Physician billing services are responsible for managing medical claims on behalf of healthcare providers. Billing includes, correctly coding diagnoses and procedures, obtaining prior authorizations, ensuring compliance with very specific healthcare rules and protocols, and follow-up on unpaid claims.
By managing the billing aspects of a physician practice, professional billing services have made improvements with cash flow. The administrator also allows for the physician to devote more time to actually being a physician instead of having the burden of administrative work. Physician billing is a component of a healthcare practice that can be done by the healthcare organization or outsourced to a third party billing company. Regardless of whether billing is handled in house or by an outside company, billing should ensure that healthcare providers are paid for their services in a timely manner and appropriately according to the services they provide.
Key Steps in the Physician Billing
The billing cycle consists of several key steps, each which contribute to the success of the billing process in receiving payment in a timely fashion and remaining compliant.
The first stage is patient eligibility verification. Prior to the patient’s arrival for appointment, the billing team will verify coverage with the patient’s insurance to confirm that the patient’s chosen plan covers the provided services. The process helps to limit the chance of the claim being denied, as well as unanticipated charges to the patient and the facility.
The next phase is the coding and charge entry. Typically, the coder will convert the diagnoses and procedures through usage of standard codes including CPT, ICD-10 and HCPCS codes. Additionally, the coder must ensure a precise usage of coding to ensure accurate representation of the services provided. Once the codes are determined and entered, a charge is attached.
Once coding is completed, the billing team begins the claims submission. At this point, claims must be submitted to the respective insurance companies electronically or mailed, depending on the type of payer. Each claim needs to have the correct patient information, provider information, procedure codes, diagnosis codes, and charge applied. Timely and accurate claim submission is the key. Mistakes at this point can cause denials and ultimately a delay to payment and cash flow.
After a claim has been processed, and payment has been made by the insurance company or the payment has been received directly from the patient, the next step in the medical billing process is to post that payment into the billing system. Payment posting is the process by which the payment is recorded into the accounting or billing system. Staff will be required to review documentation in order to confirm how much the insurance company has paid and if the patient has any remaining responsibility after the payment has been posted. This step is important in maintaining accurate records of revenue collections and allows practices to track unpaid balances.
Regardless of the due diligence taken in the process leading up to payment posting, denials and appeals happen in medical billing. Claims may be denied for several reasons, including reasons from missing documentation, to billing and coding errors. In the event a claim has been denied, a member of the billing team is tasked with investigating the reason for the denial, making corrections and finding the appropriate, additional supporting documentation, and re-submitting the claim or seeing to it that an appeal is filed.
The last step is accounts receivable (A/R) follow-up. This is the process of reviewing claims that have not been paid or have been partially paid. Billing specialists will regularly review aged reports in order to determine if there are any balances that are overdue. They may follow up with insurance companies on any delays or with patients for payment. Ongoing follow up on accounts receivable will help practices ensure a consistent cash flow by reducing balances and improving financial performance.
Challenges in Physician Billing
Despite a structured process, physician billing may encounter many challenges that affect a practice’s profitability. One issue encountered regularly is claim denials due to coding errors. Even minor errors like using an outdated code, or incorrect patient information could cause the claim to be denied. As a result, the claim will take additional time in the administrative process to correct the issue and resubmit the claim. This is lost time, and it is when the cash flow is negatively impacted by delaying the payment.
Another common challenge is reimbursement delays from the insurance company. Delays in payment from an insurance company may affect or delay the practice’s ability to meet day-to-day expenses such as payroll, rent, or supplies. In order to minimize cash flow interruptions, it is important to ensure that claims are submitted in a timely manner and when there are issues, ensure timely and frequent follow-up until payment is received.
Frequent changes in payer policies can add to the challenges. Insurers often change documentation requests, requirements for coverage, and reimbursement. If a billing team does not know about these changes, they can have reimbursement denied and lose the revenue. It is important to stay on top of the changes for maximum billing efficiency.
Compliance is another large and very real concern. Non-compliance with Medicare, HIPAA, or any other regulations can lead to audits, fines, and legal ramifications. For that reason, education of billing staff on respect for regulations is critical. It is not only for accuracy in claim submission, but also to make sure that the patient privacy is respected. Compliance is the key to protecting revenue and practice reputation.
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How Professional Billing Services Offer Solutions
Physician billing outsourcing through professionals will help to improve a medical practices financial performance. Increased revenue cycle management could be the most significant benefit. Professional medical billing services take care of the entire revenue cycle. It can be from patient intake to collecting final payments. By focusing on minimizing claim denials, trained professionals expedite claim approvals and increase cash flow. A big number of practices using medical billing services have better collection rates than practices that bill in-house therapy services.
Outsourcing also reduces administrative burdens. Internal practice billing can consume an undue amount of time and energy of the physician and staff members. Outsourcing the billing services will free up valuable time to focus on patient care and allow for greater efficiency in the practice.
A professional billing company will be up to date on coding, payer policies, and regulatory guidance changes. Those professionals are trained to submit clean claims that are within all legal and procedural guidelines. This will reduce the potential for errors, audits, and penalties- and will provide comfort for the practice.
As practices expand and grow, the real need for their billing function grows as well. A professional billing partner will facilitate a rapid and flexible change in the scale of these services without the burden of hiring, training, and managing additional staff.
Choosing the Appropriate Physician Billing Partner
It is essential to verify the company’s credentials and expertise prior to choosing a billing service provider. A competent billing company will conform to HIPAA laws and have certified coders. Professional billing service creates considerable cost efficiencies. Some studies indicate that practices cut their overhead up to 80% with an outsourced billing service. Many vendors have hourly rates starting at $7 and can offer billing solutions based upon a medical specialty as well. Some even offer complete end-to-end revenue cycle management. These complete solutions allow the medical center to decrease their administrative load and concentrate on patient care.