what is your collection rate, what % of your customers/clients uses your billing service vs. only your EHR.  Since you have been in
business, what % of the time have you been actively managing pediatric billing and the revenue cycle? If
they have been in business for more than 5 years and started medical billing within the last 5 years, their
processes and company systems were not built from the ground up around the revenue cycle
management of clients.  How do you audit my account?  How do I audit your actions?

Transitions from the old model means some changes for the practice:  new systems, processes and potentially a new
billing team.   If done properly, at the end of the rainbow is additional revenue, higher profit margins, reduced work and more free time for the practice owners!