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, 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.

Simplification of Pediatric Medical Office Operations

February 17, 2012 in Billing and Collections, EHR Selection by support Team  |  Comments Off on Simplification of Pediatric Medical Office Operations

There are many vendors and sales people that want to sell you extra ‘stuff’ for your Pediatric office. Does the product you are being sold simplify your operations, management time and increase revenue or increase your overall burden and cost? This is a basic question that every decision maker of a Pediatric Practice needs to make. The goal should be able to see 30-40 patients per day without hours of work on charts, processes, computer systems, servers, and people. Keeping this simple approach can be done with a few basic questions: what is the time I spend on charting? What is the collection rate of my practice? Does my billing team obtain continuous training on Pediatric Medical Billing? What is my audit system? Is my electronic Health Record system only designed for Pediatrics? Are we collecting above the Medical Group Management Association(MGMA) Benchmarks? Does my system require me to be the manager of Servers, IT Protocols, data back-ups as well as management of vendors whom manage these items?

Your Pediatric Billing Vendor (or internal team) should be able to provide a simple monthly report that answers the billing and claim follow-up. This report should also provide trends of billing and collections by provider in the group as well as a list of summary of claims by Insurance Company.
A practice management and E.H.R. system should be designed to first optimize your Pediatric Office as well as for the clinical workflow of Pediatrics. Our clinical system is designed and developed by Pediatricians only for Pediatrics by first optimizing the payment systems so that the offices we manage achieve >99% collection rate (significantly above the MGMA benchmarks). Not all vendors are meeting these standards. Many products are very difficult to use that requires so much training and change in workflow design. The system should not ‘feel like working in Microsoft Excel’. If so, maybe the vendor is out of date.

Some vendors hold their clients ‘hostage ‘ to their own data. All vendors should provide the practice data in a usable format if they decide to switch. There are many vendors, both large and small, that make it very difficult for practices to pull their data out of the system (this includes Client-Server software vendors that lock the data into their application….all because the server is in your office does not mean that you are protected for a hostile tactic of a vendor). If a system is simple, increases revenue, decreases hassle then a vendor does not need to move to these tactics.

Continuous improvement should be the norm in the industry. Pediatricians work very hard. If the existing system in your office is complicated and/or date, look at other options. If your collection rate is below 99%, look for a vendor whom specializes in Pediatric Medical Billing.

10 Ways to Improve the Bottom Line of Your Pediatric Practice

January 3, 2012 in Blog by support Team  |  Comments Off on 10 Ways to Improve the Bottom Line of Your Pediatric Practice

Managing a Pediatric Medical Practice is full of opportunities and challenges today. In the ‘old’ days managed care plans had minimal influence on the bottom line of your practice, Malpractice rates we’re relatively inexpensive and patients were flexible to meet 9-5 office hours. Today, much has changed in society as well as in managing a Pediatric Medical Practice. Other ‘conservative’ services such as banking have changed drastically in the last 15 years. Look how easy it is to gain access to your bank/bank account today versus 15 years ago. You can be successful in Pediatric Medicine today by understanding how to meet the needs of Patients and Managed Care Plans. Patients want good access to a good Pediatrician while Managed Care Plans know that seeing a Pediatrician is more economical then using the ER or Urgent Care Centers. Also, many Pediatricians act like a Medical Home that provides continuity of Care. Managing a pediatric practice needs to be done in an objective manner by providing goals while measuring and monitoring success toward these goals. Here are 10 suggestions to improve the bottom line of a Pediatric Practice:

1. Optimize New Patient Additions: how many patients are in your Pediatric Practice? What are the ages of these patients? What is the average # of New Patients joining your practice per month? How do your hours, location(s), facilities, and staff compared to other choices for Parents? The more practices in the same location, the stronger the value proposition needed for your practice to be successful. Patients choose a Pediatrician to obtain good advice and treatment. They need to feel heard, have their questions managed and feel that your practice provides the best options. If a provider is not meeting these needs, the practice manager/physician Partner needs to discuss the importance of service. Suggested reading, although in the Hospital Segment, includes “If Disney Ran You Hospital, 9 ½ things you would do differently”.

2. Provide and Measure Quality Care/Patient Satisfaction: Quality Care is important in any Pediatric Practice. How do you measure “Quality” in your practice? You should be able to set up reports in your E.H.R. system to measure HEDIS measures such as the % of patients that were vaccinated per a pre-determined vaccine schedule. The patient and parent have an opinion of the care in your Pediatric Practice. If you provide them an option on each visit to provide feedback either via a ‘Feedback Box’ or an online link, you have a great opportunity to see trends in the perception of the care provided by your practice. If the patient survey is created and implemented correctly, you will also be able to use the tool to view feedback per provider. This can be used as a tool to constantly improve care and/or the perception of care. To receive continuous improvement in your practice, you need the feedback and the providers need to choose to change based on the feedback.

3. Leverage the “Right” Technology: Patients and parents are use to convenience via their smart phones and home computers (look at the dramatic increase in on-line sales in 2011 versus 2010 as an indicator). Does your Electronic Health Record System have the ability for parents to schedule appointments, view select information through a patient portal (determined by the Pediatrician), and pay bills on-line? If you are not sure, ask your E.H.R. vendor what options they have the cost for the options. Also inquire if you and the providers on call can view all your patient records via a smart phone. The system used on a smart phone should be configured for a smart phone.

4. Managed the Fee Schedule: I am surprised at the number of practices that have established their fee schedule significantly below appropriate levels established by consultants in the field of Medical Practice Management as well as recommended levels provided in practice management courses through the Medical Group Management Association (MGMA). Generally, the billed rate per CPT code should be 2-3x the Medicare reimbursed amount for that code. The practice needs a consistent and well thought out fee schedule that is reviewed at least 1x per year. If you are unsure how to establish appropriate fees, contract with an organization that manages Pediatric Offices or does consulting for Pediatric Offices. This is not a task for companies that primarily sell software and have services as an afterthought. If you want to learn on your own, recommend attend courses provided by MGMA.

5. Review Contract Rates with Plans: The fee schedule is one component, what the actual contract rate with each insurance company is an important component to improve the bottom line of your pediatric practice. The fee schedule should be re-visited each year. Look at the difference between your fee schedule and the contract rate for each of the top 8-10 plans. There will be a few plans that will try to not give an increase in their rates. There were two plans I worked with for a Pediatric Practice that try to sell in ‘no increase’ from the previous year while the plans increased their profitability by 15-20% year versus year and the CEO’s of the plans made millions in salary and bonus. Remember, that Pediatricians are usually the lowest paid specialty in Primary Care and Pediatricians help the managed care plans reduce ER visits, Urgent Care centers as well as inappropriate use of the health care system. No increase in a fee schedule is a decrease in your salary since the costs associated with Rent, Employees, taxes, insurances, supplies and vaccines increase each year. You might need to cap or discharge a particular ‘poor’ performing insurance from the practice. Many of the patients from a particular plan will stay with your practice. Obtain good advice and use appropriate consultants that understand contracting.

6. Evaluate Payer Mix: What is the payer mix of your practice? Some practices have minimal patients that utilize Medicaid and/or Managed Medicaid Insurance while other Pediatric Practices are >75% Medicaid. Understanding the geography and plan mix will help you make informed decisions. You should become with some of the reimbursement and desires of the plans that comprise greater than 80% of the revenue for your practice. Analyze the capitation rate per patient per month for each of the insurance companies as well as the facility usage rate for the average capitated patient. Does your practice management system track the monthly capitation payments? What % of your monthly revenue is from the capitation checks? If you added a new provider or have a new practice, you should be more flexible on the insurances that you accept as well as the ‘cut off’ for contract rate. If you are unsure how to evaluate the payer mix, seek advice from your billing team (if you use a vendor that specializes in Pediatric Billing) or a Pediatric Practice Consultant. Recommend evaluating the payer mix at least 1x per year to determine what changes are needed.

7. Monitor Collection Rate: Net collection rate is the % collected versus the contract amount. For example, if your fee schedule for 99214 is $145 and the contract amount for the fee schedule is $100, a 99% Net collection rate means that $99 was collected of the $100 contract amount. The contract amount could be broken into three areas: co-pay collected at front desk, amount paid by insurance and amount due by patient. Let’s do an example with the $100 for a 99214 (assuming this was the only code for the visit). Let’s say the patient had a $20 co-pay and $50 paid by the Insurance per the Explanation of Benefits and another $30 due by the patient. The back-end billing team needs to bill the patient for the remaining $30. MGMA benchmarks show that the average collection rate for charges >120 days aged is approximately 95%. MGMA establishes a goal of 97% of Net collections. What is the Net Collection rate for your practice? Do you monitor this monthly? Do not settle until the collection rate is above 99%….when contracting a vendor; ask for their range in collection rates for the Pediatric Practices that they manage. When you use your own internal billing team, make sure and monitor multiple patients per week to insure that billing and write offs are appropriate per the protocols of the practice. Any person can upload charges to a clearing house, but not all practices have systems that manage the entire Pediatric Revenue cycle. An average collection rate can cost a practice thousands of dollars in lost revenue.

8. Monitor AR Days: Accounts Receivable days or AR days is a simple formula of taking the total $ in Accounts Receivable and dividing this by the averaged $ generated per day. Again, benchmarks are important to monitor on a monthly basis. The MGMA averages are between 42 and 50 with

9. Evaluate Front Desk & Providers: Both the Front Desk team as well as the providers in a Pediatric Office have a significant impact on the Revenue Cycle. The front desk team needs to verify the insurance, scan the insurance card, and collect the co-pay as well as any outstanding balance on a patient account. The Pediatric E.H.R./Practice Management system should have a system for the Practice Administrators/Physician Partners to monitor/audit the collection of co-pays. Note that some resources report that approximately 70% of practices have theft at the front desk. If you have a strong audit system that verifies the amount each day (like a bank teller) you can avoid revenue being taken from your practice. The providers have a responsibility in the revenue cycle to make sure they capture the work/advice they provided to the practice. Strong Pediatric Practice management systems should be able to simplify the choices so the providers just select from one of the most common Diagnosis codes and CPT codes.

10. Review E&M Coding: The “bell” shaped curve is the ‘ideal’ for Pediatric Practices. Some high quality based might have a curve that has slightly to the right. Some practices either under or over code. This either reduces the appropriate level of revenue for the practice or places the practice at an audit risk for which they could owe revenue back to the insurance company. The E&M coding should be reviewed by provider and practice at least 1x/quarter. If there is a provider that is ‘under’ or ‘over’ coding, consider enrolling in an on-line course provided by either MGMA or the American Academy of Pediatrics.By implementing these 10 suggestions early in 2012, your Pediatric Practice can benefit from appropriate changes for the entire year. A well-managed Pediatric practice leads to happy providers, staff members, and patients.