You may recall that a few months ago I wrote a series of posts about ways to calculate key practice benchmarks, including days in accounts receivable, net collections percentage, accounts receivable greater than 90 days old and the ratio of billing staff to providers. Now, I’d like to share some ways to use that kind of data – and more – to truly optimize the revenue cycle.

In a recent discussion with the editor of an online journal, I brought up the fact that a variety of business intelligence tools now exist to help practices understand and improve their revenue cycles. Using these tools to drill down into specific details about each of your payers—instead of taking a more global perspective—can fundamentally change the way you assess your revenue streams. Read More ›

How many secondary claims is your practice writing off?

The classic response to this question is a quick shoulder shrug, followed by the return query, “Why does it matter?” After all, the value of secondary claims is usually just a fraction of that associated with primary claims. Most practices believe it costs more in resources (especially staff time) to chase secondary payments than they’re worth.

In the past, that was probably true. But now, I’m urging all practices to take a second look at their secondaries. They may be worth more than you think.

As you consider your practice’s secondary claims, it’s important to keep in mind a very basic concept: Ultimately, the patient is the party responsible for paying you for your services. If you think back just a few decades, you’ll recall that patients used to file their own insurance claims. They were the ones who shouldered the burden of orchestrating all payment—including that of primary and secondary insurers.

While this arrangement made the patient’s reimbursement responsibility clear to all involved, it often created cash flow problems for practices. It’s hard to run a business when you’re waiting for someone else—someone with no real financial motivation—to get around to asking his or her insurance company to pay you! Read More ›

These days, you just can’t overemphasize how important it is to make sure every clinician is working at the top of his or her license. It simply isn’t cost-effective to have registered nurses, for instance, performing clerical duties.

Lots of practices seem to have this in mind when they ask about billing for their nurse practitioners (NPs), physician assistants (PAs), and other non-physician providers (NPPs). Most want to know about the basic advantages and disadvantages of billing for NPPs under their own Medicare billing numbers. Here’s my response:

The biggest advantage of allowing an NPP to bill under his/her own billing number is that you don’t have to worry about incident-to guidelines, which limit how and where an NPP-patient encounter can take place. Under his or her own number, for example, an NPP can see a new patient, or a patient in the hospital. By contrast, billing under the physician’s number requires direct personal supervision (that is, the physician must be in the office suite). NPPs also aren’t allowed to see new patients if they bill incident-to under the physician’s number.

The use of NPPs will allow your physicians freedom within their schedules to generate additional revenue through new patient encounters, surgery, etc. The main disadvantage is that payment under the NPP’s number is limited to 85% of the physician fee schedule reimbursement. If the same procedure or service is billed incident-to using the physician’s billing number, it is paid at 100% of the fee schedule amount. Read More ›

Over the past few months, I’ve posted some tips that I hope make it easier for you to correctly calculate a few key practice benchmarks (days in accounts receivable, net collections percentage , and accounts receivable greater than 90 days old ). There is one more benchmark, though, that I suspect is under-examined by many practices: the ratio of billing staff to providers.

It’s a difficult benchmark to discuss, because a practice’s size has a lot to do with it. A good ratio in a large practice is very different than one in a smaller practice — and understandably so. Larger practices not only achieve some economies of scale, but also tend to carve out employee responsibilities. While a large practice might have specified “coders,” “billers,” and maybe even a designated “Medicare specialist,” a smaller practice might rely on a single person to do it all in conjunction with other duties. Yet this ratio is still quite important.

In many practices, it’s viewed strictly as an “expense” indicator. However, I feel strongly that it’s also a significant overall gauge of your practice’s financial health. That’s because the lower your billing staff-to-provider ratio, the more consistent your revenue cycle tends to be. Read More ›

Not long ago I posted some strategies you can use to make sure you’re correctly calculating two of our industry’s most utilized benchmarks: days in accounts receivable (A/R) and net collections percentage. At the time, I briefly noted that it’s also important to check your A/R greater than 90 days old (A/R>90) because it’s possible for a good overall A/R number to mask problems with aging claims.

A/R>90 is a measure of a practice’s ability to get claims paid in a timely manner. This measure represents the amount of A/R older than 90 days as a percentage of the total A/R. Here’s how to calculate it: Take the dollar amount of the A/R that is greater than 90 days from the date of service, and divide that number by the dollar amount of your total A/R. Read More ›

Using benchmarks to rate the success of your practice’s revenue cycle is an age-old “best practice.” No matter the specialty or size of your practice, it is important to periodically track, trend, and review performance data. It is the only surefire way to understand your financial strengths and weaknesses, and subsequently improve both.

One of the biggest challenges I’ve found, however, is that practices may think they’re adequately tracking certain benchmarks when they’re not. In reality, it’s not at all unusual for practices to be a little uncertain about whether they’re correctly calculating and analyzing important numbers.

So, I’d like to address two standard benchmarks that, in my experience, are particularly thorny: days in accounts receivable (A/R) and net collections percentage. It’s essential to track both accurately, because they demonstrate a practice’s ability to quickly turn over A/R and collect all money due. Let’s walk through: the definition of each term; the proper way to calculate each; an example calculation; and some common potential analysis pitfalls. Read More ›

Every practice manager needs to fully understand how analyzing data related to the billing process can improve the management and bottom line of a practice. In a one hour webinar, Knowledge is Power – Using Data to Improve Your Revenue Cycle, Bryan Koch, VP of Strategic Services focuses on how to analyze this data and how to use it to improve your practice.

During the event, Bryan discusses:
• What business intelligence is, and why it is important to the health of your practice.
• How business intelligence can improve all aspects of the revenue cycle.
• What key performance indicators you should be tracking.
• How the data that you’re capturing today can be used to prepare your practice for future healthcare reforms, initiatives and regulations.
• How business intelligence can improve the performance of you and your staff.

To learn more about using business data to improve your revenue cycle, download the webinar here.

The ever-growing complexity of federal regulations and insurance plan rules continues to wreak havoc with the physician revenue cycle. Consider the effect on your practice of expanding global periods, bundling edits, Local Coverage Determinations (LCDs) and non-covered procedure lists.

Even the savviest medical billing staff must fine-tune the appeals process to prevent it from becoming a lengthy battle. Knowing how to write an effective appeal letter can greatly enhance your practice’s chance of getting paid for initially-denied or underpaid claims. Read More ›

This year, you have to contend with 151 new ICD-9-CM diagnosis codes, as well as 16 invalid codes. Rather than just list the changes in code order, the following tables are meant to provide them in an easy-to-read summary format. You’ll find the names of the chapters in the ICD-9-CM tabular list below –alphabetically – that contain either new or invalid codes. To see the entire list of changes for the chapters that interest you, click here. Read More ›