A complete and accurate financial picture is essential for any business, more so for medical private practices. The volume of charges and adjustments, the reliance on third-party payers, and the time lag between billing and reimbursement are unlike any other business models. This means that a medical billing professional or a company must provide a solution for a wider range of situations than a simple accounting program can do.
A Medical Billing company offers complete understanding of Practice Management (PM) software that tracks every entry in the database and arranges this information into meaningful reports to assist physician owners and practice managers.
The most vital piece of information contained in PM software is the practice’s aged accounts receivable. A summary A/R is useful in seeing what charges are still outstanding. In the current environment in which electronic billing and posting have become the norm, there should be no reason for most insurance balances to be less than 30 days old. Recognizing when balances are older than 30 days points to a problem in the reimbursement system. By running a detailed aged A/R, problem payers or individual accounts can be identified for further investigation.
According to findings in AGMA’s 2011: Medical Group Compensation and Financial Survey conducted with 49,700 US healthcare providers most medical practices across the country are operating at a loss.
Good billing company consistently monitors the state of the A/R as it changes on a weekly (or even daily) basis; learn the trends in their reimbursement patterns. Some payers may be consistently late in paying. This could be because the payer is negligent, in which case the biller should contact provider relations to rectify the matter. It may be that the payer considers submitted claims incomplete, legitimately delaying payment. In these cases, billing staff should review the payer’s requirements to ensure that clean claims are submitted.
When individual accounts are identified in the A/R as aging beyond what should be contractually expected, billers can contact the insurer to follow up on claims. If copies of the medical record are required to justify the claim, the copies can quickly be submitted within timely filing limits.
The A/R does not only contain insurance balances. Patient balances are also included in the total amount due to a medical practice for services rendered. Patients who routinely neglect their co-payment at the time of service can be easily spotted based on the amount due in their account. If their outstanding balance regularly increases in increments of ten dollars, billing staff can counsel these patients on their obligations at the time of their appointment. If large co-insurance balances accrue to an individual patient without him or her making ongoing payments, billing staff can contact them to arrange a payment plan. Finally, patient balances that become so old as to be deemed uncollectible by the practice can be referred to a professional collection agency.
Running an aged A/R also identifies credit balances. These are obligations that the practice is ethically obligated to return to payers, be they insurers or patients. A detailed summary of outstanding credits should be reviewed case by case. Is the credit due to a posting error? If so, an appropriate correction debit should be entered into the account to reflect that no overpayment occurred. With electronic posting, it is essential that billing staff thoroughly review the remittance advisory (or EOB), to make sure that it balances against what is posted.
Experienced billing company will apply an outstanding credit to the total patient balance. This may result in a patient not receiving a bill because an erroneous credit cancels out the correct balance due. By identifying posting errors in a timely manner, the accuracy of the A/R is improved. Justified patient credit balances from one date of service can be applied to another date of service where patient payment is due, ensuring that accurate bills are sent to patients.
Medical billing is a specialized service of book keeping and complete understanding of Practice Managment software. By harnessing the power of the software and their years of skills, physician owners and practice managers can learn how much money they can expect to receive and when. Good billers can also identify potential problems in the A/R as it ages, and make corrections accordingly.