The Billing Process
Transforming a clinical service into income requires managing tens of thousands of transactions with hundreds of thousands of data elements. In order to make the difference between mediocre and outstanding collection performance, an effective and efficient billing process is required.
The following are the various tools needed to implement effective billing and collection:
Demographics
Accurate patient demographics, including personal and insurance information, need to be obtained and maintained for effective billing and collection. Patients’ demographic information should be checked when they make their appointments and when they arrive at the office. Using your denials log (see below), monitor the rate of claims denial resulting from inaccurate insurance or patient information.
Charge Capture
This topic was covered in issue #1 (April 1999) of this newsletter. It is critical to continue to monitor the effectiveness of your charge capture ratio. Remember, the collection ratio for a clinical service that was not charged is ZERO.
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This provides controls over sets of data, assuring that all information leaving one step in the billing process reaches the next step intact and complete.
The steps in the billing process that should be monitored by batching include:
Charge ticket generation
Patient “arriving”
Charge ticket receipt (after patient is seen)
Charge entry (into the computer system)
It is ideal if the charge tickets are sequentially numbered. “Walk-ins” and “work-ins” should have charge tickets generated by your computer or by hand.
During the patient’s visit, the physician or other clinician marks the CPT and ICD-9 codes on the charge ticket and forwards it on to the next step in the process.
“No-shows,” cancellations, or reschedules have their charge tickets transferred to the location where the tickets are turned in at the completion of the patient visit. Charge tickets left for “un-arrived” patients are reconciled and transferred to the “completed visit” area.
At the end of the day, missing tickets are identified and the physician who saw the patient is queried to locate the missing ticket.
After all tickets are accounted for at the end of the day, the next batching process is initiated: the transfer of the charges from patient checkout to charge entry. This transmission requires control of not only each ticket, but also of all the charges marked on each ticket. This is especially important if the billing operation is at a different location from where the clinical services are provided.
There are various methods of batching at this stage. Since you must assure that all of the contents of each document are received and correctly entered into the billing system, the batching method must be more comprehensive.
The two most common methods are totaling the charges for the batch of charge tickets or totaling the CPT codes (e.g., 99212 + 99214 = 198,426). If either of these methods is used, the charge tickets, line items of charges, and the total dollars sent from patient checkout can be reconciled with the charges entered.
As charge entry occurs, any changes are accounted for (such as changed, added, or deleted codes), and the batch total entered in the billing system is reconciled with the total sent from the patient checkout area.
This process assures that a charge ticket is received for each patient and all of the charges on the ticket are entered into the billing system.
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While only a small percentage of an Ophthalmology practice’s income is paid in the office, and only a fraction of those payments are in cash, the cash represents a disproportionately complex problem. (The March 1999 Network Update Issue #10 has a full discussion on cash control issues.) Some tips for successful cash management include:
Use numbered receipts for cash payments and include a reconciliation for receipt copies at the end-of-day procedures;
Do not leave cash in the office overnight. Have someone write a check for the cash each evening;
Encourage patients’ use of credit cards or checks to reduce cash collections. Payment Posting. This is perhaps the most critical aspect of the billing process. The key to optimal payment posting is a system that assists the staff in evaluating the adequacy of the payment and the disposition of the balance.
Should the patient be billed?
Does the health insurance coverage require a write-off?
Should there be a supplemental insurance billing?
The ideal is a computer billing system that has the major payor allowable payment schedules loaded in, as well as each plan’s rules regarding the disposition of any balance after the plan pays. If your computer system doesn’t reach this ideal, you can develop a manual system. Use either a handwritten or computer spreadsheet to produce a master matrix of the allowable payment by insurance plan for most CPT codes.
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Track any denied or downcoded claims. This does not have to be a complex computer program (although a simple spreadsheet does a nice job). A spiral notebook will suffice.
The columns could be:
Pt. I.D.
Insurance Plan
Rejection Category1
Date of Service
Date Rejection Receved
Action
Result Due Date
Your billing staff works the claims to resolution as always, but on a monthly basis you can review the log to identify patterns.
For instance, if there is a large number of claims rejected for patients not being covered by the insurer, you may have a problem in your registration process. If you begin to get a large number of rejections from Medicare for “not medically necessary” services, you probably have a problem in your ICD-9 coding, most likely from a changed Medicare policy. If you are getting increasing requests for operative notes, you may want to start sending them with the original claim.
While you may have a “sense” that claims are being rejected, a quantified analysis of the number of and reasons for the rejections is invaluable information.
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How do you know when a payment is overdue?
Does your billing computer alert you?
Is that alert simply your AR Summary/Aged Trial Balance?
Is it a more refined list of claims or accounts over 30 or 60 days?
Do you have an alert system that is adjustable by payor?
A claim not paid in 30 days by an out-of-state indemnity insurer is different from a payment not received for an electronically submitted claim to your local Medicare carrier.
Once a claim falls into a follow-up category, does your system track that follow-up process?
Most systems do not track that process well, but the volume of those claims is relatively low (or at least should be low – if the volume is high, your denials log should tell you what adjustments are needed in your billing process, or who your problem payors are). With this low volume, a manual tracking system can be used.
A set of three 30-slot accordion folders can be used for a “tickler” file, with a claim needing follow-up placed in a date slot to remind you when an action is expected. By checking the file each day for claims remaining in that day’s slot, unpaid claims will not be lost in the billing process.
Performance Monitoring
There are several ways to measure billing performance, and they fall into two categories: process and outcome.
Outcome measurements include gross collection ratio and days in AR. Calculation of these two measures will be covered in a future newsletter issue.
Process monitoring includes measurements such as the average lag time between date of service and date of claim submission, the number of charges entered per staff member per day, etc.
Summary
The billing process has to be looked at from two perspectives how do you get a specific claim paid in the right amount at the right time, and how do you monitor the entire process to assure that all of your claims are being paid in the right amount at the right time. The former requires accurate information and anticipation and review of the payment. The latter requires systems of evaluation and review of workflow and business processes to assure expected performance.
Ron Rosenberg, P.A., MPH, Author Practice Management Resource Group
Irene Chriss, Editor Director, AAO Practice Management Department
