How To Maximize Your Collections
How do you bolster collections at your practice? Ensure processes that prevent poor coding and minimize data entry errors. Have strong procedures in place to follow up with insurance companies and stay on top of patient statements. Incentivize the collections performance of your office staff. With cogent details on these steps and other measures, this author shares salient insights on making collections run more smoothly.
Collections and revenue management are the lifeblood of your practice. I always use the analogy that the collections process is akin to your “heart” and if your heart is not functioning properly, it will cause all kinds of other problems in your body. The same goes for your collection process and department. If you have any malfunction in this area of your practice, you will start to see all kinds of systemic effects in your entire practice.
It is important to understand that revenue cycle management is more of a science than an art. You need a very specific system in place for your practice that the practice follows on a continual basis. I will never forget reading from one of the most famous management gurus and statisticians, Dr. Edward Deming, who helped rebuild Japanese industry after World War II. He said that “People don’t fail but systems fail.”
I have witnessed this personally. You can have the greatest, most talented staff in the world but if you do not have the right systems and processes in place, they will never succeed. You are setting people up to fail and no matter how many times you fire and replace them, the problem will never get fixed until the system is fixed. This is so important in the management of your entire practice and especially your billing and collections department.
I would like to share with you a five-point approach to addressing any problem as it relates to your collections or any other area of your practice.
1. Define. Define the problem clearly and how it is related to performance (net collections, accounts receivable days, etc.
2. Measure. Measure what you care about. Know your measure is good. (Use internal and absolute benchmarks.)
3. Analyze. Look for root causes and generate a prioritized list.
4. Improve. Determine and confirm the optimal solution.
5. Control. Be sure the problem does not come back.
Now it is time to get into the details of what I call “The Top Ten Common Pitfalls in the Billing and Collection Area of Any Practice.”
1. Rectifying Incomplete Insurance Verification And Pre-Authorizations
A lack of consistent, proper insurance verification and pre-authorizations is probably the biggest problem in most practices because it slows down the insurance and payment collection process. The further the practice moves from the date of service, the less money you typically collect. We all know how difficult it is to collect money from a patient the longer it gets from the time of the visit. I have found that once a patient’s foot condition heals, his or her memory of even seeing a podiatrist tends to get lost. In addition, improper verifications and authorizations lead to services that cannot be reimbursed because if the insurance denies the claim due to no preauthorization, you typically cannot bill the patient for the service.
The “kiss of death” is hearing the front office person say: “We’ll just bill your insurance and then send you a bill.” You must collect the patient’s portion up front and then bill him or her if there is a balance. This is your best chance of collecting the money owed for services rendered. Remember, you are most likely to get paid when a patient is in pain and in the office.
You must also have a process in place that allows patients without valid insurance to receive service with prepayment options or a payment plan in place. One must ensure the front office staff is properly trained when it comes to collecting money from patients.
There are many solutions for this first problem.