Maximizing Office Revenue: What You Should Know
Given the challenges of ensuring sound profitability for your practice in a difficult economic climate, this author reviews key principles to ensure proper billing and reimbursement, and how to minimize expenses. He also discusses key considerations when debating whether to offer additional services or purchase new diagnostic equipment.
There are two components for the financial success of a practice: maximizing income and minimizing expenses. Being able to achieve both of these components is essential, especially in these difficult economic times.
Although this may sound very simple, be careful that your billing communicates to the front office staff exactly what you are doing. Oftentimes, podiatrists simply leave the chart with office personnel to try to decipher what services you rendered and what the staff should bill. The only person who truly knows what services were rendered is the provider of those services.
Make sure there is a clear form of communication between yourself and the front office to make sure your staff bills every legitimate service that you have performed. Many services may occur in a podiatric office since we deal with bilateral conditions and multiple digits. It is easier than you think to leave a procedure or two off the bill. There is no reason to give away any services for free.
Clearing Up Misperceptions About Under-Billing
Some doctors are concerned that if they bill too many services, it may somehow trigger an audit. As a result of this fear, they tend to under-bill in an attempt to fly under the radar. There are many reasons why you may be audited. A common cause is based upon a review of your practice statistics. It is obvious when a practice bills for only high level codes as those are easy targets for auditors. Conversely, a practice that bills only extremely low level codes may also catch the attention of an auditor as either extremes of the billing spectrum are suspect.
Unless you have a very specialized practice, it would be reasonable to assume there is a mixture of services rendered and complexities of those services. Under-billing can trigger an audit as the auditor may consider that even the low-level billings are suspect and the doctor is trying to pass off non-covered services as a low level evaluation and management (E/M). Alternately, the auditor may have a perception that the physician is misrepresenting services in the hope that nobody will bother to investigate because the dollar volume is low.
Periodically audit your own super bills to ensure that what the front office staff actually submits to each insurance company is what you checked off on the super bill. If the office is not billing all services, then investigate where the problem is occurring. It could be poor training or sloppiness on the part of the front office … or you.
Also familiarize yourself with proper billing protocols, the use of modifiers and what services are generally bundled into other services. Even though you should bill for what you do, excessive billing of services or supplies can result in further analysis of your claims by the insurance carrier. This will slow down the payment time and likely facilitate a request for records (which costs you money to do and further slows down reimbursement time). This could also put you on the insurance company’s “watch” list, potentially leading to reviews of all your claims with that insurer.
Ensuring Sound Documentation For Billing
In addition to billing for the services you render, remember to document what you billed. Make sure that there is adequate documentation in the chart to verify the diagnosis, the severity of the condition and the medical justification for the services you performed.
If you are unclear with what documentation is required or unsure of the quality of your charting, check with reputable sources to review the charting. It is recommended in this situation to go through an attorney to ensure there is a privileged client-attorney relationship established to protect you. Be wary about using other sources as information gleaned from a non-attorney, third-party review of charts may be discoverable in a legal setting.
Many doctors use templates in an attempt to streamline charting. This can save charting time to allow more hands-on patient time. Templates are acceptable forms of charting as long as they paint an adequate picture of the evaluation and services one rendered that day for that specific patient. This is especially true in nursing home situations when the patients and services tend to be very similar.
The problem with templates is that they can almost appear to be photocopies. This is especially true in nursing home situations when the patients and services tend to be very similar. Be careful not to get too sloppy with templates. Your template/chart must adequately defend your billing.
In addition, it is important to be careful with templates as they can add unnecessary volume to the chart. Auditors look at substance, not volume. This is especially true in follow-up cases when the template is brought forward week after week and the amount of new information or relevant information is minimal.
The bottom line is that poor charting will result in denial of claims and have an adverse effect on your income.
Key Insights On Establishing Effective Collection Policies
Establish clear designation of personnel and policies for collections. This applies to both the insurance company and patient collection. Clearly post the billing policy and have patients sign the policy as it applies to services rendered, no-shows, bounced checks, etc. Proper billing is half the fight. Collecting is the other.
Some staff members may feel uncomfortable asking patients for money. Suggest proper phrasing so it is easier for staff to ask for payment while not being so blunt for the patient. Not collecting co-pays may seem like a small loss but when you multiply it over the weeks, that $10 co-pay per patient adds up to a substantial amount of money.
Have your staff collect the co-pay when the patient initially checks in as opposed to after the visit. It may be more difficult to collect the co-pay after the visit as patients may be rushing to get back to work or they could be a bit rattled from the services rendered (such as an injection or being told a difficult diagnosis).
Sending out monthly statements to collect such small amounts of money is usually not worth it. Having to send out a second statement is really not worth it. Keep in mind that the co-pay is mandated by the insurance plan that the patient or his or her employer selected. Not collecting that co-pay is technically a violation of that contract.
Should You Offer Additional Services?
There may be additional services that you could render in your office that you currently do not perform. This is a legitimate way to increase your income. Such services could include diagnostic services or physical therapy. Prior to proceeding with either of these services, check with the state medical board regarding scope of practice issues and what staff may or may not do when performing these services.
Also check with principal insurance carriers about their coverage guidelines and, more importantly, coverage restrictions. You may find that providing those services may in fact not be worth your or your staff’s time as well as the investment money in machinery if the coverage/payment criteria is too cumbersome and the reimbursement is too low.
When You Are Approached About Buying New Diagnostic Equipment
It is very enticing when manufacturers show you various machines that seem to have the potential to generate significant amounts of income. This generally involves diagnostic units such as ultrasound, vascular or neurologic testing machines. Keep in mind that representatives of these units are trying to sell a product. Be very leery of billing suggestions that they may offer as it would be very doubtful that the manufacturer would back you up in an audit setting.
Before purchasing a machine, make sure you have a firm grasp of how you will actually use this machine. If your practice is such that you normally only send out a few vascular or neurologic consults out per month, then you can assume this would be the volume you would be generating when performing those services in the office.
However, each of these units comes with a lease and there is obviously an incentive to try to recover the lease payments and, of course, generate income. With these machines, physicians may often perform more tests than they otherwise would have. Rapid changes in your profile can trigger an audit. Be aware that many insurance companies do not allow payment for “rule-out” type diagnoses. For example, with vascular testing, many carriers want to see evidence of ischemic symptoms in the chart versus a pre-op/rule-out vascular exam prior to elective surgery. The carrier may balk at payment if test information does not alter the treatment course but only confirms what is already clinically evident.
Coverage criteria can be very strict. If the insurance companies deny the services, you can obviously appeal but that does cost time and money. If they do not pay either initially or on appeal or even ask for money back, then you have essentially spent a fair amount of time and money with nothing to show for it.
Make sure you are well skilled in the performance of the specific diagnostic test and, more importantly, in the interpretation of those tests. If the patient has questionable vascular status and you proceed with the surgery, you may have to defend your vascular evaluation. It would be reasonable to assume the defendant would have a vascular expert testifying against you so you need to be as qualified as that individual in order to defend your quality and interpretation of the test.
Essential Insights On Minimizing Expenses
Evaluate the flow through the office to see if there is wasted staff time. There may be inefficiency and duplication of services that can translate into wasted time and poor utilization of personnel as well. Review the training of the personnel. Poor training will result in inefficiency and increased expenses.
If multiple errors continue during billing and charting, this will translate into an increased need for appeals based upon increased denials. If these errors go unspotted and the employees are not properly trained, then the denials will continue perpetuating the loss of income. It costs time and money to appeal claims and the end result may very well be that the amount of time and money spent in the appeal process negates the recovery of money one collects.
Division of job duties throughout the office is important in order to make sure all staff members are aware of their responsibilities. This is especially true in regard to billing. Make sure the appropriately trained person enters the charges and payments. In regard to denials, ensure there is a tracking system in place so the office makes timely appeals and tracks them on a regular basis.
Many insurance companies have time limits as to when the office can submit or appeal a claim. If your claim/appeal simply sits in a desk drawer, even if the insurance company legitimately owes the practice the money, you may not be able to recoup this money because of timely filing restrictions. Make sure nothing falls through the cracks. This is not only a revenue issue but a malpractice issue as well.
Make sure your computer software is up to date with new ICD-9 and CPT codes. Old codes will simply result in claims being denied unnecessarily. Computer software that is not compatible with changes in the Medicare system or other insurance company criteria will result in unnecessary claim denial or slow processing of claims. A designated person on staff should keep track of various policy/billing changes, especially when it comes to the Medicare Local Carrier Determination (LCD) coverage policies.
If you are not aware of changes in policies, you will continue to bill in error and even appeals will go for naught if your practice is violating current policy. There is no excuse for not knowing and that is not a basis for an appeal.
Ultimately if billing and collections are problems in the office, one option may be to outsource that aspect of the practice to a billing service. However, that is not without cost. If for whatever reason the office is poorly functioning in that regard, it may in fact be cheaper to pay an outside agency to collect an increased amount of revenues. Keep in mind that you are still liable for errors made by an outside billing service and any recoupment of money still comes from you.
When is an expense really an expense? Setting up another computer station is costly but do staff members wait in line for their turn at the machine? With more compact and less expensive units available, it might be cheaper to set up another workstation. Similarly, consider investing in faster computer hooks up such as higher speed DSL/cable than a standard dial-up connection. In my opinion, such an expense is really an investment.
Connecting to insurance carriers results in getting faster information retrieval, which will help with efficiency. This also allows you to see if a patient is eligible for services and/or covered benefits such as orthotics. This will minimize surprises when claims are denied for patient eligibility or coverage issues. Patients who get a large, unexpected bill will be upset and may balk at paying the balance, creating increased office tension. Collection costs detract from the bottom line and the goodwill of the practice.
As economic times get tougher, it is important that the business side of the practice, billing and collecting, gets some due consideration aside from the medical aspects of rendering care. Since many of our offices are solo or small group practices, the doctor also must be a businessperson.
We spend time and money getting our CME credits. We need to devote similar attention and resources to the administrative side of the practice. Keep both aspects in balance not only to make the practice financially successful but also to prevent the “money” side of the practice from becoming excessively challenging and a detriment to the overall atmosphere and morale of the office.
Dr. Poggio is a California Podiatric Medicine Association Liaison to the National Heritage Insurance Company and a medical consultant to Health-Net Insurance Company. He is a member of the American College of Podiatric Medical Reviewers and is board-certified by the American Board of Podiatric Medicine and the American Board of Podiatric Orthopedics.