At Cosentus we often sign new clients with their accounts receivable in a total mess. Sometimes these clients will tell us that they are barely able to stay afloat, as their medical billing company has not been billing the charges out or they do not refile claims or work denials. These troubled practices are only able to notice the lack of performance once their cash-flow has been badly impacted. However, in our experience there are major signs of an upcoming crisis and these signs can start a good 6-8 months in advance before your cash-flow is disrupted. In this age and time, you got to outsource your billing, but you need to review the performance of your medical billing company from time to time, to make sure they are doing the job, they were expected to do. Often times, medical practices are not even aware of any problems with their revenue cycle management, until the money starts drying up. Most times the practice administrators would want to ask questions or review the performance of their billing service, but they do not know the right questions to ask or are not aware how to investigate and ensure their revenue cycle is being managed efficiently. Cosentus has put together a list of 5 warning signs to watch out for, this article will provide you the right questions to ask your billing service.
Download free checklist- The Ultimate AR checklist
Increasing Account Receivables
Most often this is the first sign of a trouble in the making. You must insist your billing service to provide you with an up to date AR report at the end of every month. The report must be broken down by payer and by ageing buckets. Pay attention to the over 90 and over 120 days bucket, see if you notice a trend of these buckets growing over a period of time. Typically depending on your specialty these buckets combined together should not be over 10-14%. Sometimes there can be a payer trend that is impacting the numbers temporarily, but then if you would track the data from the past 12-16 weeks, you should be able to tell, if the ageing is stable, growing or reducing. The trend over 12 weeks should be reducing and stable closer to 10%. If it is not, and your AR is ageing 20% or higher in the over 90 days bucket, you need to ask your billing service for and explanation and what is their plan for catching up.
You need to understand the AR over 90 days is your revenue locked for over 90 days and that is bound to disrupt your cash-flow. This kind of jump in AR can be due to serious lack of diligence on the part of your billing service, they may not be refiling claims in a timely manner or may be the denials are not being worked. A healthy percentage of claims submitted get denied and according to MGMA 50% of all denials are never worked. No matter what the reason is, you need to get involved if you see an increase in the AR that is not justified. You also have the options of getting your Revenue Cycle audited by a outside billing service, this will cost you roughly about $2000-$3000 but will get you all the answers that you may need to stay on top of your billing and maintain a healthy cash-flow. Cosentus performs a FREE of cost comprehensive coding, billing and claims audit, you can click the link below and sign up in less than 60 seconds. We will let you know how well your billing arrangement is working and a road map to increasing revenue. No obligations!
FREE Comprehensive analysis of your billing, coding and claims
You did all the work, you provided the best medical care to your patient, but your medical billing company failed to capture all the charges. This is a major issue when it comes to optimized billing and it not only is a loss of potential revenue, it can also result in claims being denied. You should be able to get the details of your charges from the billing company and you can easily notice if they are billing for all the services that you provided. If you see charges that were missed, you need to question it. May be your billing service just missed it or maybe they did not believe it to be a payable service, but you should be on the same page with your biller. A periodical audit of your billing and coding is suggested to catch this early and take corrective measures, you can do this yourself or get your billing audited, using an outside billing company.
Not Submitting Claims Electronically
If you billing company does not submit majority of the claims electronically that should raise an alarm. If they are using modern technology, they should be able to submit majority of the claims electronically, which will mean faster reimbursement for you. Ask your billing service to share the numbers from their EDI portal, this should give you a good indication of what is being submitted electronically and what is the ratio of the “first pass acceptance” of your claims. The first pass acceptance should not be anything under 97% and if it is less than 97% it indicates the claims are not being scrubbed prior to submission. It is super important to submit clean claims in a timely manner to ensure faster and optimal reimbursement for your practice. Further the rejected claims need to be worked out within 24 hours and resubmitted with the necessary corrections. If your billing company is found wanting in these areas, they are sure to cost you money in the near future or maybe it is happening already. Time to start asking questions!
Too Many Denials
Claim denials can lock up your revenue in the AR and cause serious issues with your cash-flow. It is acceptable to have 3-5% denials, even the best performing practices have some denials, however if you have 10% or higher denial rate it is a sign of a failing revenue cycle management. Is your billing company doing a comprehensive denial management for you? This should also include preventive denial management, with the aim of reducing the future denial rate. Ask them if they use denial tracking to work all denials in a timely manner and eliminate denials caused by human errors or coding issues or not submitting the claims to the correct payer. A billing company that does not want to invest in upgrading their technology or fine-tune their process to meet the current industry standards will always make you lose money.
Lack Of Visibility To Your Practice Data
If your medical billing company does not provide you with comprehensive management reports, you will always be in the dark about the financial performance of your practice. An effective billing service will always provide you with great reports, as they are sure about their performance and have got nothing to hide. Only providing Gross charges and payments reports was good 15 years back, now any good biller should be able to track a lot more, failing to capture the RVU’s and managed care rates are common signs of a biller who is behind the curve. Data is absolutely the king, there are so many important practice decisions that you can make based on the data that is generated out of your revenue cycle. How much you make from each of your patient, what kind of patients make you more money as compared to the others, how each of your physicians are performing, what should be the goal of your marketing, these can all be answered using your billing data. Lack of transparent reporting is always going to land you in a financial trouble. Comprehensive practice data analytics should be part of your billing arrangement.
Medical billing is incredibly hard, but then it is really not your job, it is supposed to be taken care of by your billing service. This is why you hired them in the first place. You should be guaranteed 99% clean claims submission, ZERO charge leakage, over 90 days AR- under 10% and the financial goals of the practice met month after month. This is why you pay the big bucks and so you are owed this. We put this article together, so you can stay on top of your practice goals and ask relevant questions of your billing service. If you are not sure about the performance of your revenue cycle, we are happy to help. You can get a FREE comprehensive analysis of your billing, coding and claims. No obligations!