This billing monster is likely your practice’s largest administrative workload. It’s the culprit for many providers that fail to keep up and even close the doors to their private practices. If billing isn’t performing well, revenue is bad.
In this article I’ll be covering the fundamentals of the billing cycle and how to setup each element for success and efficiency. You’ll realize that failing in billing is a matter of choice, not your destined outcome.
Then and Now
Decades ago, healthcare billing was a very simple task. Many providers would handle the whole process themselves. They’d fill out the claim form by hand, put it in an envelope, and send it to the insurance payer via postal mail. Several weeks later, they’d receive a check in return. This was the way it was.
Now, billing matters are rarely handled by providers, even solo practitioners. The quick tasks that were once performed in small offices have become long processes that are managed by rows of cubicle workers... Keeping up with changing tides can be a struggle.
The RCM Cycle
A lot to cover here so let’s jump right in! The billing cycle is often referred to as RCM, which stands for Revenue Cycle Management. It’s basically the industry term for billing in its full cycle. I’ll be sure to give advice based on my own experience as I walk you through the cycle here.
Patient Intake
The first element in the RCM process is Patient Intake. This is the patient onboarding phase where they fill out their demographic and insurance information, sign the documents provided by the practice, and authorize treatment of care.
Eligibility & Benefits Verification
This step verifies that the patient has coverage for the provider rendering care to that patient. Verifying deductibles, copays, coinsurance, and specific procedure coverage are also part of this process.
"If the practice doesn’t already have an electronic or online means of intake setup, I would highly recommend putting one in place. Giving the patient the ability to register their intake forms before the first visit brings numerous benefits... Most importantly, having the patients information before the first visit gives the practice time to do an eligibility verification... Many clearinghouses have real-time access to payer data, making clearinghouse eligibility checks very reliable."
Encounter / Charge Entry
Once care is rendered, the provider, assistant, or scribe will enter the encounter details of the visit into the medical record... Then comes charge entry. It is most compliant for doctors to enter the encounter’s procedures and ICD-10 diagnosis codes themselves. But this isn’t always possible.
"The best strategy here is to bridge the communication between the EMR notes and charge entry. In other words, the provider simply notes what happened during the visit, and a certified coder or other qualified individual interprets what codes are applicable... Be diligent on this matter so you don’t miss out on potentially higher payouts... every insurance payer has an adjudication process where they only pay the allowed amount of your claim."
Claim Submissions, Effective Scrubbing & Clearinghouse
This is a larger process than just clicking the submit button... Your software should be able to have a thorough auditing ability... The clearinghouse verifies the patient demographic and checks that the insurance information matches that patient. When anything is incorrect or missing, the claim is rejected before being sent to the payer.
"I’m surprised when I hear there are still billing services out there who only send paper claims via mail or fax. This is such an outdated play... Electronic submissions will ensure your claims arrive faster, meaning faster payment, and they’ll provide better status tracking."
Accounts Receivable (AR)
AR is when the biller receives an EOB, explanation of benefits, and then posts any payments listed. EOBs can also be returned via the clearinghouse in the form of an ERA, electronic remittance advice... Billers should be able to balance out the payment with the allowed amount, adjustment and patient responsibility.
Denial Management
Of course, some claims aren’t paid, thus the EOB displays a denial. Most denials fall into common categories... This is the most time consuming part of RCM.
"If the person handling denial management is not the one submitting claims or at least working next to the person submitting claims, there will always be a higher volume of denied claims, creating more work for corrections, and delaying payments. And it doesn’t matter whether your practice is billing in-house or outsourcing to a billing service. This concept still applies either way."
Reporting
If the reports you’re receiving can answer these questions, then you’re gold!
- What is your average monthly revenue?
- What is your most profitable payer?
- What is your claim success rate?
- What procedures are most profitable?
- How much does each patient owe after the primary and secondary payers have adjudicated and processed their claim(s)?
The better your reporting, the more you know the health of your practice’s finances.
Patient Invoicing
Many practices think this comes before the service is rendered. This can work for copays, but charging deductibles and co-insurance can be messy if not handled later... you want to invoice patients after you have an EOB, because it displays exactly what the patient owes.
"If the patient is coming in for routine care, it’s not a bad idea to setup automated transactions. This way you don’t have to deal with collecting... Patient responsibility is often the largest area of lost revenue. This isn’t always because patients are just bad at paying their invoices. It’s often just a lack of collecting on behalf of the practice."
